United Kingdom Internal Market Bill

Baroness Bowles of Berkhamsted Excerpts

Report stage & Report: 2nd sitting (Hansard) & Report: 2nd sitting (Hansard): House of Lords
Monday 23rd November 2020 Lords Chamber

[Baroness McIntosh of Pickering (Con)]

My Lords, I am grateful to my noble friend for moving this amendment and giving us the opportunity to have a general debate on Clause 16. I will take this opportunity to ask my noble friend if he could elaborate a little on the background to this clause.

I understand that, in their consultation, the Government wrote:

“the UK Government’s proposals are an adaptation of existing rules in the Provision of Services Regulations 2009 which contain regulations on mutual recognition and non-discrimination. Rules included in the UK Internal Market Bill will look to retain the effect of the Provision of Services Regulations”.

I am sure my noble friend Lady Neville-Rolfe was being very honest when she said that this is not clear and that she does not entirely understand the background to it. I do not think that she is alone. Against that background, is it entirely fair to have only given businesses the opportunity to consult on these provisions for one month? My understanding was that the normal consultation period is at least two, if not three, months, and I wondered why the consultation on these provisions was restricted to four weeks.

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

My Lords, I thank the noble Baroness, Lady Neville-Rolfe, for drawing this clause to our attention, and I agree with the comments that have been made. In particular, I agree with the question about how you distinguish between goods and services when, nowadays, many things are never sold but rather licensed or rented and must sit either with one foot in each camp or, possibly, goods become services and vice versa.

Other confusions also arise around things that originally can be excluded but then are not when there is a substantive change to their regulation. There was some discussion, in which I was not involved, on this in Committee. What constitutes a substantive change? If you have authorisation requirements and a list of 10 things, does it mean that five have to be changed or does it mean a significant change to one? If you had to add on another one because there are some changes in circumstances, who is to know whether it is then out or in?

There are certainly a lot of things that are not yet clear and, if it does—as the noble Baroness, Lady Neville-Rolfe, has said—interfere with our services, which are the majority of our trade, then we will be in a very difficult situation. I would welcome further clarification, or indeed amendments, to make matters clearer. I am not sure whether removing the clause actually helps because the knock-on effect elsewhere would of course be substantial, but I think that there is something that needs to be fixed.

[Baroness Noakes (Con)]

My Lords, I am glad that my noble friend Lady Neville-Rolfe’s Amendment 30 is only a probing amendment. I very strongly believe that the UK’s internal market will be more robust as a result of this Bill and that it needs to cover all aspects of trade and professional activity occurring between the four parts of the United Kingdom.

However, like my noble friend, I have been struggling to work out just how important Part 2 is to businesses throughout the UK at the moment, and I also understand that there is relatively little current data on trade in services across the four nations. Given the exemptions that will apply to Part 2, the Government presumably do not think that the Bill will have very much real-world impact, at least in the short to medium term. I can see that it may be necessary to protect service providers in the future, if one or more of the devolved nations chooses to make it difficult for out-of-nation services providers, and, to that extent, I can see why we may well need Part 2 of this Bill. It would be good to hear from the Minister what he sees as the biggest problems that this Bill is trying to tackle.

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

My Lords, I hesitate to add to the excellent introduction that—if I may call her this—my noble friend Lady McIntosh of Pickering gave, except for one thing. We are dealing here with, in one case, direct discrimination and, in another, indirect discrimination, and only in these circumstances. Noble Lords will recall that, in a debate last week, as we were vividly reminded by the noble Baroness, Lady Ritchie of Downpatrick, the Minister got into a fankle—if I may be excused for using a Scottish word—on the question of discrimination. I hope that he will spell out these two areas carefully, so that the House is clear exactly what the Government think about this.

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

My Lords, I do not have a great deal to add to what has been said by the previous speakers. It is an unfortunate circumstance that the word “regulation” appears in multi-use in legislative and indeed non-legislative meaning; it can be a set of regulations or an individual regulation in a set. So I understand the concerns raised that it might be possible for regulation, or regulatory requirements, to span both a discriminatory measure and a non-discriminatory measure. Therefore, I think it would be helpful for the wording in Clauses 19(1) and 20(1), which use the slightly ambiguous term “regulatory requirement”, to refine it down, so as to disapply only the discriminatory part. There could be other ways to rework that wording to give the same effect, but it would be useful to put it beyond doubt because the word “regulation” is really rather confusing.

[Lord Purvis of Tweed (LD)]

My Lords, I have only one element to ask the Minister about; it refers to some questions that were asked in Committee with regards to regulations that have no effect. Is it the entire regulation or the component part of that regulation that would be considered to have no effect? As my noble friend indicated, many regulations are fairly extensive and will have many component parts to them; the Government or the legislation may consider that the direct discrimination part could be only one part. Is it the Government’s intention that the entire regulation would have no effect? Indeed, how would the process be carried out to identify the specific element of that? The questions raised by the Law Society of Scotland and put forward so well by the noble Baroness, Lady McIntosh, justify a very clear response. As we have said previously in Committee, the scope for those seeking legal redress within this legislation is huge, so ensuring as much clarification on this element as possible would be very helpful.

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

My Lords, I welcome the government amendments as I would welcome any improvement, but unfortunately they do not go far enough to compensate for all the implications of the OIM being within the CMA. I shall say more on that in later groups, and I do not need to rehearse all of it now, save to say that these amendments do not sufficiently change the nature of the CMA, its culture and what it was originally set up to do, so it is no longer—or it never was—the right home for a body that has to operate with the much more sensitive and different objective of the OIM.

I recognise that requiring the CMA to support the operation of the internal market in the interests of all parts of the UK, to act even-handedly with respect to the national authorities and to recognise consumers among the other classes of interested persons all featured in debate in Committee. Indeed, I rather recognise some of the wording. Amendment 55, reflecting the balance of the panel, is also welcome. Again, I seem to recall saying similar things. But I would like the Minister to clarify one thing. I am still concerned about what is controlled by this panel amendment. If the panel size in the amendment is a minimum of three, as it is for the CMA, how can you guarantee that all those interests are represented by three? In Committee, I introduced an amendment to say that the investigating panel should be a minimum of five because I thought that that was the number of people you would need to do an investigation. So both the pool from which the investigations can be drawn and the panel need to have all these characteristics. Is that how it is going to work going forward or are we restricted to the three individuals?

Amendment 56, requiring the consent of the devolved Administrations, looks good until you get to Amendment 57 and the override of one month. While I acknowledge that that can give time for discussions or whatever else may go on, absent any other conditions or explanations of why that override has been operated, it just looks like a convenient delay that you can put up with and then have your way in the end. So I do not think that that goes far enough. As I said, I do not object to the CMA having representatives of the devolved Administrations appointed to the board, but the OIM should not be in the CMA.

[Lord Wigley (PC) [V]]

My Lords, I am glad that the Government have moved a little on matters relating to the CMA and the IOM, but it is not quite far enough. I support Amendment 54. The Government have opted to give the CMA a central role. They could have opted to use not the CMA, but a whole new body created to cover this essential work that would have fully understood the world of devolved politics. They have chosen not to do so, although, to be fair, they have certainly moved on the IOM.

The consequence is that the Government lay the CMA open to criticism that it is simply unaware of the detailed issues that might concern devolved Governments. If the CMA had a nominee from each of the three devolved Governments it would avoid finding itself in a whole new world, as seen through the prism of Cardiff, Edinburgh and Belfast. This is an amendment to save the CMA from getting into an almighty and unnecessary tangle—or, as we would say in Welsh, since we are all quoting from Celtic languages tonight, into a smonach. I suspect that the CMA has not a clue what a smonach is; I rest my case. Amendment 59 is merely a consequential provision to deal with occasional vacancies on the CMA’s board, so I support that also.

United Kingdom Internal Market Bill

Baroness Bowles of Berkhamsted Excerpts

Report stage & Report stage (Hansard): House of Lords & Report: 1st sitting & Report: 1st sitting: House of Lords
Wednesday 18th November 2020 Lords Chamber

[Lord Young of Cookham (Con)]

My Lords, it is a pleasure to follow the compelling speech of the noble Lord, Lord Anderson. I have added my name to Amendment 10 in the names of the noble Lords, Lord Stevenson of Balmacara and Lord Anderson of Ipswich, and the noble Baroness, Lady Bowles of Berkhamsted.

As I said in Committee, it is essential that all the nations within the UK can pursue effective policies on public health, which is my particular interest. Last Friday, the Public Services Select Committee, of which I am a member, published its first report on the lessons from coronavirus for public services. One of the key recommendations to the Government was that there is an urgent need to recognise the vital role of public health in reducing deep and ongoing inequalities exacerbated by Covid-19. Unamended, the Bill makes that task more difficult.

While the committee welcomed the Government’s commitment to extend healthy life expectancy by five years by 2035, and to narrow the gap between the richest and the poorest, we also recognised that this would be tough to deliver. We called on the Government to wait no longer before publishing their strategy to achieve this manifesto commitment and their response to the Green Paper Advancing Our Health: Prevention in the 2020s, which was due in January this year.

Why is this relevant to these amendments? Currently, the internal market within the UK has the flexibility, through exclusions, to allow different parts of the UK to move at different speeds on public health. England was able to lead the way on restricting tobacco displays in shops; Scotland and Wales are currently ahead on policies such as minimum unit pricing for alcohol. However, the internal market Bill may limit future innovations, as the exclusions are both narrow and narrowly applied to only part of the market access principles.

While policies similar to those I just mentioned might be allowable, it is not difficult to identify future public health policies that would not. For example, in the Explanatory Notes to the Bill, the Government describe how these rules would allow a packet of crisps produced in or imported into any part of the UK to be sold in any other. However, this leaves little space for Governments within the UK to pursue future legislation that aims, for example, to restrict the salt content or size, or even to improve the labelling, of crisp packets. The justification for this is unclear, as articulated in a blog by the Institute for Government.

My view is that leaving the EU should not remove the ability we currently have for different parts of the country to move at different paces. This has meant that we have not had to move at the pace of the slowest, and the different parts of the UK can benefit from the experience of the market leader. The noble Lord, Lord Anderson, made this point well. The Government have failed to explain why their list of exceptions is so much more restrictive than that of the EU or, indeed, the WTO. While the justifications are unclear, the risks are anything but. Unless the Bill is amended, some of this ability to innovate would be lost. This would be a step back for the UK, not a maintaining of the status quo.

The background over the last few years has been to give Holyrood and Cardiff more autonomy, not less. The Bill conflicts with that trend, helping to increase demands for independence and undermining the devolution settlement. It would not limit the ability of just the devolved nations to act, but that of England too. As part of its obesity strategy, the Department of Health and Social Care will consult on requiring calories to be included on alcohol product labels. The mutual recognition principle could hamper this legislation if alcohol produced in the rest of the UK was not required to display calories. Further, if overseas companies wished to avoid displaying calories, they could simply ensure that their imports arrived in another part of the UK before moving them to England for sale. When other noble Lords and I raised our concerns about this in Committee, my noble friend Lord Callanan, responding for the Government, was unyielding. Indeed, he said that the exclusions from market access principles were

“intentionally narrowly drafted, to ensure that there are no unnecessary trade barriers that would ultimately increase costs to businesses and consumers while reducing choice.”—[Official Report, 28/10/20; col. 339.]

The Government have demonstrated that they are willing to listen to the concerns of the House—for example, with the removal of the Secretary of State’s powers to change the scope of the mutual recognition principle—yet in other parts of the Bill they have suggested a relatively small adjustment, with the need to “consult with” but not “gain consent from” the devolved nations before using these powers. There has still been no movement on the limited nature of the public interest exceptions in the Bill, nor am I aware of any discussions on that, as I called for in Committee. That is why the amendments have been brought forward again on Report.

These amendments are supported by a wide range of health organisations: the British Heart Foundation, the British Lung Foundation, Asthma UK, Cancer Research UK, the Faculty of Public Health, the Mental Health Foundation, the Royal Society for Public Health, Action on Smoking and Health, and the Alcohol Health Alliance, for whose briefing I am most grateful.

I very much hope that, even at this late stage, the Bill might be amended and the Government might reflect the concerns that have been so widely shared on this subject.

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

My Lords, I support the general thrust of all the amendments in this group, and I have added my name to Amendments 10 and 21, which relate to goods. I should also have put my name to the services amendments, because both I and my group support those as well.

As was debated in Committee, we already worked under a more generalised public policy, legitimate aim regime while in the EU, and, as the noble Lord, Lord Anderson, said, that provided safety valves, which have now been taken away. In Committee, the Minister argued that the UK internal market was different, and for some reason that meant that it needed to be narrower. I cannot understand why—perhaps because we are closer together—we have to have fewer freedoms because we have left the EU. Therefore, I agree entirely with the drafters of the amendments that there are many more legitimate aims that need to be spelled out.

Realistically, differences will not be introduced into the market without a lot of thought. As my noble friend Lady Humphreys said in Committee, Wales is a good size to experiment with. The noble Lord, Lord Young, gave examples of various nations progressing at different speeds. Differences will survive only when they are practical and when matters of good public policy all deal with specific problems within a particular area, but they should be allowed to be put to a proper test and should not be undermined from the start by immediate get-arounds.

These are important amendments, and I hope that the Government will consider carefully why it is necessary for the Bill to undermine the freedoms currently enjoyed. That is not how Brexit was advertised, whether you were for or against it.

[Lord Whitty (Lab) [V]]

My Lords, I have added my name to Amendment 11, in the name of the noble Baroness, Lady Boycott. She has her name down to speak later but has indicated to me that, because of other appointments, she might not be able to make it. She has therefore asked me to say a few words—more than I might otherwise have done.

I recognise that the amendment in the name of my noble friend Lord Stevenson lists a number of public interest exceptions that should be put into the Bill. There are good arguments for many or all of them, but surely, in this crisis period for our climate and our natural environment, the protection of the environment must be seen as an exception. It is one where, for example, the Welsh Government could take a lead, with different regulations on, for example, air quality limits, pollution in rivers, noise and dangerous chemicals that are tighter than those adopted by the UK, or English, Government.

The noble Lords, Lord Anderson and Lord Young, have both set out examples of where the devolved Administrations have indeed taken that lead. If the Government oppose long lists, they ought at least to accept a short list of environmental protections, because they are speaking with forked tongues on this. We have had that today with the 10-point plan for a long-term strategic approach to a green economy. We have had the green industrial recovery plan and commitments made for houses to be fuelled entirely by offshore wind. We have also had big commitments to green spaces and other environmental objectives. And, of course, the Government are trying to impress the world—rightly now—on our commitment when we take over to lead the COP 26 in Glasgow next year.

However, we also know that, historically, free trade is regarded as being breached when environmental protection regulations have been opposed by the WTO and in free trade agreements around the world. There is a global change in attitude towards this, and indeed to some of the WTO rules, but it would be absolutely absurd if, to preserve an internal market within the United Kingdom, we prevented progress on environmental protection by the devolved Administrations or by England alone in the name of having complete and absolute internal market access rather than mutual recognition of different requirements.

If a regulation, a tax process or a planning approach that preserves environmental protection aims is to be regarded as a barrier to trade in our internal market, we are going against the trend of the whole of the rest of government policy and actually going against what is a rather slow but nevertheless clear intent of how world trade will have to be conducted in the age of the Paris climate agreement and the need to reduce carbon and greenhouse gas emissions. If there is one public interest limitation, surely it ought to be environmental protection, and that is what would be provided by the amendment in the name of the noble Baroness, Lady Boycott, which is also signed by myself and the noble Lord, Lord Randall.

Competition (Amendment etc.) (EU Exit) Regulations 2020

Baroness Bowles of Berkhamsted Excerpts

Monday 16th November 2020 Grand Committee

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

My Lords, there is quite a lot going on with competition because of Brexit. This instrument deals with investigations that are, or will be, ongoing at the end of the transition period, and potential future monitoring in the UK of EU remedies. It also revokes EU regulation 2019/452 relating to screening in foreign direct investments.

The National Security and Investment Bill will replace at least part of the revoked EU regulation, and that Bill has started its passage through Parliament. Then there is the published draft regulation on state aid, which we have not yet considered, which deals with the change of emphasis of this Government compared with the previous direction under Theresa May.

Additionally, the United Kingdom Internal Market Bill, which we shall return to on Wednesday on Report, reserves powers on state aid to the UK and creates a landscape where the UK internal market rules may have to be taken into account, but it does not really solve how that will happen, or clarify its relationship with other aspects of trade and competition policy.

So many things are up in the air because of Brexit negotiations or because they are awaiting consultation. We live in the Pirandello-like state of characters in search of a policy, holding jig-saw pieces of legislation that we hope will one day mesh with other bits that have not yet been cut. Against that background, I thank the Minister for introducing this statutory instrument. As has been said, it modifies the no-deal version of legislation. Reading through the Explanatory Memorandum, it all seems logical, at least for this bit of the jig-saw—even if we do not know the full picture.

The questions that I have focus on whether, or how much, we will end up with enforcement systems for some decisions that are different from those applicable to others, and what practical differences that will make in terms of the strength of powers available.

As I understand it, cases that are decided by the EU, or fall to be decided by the EU under continued competence, can, after decision, either stay with the EU for monitoring and enforcement or by mutual agreement be transferred to the UK. Therefore, my first question is this: what are the likely reasons for choosing whether it stays with the EU or comes to the UK? What reasons would the UK see for that and does the EU have similar or different views? Does it depend on the size or importance of the case or only, as the Minister has already mentioned, on whether it is part of an interconnected set? Is it likely to cause disputes?

Broadly speaking, the European Commission has greater enforcement powers than the CMA—notably very significant fining powers—and the CMA is seeking greater powers, finding those that it has inadequate. As the noble Baroness, Lady Neville-Rolfe, mentioned, the noble Lord, Lord Tyrie, drew some of that to our attention in debate on 16 November on the United Kingdom Internal Market Bill.

The UK firepower relating to refusal to supply information is capped at £30,000, which is plenty for an individual or smaller business but can be inadequate for a recalcitrant large business. It may easily be less than the cost of preparing the disclosure if lawyers are involved; for example, the EU fined Facebook €1.6 million for failing to provide information, while we fined Amazon £30,000. That does not look very comparable.

The UK also has a poor track record on undertakings given to the CMA on mergers—for example, about not closing down establishments or not removing research—despite attempts to strengthen legislation. That legislation and associated undertakings have always ended up legally weak—about as strong as a wet paper bag. I have my theories as to why that is the case, but for now it raises the question whether there will be a stricter regime for cases retained by the EU for enforcement than for those it is mutually agreed to transfer to the UK. That would appear to be the case, as the Explanatory Memorandum states, and the Minister clarified, that the UK monitoring procedures are modelled on existing CMA procedures—that means not the more powerful EU versions.

The cases that are transferred are done so only for monitoring purposes; the EU retains the rights to review, vary and substitute the decisions. If the UK has a weak enforcement system, does that mean that the EU could make up for that when it comes to review or substitution? However, if it is about preservation of jobs or research which have already gone due to weak enforcement, nothing will bring those back.

The big question is not what is happening in this piece of legislation, but when domestic competition policy and domestic enforcement against large companies will become more substantial.

United Kingdom Internal Market Bill

Baroness Bowles of Berkhamsted Excerpts

Committee stage & Committee: 4th sitting (Hansard) & Committee: 4th sitting (Hansard): House of Lords
Wednesday 4th November 2020 Lords Chamber

[Baroness McIntosh of Pickering (Con)]

My Lords, I will speak to Amendment 149. It will not surprise the House to learn that I am very grateful to the Law Society of Scotland for its help in briefing me and preparing this amendment. I state once again for the record, as on the register, that I am a non-practising member of the Faculty of Advocates, so have had cause in the past to be deeply grateful to solicitors in Scotland.

Amendment 149 amends Clause 38, which relates to information-gathering powers, setting out the powers the CMA will have to gather information in support of its functions in this part; under subsections (2) and (3), it will be able to provide an information notice or require the production of a document by an individual business or public authority. The notice must describe the type of information required and when and how it is expected to be relayed. Under subsection (6), the notice must make clear which precise function of the CMA is relevant, as well as the legal and financial consequences of non-compliance. Subsection (8) sets out that no information can be requested if it could not be compelled to be given in the course of civil judicial proceedings before the court, and that a notice may not require a person to go more than 10 miles from their residence without having their travelling expenses paid or offered to them.

This begs a question, which has been identified. Through this amendment, I would make explicit reference to “legal professional privilege” in Clause 38(8), for the very simple reason that a person should not be compelled, as I just stated, under subsection (8),

“to produce or provide any document or information which the person could not be compelled to produce, or give in evidence, in civil proceedings before the court”.

This provision may apply to legal representatives, but that should be made clear by a reference to “legal professional privilege” in the clause. My direct question to the Minister is this: why is it specifically not referred to? I am sure he will say that it is implicitly relied on, but I pray in aid that legal professional privilege is the client’s privilege, not the lawyer’s privilege. It is an essential aspect of the rule of law which enables clients to consult freely with their lawyers and is widely recognised in statute. I would like it in this Bill, unless I hear extremely good reasons from my noble friend why it is not already there. I beg to move.

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

My Lords, I have two amendments in this group. I also support the amendment just explained by the noble Baroness, Lady McIntosh.

This group concerns the information-gathering powers in Clause 38; it applies to Clause 31, under which requests for a report from the CMA may be made by anyone, and to Clauses 32, 33 and 34, under which administrations may request, respectively, advice on proposed regulatory provisions, reporting on the impact of a regulatory provision and reporting on a regulatory provision that is or may be detrimental to the market.

To prepare reports, information needs to be gathered. The powers enable the CMA to ask any person for any document in their possession or to require any person who carries on a business to provide estimates, forecasts, returns or other information as may be specified. As the noble Baroness, Lady McIntosh, has already highlighted, it can further specify the time and place at which, and the form and manner in which, the information is to be provided. It may also require conversion of a non-legible record into a legible and intelligible copy of information. There is no acknowledgment of how onerous this may be other than in subsection (8)(b), which says that travel expenses must be offered if a person has to go more than 10 miles from their place of residence. This could impose significant burdens on individuals or small businesses, to whom time is money.

It does not indicate that the information sought is only that which is readily available; it seems there is nothing to stop it requiring the preparation of estimates rather than, say, just the forwarding of those that might have been given to customers in the course of business. Many businesses may well be happy to assist in what is tantamount to a survey about the effects of regulation, just as many respond to consultations, but for small businesses it could be a burden. For sole traders it may mean a significant loss if income is dependent on work, whether that is as a plumber, lawyer, childminder, shopkeeper or anything else.

I am aware that the template of CMA market study investigations and Section 174 of the Enterprise Act have been followed, but are we truly looking at comparable circumstances? Market studies have more statutory requirements and guidance around them, such as the requirement of a market study notice and all the defined stages and practices. That does not seem to have been transposed into this. Nor are the circumstances those of known market deterioration caused by market participants—for example, it may just be about proposed or enacted regulation, with any flaws caused by administrations, which is completely different from when businesses, collectively or individually, have themselves created oligopolies, monopolies or concentrations.

In Amendment 150, I put forward that there should be provision for loss of earnings—why not, if the circumstance is that the expertise of the business is being sought? An alternative way to collect this kind of information is through consultations or by commissioning research. The CMA is empowered already under Section 5 of the Enterprise Act to commission such reports without resorting to enforced business responses. The members of the panel that will prepare the reports are being paid for their expertise, so why not those others who are being harvested for information?

My Amendment 156, would insert a new clause:

“The CMA must take account of the effects of additional duties imposed on small business in its approach to the exercise of its functions under sections 31 to 34, and its powers under sections 38, 39 and 40.”


This is not a strong amendment, but at least it makes the point, as otherwise there is no guidance. I am sure that MPs would interest themselves in the sorry stories they will be sent if there are burdensome requirements but, absent something like this, they have nothing to point to when overstepping has taken place. I will return to this matter in the context of penalties in the next group, but when there has been no wrongdoing that brings about the request for information—possibly burdensome requests, enforceable through fines rather than encouragement—it seems a wholly disproportionate measure. As I have said, I do not believe the cause is comparable with current CMA market studies.

Whither now the comply or explain principle—I have always been more of a “make them comply” person, as my track record will show, but these measures offend me in principle and seem to come from the department against business. I can see the matter is different if the business is under investigation for their own doings, but there is no distinction made in the clause. Clause 39 has a “without reasonable excuse” provision and I intend to probe that in the next group but, for now, can the Minister clarify the limits to the burden that can be put upon small businesses and the circumstances envisaged? Something of record has to be made.

As a final related point, there are also circumstances, of course, where much more has been opened up for challenges by businesses through Clause 31, giving the CMA reach into both administrative decisions and to other companies. My noble friend Lord Fox will say more on that.

[Baroness Jones of Moulsecoomb (GP) [V]]

My Lords, I will be very brief, as the noble Baronesses, Lady McIntosh and Lady Bowles, have explained this group extremely clearly. As the noble Baroness, Lady Bowles, said, these measures just offend me in principle. The Government seem, time and again, to understand big business, and are happy to give very large amounts of money and all sorts of leeway to such businesses and organisations but, at the same time, quite often miss the point on small businesses, which often struggle to survive—particularly during lockdown.

Small businesses can be the creative heart of our society at times—creating jobs for a lot of local people and, indeed, more widely. Will the Minister listen and understand that such intrusive and burdensome measures really do impact on small businesses that are already struggling to survive? I know it is very difficult for the Minister to commit to anything, but surely he is prepared to discuss this sort of issue with noble Lords and perhaps come to some sort of agreement.

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Debate on whether Clause 38 should stand part of the Bill.

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

My Lords, the previous group has already set the scene on Clause 38, where I propose some changes to help small businesses, at least. The point remains that the CMA, or OIM, is an opining body, often for the benefit of Administrations, even if most of those are not happy with how it is set up. I also clarify that I am not against the CMA per se. I have responded to its consultations, been quoted by it and would give it more powers in competition matters. Even if it were the chosen body, I would still consider the same procedures and culture not right for monitoring the internal market, so to copy and paste legislation created for the competition field is not appropriate. I mention again the different approaches of DG COMP and DG Internal Market as an illustration.

In this group, I am further probing the constraints on information-gathering powers. As I have said, they often apply to individuals and businesses that have not done anything wrong, nor have their actions, individually or collectively, distorted the market. If the regulations are amiss, that is created by Administrations. With all due respect to the response the Minister gave on the previous group, that is different from competition matters, which the businesses and their actions have brought forward. I find it alarming that there is no understanding of the fundamental difference between applying competition law and monitoring an internal market, but it is early days and this is all new.

I accept that an investigation into and report on the activities of companies that are causing distortion, as could be the case under Clause 31, is different. Then, it is perhaps reasonable to use the existing CMA powers and scope. But I can assure the noble Lord, Lord Stevenson, that the format of these enforcement powers is copied and pasted from the CMA in its role dealing with companies that potentially threaten the public interest, where there is at least a suspicion that competition laws or norms, such as market concentration or fair pricing, are being challenged. In the Bill, individuals or companies are being used as sources of information for things that they have not brought on themselves, and that is the difference. It is why having the same laws is not appropriate. For this reason, I object to the compulsory scope of Clause 38 for all circumstances, and the same applies to the enforcement and penalty powers in Clauses 39 and 40.

Clause 38(6) states that the notice will be sent with

“information about the … consequences of not complying”.

That is a frightener. Is that the way to treat business? Was it consulted upon? We challenged the Minister on Monday about the information he had been given to say to us, stating that using the CMA was consulted upon. Even if there were a few throwaway lines like “such as the CMA” in response, was any consultation conducted on whether CMA market study legislation fits the rather different circumstance of investigating Administrations’ actions? If businesses or individuals decide that they do not wish to or cannot provide information, and the CMA decides, under its own rules, that their excuse is not reasonable, they can be dealt with as obstructing and fined.

There was an interesting exchange on fines on Monday, when the noble Baroness, Lady Finlay, asked whether a Member of the Senedd could be fined. The Minister said that they could be asked for information, but not fined. Now we see another way to get some of that information: turn any business that had been in discussions with the Senedd into the informer. Who knows? Perhaps one day we might even get some of the unpublished consultation responses that the Government sit on.

--- Later in debate ---

[The Deputy Chairman of Committees (Baroness Henig) (Lab)]

Does the noble Baroness, Lady Bowles, wish to respond to any of the points made?

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

Yes. My Lords, I thank all noble Lords who have spoken in this debate; I think that it will be even more interesting when we read it in Hansard.

I think that there is still a sticking point, which was exemplified by one of the Minister’s comments. He said that he did not want there to be disparity between procedures in the CMA. The point that I have been making, which seems to have been supported by all the speakers in this debate, is that they are for different things. The noble Lord, Lord Tyrie, acknowledged that it was for a different purpose. My noble friend Lord Fox referred to people being recalcitrant rather than doing nothing. I was trying to say that, within competition policy, the Government are pursuing miscreants, but they are pursuing innocent people for information. In fact, at the beginning of his response, the Minister said that the purpose is to gain the assistance of third parties. That was the first time I had heard a reasonable word about this. The Government are asking the private sector to give assistance. They can go to the devolved Administrations but there is complete asymmetry: the Government cannot fine them but people who find it too difficult to give assistance are at risk of a fine.

Of course we expect reasonable behaviour, but we do not always get it. I point to that wonderful machinery of HMRC on loan charges and ask whether we have evidence that we always get reasonableness where we want it. I am not yet satisfied. There have been some interesting suggestions about reviewing how it has gone, that we can have sight of the regulations, or that we can examine procedures that are likely to be implemented. Surely we could do some of these things between now and Report.

I still think that where we are essentially sampling and wanting views from people in the market, the burden is on the sampler, not the samplee. This is therefore a matter I wish to return to on Report, but I hope it is something we can solve. On Monday on our first group, people said that patent attorneys were vital for the country, so I had a smile on my face. Maybe now noble Lords actually know where I learned to be a nerdy pedant.

The point is that we have to have protections in the Bill where, if something unjust happens, somebody can say, “Hang on a minute, look, it says here that that excuse was reasonable,” or, “You can’t make me do this because I haven’t done anything wrong.” You cannot go around arresting people without reasonable suspicion. I do not think we should fine people without reasonable suspicion that something wrong was done in the first place. We cannot just invent a wrongness by saying, “I wanted you to give me some information and you said no”, which is basically what the powers in the Bill do.

I thank noble Lords. I look forward to a letter with some more answers to my questions from the Minister. I do not think there is anything to withdraw because this is a stand part debate, but obviously I will not call a vote.

Clause 38 agreed.

United Kingdom Internal Market Bill

Baroness Bowles of Berkhamsted Excerpts

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

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)]

My Lords, Amendments 107 and 108 in my name aim to clarify the scope and application of the professional qualification clauses of the Bill. Amendment 107 adds patent attorneys and trademark attorneys to the list of legal professions excluded from the application of the automatic recognition principle in Clause 22. As well as work related to trademarks and patents, trademark and patent attorneys may carry out broader regulated legal activities which require an understanding of the underpinning legal system in the part of the UK in which they practise. Accordingly, we are bringing them into line with the other legal professions to ensure that they are not caught by the automatic recognition provisions of the Bill. These exclusions ensure that access to these professions is not affected in any way by the recognition provisions of the Bill.  Part 3 will not affect how these professions are regulated, nor will it change what activities trademark and patent attorneys are able to perform.

Amendment 107A has been tabled by the noble Baroness, Lady Bowles, in response to this government amendment and seeks to probe the effects of the amendment in respect of authorised reserved legal activities under the Legal Services Act 2007. In respect of this amendment, I reassure the noble Baroness, Lady Bowles, that nothing in the recognition provisions of the Bill, or in the government amendment, changes how reserved legal activities are authorised under the Legal Services Act 2007, and her amendment is therefore unnecessary.

Amendment 108 is a technical amendment to provide clarity on the type of qualifications and experience requirements to which Clause 22 applies. It ensures that where qualification requirements are attached to specific activities, those requirements are disapplied by automatic recognition only if they apply to activities that are essential to the practice of the profession in question—in other words, if they amount to a barrier to access to the profession as a whole. This will ensure that Clause 22 does not apply to qualifications or experience requirements for activities which are not essential to the practice of the profession, such as optional service activities which professionals may choose to offer.

I recommend that government Amendments 107 and 108 be accepted, as they provide clarity on the scope and application of automatic recognition principles. I regret, however, that I am unable to support Amendment 107A, for the reasons I gave earlier. I hope that the noble Baroness will feel able not to press her amendment. I beg to move.

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

My Lords, I am a retired patent attorney, which is what made me curious about Amendment 107. I guess that is an interest of some kind, though no longer pecuniary.

In this group I have tabled Amendment 107A, which is intended to clarify what has become a confused situation. It can accurately cover all the legal professions named in Clause 25, although the confusion relates only to patent and trademark attorneys. Essentially, it says—as I think the Minister agreed—that there is no change to the status quo under the Legal Services Act 2007, which was the Government’s intention all along.

The background to this is that patent and trademark attorneys may be in the unique situation of being regulated and qualified on a UK-wide basis, while, through their sectoral professional qualifications, also engaging in four specific English and Welsh reserved legal activities, no matter where in the four nations of the UK they qualified, reside or practise. They do this as patent attorneys or trademark attorneys, not as lawyers.

The purpose of that unusual provision is, broadly, to enable conduct of litigation for all in the specialist England and Wales Patents Court, and for associated matters such as deeds and oaths to be dealt with. That unique construct does not fit within the definition of Clauses 22 and 23 for the professions when they are identified as patent attorneys or trademark attorneys because you cannot work it out so that there is a relevant part and the other part. Noble Lords are welcome to try—it takes quite a few pieces of paper. The point is that it is the same for all patent and trademark attorneys, wherever they are.

However, somewhere the niggling thought arose that perhaps it was confusing, or that the mutual recognition would apply notwithstanding that Clause 22 did not apply and would somehow extend the enjoyed England and Wales reserved activities to Scotland or Northern Ireland courts, deeds or oaths. Amendment 107 has, therefore, been proposed. It has the effect of defining patent and trademark attorneys as a legal profession in Clause 25, thereby putting them into Clauses 23 and 22 and simultaneously taking them out again. This hokey-cokey amendment was meant to stop confusion. It has, however, also created its own confusion, perhaps best illustrated in an explanation from the Ministry of Justice that said:

“If trademark and patent attorneys were not excluded from the UKIM bill, then one of your practitioners authorised to conduct litigation in Northern Ireland, for example, could potentially argue that under the automatic recognition principle IPReg must also allow them to conduct litigation in England and Wales without meeting the normal IPReg authorisation requirements for doing so”.


However, that does not fit the present circumstances that I have just explained. The patent or trademark attorney in Northern Ireland is qualified to conduct litigation in England and Wales but, actually, not to conduct litigation in Northern Ireland—and that is not the only wrong explanation that has been offered. Indeed, a few moments ago, the Minister referred to attorneys being qualified in respect of the part of the UK in which they practise. There is no such provision for patent and trademark attorneys. They just have that extra bit of add-on, no matter where they practise, which relates to being able to access the England and Wales Patents Court. That is quite fundamental, because that is where you would see appeals from the comptroller and so on.

I believe that a true analysis of the facts ends up as I have said, that these particular professions were not in the original construct, but some people might have been confused. Now they are defined as in and out again but, unfortunately, this leads to other confusions, suggesting divisions in the profession that do not exist but which have just been replicated in the words of the Minister. If the Minister and an MoJ official can get it wrong, who else might? A wrongful accusation, no matter that it can be refuted, is still damaging. My amendment clarifies that the status quo is maintained. It neither adds nor subtracts anything, other than giving clarity—something to point to on the same page as the confusing hokey-cokey.

[Baroness Neville-Rolfe (Con)]

My Lords, I support the noble Baroness, Lady Bowles, in probing the effect of these two government amendments. As a well-known supporter of a well-functioning IP profession, right across the United Kingdom, I have to say that I am still confused. It seems to me that, in the UK single market, the rights of these various attorneys should be fully reciprocal. Can my noble friend confirm that that is the intention? Will he further kindly reflect on whether it is the effect and, if they are not reciprocal, whether that is justified? Indeed, is there any read-across to the problems that we have encountered on the lack of reciprocal rights for EU and UK attorneys? We have discussed this elsewhere. I know that the department has had a rethink, but are we quite there?

--- Later in debate ---

[Baroness Neville-Rolfe (Con)]

My Lords, I rise to move Amendment 110 in my name and that of my noble friend Lady Noakes. My noble friend the Minister has been kind enough to write to me following the debate on where the new office for the internal market should sit. However, I remain to be convinced that the Competition and Markets Authority is its appropriate home. For this reason, I have tabled an amendment attaching it to BEIS. To make that effective, I am also supporting the noble Baroness, Lady Bowles of Berkhamsted, in opposing Clauses 28 and 29.

I will put it simply and bluntly: no case has been made for locating the new office in the CMA, except, I suppose, that it is already an independent agency and the department has some involvement in the appointment of its well-paid top brass. However, the CMA is generally highly sceptical of business, especially the bigger businesses that operate across the UK, which need to flourish if the economy is to recover. That is my past personal experience with various different hats on.

We need an office—call it what you will—that can do two things: it needs to be able to monitor objectively and to advise sensibly on difficult and developing internal border issues. These are highly politically charged, as we can see from experience during Covid. Therefore, we need an office that reports directly to BEIS and, arguably, we need a Minister for the Single Market, in the same way that we had a commissioner in Brussels when we were an EU member. Actually, I prefer the notion of a single market to that of an internal market. Most of us, including the devolved Administrations, had a great deal of time for the single market when we operated within it. Indeed, I devoted some of my career to advancing it because of its benefits to consumers, manufacturers, services, other businesses and, of course, GDP.

I am sure the Minister would agree that not everything done in Brussels is wrong, and I believe we need an in-house and a political dimension. Therefore, for me, the right model for this office is the Intellectual Property Office, which has a chair and a board from outside but also a strong CEO reporting to a BEIS Minister and advising on both policy and enforcement as well as negotiating internationally and across the UK. If BEIS, for some reason, cannot do all of those things in an in-house office, the monitoring role could go to the ONS, which is well regarded in statistical matters. However, above all, the office must be subject to ministerial direction. Recent experience with Ofqual, PHE and even the CMA itself does not persuade me that the approach in this Bill is right. It is not too late to make a change.

I note that Amendment 155 in the name of the noble Baroness, Lady Hayter, has been added to this group. I have a great deal of respect for the noble Baroness and worked with her successfully on consumer legislation in the past. However, I am not convinced that a consumer duty makes sense here, certainly not without balancing provisions on business and the economy. Business stands to lose so much from this new legislation already and from the inappropriate appointment of the CMA as the office of the internal market, and this is at a time when business is more and more adversely affected by the never-ending Covid nightmare. I think we should reflect further, but, for now, I beg to move.

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

My Lords, I have given notice of my intention to oppose Clauses 29, 30 and 41 standing part. This is part of a full set of not stand part notices that signals concerns, in principle and to specifics, throughout Part 4 and Schedule 3. I will also probe what has been left unsaid about what the CMA or the OIM will do in total regarding the internal market. I thank the noble Baroness, Lady Neville-Rolfe, for supporting my opposition to the clauses standing part. We have some common concerns, but we are not entirely in the same place. I will be interested to hear her response to some of the points I will make as the debate develops.

There are three parts to my concern. First, as I said at Second Reading, it seems odd to use the powerful investigatory might of the CMA—or a lookalike OIM—whose information-gathering powers, with accompanying enforcement and penalties for non-compliance, bear down on individuals and companies, but where the main purpose, from weighing up the clauses’ wording, is to advise administrations about their own and one another’s regulation, and not anything the companies themselves have caused. This is extraordinary.

Secondly, there are aspects in the Bill that relate to business activity. However, this is not articulated, except that businesses are presumably among those who could make a proposal to the CMA for it to undertake a review under Clause 31. I am left asking: what else is happening that has not been said? Thirdly, there is the matter of making the CMA or the OIM properly representative of the four nations.

Overall, this seems an authoritarian, unexplained and unfinished state of affairs. The use of the CMA is a hangover from when Mrs May envisaged a corresponding body to the European Commission for all competition and state aid matters. State aid considerations have now dropped away to WTO-type considerations of distortive and harmful subsidies that will not be looked at by anyone; the Trade Remedies Authority might have to respond on incoming international complaints, but the domestic side is bare. That still leaves the market access principles to be enforced somewhere.

The Government’s response to the internal market consultation says that the expansion of the CMA’s remit will not position it as an enforcer. In a letter to my noble friend Lord Purvis after last Monday’s debate, the Minister confirmed that the OIM will provide expertise in scenarios where the economic impacts of particular regulations lead to disagreement between one or more administration, and that the non-binding assessments will ensure a technical underpinning to otherwise political discussions. Under the heading:

“On the Office for the Internal Market, disputes and governance”,


the letter to my noble friend Lord Purvis says:

“The Bill does not introduce new enforcement bodies, but instead relies on enforcement of regulatory compliance provisions in existing goods regulation to ensure that enforcement of regulatory compliance takes account of the opportunities offered by the market access principles of mutual recognition and non-discrimination”.


Does that mean that the CMA or the OIM will take account of the opportunities offered by market access principles? Does the CMA enforce the regulatory compliance provisions in existing goods regulation?

The impact assessment also mentions businesses and stakeholders. Page 29 says that stakeholders can “raise complaints” on internal market matters. This could arise by way of Clause 31 and seeking a review. However, the word “complaints” smacks of adjudication. It would be helpful if the Minister could explain whether that will be the case. Is it related to the mentioned regulatory compliance? How will that work?

--- Later in debate ---

Debate on whether Clause 30 should stand part of the Bill.

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

My Lords, for the general reasons that I elaborated in the earlier group, I do not consider the CMA to be the right body, or the OIM the right structure, so in this group I give notice that Clause 30 and Schedule 3 should not stand part of the Bill. Clause 30 is about the setting up of task groups in the OIM and Schedule 3 contains more OIM detail.

Perhaps I may correct a small misspeak in the previous group. I referenced accidentally Clauses 29 and 30 instead of Clauses 28 and 29. I also pointed out then that this is part of a wider aim that Part 4 and Schedule 3 should not stand part, but as the Minister will know, it is not possible to put all of that in one amendment and debate it—we have to go through it clause by clause. However, I do not need to be reminded that removing one clause would leave the rest of them standing in a slightly awkward way. My solution is that we should get rid of them all.

I have also put forward Amendment 116 to probe how an independent OIM would look. It covers broadly the themes or principles that keep recurring as we move through the Bill and which need to be picked up, even when forced into the CMA straitjacket. I also heard what the Minister said about not creating new bodies. I recognise that there is a money aspect to this, but the point is that we need something that is better than the current proposals.

The first paragraph of Amendment 116 mentions having an MoU between the Administrations about the market access principles, and then the OIM being set up to assist in oversight. The message is simple: these matters should be consensual, and a consensually agreed body should be representing the four nations, rather than an imposed one that could potentially pay only lip service to the devolved authorities, or that does not necessarily have the right range of knowledge and abilities.

Proposed subsection (2)(a) envisages transparency, other than for commercially confidential information; maybe there could be some confidentiality for the Administrations in some instances too, but there should be a presumption of transparency, because how else are consumers or anyone else to know whether their views have been properly taken into consideration? Proposed subsection (2)(b) states that the board must include nominations from all of the devolved authorities and from the regions of England. I accept that the regions suggestion is as yet unstructured, but the principle I seek to convey is that it is no good just having the view from Westminster, it needs to be more “on the ground”, which is the enormous benefit of devolution.

The proposed third subsection says:

“Any task or investigatory group within the OIM must have a minimum of five persons drawn from all four nations of the United Kingdom.”


I have not tied the structure to the CMA-type panels, because I do not see that they are needed. However, whatever investigatory teams are used, there should be national diversity, not just cosmetically and not because it is political, but because there are genuinely different sets of knowledge and perspectives. The “minimum of three” task force of the CMA structure is clearly too few.

The proposed final subsection refers to the original CMA, not the OIM, and states that when in the ordinary course of its business the CMA conducts an investigation that requires consideration of the internal market, it shall also appoint balanced inquiry panels from all four nations. This could be in mergers, for example. I note that this part of my amendment contains thoughts that are somewhat similar to Amendment 153 tabled by the noble Baroness, Lady Hayter, which we will get to on Wednesday.

That is my vision of the starting principles for the OIM and how the Government’s construct could also be improved. I do not understand why the Government have given it copy-and-paste structures that derive from those that the CMA has for its investigations, and I question whether that is appropriate. This also underlies the clause should not stand part notices both in this group and generally.

--- Later in debate ---

[Lord Callanan (Con)]

I will certainly check that, and of course I will respond to the noble Lord if that proves incorrect. We obviously proposed the creation of the office for the internal market in the White Paper and said that we were interested in views—the noble Lord, Lord Purvis, shakes his head but I think we did. I will clarify that for the noble Lord in writing, in one of the many letters that I will be sending him. I definitely remember having discussions at the time of the White Paper with many noble Lords whom I spoke to during the consultation. We certainly discussed at the time how the creation of a new body would best monitor the function and effectiveness of the UK internal market process in the context of the White Paper, but I will certainly clarify that for the noble Lord in writing.

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

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

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

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

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

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

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

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

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

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

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

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

[Baroness Bloomfield of Hinton Waldrist (Con)]

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

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

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

[The Deputy Chairman of Committees (The Earl of Kinnoull) (Non-Afl)]

Does the Minister wish to add anything?

--- Later in debate ---

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

My Lords, the noble Lords, Lord Hain, Lord Cormack and Lord Empey, have all withdrawn their names from this debate, so I call the next speaker, the noble Baroness, Lady Bowles of Berkhamsted.

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

My Lords, I listened with interest to the noble Lord, Lord Stevenson. The separate grouping of these amendments has put an additional focus on some of the intent.

I see the merit in taking time to get it a bit more right and use regulations for the detail, but it seems to me that the moment to legislate is still when there has been agreement between the four nations, rather than in a fixed time period. I am not sure that I condone such a wide ability to amend any Act—could the Act or Acts not perhaps be named?—although I acknowledge that the purpose is limited. However, those are details; I accept the principle and direction the noble Lord is suggesting.

Concerning the new schedule in Amendment 131, I still question the ratio of six Secretary of State appointments to one each for the devolved Administrations, especially in the absence of introducing a regional element for England. Quite controversially, the new schedule also creates powers for the OIM to deal with distortive or harmful subsidies and subsidy races.

Such a provision is the elephant in the room if it is not done at some stage. Third countries could launch trade remedies complaints against the UK if they were affected by distortive or harmful subsidies. From that perspective, it is of great benefit to have a body that is seen to be independent overseeing those matters, rather than being at the political level of government, which is where it seems to be held at the moment. It is the opposite side of, but with the same logic as, the Trade Remedies Authority needing to be seen to be independent. However, regarding the four nations, the scope of intervention would be wider than would interest third countries, unless there is some corresponding agreement with third countries or the EU.

I am not actually sure how it would all work out. As yet, because I have concerns about the CMA—although I accept that looking at subsidies might be something it is better adjusted to do—it will be a little while before I could slip in this enormous power without resolving all the other issues that remain, including powers, unless the noble Lord is suggesting that this is all that the OIM can do. Anyway, I think that there are some good things and some bad things in there, and it is interesting food for thought.

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

I call the noble Baroness, Lady Jones of Moulsecoomb.

--- Later in debate ---

I am grateful for the opportunity to speak to these probing amendments, particularly in the context of the relevant clauses, especially Clause 31, relating to monitoring and reporting on the operation of the UK internal market, to make sure that it can function as smoothly as can be anticipated.

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

My Lords, I am pleased to speak in this group on my own amendments. I recognise that the noble Baroness, Lady McIntosh, has picked out some relevant points, including probing what I call the business aspect in Clause 31.

I have already rehearsed many of the arguments relating to my stand part notices, so I shall only speak briefly. The question of whether the OIM is set up to provide independent technical advice regarding business disputes with one another or with national authorities, becoming a first-round settlement process—or not, as it chooses—is all left too vague. Some not entirely technical criteria are intimately involved. I cite again my concern as to whether the OIM is the right body or structure and whether the powers exercisable over people and businesses in Clauses 38 to 40 are justified and proportionate to the reporting requirements in Clauses 31 to 34, which largely relate to the activities of Administrations.

My Amendment 145 would delete Clause 33(2), which states:

“A relevant national authority may not request a report from the CMA ... unless the authority has considered whether any other person or body is qualified to provide an independent report on the matter.”


What is meant by “qualified”? I could not find a definition in the Bill other than that in respect of professional qualifications in Part 3, which I do not think applies here. I understand and accept the subsection if the reference is to another statutory body, but the present wording seems to relate, for example, to advisory firms. I might have all kinds of views about that and how the Government seem to use advisory firms too much already, but I am concerned that such private reports would be less transparent.

However, perhaps there is a case for saying that it is more appropriate for an Administration to pay for that research and advice than foist the cost on to businesses, which is what this provision does. Can the Minister advise me of the intention of Clause 33(2)? Does it mean statutory bodies or private bodies?

Finally, Clause 37 requires the CMA to prepare and publish general advice and information about how it expects to approach the exercise of its functions. At present, how the CMA will use its powers is left solely to its own discretion, without guidance or safeguards in the Bill, but I think it is necessary to have guidance about when enforcement and fines are appropriate. For example, they are not appropriate when there is no reasonable suspicion of wrongdoing or contravention of market principles by the person or body from whom information is sought.

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

The noble Baroness, Lady Neville-Rolfe, has withdrawn, so I now call the noble and learned Lord, Lord Thomas of Cwmgiedd.

--- Later in debate ---

[Baroness Hayter of Kentish Town (Lab)]

My Lords, I shall speak also to the other amendments in this group that are tabled in my name. I would have thought that it is clear by now, in particular to those noble Lords who have sat through all three days of our debates in Committee, that I think it is really important that, as we look at how the internal market is working, we need to include consideration of how it impacts on consumers.

For example, the first of these amendments would ensure that where the CMA reviews the effective operation of the market, it would measure how well it was serving consumers. Similarly, in Amendment 139, its annual report should include the impact of the internal market on consumers. In Amendment 142 it should look at the prices, quality of goods and services, and choice for consumers, in addition to the volume of trade between the four parts of the union.

We do not want trade to go rocketing up if it simply means monopolies are growing and choice diminishing, nor simply a rush of goods of shoddy quality, or services that offer no standards and no redress. These amendments do not mean the consumer impact trumps everything else, but that it must be considered in the mix in any report so that decision-makers have the full picture at all times.

Incidentally, the wording in Amendment 142 is a straight lift from Clause 32(4)(c), so it is not particularly innovative, nor surprising to the drafters. It is just saying that if you look at how the internal market is working it must not be just by volumes of trade; it must take into account the various aspects of how a consumer would measure whether the market was serving their needs. I beg to move.

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

My Lords, I do not need to say a lot in this group because I have already made it clear that I consider transparency an important part of consumer protection and the way to find out whether consumer interests have been looked after. My Amendment 138 to Clause 31 relates to the provision where any person may request a report, which the CMA can then choose to undertake. My amendment would take away the optionality of publishing the report and says that it must be published.

The Minister said in connection with Administrations that such transparency may prevent forthright exchanges. In this location, it is not advice about regulation that comes under other clauses. This is a general case and if it is reporting—for example, opining on what is or is not a subsidy, discrimination or any of the other matters on which it could be consulted—then the opinions form a body of information that should be publicly available. I would concede safeguards, but they are there anyway in Clause 36 about reports under Part 4. However, I think that the wording should reflect the presumption of publication.

The noble Baroness, Lady Hayter, has also tabled amendments about consumer protection. While I have been a bit picky at times or uncertain whether it is the right thing to qualify the internal market with reference to any sector, what she said about consumer protection having to be in the mix is right. Certainly, Amendments 139, 140 and 142 are in the right places to establish that point.

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

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

Covid-19: Small Businesses

Baroness Bowles of Berkhamsted Excerpts

Thursday 29th October 2020 Lords Chamber

[Lord Callanan (Con)]

Our winter economy plan builds on the significant support available, with the extension of the coronavirus loan guarantee scheme until 30 November, the introduction of the job support scheme from November and the extension of the self-employment income support scheme.

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

One-third of the self-employed, including sole directors of limited companies and the newly self-employed, are still completely excluded from the self-employed income support scheme. Why can the Government not devise help for them, especially the smallest, who are not in the tax-dodging territory of payment by dividends?

[Lord Callanan (Con)]

The noble Baroness makes an important point, but we have paid out more than £11 billion to more than 900,000 small businesses, and some small businesses that are ineligible for the SEISS grant extension may still be eligible for other elements of the scheme.

United Kingdom Internal Market Bill

Baroness Bowles of Berkhamsted Excerpts

Committee stage & Committee: 2nd sitting (Hansard) & Committee: 2nd sitting (Hansard): House of Lords
Wednesday 28th October 2020 Lords Chamber

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

My Lords, I concur with the comments of my noble friend Lord German, the noble and learned Lord, Lord Hope, and others concerning consent and what might be termed the proper conduct of devolution. But I will limit my remarks to the amendments in the name of the noble Baroness, Lady McIntosh, relating to the publication of decisions, to which I added my name, not for the purpose of signalling that I am satisfied with consulting rather than obtaining consent, but because I want to flag up that there must be transparency.

It is difficult to tell from provisions throughout this Bill how transparent various procedures will be, which raises my concern that they may not be very transparent at all. The internal market is a matter of significant public interest, and while individuals may not bury themselves in the minutiae, they will feel the impact. There are various organisations on the front line of helping consumers and small businesses to understand laws and their rights. Therefore, whatever the procedure, there should be publication of the proceedings that are formulating the structure of the internal market.

I have amendments on transparency elsewhere relating to the CMA and the OIM, and they are part of the same theme. If the consumer voice is to be heard and articulated by consumer organisations, access to information is paramount. Otherwise, interventions and understanding may come too late.

[Lord Wigley (PC) [V]]

My Lords, I agree with the noble Baroness, Lady Bowles, on transparency, and I look forward to coming to those points later. I am pleased to speak to this group of amendments, and in particular to Amendments 30 and 64, to which I have added my name, and to Amendments 75A and 100A, which stand in my name.

Perhaps I should first make it clear that I support Amendment 15 in the name of the noble Baroness, Lady Finlay of Llandaff, moved by the noble Lord, Lord German, which stipulates that not only should the UK Government consult the devolved Governments but that they must obtain their consent. I would have added my name to that amendment had other colleagues not got there first. I agree with the noble Lord, Lord German, that it would be far better if we did not have these powers in the Bill at all. I also believe that the points made by the noble Baroness, Lady Bennett, go to the heart of why devolution of power was made in the first place and is still very much needed.

Amendment 16 does not go as far as Amendment 15. It advocates the need to seek consent of the devolved Administrations but it does not impose a requirement to obtain that consent. Amendment 17, likewise, does not go as far as Amendment 15, in that it again requires the Government to publish the result of consultation, so the implication is that the UK Government may well consult the devolved Governments and then blithely ignore their viewpoints. There is, as the noble Lord, Lord German, implied, no earthly point in having a consultation system if the UK Government may then, willy-nilly, totally ignore the devolved Governments’ viewpoints.

I now turn to the group of amendments that relates to Clause 12. Amendment 64 in the name of the noble Baroness, Lady Hayter, requires the UK Government Minister, in this context, to consult and seek the consent of the devolved Governments. Likewise, Amendment 75 in the name of the noble Baroness, Lady McIntosh, requires the Minister to consult the devolved Governments. But both these amendments give the appearance of consulting the devolved Governments but place no obligation whatever on the Minister to take any notice of the response elicited. The Minister can happily consult then blithely ignore the views of the devolved Governments. That is not good enough. Indeed, it is highly dangerous. It gives the appearance of consultation without providing the substance of a requirement to respect the outcome of any such process. In reality, this plays out a charade of having a joint approach between the four nations and provides an open road for the UK Government Minister to totally ignore the views of the devolved Governments.

My Amendment 75A simply requires the Minister, with regard to subsection (2), to consult and obtain the consent of the devolved Governments. I readily recognise that the UK Government may argue that the devolved Governments should not have a veto over the Westminster approach. That is something I recognise and respect, but the implication is that Westminster should have such a veto. In regard to devolved functions, the whole point is that the four nations should have the right to make their own policies. That is what devolution is about. The Government seem to take the Orwellian approach that all four nations are equal but one is a little bit more equal than the others.

My Amendment 100A applies the same principle to the consultation issues relating to Clause 20(7) and the need for the Minister also to obtain the consent of devolved Governments in that regard. What this comes down to, yet again, is the need to have an acceptable mechanism to resolve disagreements, to have the common frameworks to which we have resorted on so many other occasions and not to take the approach that the Government of England—which it is for the devolved function—always has the right, by dint of its respective size, to overrule the other four nations. If such a mechanism were in place, we would not have to put ourselves through the pain of raising these questions on every occasion that the issue of consultation between the Minister and the devolved authorities arises. I implore the Minister to bring forward an amendment on Report that would obviate the need for us to return to these issues, time after time. Until such a change to the Government’s approach is forthcoming, we will have no choice but to press amendments along the lines of this group at a later stage.

--- Later in debate ---

[Baroness McIntosh of Pickering (Con) [V]]

I am grateful for the opportunity to speak in this interesting debate on these particular amendments, many of which I support. I will limit my remarks to Amendment 37 in my name; I am grateful to the noble Baroness, Lady Bowles of Berkhamsted, for her support in co-signing.

The purpose of Amendment 37 is to bring the definition of “legitimate aim” set out in this clause in line with the source of EU law as contained in articles 34 to 36 of the Treaty on the Functioning of the European Union. In particular, I refer to article 36 of that treaty, which states:

“The provisions of Articles 34 and 35 shall not preclude prohibitions or restrictions on imports, exports or goods in transit justified”


on the grounds I set out in my little Amendment 37. It goes on to say:

“Such prohibitions or restrictions shall not, however, constitute a means of arbitrary discrimination or a disguised restriction on trade between Member States.”


For reasons similar to those set out by the noble and learned Lord, Lord Hope, in speaking to his Amendment 36, I think that it will be helpful to have

“public morality, public policy … the protection of national treasures possessing artistic, historic or archaeological value; or the protection of industrial and commercial property”

brought into Clause 8. This would be a drafting improvement, so I also make a plea to the drafting team in that regard.

I listened with great interest to what the noble and learned Lord, Lord Hope, said on adding the regulation of animal welfare. It goes to his point in a debate earlier this week on the link between this Bill and the Agriculture Bill, particularly regarding the marketing standards covered by Clause 39 of the Agriculture Bill. It would help enormously if we could have some seamless references across different Bills—in this case, the Agriculture Bill and the Bill before us this evening, the UK Internal Market Bill.

With those few remarks, I am grateful to have my noble friend consider favourably Amendment 37.

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

My Lords, I added my name to Amendment 37, tabled by the noble Baroness, Lady McIntosh. However, there are several other amendments on the same theme, all highlighting important considerations that should be legitimate aims. The legitimate aims in Amendment 37 have been in use from the EU treaties, as the noble Baroness, Lady McIntosh, explained. That makes a starting point: they have been tried and tested as well as embodying the status quo, even though, as the noble Baroness, Lady Finlay, and the noble Lord, Lord Young, explained, in the EU, they apply in a wider context to mutual recognition as well.

--- Later in debate ---

[Lord German (LD)]

My Lords, I happen to have spent 10 years of my life working on the mutual recognition of qualifications in Europe. I left that role and, 20 years after that, it was applied to about only four or five professions across Europe. Trying to understand where people are able to employ the appropriate skills, knowledge, understanding and practice in another surrounding is an amazingly complex area. That surrounding might have a different framework of regulation and perhaps a different framework of operation.

The intention to have mutual recognition of qualifications is fine, but the timing for putting it in place is not fine, because the Government want it to happen very rapidly. It seems to me that the most sensible way of doing this would be to try to work through the professions in relation to their activities, trying to make sure that, where there are barriers, those are reduced, or where there are barriers that are appropriate, they are not legislated for by accident in advance.

The noble Baroness, Lady Finlay, has already talked about the Welsh language. There is a very interesting debate to be had about professions that can or cannot operate through the medium of Welsh. It depends on the services being provided and on the context of where those services are provided. A profession operating in a context that is different in different parts of the United Kingdom will have different requirements because of the geography, culture or operation of the services that are to be provided. Therefore, my request to the Government is that they step back a little, take some time, concentrate on trying to fix the things that they can fix and, for goodness’ sake, allow this thing to mature properly before going in with legislation that will be doomed to failure in the end.

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

My Lords, on the next group I will explain that the drafting of some clauses of Part 3 is complex and not as straightforward as it could be. One way or another, it would be useful to have a statement clarifying whether the end result is the status quo, either as a general objective or for certain circumstances.

However, as the hour is late, and as I will elaborate a specific instance on Monday, I do not need to say any more, other than to support what has been said by my noble friends Lord Fox and Lord German. This appears to be a rather complex topic. Maybe taking time to sort it out and make sure that the drafting is as clear as possible would be a good exercise.

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

My Lords, as we grope our way through the Bill and get to what seem even more complex and difficult to understand parts of it, we seem to reach a point where the Bill either does not add anything or is currently so badly drafted that it might destroy what we currently have. I may be being harsh, and I realise that I am asking quite a lot of the Minister, who has probably not been directly involved in any of these parts of the Bill, or concerned with some of the issues we had to deal with earlier this evening, but it seems to me that with every group, and every minute we spend on the Bill, there is a growing understanding that, as the noble Lord, Lord German, said, the Government are trying to push ahead with something that does not take the trick, as far as we are concerned, in relation to the issues before us.

The Government need to step back, take their time, concentrate on the things that they and only they can do, and encourage those who have other responsibilities that bear on what we are talking about to develop them, and out of the gloom will emerge—because they are the answer—the common frameworks. Why do the Government not realise that that is where we are heading? Why do they not get it into their heads that we need to stop being so concerned about the possibilities—the far ranges and the sunny uplands—that may be available in some nirvana they have yet to describe accurately, and work from where we are to try to get somewhere sensible in the time we have?

United Kingdom Internal Market Bill

Baroness Bowles of Berkhamsted Excerpts

Committee stage & Committee: 1st sitting (Hansard) & Committee: 1st sitting (Hansard): House of Lords
Monday 26th October 2020 Lords Chamber

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

My Lords, I am pleased to support Amendment 2; I was about to do my own version when I discovered that the noble Lord, Lord Stevenson, had already tabled a similar one, and it is pleasing that it has cross-party signatories. There is a lot in this Bill about the internal market that is either premature or inadequately or inappropriately worded. It may be that amendments elsewhere referencing the common frameworks will help, but just as the common frameworks have a set of principles that are being followed in negotiations, a bit more about the flavour of the internal market is needed here, beyond mutual recognition and non-discrimination.

One of the principles for the common frameworks is to maintain, as a minimum, equivalent flexibility for tailoring policies to the specific needs of each territory, as is afforded by current EU rules. Therefore, it seems wholly appropriate to utilise the principles of subsidiarity and proportionality that have been a defining part of the EU internal market and which have helped form the current flexibility. It would also chime with the recommendations of the Constitution Committee in its report The Union and Devolution, which set out six principles of solidarity, diversity, consent, responsiveness, subsidiarity and clarity. We could use all those principles here too, and certainly they should guide how we approach amending this Bill throughout.

United Kingdom Internal Market Bill

Baroness Bowles of Berkhamsted Excerpts

2nd reading & 2nd reading (Hansard): House of Lords
Monday 19th October 2020 Lords Chamber

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

My Lords, I, too, welcome our maiden speakers.

Like many noble Lords, I find that the conclusions of the Constitution Committee, the European Union Committee and the DPRRC chime with my own concerns about the Bill. I concur with the many magnificent speeches today, led by the noble and learned Lord, Lord Judge, about the rule of law. My humble offering is that the Government have made their bed, must lie in it and must use internationally respected ways to work with it to best advantage.

Regrettably, the theme throughout the Bill seems not to be about working with things but a rush to legislate around primitive principles, lacking the refinements of consultation, consent or even continuity concerning devolution. Really, the question is why. The Bill seems designed to upset. Is it part of the “revolution by disruption” plan, or was it thought that boxes needed ticking right now?

The UK internal market must be taken seriously, but why is there not time to stand still and work intergovernmentally and then legislate where needed, without recourse to Henry VIII clauses to make up for not yet really knowing what to do? The powers in the Bill are a land grab, taking the soul, if not the territory, of the devolved nations as well as sidelining Parliament, allowing anything to be changed by regulation.

I want to make points about the CMA and whether it is the right body and construction to be the embryonic unelected guardian of the single market. Paragraph 35 of the Constitution Committee’s report says it all. Why choose the CMA? Why not establish a properly independent body representing all four nations? Further, the input tenets in the EU lookalike texts of mutual recognition and non-discrimination have neither been agreed by all nations, via the frameworks or otherwise, nor maintain the degree of flexibility and subsidiarity that already exists in the UK.

The CMA itself is sponsored by a Government ministry and all the appointments are still governed by the Secretary of State—despite, for the OIM side, after consulting the devolved authorities. But this is a serious question: why the hermetically sealed and secretive CMA inquiry panel process? I understand it for matters of competition where commercially confidential information is considered and policy is well developed, but for the internal market it will be a matter of public interest and constitutional development. That surely should not be secretive. It will not be simply technical analysis. That leads to overbearing harmonisation; how often have we fought the EU over that?

Analysing the UK internal market must encompass subsidiarity and degree, at least once that has been properly agreed. Does the CMA have that expertise? Surely the evidence, procedures and reasoning need to be seen and, if I may say so, be robust enough to withstand public scrutiny. The Minister has already twice referenced the support of what are, in the end, relatively few of the total of UK businesses. Even within the unsuitable structure, unsuitably appointed, a minimum task group of three is too small and exclusive. Why should it be potentially smaller than the minimum number of judges sitting in the Supreme Court? Are panellists so superior? For such a constitutionally important matter, this all needs a rework.

[Baroness Scott of Bybrook (Con)]

I remind everybody that there is a four-minute advisory time. We are getting quite late and there are still rather a lot of speakers to come.

Trade Bill

Baroness Bowles of Berkhamsted Excerpts

Committee stage
Thursday 15th October 2020 Lords Chamber

[Lord Rooker (Lab) [V]]

My Lords, I shall be brief in moving this amendment. It is partly probing and partly serious, and in due course I shall probably reserve the right to come back to it on Report.

I referred to the idea for the amendment in my Second Reading speech at col. 712 of Hansard on 8 September. I accept of course that the two bodies, the Trade Remedies Authority and the Food Standards Agency, do not have the same legal status. The Food Standards Agency is a non-ministerial government department whose staff are civil servants, and indeed its board would make such a decision as implied in the amendment. It is the principle that I seek to transfer, which has worked quite successfully in the legislation for the Food Standards Agency for over 20 years, under Governments of all parties—in other words, the principle of transparency and openness when dealing with what can sometimes be confidential matters.

The power is there, as I say in my explanatory statement, to be a further guarantee to reinforce the operational independence of the authority. No one is ever going to believe that any of these bodies—set up at the behest of Ministers and perhaps fulfilled without proper due process, in the way that all bodies should be—are actually operationally independent. The one way to ensure that is to give the body such a power. I fully accept that that is very unusual—government departments, in the main, do not understand how the Food Standards Agency legislation came to provide such a power—but it was freely given by the Government and accepted by Parliament in the 1999 legislation. To the best of my knowledge, it has not actually been used, in the sense of being a sanction.

I referred at Second Reading to a stench of corruption about this Government—not as individuals, but there is a general feeling that something is not quite right about the way things are being done. Any wayward move on a trade deal—that is the polite term—could be avoided if those who wanted to be a little wayward knew that the TRA had such a power. That is where the idea of a sanction comes in: it would be established in primary legislation, even though I suspect, and sincerely hope, it would never be used. Then, we could better trust the trade deals, which is the important, central point. I beg to move.

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

My Lords, I have listened with interest to the noble Lord, Lord Rooker. While I am in favour of transparency and of what he called the ability to sanction, I am also cautious when it comes to the disclosure of information from any source. I can see that with food, there is a public health issue that might override everything else, but I question whether the comparison is the right one when expanded more generally. Much information will be submitted to the TRA from UK and overseas companies that is commercially confidential and has been given on the understanding and indeed requirement of confidentiality—among other things, under WTO treaty obligations.

I will leave it to the Minister to reply, but it seems to me that the amendment, maybe unintentionally, goes too far and could undermine international co-operation or even leave the UK in breach of international rules. Not that I would expect the TRA to do that, but it should be clear that it is not in contemplation, so as to avoid international misunderstanding. Maybe the amendment could be worked on to include some acknowledgement of those constraints.

[Baroness Ritchie of Downpatrick (Non-Afl) [V]]

My Lords, I support Amendment 80 in the name of the noble Lord, Lord Rooker, which is trying to create levels of transparency in the Trade Remedies Authority similar to the principles of openness and transparency that underpin the Food Standards Agency.

There is no doubt that the TRA must have operational independence to enable transparency and prevent any form of corruption in trade deals. We are in a new dispensation that requires such trade deals to bring benefit and, obviously, to be open, subject to the issue of confidentiality which, I believe, the noble Lord, Lord Rooker, covers in his amendment. In many ways, I suppose there is also that direct read-across with the need for an international trade commission, but that was dealt with in previous amendments on Tuesday in your Lordships’ House.

We are all aware of the concerns about hormone-infused beef, chlorinated chicken and other issues surrounding corruption. We therefore need those high standards of transparency and openness. In that respect, the model of transparency and openness ushered in by previous Governments back in 1999 and 2001 with the Food Standards Act, which set up the Food Standards Agency, provides a useful paradigm for the transferral of those principles.

There is undoubtedly a need for the Trade Remedies Authority. It should publish advice, and any information issued should be subject to issues of confidentiality. I believe that the amendment would enable openness and transparency and help to prevent the concern that pivots around the issue of corruption. I will be happy to support the noble Lord, Lord Rooker, if he wishes to bring the amendment back on Report.

--- Later in debate ---

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

This mixed group of amendments shows that there are a lot of ideas around the TRA and the thinness of the elaborated governance arrangements, which makes appointments all the more a matter of concern. Amendments up to and including Amendment 109, in my name and that of my noble friend Lady Kramer, concern appointments, the important matter of representation and how to ensure that stakeholders have a voice, and where that voice and influence take place.

We support a role for the Select Committees. I have already spoken about how it can be a positive experience all round. We also agree that there must be a voice and policy influence for stakeholders. However, there is a significant difference between where stakeholders are placed in Amendment 106, in the name of the noble Lord, Lord Stevenson, and in our Amendment 109. This difference is important in terms of what independence means for the TRA and it is that which I wish to probe, but the amendments both show that there are issues around devolution, regional representation and dispute resolution that are missing, as indeed they are in the internal market Bill.

Much of the concern about representation stems from the economic interest test. As I said on Tuesday, it has the potential to play an important part in final decisions about applying remedies and requires analysis of various socioeconomic factors, including effects in geographical areas. The test echoes the EU interests test but has been further elaborated, and as it only covers the UK, offers scope for greater granularity. Guidelines issued in 2019 broadly envisage the economic interest test being technical, but they also say that there should not be an over-prescriptive methodology. While such flexibility may well be appropriate, it does not diminish anxiety.

No other country has quite the same test. The EU’s is nearest, but it has majority voting of member states in Council as a final decider. On the economic interest test, we have the TRA and, in some very limited circumstances, an override possibility for the Secretary of State and then the Upper Tribunal.

The TRA will carry the burden of proof of having to show a disproportionate effect in order to remove or dilute a remedy that is otherwise shown as justified under international trade law criteria. This could be controversial, pitching consumer versus jobs and upstream jobs against downstream jobs that may be in different areas. There is also a requirement to consider competition and market structure, which at its core is also about consumers.

Reducing an otherwise justified remedy will inevitably cause upset—which is why most countries avoid it. It potentially puts the TRA in the position of “picking losers”, so of course stakeholders want to be there to make sure that they are not the losers. Even though there will be hearings and submissions involving all interested parties, there is reasonable justification for stakeholders having some closer involvement in the evolution of the policy, especially for the devolved Administrations.

--- Later in debate ---

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

My Lords, I share the concern of the noble Lord, Lord Bassam, and the noble Baroness, Lady Noakes, about the creeping power of HMRC to demand information, potentially from anyone, without any controls or supervision. I am a member of the Finance Bill Sub-Committee, and this is a matter that we, too, are investigating in our current inquiry.

Here in the Bill there is another swathe of powers, or potential powers. I am not against powers to investigate or to make sure that any taxes due are properly paid; the problem comes with generalised powers that can then be used beyond what might be called their proper limit, or exercised by individuals at relatively junior level without appropriate training. We have seen that before. HMRC also has a track record of being rather heavy-handed on innocent or easy victims—as with the loan charge—and missing the big fish.

Against that background, Clause 7 is drawn too wide. Clause 7(1), which kicks off the provision, is worded to cover any person. It is not limited to whether they have an interest or are connected in any way with the trade, business or profession. It could enable fishing anywhere—and potentially compulsorily under regulations made via Clause 7(3). Clause 7(3) also seeks to be able to amend Acts of Parliament on the type of information required and how the request is to be made, again without limitations. If it follows HMRC’s present trend, that could include seeking the disclosure of information that would normally require the approval of a court. I expect that that is intended, as it is in the current Finance Bill. That is already unacceptable, but at least it is in a Bill; it would become even more unacceptable were it done by regulation.

Once HMRC had got such information, Clause 8 would permit it to allow the onward disclosure of that information—again, at HMRC’s own discretion—which should not be allowed, and most certainly not in blanket form.

[Viscount Trenchard (Con)]

My Lords, I support Amendment 84 in the name of my noble friend Lady Noakes, which she moved so eloquently. Like her, I am a strong supporter of the Government’s trade policies, but I share her wariness about the Bill’s powers to require disclosure of information. I believe that it is not the kind of thing a Conservative Government should do, in so far as those powers go beyond what is absolutely necessary.

I also agree with my noble friend’s Amendment 87, and I ask my noble friend the Minister to explain exactly which other functions the Government had in mind when they drafted the rather convoluted language of subsection (2). I also agree with my noble friend’s Amendment 88. Why does the Minister think that HMRC should have the power to disclose what may well be sensitive information, the disclosure of which might have an anti-competitive effect?

I also have some sympathy with Amendment 85 in the name of the noble Lord, Lord Bassam of Brighton. Can the Minister explain in what circumstances he thinks it would be necessary and reasonable to use this Henry VIII power?

--- Later in debate ---

[Baroness McIntosh of Pickering (Con)]

My Lords, it makes sense to take Amendments 85A and 89A together and I am grateful for the opportunity to do so. It is generally believed in legal circles that Clause 7(1) and the whole of Clause 8 as currently drafted are extremely wide and give great discretion to HMRC to require information. A similar amendment was moved in the other place that these provisions should be much more clearly defined to give greater certainty about the extent of the information and the anticipated frequency of this method of data collection. As my noble friend Lady Neville-Rolfe described so clearly, while in normal circumstances it could be quite amusing, a breach of confidentiality or legal privilege is no laughing matter—and accidents and mistakes do happen. It is for that reason that Amendment 85A seeks to add at the end:

“Nothing in regulations made under subsection (3) may require the disclosure of information or the production of documents which are subject to legal professional privilege.”


Similar wording would be added to the relevant provisions of Clause 8.

I know that my noble friend Lord Younger went to some pains in summing up the previous debate to make it clear that the information would be provided on a voluntary basis—his defence was that there should be no compulsion. That indeed was the summing-up of my right honourable friend the Minister, Greg Hands, in the other place: that legal professional privilege was, in his words,

“a long-standing principle that protects the confidentiality of communications between lawyers and their lay clients and vice versa.—[Official Report, Commons Public Bill Committee, 25/6/20; col. 299.]

He went on to expand on why the principle is so important.

In thanking the Committee for the opportunity to speak to these amendments, I will say that it is felt that there are grounds to have these two amendments written into the Bill. Perhaps the Minister could meet me half way to make sure, by putting these phrases into the Bill, that there is absolutely no scope for anything to be done involuntarily or accidentally. With those few remarks, I beg to move.

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

My Lords, we support these amendments and, broadly speaking, I could just repeat my comments on the previous group. So, if your Lordships could take them as read, I will not repeat them.

The powers of HMRC cannot ride roughshod over matters that are protected, in this instance by legal privilege. It seems to me that HMRC cannot be put above the law as a matter of principle. I will repeat that there are concerns because of the current provision in the Finance Bill seeking to obtain access to bank accounts that would normally have required a court’s approval. There is also doubt as to whether, within HMRC, there are the appropriate procedures for the proper handling of some of the information that it may demand. The issue is around the training and abilities of the people who may access or disclose things who, if previous form is to be followed, can be in relatively junior positions. I think that these are matters that HMRC is trying to address but, despite that, it seems improper to demand to acquire powers before any safeguards are in place. Also, legal privilege would appear to me to need special protection, and therefore provisions to achieve the aims of these amendments would be useful in the Bill.

[Lord Bassam of Brighton (Lab) [V]]

My Lords, I thank the noble Baroness, Lady McIntosh, for her speech and amendments. As she says, the provisions in the Bill are quite widely drawn, and the amendments stop information on documents relating to legal professional privilege being disclosed. I well understand the sensitivity of legal professional privilege. All information between a lawyer and their client must be handled with care and confidentiality, so we will be listening carefully to whether the Minister’s response alleviates the concerns of the noble Baroness, Lady McIntosh. I suspect that her amendments are probing but, as the noble Baroness, Lady Bowles, said, they touch on sensitive issues.