Subsidy Control Bill

Baroness Bloomfield of Hinton Waldrist Excerpts

Committee stage
Monday 31st January 2022 Grand Committee

[Baroness Bloomfield of Hinton Waldrist (Con)]

I thank the noble Lords, Lord Wigley and Lord McNicol of West Kilbride, for tabling Amendments 1, 13, 16, 17 and 20, and all other noble Lords who participated in this debate. I say at the outset, in answer to the noble Baroness, Lady Randerson, that the use of the Moses Room is not intended to minimise the importance of this Committee stage. We agreed through the usual channels that this would be the best use of time.

Before I discuss each amendment in turn, I start by saying that the proposed UK subsidy control regime empowers public authorities, including the devolved Administrations, to award subsidies flexibly and quickly to meet their policy objectives. As noble Lords have said, the United Kingdom Internal Market Act 2020 amended the relevant devolution Acts to make the regulation of subsidies a reserved, or in Northern Ireland an accepted, matter. The devolved Administrations are, and will remain, responsible for spending decisions on devolved subsidies within any subsidy control system.

As the Minister in the other place clarified, the devolved Administrations have standing to challenge UK Government or any other subsidies in the Competition Appeal Tribunal in instances where the interests of people in the areas in which they exercise their responsibility are affected. Some provisions of the Bill engage the legislative consent Motion process, as they alter executive competence; for example, they confer new functions on DA Ministers. We hope that the devolved Administrations will agree with us on the importance of the Bill and be able to give us their legislative consent for the relevant provisions. Those discussions are continuing and I will keep the Committee updated.

We have engaged closely with the devolved Administrations throughout this process at ministerial and official level, not only on the LCM process but on our policy development ahead of the Bill’s introduction, in advance of our publication last week of the illustrative documents, and as we continue through the parliamentary process in the run-up to implementation. In response to the noble Baroness, Lady Humphreys, I confirm that the Minister for Small Business met the Welsh Minister for Finance and Local Government, Rebecca Evans, last Thursday—27 January. The meeting discussed the Bill as part of ongoing engagement to understand concerns on it and to provide reassurance.

I will begin with Amendment 1. Clause 1 provides an overview of what each part of the Bill will cover and establishes its application to other legislation. Clause 1(7) and (8) specify that if a subsidy is granted, or a scheme is created, using powers contained in either primary or secondary legislation, the subsidy control requirements will apply, unless an Act of Parliament specifies otherwise. The specific reference to an Act of Parliament here is solely to clarify that nothing in the Bill should be interpreted as conflicting with the fundamental principle that no Act of Parliament may bind a future Parliament; in other words, it reflects the constitutional reality and does not create any further exemption or special treatment.

Amendment 1, proposed by the noble Lord, Lord Wigley, extends this clarificatory statement to cover the Senedd and the Scottish Parliament. In doing so, it fundamentally changes the character of this statement from a clarification to an exemption from the subsidy control requirements. The amendment would allow the Senedd and the Scottish Parliament to set aside the subsidy control requirements set out in the Bill, not only for the purpose of subsidies given directly in primary legislation, for which specific provision is made in Schedule 3, but for subsidies given by means of a power in that legislation; in other words, for all devolved spending powers in Scotland and Wales.

The discrepancy highlighted here between the Parliament of the United Kingdom and the legislatures in Northern Ireland, Scotland and Wales is not a matter of government policy but a reflection of constitutional reality. The subsidy control regime differentiates between devolved legislatures and Parliament in a way that respects the devolved legislatures and reflects this Parliament’s status as the supreme legislative body of the United Kingdom. The devolved legislatures have a unique constitutional status and we have ensured that the requirements placed on subsidies given directly in devolved primary legislation are proportionate and respectful of their status and processes. Schedule 3 sets out the specific arrangements that take account of this. None the less, it is important that the subsidy control requirements apply comprehensively and that we do not create exemptions.

As for subsidies given through powers conferred by Parliament or the devolved legislatures in secondary legislation or otherwise, it is essential that these are compliant with the subsidy control rules without exception. As it stands, the clause simply clarifies that express or implied repeal by a future Act of Parliament remains a possibility. It does not suggest that the Government will, on a whim, propose legislation that exempts a particular project or power from the subsidy control requirements.

It is absolutely right that subsidy control is a reserved matter: by its very nature, it affects how all public authorities in the UK, including devolved authorities, may exercise their spending powers. That is because its purpose is to establish common rules for different authorities with different interests and policy objectives to protect UK competition and investment. The Bill will also facilitate our compliance with our international obligations, including those set out in the EU-UK Trade and Cooperation Agreement, which reflect exactly this constitutional reality.

I turn to Amendments 13, 16 and 17. Clause 10 concerns the making of subsidy schemes and streamlined subsidy schemes. Public authorities using a streamlined subsidy scheme will not have to access any subsidies they award under the terms of the scheme against the subsidy control principles. Streamlined subsidy schemes will have parameters for use that must be complied with by the public authorities using them, and can be made by a Minister of the Crown. Two illustrative streamlined subsidy schemes were published by the Government last week; I trust that they provide practical examples for noble Lords of the possible terms of these parameters for use.

Together, Amendments 13, 16 and 17 would have the effect that a Scottish Minister, a Welsh Minister or the Northern Ireland department would have the power to make streamlined subsidy schemes and lay them before their relevant devolved legislature. I will therefore take them together. The first amendment would allow streamlined subsidy schemes to be made by Ministers in Scotland or Wales or the Northern Ireland department. The second and third amendments would require such streamlined subsidy schemes to be laid before the relevant devolved legislature when made or amended.

Related amendments on this matter, regarding the role of the devolved Administrations, were made in the other place. The position of the Government remains that we will create streamlined subsidy schemes for public authorities across the UK to use to award subsidies that help UK-wide priorities. Streamlined subsidy schemes will therefore function best when they apply across the length and breadth of the United Kingdom. The Government will design these streamlined subsidy schemes such that they are fit to be used by public authorities in all parts of the United Kingdom.

Given that these streamlined subsidy schemes will be part of the UK-wide subsidy control regime, the appropriate place for them to be laid is in this Parliament. We have published two illustrative streamlined subsidy schemes and an accompanying policy statement that sets out for Parliament how the Government intend to use these schemes. We have worked with the devolved Administrations while developing this policy at both official and ministerial level. Officials will continue their close engagement with the devolved Administrations as the regime continues to develop. Finally, it is important to note that Scottish Ministers, Welsh Ministers or a Northern Ireland department, as primary public authorities, can also make schemes for use by other public authorities where that is within their existing functional powers; for example, the Scottish Government may choose to make a scheme for use by local authorities in Scotland.

On Amendment 20, Clause 11 sets out the terms for making regulations to define subsidies and schemes of interest or schemes of particular interest. The amendment would require the Secretary of State to seek the consent of each of the devolved Administrations before making regulations on subsidies, schemes of interest or schemes of particular interest under the clause. If this consent was not forthcoming, the Secretary of State would be required to make a statement to the other place explaining why they had chosen to proceed with the regulations without DA consent.

This amendment was also raised in the other place; the Government’s position on it remains the same. Regulations made under Clause 11 will define subsidies, schemes of interest and schemes of particular interest to ensure that the work of the subsidy advice unit is focused on subsidies and schemes that are most likely to cause negative effects on competition and investment in the United Kingdom, or which may do the same to our trade with other countries.

These regulations are key to the functioning of a reserved policy area. It is right, therefore, for the regulations to be debated and voted on here in the UK Parliament. I simply do not believe that it is appropriate to require the Secretary of State to seek consent even when the Secretary of State may ultimately proceed without that consent from the devolved Administrations on a reserved matter. A requirement to seek the consent of the devolved Administrations each time regulations are made under Clause 11 also risks introducing significant delays into the process, particularly if regulations need to be amended quickly in the future, such as in the event that economic conditions change rapidly. In such cases, the Government may need to legislate rapidly without consent, so the amendment would not achieve its aim.

The Government have had numerous discussions with Ministers and officials in the Scottish Government, the Welsh Government and the Northern Ireland Executive and we are committed to continuing to engage regularly with them. We have published illustrative regulations on subsidies and schemes of interest and of particular interest, in addition to the accompanying policy statement outlining the Government’s approach to this important question. Ahead of publication, officials have discussed the approach to these regulations with each of the DAs, taking on board their comments and suggestions as the policy has developed. We have also provided early sight of the draft regulations for comment ahead of publication. I assure noble Lords that this engagement will continue as we prepare for implementation of the regime. I also welcome any comments or questions that my noble friend may have regarding the illustrative products. Indeed, I welcome any further comments or questions from the devolved Administrations. I therefore humbly request that the noble Lord withdraws his amendment.

[Lord Wigley (PC)]

My Lords, I am grateful to the Minister for her response, which I will come back to in a moment. First, I thank all noble Lords who have participated in this short debate. The noble and learned Lord, Lord Hope, spoke of respect and co-operation between Westminster and the devolved Administrations. That goes to the heart of what we are talking about. We need a regime, as far as these aspects of business are concerned, that has mutual respect and co-operation between all parties; otherwise, we are bound to find ourselves in a position where one body is trying to outdo the other and perhaps to gain political kudos for doing so. That is not what this should be about.

The noble Baroness, Lady Humphreys, whose support I was grateful to receive, spoke about the Bill giving no consideration to the issues that arose in respect of earlier Westminster Bills taking powers from the devolved Administrations. That is the feeling that exists, certainly in Cardiff Bay and the Senedd and, as I understand it, in Edinburgh as well.

I was grateful to the noble Baroness, Lady Bryan of Partick, for her comments. She highlighted the failure of Westminster to adequately consult in good time. That, again, is an element of this lack of respect. By properly consulting in time, there is an opportunity to be able to amend proposals taking such consultation on board. But it is done at the last moment. I understand that one consultation took place last Saturday—not from this department, I think—on something that is happening today. That is no good. There has to be an active engagement between the Governments of our three nations, or four nations if we include Northern Ireland—I have not included Northern Ireland in this because of the complex situation there, but of course the principles apply equally.

The noble Baroness, Lady Jones, spoke of the need to have proper respect for devolved Administrations. That should run through every Bill. I noted the strong feelings that the noble Baroness, Lady Randerson, who spoke mainly to Amendment 20, had concerning the consent of the devolved Administrations. The parity of esteem that the noble Lord, Lord McNicol, talked about goes to the heart of this issue.

The other amendments in this group will no doubt be taken at later stages in different guises, because they touch on subjects that arise in different parts of the Bill, but the noble Baroness, Lady Bloomfield, said that the question of the relationship between the Governments in Cardiff, Edinburgh and here at Westminster “reflects the constitutional reality”—those are the words that she used. Those words will create a reaction in Edinburgh and Cardiff that will cause even greater problems.

We need to seek a new partnership approach. If the unity of purpose within these islands is to mean anything, it must be on the basis of respect between all three or four partners and not the idea that because Westminster was the original one and the all-powerful one, it can overrule or ignore what is felt in Edinburgh, Cardiff or Belfast. I believe that it is possible in the general context to get a formula that can reflect that need for recognition and respect, but it is not going to be achieved in the way that the Bill is drafted. The reaction in Cardiff and Edinburgh was totally foreseeable and it could have been avoided—and it needs to be avoided.

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[Lord McNicol of West Kilbride (Lab)]

My Lords, I have very little to add to what other noble Lords have said. I am grateful to the noble Lord, Lord Wigley, and my noble friend Lord Chandos for Amendments 2, 2A and 3. As has been said, they go to the heart of the Bill. Clause 2 is titled “Subsidy” and lays out the effect and explanation of what a subsidy is or can be. The noble Lord, Lord Wigley, has come up with an interesting means of looking at protecting the devolved authorities’ interests by making it clear, as we have heard, that certain forms of payments would not be classified as subsidies and would therefore fall outside the control and requirements of the Bill.

The amendment from my noble friend Lord Chandos raises an interesting point in relation to the illustrative documents that have just been released. As the noble Lord, Lord Fox, said, my noble friend’s amendment was tabled late but that was because the guidance papers were released so late. If some of the guidance and regulations had been shared and published earlier, some of our colleagues in the elected Chamber may well have been able to pick up and dig into some of these issues.

The noble Lord, Lord Wigley, touched on the use of subsidies as a legitimate tool for securing economic benefit when done correctly, but also when done transparently. This is one of the fundamental issues we will come on to in later amendments. The big difference from European state aid is obviously that an agreement had to be reached before state aid was brought in. With this system, and this is one of the benefits of it, the subsidy can be brought in very quickly beforehand. But that creates a huge dilemma if the information on the subsidy is not transparent, and if there is no proper opportunity to analyse and challenge it. That is why we will be going into far more detail on this.

Tidying up some of these issues and getting them into the Bill, rather than in secondary legislation and regulations, would help to move it into a far better position. With that, I look forward to the noble Baroness’s response to the issues, especially the one raised by my noble friend Lord Chandos on why equity cannot be added straightforwardly. The Minister, the noble Lord, Lord Callanan, has tabled a number of government amendments. It would be great if we could do some of the tidying up as we move through Committee.

[Baroness Bloomfield of Hinton Waldrist (Con)]

My Lords, again, I am grateful to the noble Lord, Lord Wigley, for tabling his amendments, and to all noble Lords for participating in the debate.

Clause 2, as the noble Lord, Lord Fox, said, is the cornerstone of the new subsidy control regime as it sets out the definition of a subsidy for the purposes of the Bill. The definition consists of a four-limb test, and all four limbs must be satisfied for a financial measure to be considered a subsidy. I also draw the Committee’s attention to Clauses 3 to 8, all of which are necessary to understand the definition of “subsidy”. I believe that those provisions collectively provide sufficient clarity and legal certainty to ensure that all public authorities can give subsidies with confidence. We will provide guidance on this matter as the Bill comes into force.

In response to my noble friend Lord Lamont, I believe the Bill sets out a series of overarching principles that provide a level playing field for all public authorities in the UK. The Bill is not a framework for funding; therefore, in response to my noble friend, spending decisions are of course for the Chancellor. It is a set of rules that all public authorities must follow in their decision-making when they give a subsidy or make a scheme. I do not recognise the criticism that it is too streamlined or too narrow, or that it will not be accessible to the devolved Administrations and to other public authorities outside Westminster. The streamlined subsidy schemes that we create will be beneficial but also entirely voluntary for public authorities to use. I note too that we have adopted helpful suggestions from the devolved Administrations for the illustrative Subsidy Control (Subsidies and Schemes of Interest or Particular Interest) Regulations on the treatment of rescue and restructuring subsidies to ailing businesses, as well as in relation to the identification and selection of sectors of interest.

Amendment 2, proposed by the noble Lord, Lord Wigley, would exclude from the definition of a subsidy financial assistance offered by a public authority to all enterprises operating wholly or largely within its territory. I entirely agree with the noble Lord that it is of the utmost importance that public authorities are responsible for the financial assistance that they provide within the areas for which they are accountable, and that when a devolved Administration—or, for that matter, a local authority—design a scheme that is general to enterprises in their territory, subsidies should not be specific. Of course, those subsidies should be designed in support of the economy and community for which the public authority is responsible in order to address market failures or issues of disadvantage. I am pleased to inform the noble Lord that that is what Clause 2 provides, with particular reference to the notion of what constitutes a specific subsidy in Clause 2(1)(b) and Clause 4. I am grateful to him for raising this important point.

The requirement that is relevant to the noble Lord’s amendment is that a subsidy must be specific. In order to be specific, Clause 2(1)(c) provides that it must benefit one or more enterprises over one or more other enterprises with regard to the production of goods or the provision of services. When determining whether a subsidy benefits one or more enterprises over others, it is necessary to consider what constitutes the reference framework for that subsidy by reference to the legal basis for that subsidy, the authority giving the subsidy and how it is financed, in order to determine who is in the same legal and factual position.

Where a UK-wide power is conferred on a UK Minister, the reference framework is the whole of the UK, while a subsidy that will benefit only enterprises in a specific part of the UK—such as Wales or, indeed, London—will meet the definition of a specific subsidy. However, when an Administration covering a discrete area, such as a devolved Administration, make a subsidy under the powers conferred on them, the reference framework will be the territory of that Administration.

Therefore, in the case of Wales, for example, a disadvantaged workers’ subsidy scheme that is available equally to all enterprises in Wales will in most cases not be specific because the subsidy will not favour any enterprise in Wales over another enterprise in Wales in the absence of factors limiting the availability of the subsidy. However, a disadvantaged workers’ subsidy by the Welsh Government limited to enterprises in Newport, or which was otherwise limited in availability, would be a specific subsidy because it favoured enterprises in Newport over other enterprises in Wales. It can also be said, with reference to Clause 4(2), that the notion of the reference framework is inherent in the design of subsidies by the devolved Administrations because they can act only in pursuance of their devolved competences.

Similar provisions are made in relation to taxation in Clause 4 to ensure that, where a devolved Administration are acting autonomously in relation to a devolved tax or a variation of a national tax, there will not be a subsidy if the scheme of taxation does not contain elements that are specific to their areas of responsibility. Acting autonomously includes having the competence to set the tax and being responsible for the fiscal consequences of setting the tax at the chosen level.

I hope to persuade the noble Lord, therefore, that the discretions he wishes to maintain for subsidies that are general to enterprise in Wales—and not confined to certain enterprises in Wales—are inherent in the general principles in the Bill, which are derived from the TCA, without need for a specific amendment.

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[Lord McNicol of West Kilbride (Lab)]

Thank you. If the Minister wishes to write to us, that is fine. I am sure we will come back to this.

[Baroness Bloomfield of Hinton Waldrist (Con)]

I think I said that an equity investment is still considered a direct transfer of funds from one entity to another. The whole point of not putting in an exhaustive list is to avoid worry about what you leave out of a list, rather than what you have in it. I believe this is already covered by the Bill.

[Lord Wigley (PC)]

My Lords, I am grateful to everybody who has participated in this short debate. I am not sure whether the noble Viscount, Lord Chandos, is happy with the response he got, but no doubt there will be opportunities to pursue that further. I also noted the comments of the noble Lord, Lord Lamont. There is clearly an issue here that needs some further consideration.

I was grateful to the noble Lord, Lord German, for his contribution. He was Minister for Economic Development in the Welsh Government. Was it 20 years ago?

Advanced Research and Invention Agency Bill

Baroness Bloomfield of Hinton Waldrist Excerpts

Report stage
Tuesday 14th December 2021 Lords Chamber

[Baroness Chapman of Darlington (Lab)]

My Lords, we remain disappointed that the Government failed to accept the Delegated Powers and Regulatory Reform Committee’s recommendation to omit Clause 8, which provides a very broad power to be carried out with minimal parliamentary scrutiny. I am not surprised that the noble Lord, Lord Clement-Jones, has retabled the amendment, although I suspect that the Government will not change their approach this evening.

I am grateful to my noble friends Lord Davies of Brixton and Lord Stansgate for tabling their Amendments 10 and 11, which would ensure that there is better understanding of ARIA’s work as it progresses toward the magic 10-year mark. We agree with the thrust of both those amendments. On Amendment 10, it is important that lessons can be learned and any required changes enacted to ensure that ARIA’s funds are continually put to the best possible use. Amendment 11 would give Parliament a loose oversight role, which feels incredibly important, given its almost complete lack of involvement once the body has been established. I noted that when he was in his place earlier, the Minister described the arrangements that the Government are proposing as “robust”. I gently say that they are anything but.

We hope that the Government see some merit in these proposals. It is not clear that the provision needs to be statutory—I accept that—but can the Minister give a clear commitment about interim or periodic reviews beyond the publication of annual reports, which are the absolute minimum that we should expect, and opportunities for Members of this House and the other place to discuss and debate them?

[Baroness Bloomfield of Hinton Waldrist (Con)]

I want to start by addressing the comments on the Delegated Powers and Regulatory Reform Committee’s report on this Bill. As noble Lords will know, the Government made significant changes to the Bill in Committee to respond to the DPRRC’s recommendations. We have taken its report extremely seriously and shown that we are willing to engage with, and act on, its recommendations.

Regarding the committee’s other recent report, on the delegation of power more generally, we would submit that the changes we have made to this Bill are a clear demonstration of the relationship between the legislature and the Executive operating as it should and of legislative proposals submitted and amended in response to scrutiny. Certainly, what we are proposing for ARIA is a world away from some legislation made in the context of Brexit or the pandemic, which is the focus of the committee’s concern in its report.

We have carefully considered the committee’s recommendation with regard to Clause 8. In our view, the power to dissolve ARIA through regulations made under this clause, which would be omitted by Amendment 9 in the name of noble Lord, Lord Fox, remains an important part of the Bill. We have decided not to accept the recommendation in this instance because there is both a strong policy rationale and a clear precedent for this delegation of power.

As was said in Committee, the power can be exercised only 10 years after the Bill receives Royal Assent, and it is therefore an indication of the Government’s long-term commitment to ARIA. I think there is broad agreement that this patience will be essential if ARIA is to pursue successfully the most ambitious research and innovation. It goes to the heart of what ARIA is about. It must have the opportunity to prove itself before it is judged, and this has been recognised by many R&D stakeholders.

In Committee, my noble friend Lord Callanan referred to the precedent for this delegation of power. Under powers contained in the Public Bodies Act, several bodies established in primary legislation have been dissolved by statutory instrument. Again, if noble Lords will permit me, I will refer to the Administrative Justice and Tribunals Council, which was created by the Tribunals, Courts and Enforcement Act 2007 and was abolished using powers from the Public Bodies Act in 2013. The Public Bodies Act gave Ministers broad delegated powers not just to abolish bodies but also to merge them and change their governance structure and functions. That goes far beyond the power in Clause 8. As we do not know the context in 10 or more years’ time, when this power might be exercised, it is right that it is applicable in a range of scenarios.

On consultation, there is a broad requirement for the Secretary of State to consult those they think appropriate. I suggest that Parliament and Select Committees will be included among these stakeholders, and that the Secretary of State will think it appropriate and necessary to consult them. We do not believe that there is no opportunity for parliamentarians to be involved in those discussions. I hope I have managed to convince noble Lords of the seriousness with which we take the DPPRC’s recommendations, the careful consideration we have given to its view of Clause 8 and the very good reasons I think there are for departing from its recommendation in this instance, and retaining it. I hope noble Lords are convinced and that the noble Lord, Lord Clement-Jones, feels able to withdraw his amendment.

The power in Clause 8 shares with Amendments 10 and 11 a recognition of the experimental nature of ARIA, which has been highlighted by many in the R&D community. These amendments speak to our desire to extract the greatest possible benefit from our £800 million investment in this new agency. We hope those will be both direct benefits from the research and innovation it funds and indirect benefits in terms of learning that can be applied to R&D funding in the UK more generally. I hope that learning will be a dynamic process, and while I sympathise completely with the intent behind these amendments, I hope I can reassure noble Lords that there are already more than adequate arrangements in place for public bodies such as ARIA to be formally reviewed. I do not think anything further is necessary.

Amendment 11 in the name of the noble Viscount, Lord Stansgate, introduces a review of various aspects of ARIA’s operations, including whether it has fulfilled its functions and achieved value for money. Both of these are core considerations of the National Audit Office. The regularity of ARIA’s spending—whether it is in line with its functions—will be part of the annual assessment and certification of ARIA’s accounts, and the NAO will be able to conduct value-for-money examinations of ARIA as per the National Audit Act in the usual way. I hope the noble Viscount will agree that a further review mechanism on these points is not needed.

I turn to the second two elements of this amendment, which deal with the geographical spread of grants and ARIA’s transparency arrangements. I stand by my noble friend’s earlier commitment that ARIA will proactively publish information on its regional funding annually and, in the interests of transparency, make information publicly available on all delivery partners, supported through the full range of its funding mechanisms. I hope this reassures the noble Viscount, Lord Stansgate, that there are already arrangements in place to cover all these important points he has raised and that he does not feel it necessary to press his amendment further.

Amendment 10 is very specific to ARIA. As I have said before, I do not think a one-off formal report is the right way to envisage these lessons being learned. It should be a dynamic process: some important points may become apparent relatively quickly while some advantages or disadvantages of the ARIA model may not emerge even within the six years outlined in this amendment. We have discussed the need for patience, and I believe that means we must resist, as far as possible, the temptation to poke and prod and investigate this new organisation. Clearly, there is a balance to strike here, but it is my contention that the default position must be to let it be and gather these learnings in the most light-touch way we can.

In his amendment, the noble Lord, Lord Davies of Brixton, has allowed an entire year for the review to be conducted and published. That indicates a significant intervention in ARIA’s activities and a degree of close scrutiny that I do not think is a natural companion to risk-taking and high ambition. I note that the noble Baroness, Lady Chapman, also expressed concern about 10 years being a long time without scrutiny. There are a number of avenues for scrutiny—as a public body, ARIA will be subject to tailored reviews of its governance and effectiveness. It will need to bid for new funding in coming years and evidence its effectiveness and impact at that point. I hope the noble Lord will accept my assurances that it is absolutely our intention to learn from ARIA to the benefit of the wider R&D system, and that he will not press his amendment, on the grounds that such a structured and formalised obligation may not be the most appropriate way to do so.

[Lord Clement-Jones (LD)]

My Lords, I thank the Minister for her reply, which, I am afraid, amounted to a very polite raspberry to the DPRRC. She used very polite phrases such as “carefully considered”, but the fact is that the Government are intent on ignoring one of the major recommendations of the committee—namely, that the powers in Clause 8 are inappropriate.

The Minister talked about a clear precedent, and I referred to the precedent that the Minister, the noble Lord, Lord Callanan, cited in Committee. But when the Administrative Justice and Tribunals Council was abolished, it was done by the super-affirmative procedure, and the Government have not even offered to use that in this case. This is rather different to that situation; this is effectively abolishing the whole substance of what the Bill is about: ARIA itself. I do not think there could be anything more radical than a Henry VIII power that does that.

I am afraid that I do not really regard what the Minister said as a full response to the DPRRC, and I am certainly not persuaded by the Government’s position. But this is part of a longer, long-running argument between the Executive and Parliament. Clearly, the DPRRC, which I support very strongly, wants much greater parliamentary involvement and oversight in decisions such as this. It believes that, where possible, primary legislation is the appropriate instrument, not secondary legislation. Does the Minister want me to give way?

[Baroness Bloomfield of Hinton Waldrist (Con)]

Before the noble Lord sits down, perhaps I could come back on the specific point he made about the Public Bodies Act. This Act was developed in the context of widespread public body reform. It was therefore appropriate that the super-affirmative procedure was applied. In the context of much broader powers, it was right that their use was subject to this higher level of parliamentary scrutiny. In contrast, the power in Clause 8 is much more narrowly defined, such that ARIA can only be dissolved—it cannot be merged, or have its functions or governance changed. That is a significant difference between the two.

[Lord Clement-Jones (LD)]

My Lords, that is a significant difference between us. Merging is one thing, but total abolition is another. Perhaps the Minister could have offered the super-affirmative procedure in those circumstances. As I say, this is part of a long-running argument. The Executive are determined to hang on to their Henry VIII powers. I hope that Parliament will continue to press for fewer Henry VIII powers, much greater use of primary legislation, where appropriate, less use of skeleton Bills, and so on. This is a very broad landscape that we are debating. In the meantime, I beg leave to withdraw my amendment.

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[Lord Clement-Jones (LD)]

My Lords, I have signed and I support Amendments 12, 13 and 14. As someone immersed in issues relating to AI, machine learning and the application of algorithms to decision-making over the years, I, too, support Protect Pure Maths in its campaign to protect pure maths and advance the mathematical sciences in the UK—and these amendments, tabled by the noble and gallant Lord, Lord Craig, reflect that.

The campaign points out that pure maths has been a great British success story, with Alan Turing, Andrew Wiles and Roger Penrose, the Nobel Prize winner—and, of course, more recently Hannah Fry has popularised mathematics. Stephen Hawking was a great exemplar, too. However, despite its value to society, maths does not always receive the funding and support that it warrants. Giving new funding to AI, for instance, risks overlooking the fundamental importance of maths to technology.

As Protect Pure Maths says, the 2004 BEIS guidelines on research and development, updated in 2010, currently limit the definition of science and research and development for tax purposes to the systematic study of the nature and behaviour of the physical and material universe. We should ensure that the ARIA Bill does not make the same mistake, and that the focus and capacity of the Bill’s provisions also explicitly include the mathematical sciences, including pure maths. Maths needs to be explicitly included as a part of scientific knowledge and research, and I very much hope that the Government accept these amendments.

[Baroness Bloomfield of Hinton Waldrist (Con)]

I thank the noble and gallant Lord, Lord Craig of Radley, and the noble Viscount, Lord Hanworth, for tabling Amendments 12 to 14, and those who contributed to the debate. We recognise the fundamental importance of pure and applied maths to other sciences, and as the focus of scientific inquiry in its own right. It is right that we take the opportunity to note that importance here.

The noble and gallant Lord gave a number of potent examples of the importance of mathematical contributions to scientific innovation. Much like, we hope, the projects and advances that will be supported by ARIA, breakthroughs in mathematics can lead to unexpected leaps of progress in separate fields or find application in solving intractable and seemingly unrelated problems in other areas of science. As we just heard from the noble Lord, Lord Clement-Jones, who rightly reminded us, the UK has been home to many outstanding mathematicians of global significance, from Isaac Newton to Andrew Wiles.

However, I emphasise to the noble and gallant Lord, Lord Craig of Radley, and the noble Viscount, Lord Hanworth, that the drafting of the clause that they have sought to amend follows existing powers in the Science and Technology Act 1965, and the Higher Education and Research Act 2017. It is important that it does so. Research into mathematics, including pure mathematics, has been funded in the UK using those powers for over five decades. Maths research is funded by the Engineering and Physical Sciences Research Council—one of the research councils that make up UKRI. The EPSRC spends more than £200 million on this theme, which includes research into maths in areas from number theory to topology and artificial intelligence. It is clear that maths is included in the definition of sciences as currently included in the Bill.

The 2004 guidance referenced by the noble Viscount, Lord Stansgate, predates the Higher Education and Research Act, which makes it clear that maths is included in the definition of science as drafted in the Bill. There is no need to particularise the interpretation through these amendments. Indeed, it would clearly be undesirable to seek to list exhaustively every possible field of scientific inquiry within the Bill. Departing from the existing embedded way these powers to fund research, including in mathematics, are drawn would be unhelpful.

ARIA’s programme managers will set ambitious programme-level goals. Although we do not often expect programme-level goals to lie within pure mathematics, it is right to highlight that ARIA might need to draw on pure and applied maths to achieve those goals, given their importance within the new fields noble Lords highlighted. It is right that ARIA may fund research in those areas.

We are confident that any activities of this nature that ARIA will seek to pursue are covered by its functions, and that the results of scientific research will encompass the results of mathematical inquiry that might be needed by ARIA. ARIA’s supplementary powers provide further reassurance. When exercising its functions, such as funding a programme with a specific scientific objective, ARIA’s supplementary powers allow it to do whatever is necessary in support of that. It is therefore the case that any mathematical endeavours that ARIA needed to draw on for a programme—for example, in support of a particular objective for machine learning—could be funded under its supplementary powers as well.

On that basis, although the noble and gallant Lord and the noble Viscount have raised important points, I hope they will be satisfied that there is no need for their amendments and feel able not to press them.

[Lord Craig of Radley (CB)]

My Lords, I thank the Minister and all those who spoke to this. Quite clearly, there is a difference of view between the Government and those of us who have spoken to them about how we should treat mathematical sciences in the present age. It is a pity that it has not been possible for the Government to agree to the amendment, but, in view of the late hour, I shall withdraw it.

Advanced Research and Invention Agency Bill

Baroness Bloomfield of Hinton Waldrist Excerpts

Committee stage
Monday 22nd November 2021 Grand Committee

[Viscount Stansgate (Lab)]

I found the noble Baroness’s comments in our last session very helpful and I learned a great deal—and now I have learned some more.

[Baroness Bloomfield of Hinton Waldrist (Con)]

We discussed this with the Table and it was agreed that, because they are the noble Viscount’s amendments, we would allow him to speak. That is acceptable, according to our clerk—but perhaps briefly, if he would not mind.

[Viscount Stansgate (Lab)]

I will be very brief. I take it that we are talking about the climate-change provision, on which I will say only this: on Thursday the House debated the impact of COP 26. The whole House knows that the future of planet earth is not unimportant, and I would have thought that, for a body such as ARIA, there is every reason to suggest, possibly in the Bill, that it should bear some serious regard to the Climate Change Act 2008, under which the Government of the time and succeeding Governments have been operating.

--- Later in debate ---

[Viscount Stansgate (Lab)]

My Lords, I rise briefly to support my noble friends Lady Chapman and Lord Browne. Amendment 31A is in my name. The Government saw fit to put Clause 5 in the Bill for a reason and I am sure the Minister, when he comes to reply, will refer to the reason why it is so important. Similarly, some of us on this side of the Committee feel that it is particularly important that, when those powers are exercised by the Secretary of State, Parliament knows about it at the time—not just in an annual report produced later. Also, with others, I think that there may be further scope to consider whether in this legislation or the National Security and Investment Act, which has already been referred to, there could be ways of furthering the arguments of my noble friend Lord Browne, if the Government are prepared to consider constructive ways forward.

[Baroness Bloomfield of Hinton Waldrist (Con)]

My Lords, I thank the noble Lord, Lord Browne, for his comments on Amendment 30. I recognise that this is an issue that he cares deeply about, as do other noble Lords, including the noble Lord, Lord Broers. As we heard, the amendment relates to ARIA’s ability to attach conditions to grants to prevent the takeover of an asset or entity, but this Bill is not about the general conditions or, indeed, climate for takeovers of UK private business by US entities; rather, in tabling this amendment, the noble Lord has raised important questions about the benefits derived from public investment in R&D. I appreciate his sentiments about the UK retaining the benefits of ARIA’s funding and, as we discussed on Wednesday, Clause 2(6) gears ARIA towards considering the UK benefits of its activities.

The UK is a world-renowned destination for foreign investment and the UK economy has thrived as a result. We are open to foreign investment; the Government would be very concerned that placing further restrictions in the Bill could deter foreign investment in instances where it would be beneficial and, in some cases, might sit at odds with the wider principles held by the scientific community about the free exchange of ideas and the benefits of international collaboration in research and innovation. Although many noble Lords will share the concerns of the noble Lords, Lord Broers and Lord Fox, that we seek to incentivise the City to invest more funds in fledgling British businesses, as there is indeed considerably more private equity available in the US, that is not an issue that this Bill can solve.

However, I reassure the noble Lord, Lord Browne, that, as set out in the R&D road map published last year, and the innovation strategy published this year, one of the Government’s key ambitions is to become world class at securing the economic and social benefits from research and to safeguard intellectual property. We are pursuing a range of activity to achieve this, and the Government are concerned that adding legislative constraints will impact our position as a free trade champion. ARIA will be expected to collaborate closely within the UK R&D landscape—with Innovate UK, the Catapult Network or private equity partners—to find clear onward paths to take the benefits of its programmes to the next level. This is indeed the challenge rightly identified by the noble Lord, Lord Fox.

Furthermore, the patent box tax incentive will support the retention of intellectual property in the UK by allowing businesses to pay a reduced rate of tax on profits arising from exploiting patents and other qualifying products. Its aim is to encourage the commercialisation of inventions by companies in the UK. I hope that the noble Lord will recognise that we are taking action on this issue outside of legislation. It might just come down to the ideological difference between protectionism and free trade.

On occasions where it is necessary, the National Security and Investment Act 2021 will give the UK Government robust powers to scrutinise and intervene in relevant acquisitions, such as takeovers, to protect national security. This Act will sit alongside the Secretary of State’s power in Clause 5 to give directions where it is necessary or expedient in the interests of national security. I hope that this will answer some of my noble friend Lord Lansley’s remarks.

Regarding Amendment 31 in the name of the noble Baroness, Lady Chapman, the Government’s position is that ARIA must be able to operate with strategic autonomy. This includes making its own decisions on funding research, without influence from government. Clause 5 was designed to ensure that ARIA’s activities could be limited only if they posed a threat to the UK’s national security; for example, ceasing a particular contract or activities with parties from a particular jurisdiction, or ceasing activities on a specific technology. These powers are necessary to ensure that the Government can intervene to protect national security.

I assure the noble Baroness that it is not our intention to use these powers to require ARIA to spend any grants in the interests of national security concerns. Given the autonomy that ARIA will have from Ministers, it would be more appropriate to expect the Government to use other structures if any such need arose. I therefore hope that the noble Baroness will understand the intention behind this clause and that there is no need for this amendment.

Finally, regarding Amendment 31A specifically, given the nature and sensitivity of national security directions, the Secretary of State may be required to respond urgently and privately and it would not be appropriate to publish all directions made under this section. ARIA’s annual report, which this amendment seeks to add to, will align with HMT’s financial reporting manual and the normal standards of reporting. I believe this will ensure the right level of information is provided to allow appropriate parliamentary and public scrutiny of ARIA’s activities, and I am therefore unable to accept this amendment.

Onshore Wind Bill [HL]

Baroness Bloomfield of Hinton Waldrist Excerpts

2nd reading
Friday 19th November 2021 Lords Chamber

[Lord Kerr of Kinlochard (CB)]

I was puzzled because planning is a devolved function in Scotland, Wales and Northern Ireland.

However, those are small points. The big point about this Bill is Clause 1(1), of course, which calls for a review. The present system—or, rather, the lack of any system—for planning applications in England has created a paralysis that, if prolonged, will inevitably mean the country missing the target of net zero by 2035. My company’s onshore wind programme pipeline is heavily weighted to Scotland, Wales and Northern Ireland because, since 2015, the Government have washed their hands of the approval process in England, leaving it entirely to local opinion. As the noble Baroness, Lady Hayman, said, a single local objection sinks a proposal or delays it sine die. Open-ended consenting timelines that are five to 10 years long and often end without consent obviously deter investment. Between 2011 and 2015, 435 turbines were erected on 108 sites. However, as the noble Baroness said, between 2016 and 2020, applications went down by 96%. Only 16 turbines were permitted in those five years.

This really matters. The analysis I have seen suggests that, to reach net zero by 2035, the country will need a fourfold increase in offshore generation, a doubling of solar generation and a trebling of onshore wind. The Climate Change Committee says that the onshore wind capacity, now some 14 gigawatts, some of which is nearing the end of its operational life, will need to be about 35 gigawatts. This means new capacity of about 1.25 gigawatts a year. Currently, we are installing about 600 megawatts a year, very little of it in England, so we need to go twice as fast as we are now. We will not manage that unless the paralysis of planning in England comes to an end. That is why this Bill is so important and why the Government should welcome it and get behind it. I really hope they do. It is all very well the Government puffing our legally binding targets. If you will the end, you should will the means.

Of course local opinion matters, but going for 30 gigawatts by 2030 would create 30,000 full-time construction jobs and 30,000 full-time operating jobs. We can all think of communities across England, not least those where the Government want to see levelling up, where such jobs would be welcome. Currently, it does not and cannot happen in England because a single objection kills a proposal. Local unanimity is needed, so applications are not made and jobs are not created. Without a predictable future project pipeline order book, supply chains maximising UK content and cutting costs cannot be created. If all this persists, the decarbonisation targets will not and cannot be met.

Pace the Prime Minister, we really cannot have our cake and eat it. One cannot be proudly green, decisive and determinant—rhetorically—and refuse to get one’s hands dirty about delivery. One cannot be laissez faire when one is surely bound by one’s target. One cannot just leave it to one’s successors. If I were to be undiplomatic, which is unthinkable, I would say that that would be almost as hypocritical as—

[Baroness Bloomfield of Hinton Waldrist (Con)]

My Lords, I remind the noble Lord of the advisory speaking time.

[Lord Kerr of Kinlochard (CB)]

—promoting the decarbonisation of transport and, at the same time, freezing fuel duties for a decade. That was very tactless. I urge the Government to welcome the Bill of noble Baroness, Lady Hayman, as I do.

Advanced Research and Invention Agency Bill

Baroness Bloomfield of Hinton Waldrist Excerpts

Committee stage
Wednesday 17th November 2021 Grand Committee

[Lord Fox (LD)]

My Lords, this has been an interesting debate. I fully associate myself with the words of my noble friend Lady Randerson. To put it plainly, we have heard around the Committee a strong feeling that the nations of the United Kingdom have to be fully engaged in this agency in some way, although, to echo the last speaker, the way in which that can be worked through is something we can all be flexible about. I think we all look forward to the debate on Amendments 37 and 40 to hear what the Government's thinking is about those.

On Amendment 9, having some eyes and ears around the regions as well as the nations is essential. Regarding most of the amendments from the noble Baroness, Lady Chapman, she is right to stress that inequality is a central issue and it should be a focus of what we do. However, I would point out that while a lot of people have mentioned London in the context of being rich and well funded, it is not just a matter of region because within a region there can be huge variation. I shall use the example of the London Borough of Tower Hamlets, which I declare I have a home in. There we have some of the richest people and some of the most deprived living a few yards apart.

The noble Lord, Lord Ravensdale, raised the issue of HQ locations. Some noble Lords may know that the European Medicines Agency was due to go into Tower Hamlets but now, for reasons they will all know, it is not. So I will mention that I am supporting the campaign by my colleague in Tower Hamlets, councillor Rabina Khan, to locate ARIA in Tower Hamlets and take the place of the European Medicines Agency. It would be a good development around there and something that I think would be very constructive.

Although I do not fully agree with the wording of the amendments from the noble Baroness, Lady Chapman, I think there is a sense in there that we need to get a hold of. How does this agency engage? How does it not become isolated in the golden triangle or somewhere else? That is the question to which we seek some response from the Minister. That is the issue we will take to Report, whether in amendments such as this or in a new version that seeks to make sure we have engagement across the whole country, national or regional.

[Baroness Bloomfield of Hinton Waldrist (Con)]

My Lords, I thank the noble Baroness, Lady Randerson, for her remarks on these amendments. Many points were raised that I agree with, including a number from the noble Baroness, Lady Chapman. I will address the different elements of this group in turn.

First, I should be clear that it is absolutely the Government’s intention that ARIA increases prosperity across England, Wales, Scotland and Northern Ireland. This is reflected in ARIA’s existing functions, which require it to have regard to contributing to economic growth or economic benefit in the UK or, for example, improving the quality of life. There is no need for specific additional powers to allow ARIA to operate regionally; the Bill as it stands already allows ARIA to do so. Addressing regional inequality is at the heart of our levelling-up agenda and innovation strategy, driving greater benefits from our R&D system to more places across the UK.

I will now address head-on the proposed location of ARIA, because there is none. No decision on the location of these offices has been taken. As a funder, the contribution the new agency makes will result from its project portfolio and funding decisions; it is not an infrastructure project. ARIA will have only a small physical presence at its headquarters, the location of which will probably not be agreed until the appointment of the chief executive officer. That may have some bearing on where it is to be located. I cannot make the commitment that it will not be based in the London-Cambridge-Oxford arc, but that is not our intention at this stage. We have a completely open mind as to its location.

Amendment 23 would impose a new duty and reporting obligations on ARIA in this regard. It is my view that these system-wide ambitions should not be the statutory responsibility of a small new agency that represents about 1% of UK R&D spending. As we have stated previously, UKRI is the public R&D funder with system-wide responsibilities. Tackling systemic issues, such as the overall regional distribution of R&D funding, falls firmly within the UKRI remit.

ARIA’s purpose is to pursue the most ambitious research and innovation projects, where the benefits are long-term and uncertain, wherever in the country they are located. ARIA should not be subject to the political priorities of the Government of the day, no matter how long-standing or important those priorities might be. I believe that seeking to quantify its economic impact in every region of the UK and submitting that for outside assessment, under the shadow of this statutory obligation, would incentivise exactly the same risk-intolerant approach that we are seeking to liberate ARIA from.

We are in danger of expecting ARIA to spread itself too thinly, against the recommendation of the Royal Society and the House of Commons Science and Technology Committee that it focus on a very limited number of programmes. ARIA cannot be expected to be active in all regions of the UK at once, so I suggest that Amendment 34 is not an appropriate obligation to place on the organisation.

We have spoken at length about the importance of providing ARIA with independence and equipping it to take risks and tolerate failure. A board appointed by the Secretary of State advising ARIA where to direct its funding represents an extraordinary level of political control over ARIA’s activities. It is completely inconsistent with the decisions on project-level spending being taken by technical experts based on a deep understanding of the relevant field and the scientific merits of the proposals.

In a similar vein, Amendment 4 looks to add a representative from each of the devolved Administrations to ARIA’s board. Ministers in Scotland, Wales and Northern Ireland are unanimous in their support for the important principle of ARIA’s independence. We have had close discussions with Ministers and officials at all levels in all three devolved Governments throughout the passage of the Bill.

We have agreed a mechanism for input with the devolved Governments which will be set out in an agreement between the four Administrations of the UK. The agreed text of this MoU will be shared before Report, but it is contingent on the government amendments we will come to discuss later. The final version signed by all parties will be published before Royal Assent. All four Administrations of the UK are committed to upholding the important principles of ARIA’s strategic autonomy, operational autonomy and minimal bureaucracy. Similarly, all are committed to facilitating ARIA’s seamless operation throughout the UK.

--- Later in debate ---

[Baroness Bloomfield of Hinton Waldrist (Con)]

My Lords, these amendments relate to ARIA’s supplementary funding powers—its ability to borrow and form and participate in partnerships and joint ventures. I will begin by clarifying some of the controls and rules that would govern ARIA exercising these powers and I hope I can find enough reassurance for my noble friend Lady Noakes here. She always starts a debate with a great deal of knowledge, so we always pay attention.

ARIA could only ever make use of a financial mechanism, such as borrowing, for the purpose of exercising its functions—to conduct scientific research and exploit and advance scientific knowledge. Any such activity would also be subject to conditions attached to grant funding provided by the Secretary of State under Clause 4. Any borrowing would also meet the stringent requirements and controls of HMT’s Managing Public Money, which sets conditions to ensure value for money. It would be agreed with Her Majesty’s Treasury in advance. This is part of a suite of non-legislative controls that exist on borrowing.

I also highlight that UKRI has the power to borrow. Mirroring that approach, it is reasonable for ARIA to have this full financial toolkit, as it may be appropriate for it to use in certain future circumstances. For example, one possible scenario in which borrowing may be useful would be if ARIA were to own a controlling stake in a subsidiary, which while partially government owned, aims to act with autonomy. Such an entity may want to borrow if purchasing a large capital asset, in order to resolve cash flow issues if an upfront payment were required.

On ARIA’s power to participate in partnerships and joint ventures, using this power ARIA could take an equity stake in a company forming around a new technology. This could provide a clear benefit in cases where the company is creating assets of strategic importance to the UK. On this point, I reassure the noble Lord, Lord Fox, that the National Security and Investment Act does indeed apply to all ARIA’s activities.

In another scenario, ARIA’s taking an equity stake in a company may help to crowd-in private sector interest, bringing in greater funding totals, lowering financial exposure and creating a clear pathway for the commercialisation of a technology. It is fundamental to the design of ARIA that it is able to innovate with different methods of funding high-risk research.

As I have made clear, appropriate checks are in place to ensure the Government can agree the details of any future borrowing activity, and the ability to engage in joint ventures will be an integral feature of ARIA’s full financial toolkit. I therefore see no reason the mechanisms available to ARIA should be limited through the Bill and I ask the noble Baroness to withdraw her amendment.

[Baroness Noakes (Con)]

My Lords, I thank all noble Lords who have taken part in the debate. I particularly thank the noble Baroness, Lady Chapman, not only for her kind words but for pointing out the reputational risk in addition to the financial risk. As an accountant, I tend to think of financial risk before anything else.

I should say to the noble Lord, Lord Fox, that I did not say that I was against joint ventures and partnerships; I said that they were fine and that it was just a question of the degree to which, through those mechanisms, additional liabilities could be taken on that would then end up on the public sector balance sheet. Often joint ventures and partnerships are structured in such a way that, through those vehicles, access to additional borrowing of various kinds, or quasi-borrowing, can then end up coming back. Those are the reasons why I was probing in relation to joint ventures and partnerships. I accept that in many types of arrangement they are a natural way to do business in this area.

I thank my noble friend the Minister for what she said. I think she said that conditions could be attached to grant funding—indeed, there is a sentence on that in the Explanatory Notes for whatever clause relates to grant funding, which I cannot remember at the moment—but no other details were provided on how that works. Is that prospective? Is it done every time that money is paid over? I do not understand how it will work. Once ARIA has got hold of the money and does not need any more grant funding at that point in time, what powers do the Government have over its further borrowing after that?

My noble friend also talked about managing public money. I do not have an encyclopaedic knowledge of that, but from memory I could not see how that related to the issue I was really raising—whether you can borrow money without Treasury consent, which is what is implied by the statute, with it ending up on the public balance sheet.

[Baroness Bloomfield of Hinton Waldrist (Con)]

Perhaps I could come back on that point. Any borrowing will be agreed with HMT in advance and will comply with the terms of managing public money, which requires that public sector organisations may borrow from the private sector only if the transaction delivers better value for money for the Exchequer as a whole.

[Baroness Noakes (Con)]

I think I understand what my noble friend is saying. It is then about seeing how managing public money bites on ARIA, which has an unconstrained power to borrow. I would like to think about that further, and perhaps my noble friend could explain alongside that how conditions attaching to grant funding work in practice. Who says what to whom, and when? Perhaps then I can understand the mechanics of that. I am sure that, if the Government have thought this through, she will be able to give me a comprehensive answer on how we are not letting ARIA go out into the world and bust the public sector borrowing requirement—even more than it is already bust. I beg leave to withdraw the amendment.

--- Later in debate ---

[Baroness Bloomfield of Hinton Waldrist (Con)]

I turn to a series of amendments that relate to ARIA’s intellectual property arrangements. I am particularly grateful for the contribution of the noble Lord, Lord Broers. With all his wealth of experience, he has added much to the debate.

Turning first to Amendments 18 and 19 from my noble friend, I point out that in exercising its functions, there is already provision for ARIA to acquire and own physical property and intangible property, such as intellectual property. In compliance with its functions, ARIA can own property as it is a statutory corporation with its own legal personality. Paragraph 17(2) of Schedule 1 is not exhaustive, and therefore covers property and intellectual property as a subcategory of property. I hope that my noble friend will understand that I cannot accept this amendment, as it duplicates what is already provided in Clause 2.

Moving on to Amendment 22, I recognise the sentiment of this amendment, and I reassure my noble friend that ARIA will have the freedom to choose whether to retain or share its intellectual property rights. We recognise that ARIA’s intellectual property arrangements will need to be flexible, as they will vary depending on the research area, the amount of involvement of partnering institutions, such as business and academia, and the stage of technological development. ARIA will also have to agree bespoke intellectual property clauses tailored to the specifics of individual programmes and projects, given that commercial value is also likely to vary across ARIA’s portfolio. An amendment here is not necessary, as Clause 2(2)(c) already makes provision for ARIA to make available rights to, or license, its property, including intellectual property. I hope that I have managed to assuage my noble friend’s interest in the flexibility of ARIA’s intellectual property arrangements.

The noble Lord, Lord Fox, asked about the acquisition of pieces of research equipment. ARIA will have the ability to do its own research if needed, it will have scientists and experts working for it and it might sometimes be simpler for ARIA to conduct research directly if needed.

The noble Lord, Lord Browne, also expressed reservations about what ARIA could do. I should point out that ARIA is a statutory corporation. It will only ever act in compliance with its functions and powers and, as a consequence, the powers must, in general, be available.

Turning finally to Amendment 28, which relates to ARIA’s ability to retain income generated through the exploitation of intellectual property, I can assure my noble friend that I firmly agree on the intention behind this amendment. The ability for ARIA to retain income from its activities is subject to ongoing discussions with HM Treasury, and will be agreed to in compliance with the Government’s consolidated budgeting guidance. The detail of arrangements will be finalised as part of the funding delegation letter between BEIS and ARIA. It is therefore not appropriate for this to be placed in legislation. I hope that I have managed to assuage his concerns on those two important amendments, and ask him not to press them.

[Lord Fox (LD)]

On Second Reading, the noble Lord, Lord Callanan, said that “It”—ie ARIA—

“can fund the purchase of a piece of research equipment, which ARIA then owns, and it can loan it out on the condition that it is then returned within a specific timeframe.”—[Official Report, 2/11/21; col.1204.]

So essentially, it becomes an equipment lending library. That is not exactly what the Minister has just said. Are the two things both true, is only one of them true, or what?

[Baroness Bloomfield of Hinton Waldrist (Con)]

I think they are both true.

[Lord Lansley (Con)]

I am grateful to my noble friend, particularly because, as far as I can tell, we are all agreed that ARIA should have the flexibility to do these things. Where we not quite all in the same place yet is that it seems to me that the legislation can make that clear and it would be helpful if it did. Maybe we will come back to it and my noble friend will enlighten me. She seemed to say that in paragraph 17 of Schedule 1 the reference to property encompasses intangible and intellectual property but the word “property” is not there. That is my point. The word “property” needs to be there in order for intangible and intellectual property to be encompassed within it.

There are circumstances—for example, where the Secretary of State makes grants to ARIA and where ARIA provides financial support—where my noble friend seems to be saying that it will have the flexibility to enter into all these agreements, to share its intellectual property, to secure the benefits and retain them and reinvest them but that does not need to be in the Bill. Yet, we have these places where there are little lists of what the conditions might be like or what the provision might include. They may be non-exhaustive lists but the only things that seem to be listed are things that constrain ARIA, rather than making it clear that intellectual property, which is at the heart of its activity, is something where it should absolutely have this kind of flexibility.

I know the Treasury would hate to have it in the Bill that ARIA can retain intellectual property revenues and reinvest them for its purposes but that is exactly why we should put it in the Bill. I think we will return to this issue. I gladly give way to my noble friend.

[Baroness Bloomfield of Hinton Waldrist (Con)]

I reassure my noble friend that paragraph 17 is not an exhaustive list. ARIA can develop and exploit scientific knowledge and this covers it getting a patent, under Clause 2(1)(b). The supplementary powers in paragraph 17(1) of Schedule 1 allow acquisition and disposal of property including intellectual property—

[Lord Lansley (Con)]

Paragraph 17(1) allows anything.

[Baroness Bloomfield of Hinton Waldrist (Con)]

Is that not the point?

[Baroness Noakes (Con)]

No.

--- Later in debate ---

[Baroness Bloomfield of Hinton Waldrist (Con)]

We will take this point away and clarify it.

[Lord Browne of Ladyton (Lab)]

I may have misinterpreted something earlier, but I do not think I have misinterpreted this. Paragraph 17(1) allows ARIA to do anything as long as it meets the test. It is judge and jury of its own testing. It allows it to do anything. What I do not understand is why there is a list below it because the list is just confusing. It misleads people into thinking that unless it is on the list ARIA cannot do it. It can do anything, almost, as long as it meets the test.

[Baroness Bloomfield of Hinton Waldrist (Con)]

I think, given the concerns raised, we will take it back and discuss this in the department.

Professional Qualifications Bill [HL]

Baroness Bloomfield of Hinton Waldrist Excerpts

Report stage
Tuesday 9th November 2021 Lords Chamber

[Lord Purvis of Tweed (LD)]

My Lords, an issue raised in Committee that it would be helpful for the Minister to provide an update on—in writing would be satisfactory to me—concerns those European Union workers who had been providing services, with their qualifications recognised, and had applied for settled status but on the fast-track element, which did not ask them to provide any more information about the qualifications recognition. With Clauses 5 and 6 revoking the previous EU scheme and the move towards the domestic schemes, there is still potentially a grey area for those workers who will have to provide proof of their qualifications recognition if they change employer, or indeed if they seek new rental or property agreements, et cetera.

Previously, the noble Lord, Lord Grimstone, indicated that the Government were aware of this, and he provided assurances. It would be very helpful if the Government could say how many of these workers could be in this position. It emphasises the point made by the noble Baroness, which I agree with, that, even if there are unintended consequences of putting at risk some of these workers, we can ill afford it.

The second element is that it would be helpful to know the Government’s intentions for the timing of the revocation of the EU scheme. Previously, the Minister indicated that it would be when the Government were ready to do so but that they were not in any rush to do it. It will be helpful to know what timeframe we are looking at, because the noble Lord, Lord Frost, in a Statement he provided to the House in September, said that the Government were now carrying out a substantial review of previous European legislation and retained EU law. Are professional qualifications separate from that review or will they be considered as part of it? If the Minister could give some reassurance on that, I would be grateful.

Finally, because this will probably be my last comment on the Bill in this House—which I am sure the noble Baroness, Lady Bloomfield, will be pleased to hear—I want to put on record how she and the noble Lord, Lord Grimstone, have engaged in this process. I have been in this House a number of years, and we hear at the Dispatch Box fairly frequently that the Government value the input and scrutiny from this House and take on board whenever we amend legislation, and we always welcome that. But our amendments quite frequently get buried in the dust in the other House, when all our great counsel and wisdom is turned back.

The benefit of the noble Baroness and the noble Lord listening and then acting by tabling the government amendments is that this is now government policy, and the Bill is now substantially changed. If I understand it correctly, this will be the first time that the autonomy of regulators will be respected in primary legislation. That is a considerable achievement for the parliamentary process of a Bill of which we had been not only sceptical but critical at the early stages, but which we now support. Therefore, I commend both Ministers and their teams for the work they have done. Personally speaking, I think the Bill is in a much better position. For the benefit of our regulators and those who receive services that the professions operate, it is a better Bill as a result.

[Baroness Bloomfield of Hinton Waldrist (Con)]

I thank the noble Lord, Lord Purvis, for his kind words; I will certainly try to continue to do my best at the Dispatch Box. I also thank the noble Baroness, Lady Blake of Leeds, for her amendment. In Committee, the House sought confirmation that professionals who have already had their qualifications recognised in the UK will be able to continue to rely on those recognition decisions. Indeed, those professionals will be able to continue to do so, provided of course that they meet any ongoing practice requirements. Nothing in the Bill, nor the regulations anticipated under it, will interfere with or reverse such decisions.

Regulations commencing Clause 5 will include saving and transitional provisions to ensure that professionals’ existing recognition will continue to be valid, and applications made before revocation comes into effect by the commencement regulations will continue to be assessed under the relevant retained EU recognition law. It is possible to make similar provisions in regulations under Clause 6.

The noble Baroness, Lady Blake, asked what a smooth transition would look like. It will include regulations which ensure that the UK meets its international obligations under the EU-UK withdrawal agreement, EEA EFTA separation agreement and the UK Swiss citizens’ rights agreement. It includes saving and transitional provisions to ensure that professionals’ existing recognition will continue to be valid, and applications made before revocation has commenced will be assessed under the EU system. Commencement of Clause 5(1) is timed to avoid burdening regulators or creating gaps in their ability to recognise overseas qualifications. The Government took a similar approach when amending retained EU recognition law in 2019 to ensure a smooth transition for businesses and professionals following the UK’s withdrawal from the EU.

The noble Baroness also asked why, if we are so committed to protecting the ability of those with existing recognised qualifications to continue practising, we are not putting this on the face of the Bill. We believe that this matter is best dealt with through saving and transitional provisions in secondary legislation. The UK Government and devolved Administrations took this approach when amending EU legislation on recognition of professional qualifications to prepare for leaving the EU. We see no reason to depart from this approach and enshrine this commitment in the Bill.

The revocation of the general EU-derived system will not impact the ability of professionals with recognition decisions awarded under that system to continue practising in the UK. This applies even where a professional takes a career break and chooses to return to a profession in which they were awarded recognition. The noble Lord, Lord Purvis of Tweed, asked about the fast-tracked settled status of EU citizens. We are unable to provide the House with the precise timetable at present, but we will engage with stakeholders as we go forward.

Professionals who do take a career break should check with their regulator to establish what, if anything, they will need to do to continue practising or to return to practice. This will of course vary between professions. If a profession has a continuing practice requirement, that will also apply for individuals currently practising. For example, where a registered medical professional has a licence to practise, they must revalidate their registration every five years. Similarly, when a professional returns to the UK, their first port of call would be to the relevant regulator in the UK to ascertain requirements for recognition.

The Bill does not make commitments in these areas, because that would be interfering with regulators’ ability to regulate. The main reason that this amendment has been proposed is to protect those with recognition decisions, but there is no threat from this Bill to those decisions. The Professional Qualifications Bill respects existing recognition decisions and any ability a regulator has to set professional standards. I therefore ask the noble Baroness to withdraw this amendment, if I have provided sufficient reassurance.

[Baroness Blake of Leeds (Lab)]

I thank the Minister for her response, and the noble Lord, Lord Purvis, for his comments.

I think I can honestly say that there is still concern. I have heard it particularly from those professionals who are not practising at the moment—so there is a continual need for reassurance. However, I thank the Minister for her comments and beg leave to withdraw the amendment.

Professional Qualifications Bill [HL]

Baroness Bloomfield of Hinton Waldrist Excerpts

Tuesday 9th November 2021 Lords Chamber

[Lord Foulkes of Cumnock (Lab Co-op)]

My Lords, it is a great pleasure to follow the noble Lord, Lord Bruce of Bennachie—if I have got the pronunciation right. Bennachie is a wonderful part of Scotland but he reminds me that maybe I should declare an interest. I am a proud father in that my daughter is a teacher and therefore registered with the General Teaching Council. I am just as proud that my granddaughter is training to be a nurse so she will come into one of these categories as well. I am not sure that I really have to declare that interest, but it is nice to say that anyway, is it not?

I am also pleased to be one of the three signatories to some of the amendments; in other cases, I am one of four signatories, with the noble and learned Lord, Lord Hope. That makes for all-party support for the amendments, most of which are the brainchild of our mutual friend Michael Clancy of the Law Society of Scotland, for whom we have to give many thanks and wish him well, at the moment particularly. I was thinking that not only is it an all-party amendment, but that the route from Pickering to Bennachie via Cumnock would be a wonderful trip for Susan Calman. I hope you all watch that wonderful programme where she drives a little campervan called Helen, named after Helen Mirren. I am not sure if that is a compliment or not, but it is certainly a very good programme. I am probably running off the topic a little. Fortunately, the Chair does not have the same powers here as I used to suffer from in the other place when I was drawn to—

[Baroness Bloomfield of Hinton Waldrist (Con)]

I do.

[Lord Foulkes of Cumnock (Lab Co-op)]

Oh! I will see the noble Baroness later; I thank her for drawing my attention to that.

I wholly support what the noble Baroness, Lady McIntosh, has put forward. This is the only speech I am going to make today although I support a number of other amendments. I want to make two points. I take every appropriate opportunity to criticise the UK Government. I did so earlier today at Question Time, so no one can accuse me of not being critical when it is appropriate. However, today I join in with what others have said to the Minister. From all that I have heard from the noble Baronesses, Lady McIntosh and Lady Hayter, and from a number of others, the Minister has been really helpful in taking account during the summer of all the representations, and all credit to him for that.

My second point is that sometimes I feel in some areas—not in all—the UK Government are a bit better than the Scottish Government. The Scottish Government are not good at consulting. They do not consult local authorities. They do not devolve powers in the way that they should in Scotland. Scotland is a third of the land area of the United Kingdom. It is a big country. Scotland is not a unified, homogenous country. It is a very diverse country. The highlands are very different from Glasgow, which is different again from the borders, which are different again from Edinburgh and different again from Dundee. They are very different and I am afraid that the current Scottish Government do not seem to fully recognise those differences and take account of them from time to time. I am very pleased that we are suggesting two things today. One is that they should consult all the appropriate regulatory bodies; I agree with that. That is what we are talking about today in these amendments; I am in order now. Also, later we should consult with the devolved authorities in areas where they have competence and an interest. It is right to do that.

Sometimes we talk about treating them as equals; I have heard the noble and learned Lord, Lord Hope, and others do so. I do not want to disagree with those noble Lords, but they are not equal. We should treat them with total respect, but they are not equal to the UK Government. The UK Government are the sovereign Government of the UK, and devolved authorities are devolved. There is a big difference between devolution and separation. The SNP tries to forget about that and elide the two, pretending that one just moves into the other, but it does not. Devolution is power devolved from the UK Government. There ought to be more power devolved in England; that is where the democratic deficit is.

Advanced Research and Invention Agency Bill

Baroness Bloomfield of Hinton Waldrist Excerpts

2nd reading
Tuesday 2nd November 2021 Lords Chamber

[Viscount Stansgate (Lab)]

My Lords, it is a totally unexpected pleasure to follow the Minister as I am the first in the list. It is a great honour to take part in this debate, the first Second Reading in which I have taken part, when I consider the range of other speakers who we are going to hear from this evening, all of whom are so very distinguished. I am also mindful of the fact that the president of the Parliamentary and Scientific Committee is contributing to the debate. As his vice-president, I cannot remember a time when both officeholders were speaking together.

The relationship between the Government and science is subtle, complex and of critical importance to the future of the country. It goes without saying that we have a tremendous record on science in this country, to which I pay tribute, along with everybody else. Our record on Covid vaccine development and distribution is but the latest example. The UK is world class, but it is a competitive world out there and this Bill matters to our future if we are to be the science superpower we all want us to be.

The problem for successive Governments of all kinds is that they have to try to find a balance between giving researchers the freedom to follow their own instincts and curiosity, while at the same time guiding large sums of public money towards wider societal benefits, such as national prosperity and real improvements in the quality of life for their citizens. This balance is not easy to strike. ARIA represents an attempt to strike a new balance by introducing a new organisation with a relatively small staff and a relatively small amount of money with extreme freedom to decide what to do without the existing constraints that apply elsewhere. There is also a difficult and delicate balance to strike between parliamentary oversight and the intellectual freedom which will be necessary to enable ARIA to generate the creativity required to do things differently.

The Minister made it clear in his opening speech that what is being proposed is something very new because we are dealing with high risk and potentially high reward, as he acknowledged. Therefore, the heart of what the Bill is about is not so much an agency as an idea. We are discussing an experiment never before undertaken in the UK, and we are being invited to approve and establish a new participant in what is called the scientific landscape. If we were having a vote today, I would vote for the Bill because this is broadly a good idea and I support additional funding for science, but it raises lots of questions which is going to make the Committee stage very important, and I will return to that in a bit.

First, I hope the House will allow me a brief moment to consider the wider historical context of the proposals that the Government are inviting us to consider today. More than 100 years ago, I think in 1918, Lord Haldane chaired the committee that led to the establishment of the first research council. The Haldane principle that emerged was, in essence, that research should be decided by researchers and not the Government. This has stood the test of time not least because it is convenient for Ministers. It shields them from bearing the direct responsibility for making individual decisions on individual funding.

ARIA takes this a stage further. It will need to offer real scientific independence at programme level. With regard to peer review, standard processes may not always be appropriate for ARIA, as it aims to empower exceptional scientists to start and stop projects quickly. I do not particularly care for military analogies, but when I think about ARIA it makes me wonder whether in times past Barnes Wallis or Alan Turing might have been funded by ARIA. They were both individually brilliant.

Over the decades the structural organisation of science in government has been through endless changes. For about a quarter of a century science was put in with the Department for Education, to create the DES, and, frankly, that is where science languished. I regard the start of the modem era as being when the noble Lord, Lord Waldegrave, launched Realising our Potential in 1993, rearranged the research councils and set up the Office of Science and Technology. Even the current department, BEIS, has over the past 20 or more years been through many changes in emphasis and names from the DTI to the ungainly DIUS, if anybody remembers that, and there may be more name changes on the way. Then there are things such as the Technology Strategy Board, which became Innovate UK until its absorption into UKRI, and even UKRI itself, which was described at the time as the kind of reform that comes along only once in a generation, was formed only in 2018.

Some argue that there is no point in creating ARIA if it is going to be just another entity in the science landscape doing the same things as UKRI but with less money. There is no guaranteed method, and never has been, of successfully identifying commercially successful projects arising out of science research. Too often in this country, as noble Lords will know very well, we have suffered from what is called “the valley of death”—that is, we are good at discovering new things but bad at developing them and exploiting them for commercial success. However, it is hard to legislate for success.

The agency will not automatically succeed. On the contrary, one of its earliest proponents suggested that if ARIA is not failing then it is failing, which is an interesting point. Last weekend, I went to see the latest James Bond film—I recommend it—and it occurred to me that there is a link between those films and this Bill. If the Minister was promoting ARIA as a movie, I can see it now: “ARIA—Licence to Fail.” Whether it does or not is almost impossible to predict because we do not know when a transformational breakthrough will be made, so consistency of funding over the next 10 years will be crucial.

One thought that comes to mind at the start of the many questions I want to put is about the agency’s proposed name. We know that much of the inspiration for ARIA comes from America. When this idea was first mooted by the Government in March 2020, they called it ARPA. They have now chosen the letter “I” for “invention” rather than “P” for “projects”, and that is an interesting distinction worth exploring. “Invention” conveys more of an individual exercise, whereas “projects” suggests a more collaborative approach with many more people involved, so we may discuss in Committee whether we should reconsider the title.

I am grateful to all those organisations that have been in touch to offer advice on ARIA, and I am sure there will be a lot more as we go through Committee. They include the Royal Society of Biology, the Biochemical Society, the Physiological Society, the Campaign for Science and Engineering, the Royal Society of Chemistry and others.

My own list of questions is not exclusive; I am sure that other noble Lords tonight will have many more. But they include the following: what will the relationship be between ARIA and the existing parts of the research landscape, such as UKRI, in particular? What will it be with the new science and technology council, recently established by the Prime Minister, and the new Office for Science and Technology Strategy? What about its relationship with the Council for Science and Technology, currently co-chaired by the chief scientific adviser and the noble Lord, Lord Browne of Madingley?

[Baroness Bloomfield of Hinton Waldrist (Con)]

I gently remind the noble Viscount that there is an advisory speaking time limit of seven minutes. If we go on from the first speech, we get rapidly out of control.

[Viscount Stansgate (Lab)]

It is kind of the noble Baroness to mention it. If I had a pair of scissors, I should have to cut this speech in half, and noble Lords would no doubt be only too grateful. I will do so verbally.

One area where I think we will divide in Committee is that the Government are determined to exempt ARIA from freedom of information. Like other noble Lords, I received a briefing from the Information Commissioner’s Office, which strongly advocates that FoI requests should be allowed. The News Media Association has also taken the trouble to write to us on the same issue. I am sure that is something we will explore.

In drawing my remarks to a close, I will mention the famous questions that DARPA used to identify projects which were worth funding. First, what are you trying to do, and can you explain it in jargon-free language? Secondly, how is it done today, and what are the limits of current practice? Thirdly, what is new in your approach, and why do you think it will be successful? Fourthly, who cares? If you are successful, what difference will it make? Fifthly, what are the risks? Sixthly, how much will it cost? Seventhly, how long will it take?

Finally, the Bill proposes that the Government must wait 10 years before taking any action to close ARIA down, so I look forward to taking part in the Second Reading of the “ARIA (Continuation) (Amendment) (No. 2) Bill 2031”, when we will at least have the experience of 10 years to guide us in our debates.

Status of Workers Bill [HL]

Baroness Bloomfield of Hinton Waldrist Excerpts

2nd reading
Friday 10th September 2021 Lords Chamber

[Lord Blencathra (Con)]

It is irrelevant since breakfast as well, actually. It was based on the employment situation in this country in 2016. It is now all ancient history and I am delighted to see that the free market is driving up wages for those workers at the bottom end of the scale, whose skills are now in great demand—the lorry drivers, white van men, cooks and shelf fillers. I take particular delight that an HGV driver for Waitrose doing an essential job may earn more than a lawyer living off the misfortune of others—I make only a small apology to noble Lords and noble and learned Lords present.

Two weeks ago, I read an article in which a restaurant owner was saying that it was outrageous that he was now having to pay commis chefs—I understand that they are not French socialists but vegetable choppers— £11 an hour and asking what the Government were going to do about it. I hope that my noble friend will say, “Absolutely nothing”. The free market has been used for the last 20 years to keep wages down. Now it can drive up the wages of low-paid essential workers.

Some of the evidence to the Taylor review was spot on. Leeds City Region said:

“It is good jobs that matter—where people feel a sense of stability, have a say in the workplace, know that their effort is recognised and rewarded, have the skills to do the job but also to develop their own potential, and trust that they will be treated fairly. And most critically, that they are paid a decent wage for the work that they do.”


How can anyone disagree with a word of that? The Taylor review had a chapter called

“key labour market challenges ahead”,

identifying poor wage growth and poor productivity. That was in 2017. Now wages and productivity are increasing rapidly, which means that companies will be forced to end the abuses of the so-called gig economy and fake self-employment status. There was only one item in the Taylor review that was accurate, the comment that

“we have to examine why, with employment levels at record highs, a significant number of people living in poverty are in work … if they have no guarantee of work from week to week or even day to day, this not only affects their immediate ability to pay the bills but can have further, long-lasting effects, increasing stress levels and putting a strain on family life.”

Again, who can disagree with that?

Way back in 2017, the review wondered why, with employment at record levels, so many people in work were in poverty. I think that we now have the answer, which has revealed itself over the last few months. While we had 2 million to 3 million cheap EU workers, companies could get away with zero-hours contracts, minimum wage and sometimes not even minimum wage, as we have seen in Amazon warehouses, Deliveroo, Uber and others, which have been committing flagrant abuses of workers’ rights by calling them self-employed. I am completely in favour of flexible working hours—after all, we have it here on a daily basis—but people on flexible hours must have proper legal contracts setting out those hours and their terms and conditions of employment.

Let us stick with employers, employees and genuine self-employed. Let us see wages and productivity rise. I say to restaurant owners, supermarkets and others, “Dry your eyes”—there is no God-given human right that we must have cheap takeaways or cheap eating-out food. If we cannot get strawberries from Morocco, iceberg lettuces from Spain or avocados from Brazil at Christmas—I am almost finished—then too bad. That will be a small price to pay for the huge benefits of the poorest in society earning more. Pay your staff whatever it takes, with proper contracts which may have flexible hours. Train up apprentices and raise prices accordingly. Food is already too cheap in this country for the vast majority of people; if those on low wages are paid a proper wage, they will be able to afford any increase in food prices.

Finally, why should I as a Conservative support this Bill? I believe in caring capitalism and a fair day’s wage for a fair day’s work. After the Prime Minister’s announcement this week, I think that we are all a bit pink on this side now. I wish the noble Lord success with his Bill.

[Baroness Bloomfield of Hinton Waldrist (Con)]

My Lords, before the next speaker, I should say that we need to try to keep to the advisory speaking time, because otherwise it cuts into the Minister’s summing up at the end.

Professional Qualifications Bill [HL]

Baroness Bloomfield of Hinton Waldrist Excerpts

Committee stage
Tuesday 22nd June 2021 Lords Chamber

[Baroness Bloomfield of Hinton Waldrist (Con)]

Hoffwn ddiolch i bawb a siaradodd yn y dadl byr ond bwysig hon. I thank all noble Lords who have spoken in this short but very important debate. I thank the noble Baroness, Lady Finlay of Llandaff, for her amendment, which relates to Clause 14 and the Welsh Minister’s powers to make regulations under the Bill. I note that it is supported by the noble and learned Lord, Lord Thomas of Cwmgiedd. The amendment would remove the subsections within Clause 14 whereby a Minister of the Crown’s consent would be required before any provision is made by Welsh Ministers in regulations that would, if contained in an Act of Senedd Cymru, require such consent.

First, I reiterate that the Government fully respect the devolution settlements. Devolved matters should normally be for the devolved Administrations to legislate on. It is hard to conceive of a scenario where this would not be adhered to. I remind noble Lords that the Government are seeking legislative consent to the Bill in line with the Sewel convention. The conditions in Clause 14 that the amendment would strip out are entirely in line with the devolution settlements. To deviate from the agreed position under the Welsh devolution settlement purely for the purposes of regulations made under the Bill would be inappropriate and unnecessary.

On the concurrent powers in the Bill, some professions are regulated on a UK-wide basis, and the regulation of some professions is entirely at devolved level. The Bill will apply to the entirety of the UK and, in line with the devolution settlements, allow the devolved Administrations to make regulations within devolved competence. The inclusion of concurrent powers ensures that professions which fall within devolved competence but are regulated on a UK-wide basis can be dealt with under the Bill by the relevant appropriate national authority. Of course, we shall always consult the relevant devolved Administration before these powers are used in devolved areas.

In answer to the noble Baronesses, Lady Randerson and Lady Finlay of Llandaff, officials met the Education Workforce Council at the end of April and are meeting the social care regulators next week to discuss the Bill. Social Care Wales was on the first indicative list and came off the second one following clarification from departments. As noble Lords know, the Education Workforce Council was on both lists. Because we are meeting the regulators so shortly, I will agree to write to noble Lords and update them on the progress of those discussions when they have actually happened. To that end, I hope that I can persuade the noble Baroness to withdraw her amendment.

[Baroness Finlay of Llandaff (CB)]

My Lords, I think I should start by saying “Diolch yn fawr iawn” to the Minister for her reply.

I am most grateful to the noble Baroness, Lady Randerson, for supporting me and the noble and learned Lord, Thomas of Cwmgiedd, in this amendment. I am also grateful for the support of the noble Baroness, Lady Garden of Frognal, and for her interpretation when she described it as “any passing Minister” being able to make some power, which is how it did feel when I read this in the Bill.

As has been said, the devolution settlement is indeed very complicated, and the problem is that the Bill appears to worsen those complications. The noble Baroness, Lady Hayter of Kentish Town, really put her finger on it in explaining what is, in some ways, the delicate nature of all this. I look forward to having a written reply from the Minister, because this is very complicated indeed. I do not think that we have clarified it adequately and, following that letter, I may well want to come back to it on Report. In the meantime, I beg leave to withdraw the amendment.

--- Later in debate ---

[Baroness Blake of Leeds (Lab)]

This has been an interesting debate, especially for those of us who are only just beginning to get to grips with the whole process of affirmative and negative procedures. I thank the noble Baroness, Lady Randerson, for her explanation and the clarity with which she gave her understanding of why she has put forward the amendment. Clearly the Minister needs to explain why a distinction has been drawn and why the Government believe it is necessary.

As we have heard, Clause 15 states:

“Regulations under this Act are subject to the affirmative resolution procedure where they contain provision amending, repealing or revoking primary legislation or retained direct principal EU legislation”—


otherwise, regulations are negative. Amendment 58, in the names of the noble Baronesses, Lady Randerson and Lady Bennett, seeks to ensure that all regulations made under the Act will be subject to the affirmative procedure. As the noble Lord, Lord Moynihan, stated, the Delegated Powers Committee has raised similar concerns, stating, for example, that the power in Clause 10(4), which is subject only to the negative procedure, was “inappropriate”.

There seems to be a recurring theme throughout the discussions and debates that we are having as we go through these procedures: namely, that we must ensure that Parliament is not sidelined and that appropriate parliamentary scrutiny can take place. How many negative SIs does the Minister expect to come before Parliament in the first year after Royal Assent?

On Amendments 65, 66 and 67, I thank the noble Lords, Lord Purvis and Lord Fox, for putting forward the idea of one-year delay to revoking retained EU legislation, and I thank the noble Lord, Lord Purvis, for his detailed explanation of why that could be an attractive route to follow. I would like the Minister to explain whether this was ever considered. Indeed, would it give the regulators time to raise funds to cover any additional costs, or—to return to the theme of unease around so many areas of the Bill—is the Minister only worried about how a one-year delay could affect the UK’s pursuit of trade agreements?

[Baroness Bloomfield of Hinton Waldrist (Con)]

I thank the noble Baroness, Lady Randerson, and the noble Lord, Lord Purvis of Tweed, for their proposed amendments. As we have heard in this debate, the amendments concern parliamentary procedure for regulations made under the Bill and, separately, the timings for the revocation of relevant retained EU law. I note the concerns raised by almost all noble Lords who have participated in this debate about the use of delegated powers.

The Government have carefully considered the powers in the Bill and consider that they are necessary and justified. It would be unfeasible to specify in the Bill detailed amendments to a large number of pieces of primary and secondary legislation. In respect of certain policies, there is a need for flexibility to make changes over time. For example, the Bill takes a power to implement international agreements so far as they relate to the recognition of professional qualifications, the content and timing of which will depend on the outcome of trade negotiations.

On trade negotiations, I reiterate that the UK’s offer to potential trade partners on the recognition of professional qualifications depends on many factors, including the size of the potential market for the export of professional services. On the concerns addressed by the noble Baroness, Lady Randerson, I reiterate my noble friend’s comments about the status of the Australian trade deal. I understand the noble Baroness’s concerns, but I feel that we should probably wait for the final text to be issued.

I will start with Amendment 58, which I note the noble Baroness, Lady Bennett of Manor Castle, supports. The amendment would have the effect that all regulations made under the Bill would be subject to the affirmative procedure. Clause 15 sets out the parliamentary procedure for how regulations under the Bill should be made. The clause already provides that any regulation amending, repealing or revoking primary legislation or retained direct principal EU legislation is subject to the affirmative procedure. It is right that Parliament has the appropriate scrutiny of such regulations.

The clause goes on to set out that the negative procedure should be used for other, more technical regulations. Further, as an additional safeguard, the Bill provides that regulations subject to the negative procedure may be made also subject to the affirmative procedure where required. For example, regulations made under Clause 10(4), in relation to the duty placed on UK regulators under that clause to provide requested information to their overseas counterparts, would be made under the negative procedure. Those regulations may make provision in connection with that duty—for example, in relation to the timeframe in which the duty is to be complied with. The negative procedure is clearly more fitting in these instances and will provide an appropriate scrutiny for such measures.

I turn to Amendments 65, 66 and 67, which propose a minimum of 12 months before revoking relevant retained EU law. I thank the noble Lord, Lord Purvis of Tweed, for tabling these amendments, and I note that the noble Lord, Lord Fox, supports them. We have already discussed at length the core professionals whose qualifications and experience have been gained overseas, reflecting our status outside the EU single market and our global outlook. Clauses 5 and 6 play a key role in doing that. The details of those clauses were addressed on day 2 of Committee, so I will not repeat them now, but I will repeat what my noble friend the Minister said about the timing of commencement regulations for these clauses and his assurance to noble Lords that the Government have no intention of rushing this.

The Government will consider carefully when to implement commencement regulations to revoke the EU-derived system under Clause 5(1). In order to support a coherent legislative framework while making sure that decisions are taken at the right time for the professions affected, there will need to be appropriate prior engagement with the devolved Administrations, regulators and other interested parties. Likewise, Clause 6 provides for the revocation of other retained EU law by the appropriate national authority, and I would expect there to be appropriate engagement from all such authorities with regulators. As a result, I am confident that the Bill will come into force in an orderly manner with no surprises for regulators, and that it will not bring with it such wholesale changes for which the regulators would need a year to prepare if regulations were to be made before that period had elapsed. I hope that has allayed some of the concerns of the noble Lord, Lord Purvis, that we were passing legislation before we had our policy ducks in a row.

I hope my explanations on these points have provided appropriate reassurance and I ask that the amendment be withdrawn. Lastly, I apologise to the noble Baroness, Lady Blake, but perhaps I could write to her with specific answers to her questions.