(11 months, 3 weeks ago)
Lords ChamberMy Lords, I have some very real concerns about the impacts of the new failure to prevent offence on small and medium-sized entities. If my noble and learned friend Lord Garnier’s Motion E1 is agreed to, I think it could be very significant. I believe that the other place was wise to restrict the offence to larger companies only. Setting the threshold at the micro-entity level would still leave very many small and medium-sized entities within the scope of the offence.
I did try to find out how many companies would be affected. My noble friend the Minister said 450,000 companies would be brought within the net of the offence. According to Companies House statistics, around 3.1 million active companies filed accounts last year. Of those, 1.6 million were for micro-entities, and would therefore be excluded, but 1.4 million were for small companies that took advantage of the audit exemption. That, very broadly, is the group of companies that would benefit from the changes made by the other place; it is obviously rather more than 450,000. Whatever the number, there will certainly be regulatory costs for those companies, whether 450,000 or 1.4 million. My noble friend the Minister has given his estimate of what those costs will be. I have never placed much faith in estimates made by Governments of the direct costs of regulatory burdens that Governments try to impose. I generally put a multiplier against them to arrive at a more realistic figure.
However, I believe the most important cost is the opportunity cost that is imposed by regulation. Every time a new regulation is imposed, the people who run small businesses have to spend time away from thinking about their core activities, which should be wealth-generating. Every moment spent thinking about whether they have reasonable prevention procedures in place, or implementing those procedures, is a moment spent not thinking about how to grow the business or how to make it more profitable. Large companies have specialists to cope with all this. Small businesses often have no one beyond the proprietor of the business itself, but they are the very people who are supposed to be spending their time growing their businesses, thereby helping the UK economy to grow—and my goodness me, do not we need growth in our economy?
The cumulative effect of incremental regulation on individual businesses is huge, as any small businessman will tell you, but the cumulative opportunity cost for those businesses of missing out on that growth, and the impact that will have on UK plc, simply cannot be ignored when we are looking at any form of legislation that imposes burdens on businesses. I urge noble Lords to accept the pragmatic solution that the other place has put forward.
My Lords, I am greatly assisted by the correction made by the noble Lord, Lord Faulks; I had great difficulty in understanding the amendment on first reading. Now that he has corrected it, I would like to say from the point of view of a Scots lawyer that there is nothing startling in the proposition that is made. We in Scotland are quite used to the normal routine that law enforcement agencies are not liable in costs for the proceedings that have been taken, probably for the reasons that the noble Lord has clearly expressed.
(1 year, 3 months ago)
Lords ChamberMy Lords, Amendment 1 introduces a new clause after Clause 17. Amendments 2 and 3 in this group are consequential.
I am grateful to my noble friend Lord Callanan for adding his name to the amendments and I am even more grateful to my noble friend’s officials, who have produced these amendments at great speed in response to the less elegant amendment which I moved on Report last week. It is a great privilege to be given the opportunity to table these amendments in my name.
The underlying concept behind these amendments is transparency about the progress that the Government are making in dealing with retained EU law. This Bill now revokes only a portion of that law, but it will remain an important task for the Government to decide what to do with the rest of the laws on our statute book and ensure that they support the needs of the UK economy and our citizens. It represents a once in a generation opportunity to achieve significant regulatory reform.
Amendment 1 builds on the retained EU law dashboard, which pulls together all retained EU law and shows progress in reforming that law. While some have criticised the dashboard because the number of items of retained EU law continues to increase, the core information that it contains, including visual representation of progress, has been a great achievement. Subsection (1) of the proposed new clause places an obligation on the Secretary of State to update the dashboard. It also requires the Secretary of State to publish and lay before Parliament reports on the revocation and reform of EU law.
These reports will do three things: they will summarise the dashboard; they will set out progress that has been made in revoking and reforming retained EU law; and, importantly, they will set out the Government’s plans for revocation or reform. Information on the Government’s plans does not currently get reported in a comprehensive way, and so this should be a valuable data source both for parliamentarians and for those outside Parliament. The first report will be for the period up to 23 December this year, and there will be three more reports, the first two covering the years to 23 December 2024 and 23 December 2025 and a final one for the six months until 23 June 2026. The end date is, of course, the 10th anniversary of the great referendum vote and coincides with the final expiry of the powers in this Bill to reinstate or revoke EU law.
I know that noble Lords support effective accountability of the Executive to Parliament, and I believe that this new clause will improve Parliament’s ability to oversee how well the Government are delivering on their Brexit promises. I very much hope that by the time of the final report, 23 June 2026, if not earlier, the Government will have demonstrated that all retained EU law has been dealt with, whether by a positive decision to keep it intact or by revocation or reform. Last week the noble Baroness, Lady Chapman, and the noble Lord, Lord Fox, were less than enthusiastic about my amendment on Report. It is perhaps wishful thinking to think that this new and improved version will result in a change of heart, but none the less I commend it to them. I beg to move.
My Lords, this amendment, which I fully understand, places a lot of emphasis on the capacity of the retained EU dashboard, but there are some important deficiencies in its capacity, the most important of which is that it does not contain any post-devolution legislation. That can be demonstrated by looking at the schedule that has just been introduced into the Bill. There is not a single item of post-devolution material on it.
When the Common Frameworks Scrutiny Committee, of which I am a member, invited some officials who work on the dashboard to address us and explain how it works, we asked them whether there was any post-devolution retained EU law on the dashboard. They told us that there was not, that devolution material was not there. We asked whether it was the intention that it should include post-devolution material and they said that it was not and that it was not designed to do that.
So there is a question I would like to ask, and I think it is fair to ask the Minister, about what the position truly is on this. I do not think he has ever fully acknowledged, at least in this Chamber, the fact that the dashboard does not contain post-devolution material at all. Is it intended that the dashboard should be updated, as is the obligation in the amendment, to include post-devolution material? If so, when will that be done and is it clear that the devolved Administrations are able to do that in time to meet the first deadline, which is the end of this year? They have a great deal to do already with the amount of work which is required of them by the Bill, and to have to work on updating the dashboard as well might be beyond their resources. This is a very important issue. I am not trying to undermine the amendment, but I want to understand its capacity to do what the noble Baroness, Lady Noakes, told us it is intended to do.
(1 year, 3 months ago)
Lords ChamberMy Lords, there are references—for example, in Clause 16—to a sunsetting date, so there are parts of the Bill that retain sunsetting and it has not entirely been departed from. I see the value of sunsetting and I am in favour of reforming our rules book, but it would be a mistake to think that we were taking the brake off completely; that is not the way the Bill is constructed.
With the greatest respect to the noble and learned Lord, I think the main substance of sunsetting has been removed by the amendments put forward by my noble friend because we do not reach a cliff edge at the end of this year, or such a later date as might have been put in place, for the whole of retained EU law to disappear if it had not been dealt with. That is the issue that I was referring to.
Perhaps I could just complete what I was saying. I hope that between now and our next day on Report we can have some constructive dialogue with my noble friend the Minister about how we can have some kind of process, information sources, or whatever, to ensure that what we have lost with these amendments—which is ensuring that we deal with the whole of retained EU law—can be salvaged.
(3 years, 2 months ago)
Lords ChamberMy Lords, I will be brief. The requirement in these amendments for regulations to be published in draft form and consulted on is sensible, for the reasons that the noble Baroness has given. I just do not see why they are confined to this so-called priority list, because any profession that could be brought within the ambit of Clause 1 or Clause 3 should be treated in the same way. While we can sympathise with the medical professions and vets being priority groups over such mundane things as auditors and farriers, in practice any profession that might be impacted by these sorts of regulations, and could therefore have its standards impacted, ought to be covered in a consultation process.
I do not think the consultation process, as drafted in these amendments, should be confined to the regulators, because it is not just the regulators themselves that would be impacted by any regulations made under these clauses; so would the professionals operating in those regulated professions and all the other groups affected by them. I support consultation being in the Bill because of the unusual nature of the powers the Bill is taking, but I do not think it should be confined to the so-called priority groups.
My Lords, I have added my name to Amendment 27, which is principally in the name of the noble Baroness, Lady Hayter of Kentish Town. There is a lot to be said in this particularly obscure Bill for the publication of regulations in advance of their being made, so that people can see them in draft and consider them before they take effect. Regulators themselves would of course be consulted if this amendment is passed, but publication gives the opportunity for the wider public to scrutinise them, and no doubt inform this House and the other place, before the crucial point comes when the regulations are made. So I support this particular amendment.
There is a lot of force in the point just made by the noble Baroness, Lady Noakes, that to confine this provision to the priority professions perhaps misses the point. Perhaps there should be a requirement across the board. There are other important professions that are not in this list. I am not claiming this particularly for the legal profession, as there are certainly other professions that are absent from this list, given the enormously long list of people who are within the purview of this Bill. The amendment may be a starting point but, for what it is worth, I support it.
(3 years, 10 months ago)
Lords ChamberMy Lords, I would like to remind the Committee of two things about this Bill. First, the Bill is to facilitate trade between all parts of the United Kingdom, not make it harder. Secondly, businesses favour barrier-free trade. That was the very clear message that came from the consultation on the White Paper during the summer. We should be trying to minimise the possibility of barriers being put up to trade within the United Kingdom.
If we allow exclusions of goods from mutual recognition, that will inevitably lead to higher costs. This is analysed in quite considerable detail in the internal market White Paper. Costs generally end up being borne by consumers. Excluding goods can also result in businesses deciding to withdraw from certain markets, which can in turn restrict consumer choice. I know the noble Baroness, Lady Hayter, is keen on consumer protection; she reminded us of that on the first day of Committee. Restricting trade tends to operate against consumer interests, so we should be very careful in trying to put amendments to the Bill that make trade more difficult. I also remind noble Lords that restricting trade is more likely to hit the devolved Administrations’ economies because of their greater dependence on exporting to the rest of the United Kingdom.
I want to comment on a couple of the amendments in this group, Amendments 7 and 8. The noble Baroness, Lady Hayter, said that Amendment 7 was a probing amendment, but by seeking to exclude imports into any part of the United Kingdom we are reducing the internal market rules to a very parochial interpretation. It seems to ignore the plain fact of commercial life, which is that there are complex supply chains and complex distribution logistics. It is of course the way we have been living in the EU; at the moment, we are quite accustomed to importing in one place and those imports being accepted throughout the rest of the community.
It also seems to me that the noble Baroness’s amendment would, in effect, impact exports between different parts of the United Kingdom. For example, if something was exported to Wales and imported to England, it would stop it then being imported into Scotland with the protection of the internal market Bill. That does not seem to make any kind of sense. It is pretty clear from the impact assessment that Wales and Scotland in particular are reliant on intermediate goods coming from other parts of the United Kingdom.
The noble Lord, Lord Rooker, spoke to Amendment 8. I did not follow what he said about pig semen because I do not think that, by any definition, pig semen is an animal feedstuff. I did have a chance to check the definition of “animal feedstuff” while he was speaking, and it is not. Perhaps we can put that to one side. We have to understand that if we try to exclude food and animal feedstuffs from the UK internal market mutual recognition rules, this will again potentially impact the devolved Administrations the most, given their import and export profiles. For example, if you look at Wales’s agri-food chain, you will see that 48% of agricultural inputs to Welsh food manufacturers come from the rest of the UK and 31% of food and drink sold in Wales comes from the rest of the UK. We should be thinking really hard about who we are likely to hurt when we put amendments such as this in the Bill, which restrict barrier-free trade.
My Lords, I support Amendment 7 in the name of the noble Baroness, Lady Hayter, and Amendment 21 in the name of the noble Baroness, Lady Finlay.
I shall start with Amendment 7. First of all, I entirely agree with the noble Baroness, Lady Noakes, that importing and exporting goods is part of the commercial life of this country. That applies across all parts of the United Kingdom, and one can well understand the point that she makes about the importance for the devolved Administrations of maintaining that system with as little interference as possible. However, the point to which Amendment 7 draws attention is a matter of real concern to the devolved Administrations. As she explained, its effect appears to be to deny them any involvement in decisions on the importation of goods from overseas, to which they might wish to take objection. Various horror stories are of course passed around as one discusses this issue, but I am not concentrating on them so much as I am on the simple lack of ability to contribute to a discussion as to whether or not these goods should be imported.
If one was talking about legislation, I suppose one would say the Sewel principle would apply and consultation would take place, but there appears to be nothing that allows for that. The effect of the way the provision is worded is that something that comes in can take the benefit of the principles and pass without any kind of control to the devolved Administrations, without their having any say. That is of real concern. This is a probing amendment, but it requires some explanation of what place, if any, the devolved Administrations have in trying to resist the importation into, and transmission across borders within, the UK of goods to which, for one reason or another, they might wish to take exception.
That covers Amendment 7. As for Amendment 21, I was attracted by what the noble Lord, Lord German, said about the dual carriageway—the parallel lines—for a particular reason, which I have not mentioned before but must be emphasised. The common frameworks are living arrangements. There is no point at which one can strictly say that a framework has come to an end, although I confess that my own amendment suggests that it could happen. These frameworks are open to subsequent discussion and revisiting as things change. For example, much of the UK emissions trading system is based on EU law and treaty arrangements that could change. If that happened, the framework would be revisited, and, no doubt, different policy decisions may need to be taken. The same is true of the hazardous substances framework.
One has to bear in mind these are two living instruments working side by side: the UK internal market and the common frameworks system. The fact that, as the Bill has it at the moment, there is no means by which they can communicate with each other, is a matter of real concern, because it affects the whole structure of how these things co-operate and will co-operate in the future, in ways we cannot yet predict. That underlines the importance of trying to find a solution to the point I drew attention to on Monday of making some arrangement whereby the decisions taken, based on common framework decisions, to legislate in the devolved Administrations are protected against the effect of the market principles, particularly the non-discrimination principle, which has very broad reach indeed.
The great value of the amendment of the noble Baroness, Lady Finlay, is that it has drawn attention once again to that very real problem. It requires some response from the Minister so that we can have some idea of how he thinks these two parallel carriageways, stretching out into the future, will ever meet and co-operate with one another.
(3 years, 10 months ago)
Lords ChamberMy Lords, I want to add a few words in support of Amendment 2. Proportionality and subsidiarity are part of the language of EU law which, while relatively new in historical terms, we are now very familiar with. It would be a mistake to think that as we reach the end of the transition period, we should leave these concepts behind. Proportionality, after all, is deeply embedded in our own public law, and has been for decades. It has long since been recognised that black-letter law alone is not a good guide to the way in which public law and public affairs should be administered. One simple example can be found in the civil litigation rules, where the word appears to make it clear that the courts should seek to obtain a just result with appropriate speed and expense in giving effect to the rules that are set out in the document. The point is that individual facts and circumstances vary greatly across the spectrum. Proportionality allows them to be taken into account and avoids blunt decisions where a greater need is to fit the facts together with the rule to find a suitable result that will achieve the desired object.
Subsidiarity too is now deeply ingrained in our constitutional arrangements. It is part of the thinking behind devolution, and the word is used with reference not only to Wales, Northern Ireland and Scotland but to devolution throughout England. The great advantage of this is that local decisions are best taken with regard for local circumstances. For them to be taken centrally sometimes misses the point and leads to solutions that are inappropriate given the local circumstances. It is a useful tool best used in the administration of our affairs to make sure that things are properly organised across the whole of our United Kingdom, which, after all, is what our new internal market is all about.
Both these principles are sound and appropriate guides as to how the two basic principles which are set out in Clause 1 should be administered. I support the argument that, somehow, these principles should find a place in the Bill. Quite how that is done I leave to the draftsmen, but Amendment 2 is at least an important start to make sure that the significance and relevance of these principles are appropriately recognised.
My Lords, I offer a few comments on these amendments. It seems to me that Amendment 1 has the effect of confining the concept of the internal market to consumers and the environment. That completely misses the point. If we go back to the Government’s White Paper in July, we see they were clear that the policy objectives were economic opportunities across the UK, increasing competitiveness and making the UK the best place to do business, thereby supporting the general welfare, prosperity and economic security of all UK citizens. The amendment in the name of the noble Baroness puts the cart before the horse, trying to make that an overarching requirement when it should be a consequence of achieving all the other things.
I emphasise that this is about frictionless business—about making it easy to do business across the UK. In all our debates, we should not lose sight of the importance of this to the devolved nations. About 60% of the exports of Scotland and Wales go to the rest of the United Kingdom; for Northern Ireland, it is a fraction below 50%. They are important to those economies. We are trying to create an environment in which trade can prosper and grow within the UK, without barriers, which will in turn allow the other objectives to be achieved—for example, the protection of consumers and supporting the general welfare of the country.