United Kingdom Internal Market Bill

Lord Stevenson of Balmacara Excerpts

Committee stage & Committee: 3rd sitting (Hansard) & Committee: 3rd sitting (Hansard): House of Lords
Monday 2nd November 2020 Lords Chamber

Moved by

[Lord Stevenson of Balmacara]

115: After Clause 30, insert the following new Clause—
“Office for the Internal Market: establishment as a body corporate
(1) Within the period of six months beginning on the day on which section 30 comes into force, the Secretary of State must by regulations establish the Office for the Internal Market (“the OIM”) as a body corporate.(2) Regulations under subsection (1) may amend or modify any enactment including this Act for the purposes of requiring or authorising the OIM to do anything required or authorised to be done by the CMA under this Part.(3) Schedule (Office for the Internal Market) contains further provision about the OIM once it has been established as a body corporate.(4) Regulations under this section are subject to the affirmative resolution procedure.”

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[Lord Stevenson of Balmacara (Lab) [V]]

My Lords, I move Amendment 115 and speak to Amendment 131. They need to be taken together. We have covered a lot of ground in the last couple of groups, so I will be brief. We have looked at the role, functions and operational mechanisms of the Bill’s proposed office for the internal market and have also covered what happens if and when things go wrong.

The emerging view—although it is not shared by the Minister—is that the Bill has not got this right. Amendments 115 and 131 which, as I said, need to be considered together, take us in a new direction. I take the feeling of the Committee that we are talking about an independent body, which has to be a UK body. As was rightly said by the noble Baroness, Lady Noakes, being a UK body does not mean that it also part of the individuals it is supervising.

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[The Deputy Chairman of Committees (Baroness McIntosh of Hudnall) (Lab)]

My Lords, I have had no request to speak after the Minister, so I call the noble Lord, Lord Stevenson of Balmacara.

[Lord Stevenson of Balmacara (Lab) [V]]

My Lords, I thank those who have spoken in support of the amendments, particularly the noble Baroness, Lady Bowles, who accepted the principles despite having doubts about some of the factual points, and the noble Baroness, Lady McIntosh, for covering a lot of ground and raising questions that will need to be addressed by Ministers. In fact, I do not think that they were addressed in the response this evening. I thank my noble friend Lord Judd for bouncing back after having been ignored and making some very good points about why it is important to seek principles as we go through the Bill, because they are sadly lacking at the moment. The legislation seems a formulaic response, almost an early policy draft of what one might do if one were to regulate an internal market. It does not smack of having had a lot of discussion and debate or even wider consultation. The Government do not seem to have in mind a process whereby they can arrive at a solution to the problem of how we get shared ownership and trust into a system which is broadly voluntary in its basis without it looking as though it is a top-down, heavy-handed approach. There may be political advantages in that in the short term, but in the long term it is not the way to go.

This was a probing amendment to which we heard some responses, but there are still one or two to come. I am left with the feeling that, whatever we call the body and wherever we locate it, if it is capable only of providing non-binding advice and has no powers, it leaves the question of who will police the whole system. What happens, for instance, if the devolved Administration in Scotland decide they want to do something in particular in relation to whisky, chicken or flour—and we now know an awful lot about flour adulteration? Who will police that? Will it be BEIS? If so, can the Government really say, hand on heart, that the right way to approach what is effectively a devolution issue is through a top-down, UK Government-organised structure? I wonder. I beg leave to withdraw the amendment.

Amendment 115 withdrawn.

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Moved by

[Lord Stevenson of Balmacara]

132: After Schedule 3, insert the following new Schedule—
“UK SHARED PROSPERITY COMMISSION1_(1) A body corporate called the UK Shared Prosperity Commission is established.(2) The UK Shared Prosperity Commission is not to be regarded—(a) as the servant or agent of the Crown, or(b) as enjoying any status, immunity or privilege of the Crown. (3) The UK Shared Prosperity Commission’s property is not to be regarded—(a) as the property of the Crown, or(b) as property held on behalf of the Crown.Membership
2_(1) The UK Shared Prosperity Commission is to consist of—(a) a Chair and five members appointed by the Secretary of State,(b) a member appointed by the Scottish Ministers,(c) a member appointed by the Welsh Ministers,(d) a member appointed by the Department for the Economy in Northern Ireland.(2) Before appointing a chair and member under sub-paragraph (2)(1)(a) the Secretary of State must consult the Scottish Ministers, the Welsh Ministers, and the Department for the Economy in Northern Ireland.(3) Before a chair can be appointed under sub-paragraph (2)(1)(a), the appointment must be confirmed by the Treasury Select Committee or a committee of either House whose remit covers the Treasury.Funding
3__ The Treasury must pay to the UK Shared Prosperity Commission such sums as the Her Majesty’s Government considers appropriate for the purpose of enabling the UK Shared Prosperity Commission to perform its functions.Powers
4_(1) The UK Shared Prosperity Commission may distribute sums from the Treasury across the four nations and regions of the United Kingdom following an assessment of relative need.(2) The UK Shared Prosperity Commission may conduct an assessment of relative need across the four nations and regions of the United Kingdom.(3) The UK Shared Prosperity Commission may do anything which appears to it to be necessary or expedient for the purpose of, or in connection with, the performance of its duties in sub-paragraphs 5(1) and 5(2).Accounts and audit
5__ The UK Shared Prosperity Commission must—(a) keep proper accounts and proper records in relation to them, and(b) prepare a statement of accounts in respect of each financial year.Annual report
6_(1) The UK Shared Prosperity Commission must prepare a report on the performance of its functions during each financial year.(2) The report must include the statement of accounts in respect of that year.(3) The report must be prepared as soon as reasonably practicable after the end of the financial year to which it relates.(4) The UK Shared Prosperity Commission must send the report to the Secretary of State.(5) The Secretary of State must lay the report before Parliament.Public records
7__ In subparagraph 2 of the Table in paragraph 3 of Schedule 1 to the Public Records Act 1958 (definition of public records), at the appropriate place insert—“UK Shared Prosperity Commission.” Investigation by the Parliamentary Commissioner
8__ In Schedule 2 to the Parliamentary Commissioner Act 1967 (departments subject to investigation), at the appropriate place insert—“UK Shared Prosperity Commission.”House of Commons disqualification
9__ In Part 2 of Schedule 1 to the House of Commons Disqualification Act 1975 (bodies of which all members are disqualified), at the appropriate place insert “UK Shared Prosperity Commission.”Northern Ireland Assembly disqualification
10__ In Part 2 of Schedule 1 to the Northern Ireland Assembly Disqualification Act 1975 (bodies of which all members are disqualified), at the appropriate place insert—“UK Shared Prosperity Commission”Freedom of information
11__ In Part 6 of Schedule 1 to the Freedom of Information Act 2000 (other public bodies and offices: general), at the appropriate place insert—“UK Shared Prosperity Commission.”Public sector equality duty
12__ In Part 1 of Schedule 19 to the Equality Act 2010 (public authorities: general), in the group of entries under the heading “Industry, business, finance etc”, at the appropriate place insert—“UK Shared Prosperity Commission.””

[Lord Stevenson of Balmacara (Lab) [V]]

My Lords, I will also speak to Amendments 167 and 168, which are also in my name. I am grateful to other Members for contributing to this group. The group is about another of the black holes that we are discovering in the Bill. This one is about state aid or, as we must learn to call it, subsidy—or, as the Government would have us call it, “the UK shared prosperity fund”, although details about that are incredibly difficult to find.

State aid matters. It particularly matters if people think money is being stolen from them and used for other purposes. The Government have quite a lot to do to try to explain where they are going with this state aid issue, the timescale and how they intend to make progress in bridging the gap between people’s expectations and where they currently are.

We currently get an awful lot of money through state aid; it is certainly money that would be felt if it were not there. It is hard to get a complete picture of it; the best figures that I have been able to find come from the Institute for Government, which suggests that about £20.7 billion is currently available through state aid in two main forms, the European Regional Development Fund and the European structural funds. The regional development fund focuses on physical development—physical capital, as it were—while the ESF, the structural funds, are about employment and young people and are probably best described as human capital. The combination is a significant quantum of money, held by people who I think regard it as not being money provided directly by the UK Government, although of course money technically circulates around and presumably was originally from taxation in the first place.

Two significant points come from that. First, the headline funding from the EU at the moment is matchable. We currently think that about 40% is added on top of the just over £10 billion—£10.6 billion, I believe—that is available directly from Europe to the UK agencies that spend it, so that gives us the figure of about £20 billion when it is matched with local authority and central government funding and from the lottery.

An issue that is hidden, or at least more opaque, in terms of how state aid is organised is the way in which it seems to come in response to different requirements. For instance, the long-standing convention is that there is a regional bias based on deprivation, which takes into account the broader picture across the whole of Europe. In the UK, there are only two counties currently in the most deprived areas—or most in-need areas, I think they are described as—which are west Wales and Cornwall and the Scilly Isles. However, there were recently rumours that, had we stayed in the EU, which we are not, four more might have been put into that higher-needs category. That leaves the question: will the Government continue that process? Will they also think in terms of how individual parts of the country are treated in relation to that?

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[Baroness Penn (Con)]

My Lords, all I can say to the noble Lord is that the attitude and approach of this Government is one where we intend to work in partnership both with the devolved Administrations and with local communities to ensure that these new powers are used to the best effect and that the UK’s shared prosperity fund supports citizens across the United Kingdom.

[Lord Stevenson of Balmacara (Lab) [V]]

My Lords, I thank all those who have contributed to this wide-ranging debate, which was conducted throughout at a very high level indeed with respect to the very important issues that we had in front of us. I am grateful to the Minister for her quick-fire response. She covered a lot of ground; I will have to read Hansard carefully to be sure that I picked up all her points.

I have three responses to make. First, I do not think she was convincing in her defence of why the new powers contained in Clause 48 are required. The noble and learned Lords, Lord Thomas and Lord Hope, among others, were incredulous about the reasons for them and put their case very well. I do not think she was able to be as convincing on that as perhaps she hoped to be.

However, the Minister was very positive in response to the questions that a number of us asked about the replacement for the current level of EU funds, saying that the level of funding will be a minimum to match, it will be based on need and will tackle inequality and level up spending for these issues around the UK, and there will be time for a smooth transition. She stressed the collaborative approach that will be taken, but I will want to come back to that. She also left a few serious concerns about how exactly the process would go.

I think she will want to look again at the words of the noble Lord, Lord Dunlop, who spoke with great power; he made a number of points about additionality, accountability and co-operation as the necessary building blocks for any process which involves the insertion of UK Government-led funding in areas which have previously been done on a co-operative basis—bottom up rather than top down. Part of that was also raised by the noble Lord, Lord Bruce of Bennachie, who asked the Minister to recognise the differences that have arisen over time.

I shall leave with her two points. At this stage in the process when it is not certain how things will develop—even if the total amount of money and other things being said around funding are convincing—lack of information and engagement will breed distrust and suspicion. The Government need to think very hard about what approach they will take on a consultative and other basis, or else they will bring instability with them as they move forward.

Secondly, the case made by a number of people who spoke—not just those concerned about the direct impact on devolution but those concerned about other matters to do with climate change—has not been properly answered. There will not be any real return for the Government on this if they think that devolution will be assisted by what looks like a power grab without collateral arrangements being put in place. These funds need to be administered locally and planned co-operatively. At the end of the day, as one person said in the debate, the levers that are used to fund the people who are going to see the money will be local. If the Government do not get that right at the beginning, the rest will not work. However, we will read carefully in Hansard what was said. It has been a good debate on all sides. I beg leave to withdraw the amendment.

Amendment 132 withdrawn.

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[Lord Fox (LD)]

My Lords, my name is on this amendment, and I am pleased to support it and to follow the very clear explanation that we have just heard.

I speak briefly to subsections (3) and (4) of the proposed new clause. The former calls for the report to deal with

“indirect or cumulative effects … distortion of competition or trade”

and, as I am sure that the noble Baroness, Lady Hayter, would be pleased to hear were she still here

“impacts on prices, the quality of goods and services or choice for consumers”

then moves on to consider

“the health and safety of humans, animals and plants … standards of environmental protection”

and other issues that have come forward.

This is another way of trying to do many of the same things that have come through the variety of amendments that your Lordships have heard over the course of the last three days in Committee. All the Ministers have all talked about level playing fields, and the purpose of this legislation is to create a level playing field. We all subscribe to that. The purpose of subsection (4) is to create an informational level playing field, to ensure that all the Governments are receiving the same information and create some transparency so that the outside world—indeed, the companies involved and the people involved—also receives that information.

I am sure that the Minister will stand up in a few minutes and give us very good reasons why this amendment should be withdrawn, but before he does, can he undertake to ensure that the level playing field applies not only to the commercial and trading issues, but also to the information that all the players receive when these decisions are being taken?

[Lord Stevenson of Balmacara (Lab) [V]]

My Lords, it will be interesting to hear how the Minister responds to this request, which has been well described as a bit of a coda. On the other hand, it also contains teeth, which would be there to be used, if someone wished to. It is important to get this right and understand, if it is rejected, why it is. I look forward to that.

Ministers know that we on the Labour side think that the common frameworks are at the centre of the managed divergence that we want to see and allow to happen across the devolved Administrations. It is important that the process continues and that is at the centre of the Bill, because it is not at the moment; it is hardly mentioned, except in passing. If that is the case, we look for some additional reassurance from the Minister that the powers that might be available to the Government, when they feel the common frameworks are not working, are not used too early or vicariously just to show the devolved Administrations who is in charge. As we were reminded by the noble Lord, Lord Dunlop, on day one, the Government already have powers to deal with any default they feel is present in the common frameworks. The questions raised by this amendment are important, and I look forward to hearing the Minister’s response.

[Lord Callanan (Con)]

I thank those hardy souls who have stayed for this brief debate. Amendment 143, tabled by the noble Baroness, Lady Finlay, is concerned with a proposed role for the CMA in the laying of regulations on the application of the market access principles. It builds on the earlier Amendments 6, 78 and 104, which concerned the scope within which the UK market access principles proposed in the Bill will apply. I understand that the noble Baroness has tabled this amendment on behalf of the Welsh Government, and I thank the Welsh Government for their positive engagement on the Bill so far. The UK Government look forward to continued and constructive future engagement with them on more aspects of these proposals.

Before I turn to the detail of this amendment, I note the previous discussion on similar amendments also tabled by the noble Baroness, Lady Finlay, which would have narrowed the scope of the market access principles. As I set out then, those amendments would, in combination, prevent the market access principles from applying in time, at the end of the transition period. Earlier, I set out that the lengthy process the amendments put in place before the principles can apply, including the need to exhaust the framework discussions first, would mean a considerable delay in securing business certainty that trade can continue unhindered within the UK’s internal market. Amendment 143 would add an additional layer of bureaucracy to that process.

In our view, it would also problematically risk bringing the CMA into potentially contentious decision-making and mean its role was weighted towards supporting the Secretary of State over the devolved Administration counterparts. This contrasts sharply with our vision for this, which is to ensure that the OIM’s expert reporting is available to all four administrations equally. Above all, however, the advice provided by the OIM will be economic in nature. Its panel will have expertise across intra-UK trade, regulatory impacts on business and competition effects, which is one reason why the Government chose to establish it within the CMA. We had that debate earlier.

The office for the internal market will not be equipped, therefore, to opine on matters related to animal welfare or environmental protection. To lay this obligation on the OIM would bring a significant risk of duplication of the remit of other public bodies, which would cause considerable confusion for the many stakeholders in this field. For these reasons, and the uncertainty and confusion that this and other related amendments would generate for businesses and citizens, the Government regretfully cannot support them, and I hope the noble Baroness is able to withdraw.