United Kingdom Internal Market Bill

Baroness Bloomfield of Hinton Waldrist Excerpts

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

[Baroness Bowles of Berkhamsted (LD) [V]]

My Lords, we have had an extensive and thoughtful debate, and I thank all noble Lords who have taken part. I thank my noble friends Lord Palmer and Lord Purvis for supporting my amendments, and indeed others who have mentioned them; one who springs to mind is the noble Baroness, Lady Altmann. As ever, the major constitutional issue has taken pride of place over technical issues. I am sure that noble Lords have realised that I am rather interested in the technical issues too, but we will end up having to come to grips with them, so I will not reiterate now.

To comment on some of what has been said—I cannot do justice to all speakers—my noble friend Lord Palmer said that there needed to be much more clarity to the OIM, and that we needed to resolve the ambiguity of its structure, flesh out how it works and find out what it meant in real terms. I think that is also the basis for a lot of other thoughts, whether they are technical or to do with devolution. What comes out loud and clear is whether all parts of the UK will feel that they have voice or ownership. My noble friend Lady Randerson led with the proposals that others have also spoken on and which have the support of the Welsh Government. It is all about having a structure that is workable for everybody and not part of something working inside the UK Government.

The Minister says that the CMA is independent. I accept that to a large extent that may be true, but there is still the problem that its strategy can be directed or steered by BEIS. That is just not the way to give the devolved Administrations confidence when, as has been outlined, the hybrid role of UK Ministers leaves us in the rather unsatisfactory situation of the same person trying to arbitrate. It is like the referee in the rugby match that my noble friend Lady Randerson referenced. Indeed, the noble Lord, Lord Wigley, said that basically the referee cannot be the manager of one of the teams—which rather seems to be the situation that we have here.

Some very valid points were made by the noble and learned Lord, Lord Thomas of Cwmgiedd, who said that judges had to be drawn from the different parts of the United Kingdom who understood everything vis-à-vis their specialist knowledge. I would not hold myself out at the level of a judge. I am not bad when it comes to negotiating things internationally, but I am English and would never hold myself out as being able to represent the positions of the devolved Administrations. I know that there are known unknowns that I do not know, and that is the situation we have to recognise. Whatever the integrity of the people on the CMA, you just do not know that the background is there unless they are drawn from a diverse field. I am very much one of those people who says that you cannot have sectoral interests, but this is different. I do not consider that devolution is political in that sense—we are all trying to get on together.

The noble Baroness, Lady Finlay, made a very interesting point when she suggested that it could perhaps be an interim measure because it has all been brought together very quickly. The noble Lord, Lord Hain, investigated the governance of the CMA and came up with many of the same conclusions as others. The noble Baroness, Lady Bennett, echoed that it is all about a voice for the legislatures and how to keep devolution alive.

As I said, I share with the noble Baroness, Lady Noakes, the view that the CMA is meant to be a UK-wide body and that nominees are not always the best people, but what is good enough for judges is, I think, good enough for the OIM. Yes, perhaps you always have to compromise, but my compromise comes down on the side of voice and ownership; otherwise, the body will never be trusted, as the noble Lord, Lord Empey, said. You have to have the confidence of knowing that people are properly at the table. I acknowledge that we have had rather haphazard devolution but, just because we have left the EU, that cannot be solved with “Whitehall knows best” and by taking back things that properly have been devolved.

The noble and learned Lord, Lord Hope, supported consensual Motions and said that consultation is not a guarantee. The noble Lord, Lord Cormack, warned us of the danger of a broken United Kingdom, emphasising again that there was a need for more time to be taken and for more confidence. The noble Lord, Lord Judd, had a good point in suggesting that we need a federal UK. That would perhaps make things easier, but we are not able to resolve that now—so, as he said, it comes back to understanding separate identities and to ownership.

The noble Baroness, Lady Altmann, supported some of my amendments and wanted the proper involvement of all parties. She also felt that the CMA was the wrong home, and really was not a viable place or a viable alternative to constructing a new body, because of the strategic involvement of BEIS and HMT, and because of it not being sensitive to matters of small businesses and diversity.

The noble Baroness, Lady Ritchie, was I think the first to bring forward the same points about needing a degree of independence and embracing the devolved legislatures, and also the fact that the Constitution Committee had also asked, “Why the CMA?” This was echoed by the views of my noble friend Lord Purvis. I agree with him; I could not find the flagging up of the CMA. It may be that one respondent said “a body such as the CMA”, but I did not see any consultation on it being the CMA or whether it was appropriate. The noble Baroness, Lady Ritchie, and other noble Lords also pointed out that the CMA is used to dealing with private business and enterprise and has a BEIS strategic influence.

I cannot begin to summarise what was said by my noble friend Lord Purvis, but the fact is that the CMA is left trying to analyse hypothetical benefits. It is true that we do not really know how this is all going to work out. If noble Lords follow the logic of my noble friend’s argument, they will find that he concluded by asking what incentive there was for this body to be used by the devolved Administrations. It is not intended to stir up wars between the devolved parts of the UK and the centre, but my view is that, by its set-up, it is likely to stoke rather than resolve concerns.

As I said before, the noble Lord does not like looking to the EU for examples, but it is a bit like when the Commission comes out with a proposal. It always wants to harmonise everything to make it easier and then the member states, notably the UK, get stuck in. You then get down to the nitty-gritty and you solve it. At the moment, we have this sort of overview coming from the Government that gives the devolved Administrations no room to manoeuvre—yet, when they get down to the nitty-gritty in the common frameworks, what happens? You can reach a conclusion.

[Baroness Bloomfield of Hinton Waldrist (Con)]

Perhaps the noble Baroness cannot feel the mood of the Committee, which is that she should now withdraw her opposition.

[Baroness Bowles of Berkhamsted (LD) [V]]

I am sorry; I had basically come to a close anyway. There is much more that needs to be done. I do not think this is politicising; I think it is respecting devolution.

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[Baroness Bloomfield of Hinton Waldrist (Con)]

My Lords, I appreciate the comments made in the debate and I appreciate that these amendments seek to correct, improve and debate the issue. Indeed, that is the role of this Committee. Given that, I take issue with the last point made by the noble Lord, Lord Fox.

Amendments 115 and 131 would bring in fundamental changes to the statutory basis for the Office for the Internal Market. They propose making the office a separate, standalone public body, thereby removing its Crown status. The noble Lord, Lord Stevenson of Balmacara, suggested that the new OIM should use Ofcom or the National Audit Office as a model. This would fundamentally change the nature of the OIM. It would change its funding model and would ask it to operate like a regulator, although it is not intended to act as one.

It has already been explained that the Government have concluded that the CMA is best suited to house the Office for the Internal Market to perform these functions, and the reasons were set out in the Government’s consultation response. I will again emphasise the key points. The CMA has built up a wealth of expertise and experience that makes it a natural fit to take on these additional functions. It has a global reputation for promoting competition for the benefit of consumers and for ensuring that markets work well for consumers, businesses and the economy. We will come on to discuss the concerns of the noble Baroness, Lady Hayter, about the interests of consumers being reflected in the OIM.

The Office for the Internal Market will build on the CMA’s existing technical and economic expertise which will now support the further development of the UK internal market. My noble friend Lady McIntosh asked how we can guarantee the independence of the OIM and ensure that we carry the devolved nations with us. The OIM will be independent and will operate at arm’s length from the Government and the devolved Administrations. It will not be an enforcement body and it will not be able to override the decisions of any of the Administrations. As noble Lords will know, the Government are continuing their engagement with the devolved Administrations as the functions are developed further.

In the last group, the noble Lord, Lord Purvis, asked what the incentives are for the devolved Administrations to use the OIM. All of the devolved Administrations have an interest in the smooth functioning of the internal market and the development of effective regulation to support it. The Government are confident that all the Administrations and legislatures will value the expertise and advice of the OIM and the authority of the evidence base that it will build up.

The noble Baroness, Lady Jones, asked whether the OIM will give advice on the decisions made by the devolved authorities. I assure the noble Baroness that the non-binding advice of the OIM will provide a complementary and expert resource to help facilitate better regulation and, should it be requested, this will include regulation developed by the devolved Administrations as well as by the UK Government. The OIM will be independent and will operate at arm’s length from the Government and the devolved Administrations. As I have said, it will not be an enforcement body and it will not be able to override the decisions of any of the Administrations.

An earlier grouping addressed the involvement of the devolved Administrations in the panel membership of the office. I will therefore say briefly that the direct devolved Administration appointments to the panel of the OIM would risk its effective and independent operation. Appointments to the body will be made by open and fair competition and the chair through the robust procedures of the Public Appointments Commission and the Cabinet Office, which operates across the jurisdictions of all of the devolved Administrations.

I turn to UK subsidy control. Clause 50 reserves to the UK the exclusive ability to legislate for a UK subsidy control regime in the future. It is an issue of national economic importance as it is essential to supporting the smooth functioning of the UK’s internal market. We will debate the detail of subsidy control reservation in a later grouping, but I will cover it briefly now. On 9 September, the Government published a statement regarding the future of subsidy control. In that statement, we committed to publishing guidance on the international commitments that will apply to the UK on 1 January 2021, before the end of the year. This will cover World Trade Organization rules on subsidies and any commitments we have made in free trade agreements.

We also set out our intention to publish a consultation in the coming months on whether we should go further than our WTO and international commitments. This will include consulting on whether any further legislation should be put in place. The amendment would create uncertainty and fundamentally undermine the future consultation which will be the mechanism through which decisions regarding future regulations for UK subsidy controls will be made.

In addition, it should be noted that the function of the office for the internal market will be to provide non-binding technical advice, monitoring and reporting on the health of the internal market. It is not the Government’s intention to give it a range of enforcement and regulatory powers, which the proposed new schedule would do in respect of UK subsidy control.

My noble friend Lord True said on an earlier group of amendments said that, in line with GDPR, not all respondents had consented to sharing their views, so publishing only a subset of the consultation would not offer an accurate enough reflection.

For the reasons set out now and earlier, I am not able to accept this amendment. I hope that the noble Lord will therefore withdraw it.

[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.

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[The Deputy Chairman of Committees (Baroness Garden of Frognal) (LD)]

My Lords, the noble Baronesses, Lady Noakes, Lady Jones and Lady Neville-Rolfe, and the noble Lord, Lord Palmer, have all withdrawn so I now call the Minister, the noble Baroness, Lady Bloomfield of Hinton Waldrist.

[Baroness Bloomfield of Hinton Waldrist (Con)]

I start by trying to reassure the noble Baroness, Lady Hayter, that we do not wish to see monopolies increasing and choice and quality declining either.

Amendments 136, 139, 140 and 142 aim to give the monitoring and reporting obligations of the office for the internal market a specific focus on the interests of consumers. Clause 31 enables the office for the internal market within the Competition and Markets Authority to operate general and periodic reporting and monitoring to assess the effective operation of the UK internal market and Parts 1 and 3 of the Bill, including how it operates for consumers. These amendments would limit this function to assessing the operation of the market as it affects consumers.

The role of the office for the internal market is to monitor the health of the UK internal market, including specific regulations, sectors and nations. Moving to a narrower definition of the assessment criteria of Clause 31, from the outset, would hinder its effectiveness in fully delivering this function.

To appreciate this, it is worth setting out the breadth of the areas of monitoring that are in scope. They include emerging trends and developments in the UK internal market, cross-border competition, the nature and level of trade between different parts of the UK and access to goods, services and trade. Monitoring may be undertaken independently by the CMA or upon request by other parties such as the UK Government and the devolved Administrations. Proposals can be submitted to review specific sectors relating to the UK internal market.

In doing its work, the office for the internal market will naturally be able to gather information from consumers, businesses and public bodies. Clause 32(4) also specifies that its advice and reporting can involve consideration of the impact of new regulatory proposals on the pricing, quality and choice of goods and on services for consumers. The interests of consumers are therefore an important concern which is already laid out for the office for the internal market when undertaking its monitoring and reporting functions. So, I can assure your Lordships that it will take into account consumer interests in undertaking its wide monitoring and reporting functions and there is no need for a specific reference to this in Clause 31.

Amendment 138 aims to impose an additional requirement in Clause 31 that reporting on reviews which the CMA undertakes of its own initiative or following a request under subsection (1) on matters relevant to the effective working of the UK internal market must be published. Clause 31(4) already requires that all reports the Competition and Markets Authority produces on matters in subsection (1) be published. Clause 32(10), Clause 33(6)(b) and Clause 34(10) also require publication of the reports on the operation of the UK internal market referred to in those clauses as soon as reasonably practicable. In light of this reasoning, I trust that the noble Baroness, Lady Hayter, will be assured that the amendments are unnecessary and that the amendment moved should be withdrawn. We are already doing a lot of background thinking on consumer protections; it is not a closed issue.

[Baroness Hayter of Kentish Town (Lab)]

I thank the Minister for that reply and particularly for her last few words about ongoing consideration. If these debates feed into that consideration, we will not all have stayed up late for nothing.

I also thank the noble Baroness, Lady Bowles, for her support. I have not looked at the exact wording or at whether what the Minister said is right, but what the noble Baroness said about transparency is important. Because it is very difficult for individual consumers to take up these big questions, transparency is really important for their advocates—that is, consumer representatives—who are often very underrepresented on all these committees. Transparency is particularly important for those who, from the outside, are trying to ask questions about choice, redress, standards, quality and so on. I hope that those who are thinking about that issue will hear some of the arguments we have made. If they influence the sort of questions that are posed, we will put one little tick there, but the proof of the pudding will be in the eating. Will this be better for consumers when we have the market going? For the moment, I beg leave to withdraw the amendment.