United Kingdom Internal Market Bill

Baroness Penn Excerpts

Consideration of Commons amendments & Ping Pong (Hansard) & Ping Pong (Hansard): House of Lords
Wednesday 9th December 2020 Lords Chamber

Moved by

[Baroness Penn]

That this House do not insist on its Amendments 48 and 49 to which the Commons have disagreed for their Reason 48A.

48A: Because they would alter financial arrangements made by the Commons, and the Commons do not offer any further Reason, trusting that this Reason may be deemed sufficient.

[Baroness Penn (Con)]

My Lords, the Government have reinserted into the Bill the power to provide financial assistance. This was removed by your Lordships’ House through Amendments 48 and 49. There is a point of parliamentary principle at play here, which is that the other place wishes to assert financial privilege and preserve that House’s right to decide on public spending arrangements. Indeed, that is the reason for disagreement that has been sent from the other place, and we must respect its financial primacy. It would be contrary to normal practice for noble Lords to insist on any amendment disagreed for a privilege reason. Indeed, it is the only reason given by the Commons, as it alone should be deemed sufficient.

However, we have also heard clearly from the other place that this is a power they wish to remain in the Bill for other reasons, when asked to think again by your Lordships’ House. These clauses form the financial assistance power, which enables the UK Government to deliver strategic investment in all four corners of the United Kingdom. This is all the more important as businesses and communities throughout our countries recover from the Covid crisis. The past few months have demonstrated clearly how important the responsiveness and scale of UK Government support can be to protecting lives and livelihoods.

This power will cover infrastructure, economic development, culture and sport, and will support educational and training activities and exchanges both within the UK and internationally. These are policy areas in which funding was previously provided by EU programmes under terms and conditions set by the EU. It is right that, as we leave the transition period, the UK Government have the right tools to make sure the whole country can benefit from investment which strengthens the communities, economies and connectivity within and between all parts of the UK.

I emphasise again that this power is in addition to the devolved Administrations’ existing powers. It does not take away responsibilities from the devolved Administrations; rather, the power will enable the UK Government to deliver investment more dynamically and in collaboration with the devolved Administrations and other partners. The Government will work with the devolved Administrations to make sure that we can complement their existing and continuing powers, used to support citizens in Scotland, Wales and Northern Ireland. We will also work collaboratively with other crucial partners, including local authorities and wider public and private sector organisations.

We have taken this collaborative approach to investment with devolved Administrations already: for example, through our successful city deals programme. The UK Government intend to continue to work in this spirit of partnership with stakeholders as we deploy support with this power. Practically, the power means that the UK Government can make good on our commitment to the UK shared prosperity fund. We have published our heads of terms for the fund online. The UKSPF will help to level up and create opportunity across the UK in those places most in need—such as ex-industrial areas, deprived towns, and rural and coastal communities —and for people who face labour market barriers. These places will then develop investment proposals, with input from a range of local partners, to be approved by the Government. We will set out further details on the objectives and administration of the UKSPF in a UK-wide investment framework published in the spring. We will continue to engage the devolved Administrations as we develop the investment framework and in advance of its publication.

The noble and learned Lord, Lord Thomas, has put forward Amendments 48B and 48C. Let me be clear that the UK Government intend to work with both the devolved Administrations and local communities to ensure that this power is used to best effect and that the UK shared prosperity fund supports citizens across the UK. Indeed, the devolved Administrations will be represented in UKSPF governance structures. Our intention is to work with the devolved Administrations and respect the devolution settlements, and I hope that noble Lords will take this as a demonstration of that commitment. I can assure the House that officials in the Ministry of Housing, Communities and Local Government will continue their ongoing conversations with their counterparts in the devolved Administrations, and will discuss the detail in due course. This provides one example of what we seek to deliver with this power, but I hope it makes plain our intended approach for working collaboratively, while taking a UK-wide view of investment opportunities, to support all parts of the country. As such, I hope that this will encourage the noble and learned Lord not to test the opinion of the House on his Motion.

Motion K1 (as an amendment to Motion K)

Moved by

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

My Lords, I thank the Minister for her clear and concise introduction to this topic. Although she said she was relying primarily on the Commons argument that this issue engages financial privilege, she recognised there were other issues going on, and it was good of her to take the argument a bit further. We are, as the noble Lord, Lord Fox, has also said, completely cognisant of the restrictions placed on the House due to financial privilege being engaged. The noble and learned Lord, Lord Thomas, made a compelling case about the wider issues, and it is important to have those on the record. I will add to the list of points he made.

The Government clearly assert—and we believe them —that these will be additional to existing powers, and we should not be concerned, as we have been, that the devolved Administrations will have their responsibilities and authority challenged in this way. The Minister said that the driving force behind the shared prosperity fund is to add and complement existing arrangements. If she wishes to repeat it when she winds up, that would be helpful. In that sense, there should be no need for the concern that is currently in the devolved Administrations about that particular aspect of it. We do not have the detail, and I think she said the likely outcome for their consultation would not be before spring 2021, which seems a long way away in terms of what we are doing. We accept that existing programmes are currently running out—but they are running out; they are not being continued at the same level and, therefore, there will be a shortfall unless the Government are prepared to move a bit faster than the current timescale suggests.

The Minister also confirmed—and this is good news —that there will be engagement with the devolved Administrations. When she responds, perhaps she could explain a bit more about what that means. We have already heard from the Government today about programmes of engagement that have involved substantial change in previous views; it would be good to hear that language repeated when she talks about how the devolved Administrations might be engaged with this process.

The Minister has confirmed there will be some form of shared prosperity fund board, which is interesting. She may recall that at the previous stage of this Bill, we proposed a shared prosperity commissioner. I said at the time, and I still think, that that was code for a board, because we were trying not to engage financial privilege. We have clearly failed in that. Can she confirm the board will be independent and say more about the powers that might be invested in that board? Can she also talk a bit more about whether the programme itself, when it is brought forward, will be subject to guidelines? Will those be published and discussed before they are invented? Will there be themes to it, as there have been in previous rounds of the regional structural funds? Will the funds be competitive and open to all countries to bid for? Can she confirm, most importantly, that the plan will be for the funds under the shared prosperity fund to be separate from any Barnett formula calculations? That is not in the sense of making people not eligible for funding—that is not what we are about here—but a needs-based or different set of indicators to set out the ideas under which the shared prosperity fund will operate. I look forward to hearing her response.

[Baroness Penn (Con)]

My Lords, I thank noble Lords for this short but very useful debate. I think it might be useful to take the points of the noble and learned Lord, Lord Thomas, in turn. On the first point on financial privilege, I think the noble Lord, Lord Fox, was wise to stay out of that one. All I can say to this House is that the decision on financial privilege is made by the Speaker on advice from the clerks. It is the only reason, when invoked, that can be given. Though I have spoken to others, that is the process in the other place.

On the second point on the consultation of, and consent from, the devolved Administrations on spending on these matters, I have said before, and will again, since the noble Lord, Lord Stevenson, asked me to reiterate, that this is about an additional programme of spending to support the work of the devolved Administrations but also about taking a strategic look across the whole of the UK. It is important to remember that the main fund we are talking about, when it comes to the use of this power and the shared prosperity fund, replaces EU structural funds that were determined at an EU level for the needs of many different nation states. They were determined at an EU level and, while they may have been managed and delivered at a local level, the structure, framework and principles that people had to deliver were decided at an EU level.

The third point was about a principled basis for the funding. The Government set out, at the spending review, the heads of terms for the shared prosperity fund. Those have begun to outline how the shared prosperity fund will work. A portion of the SPF will target the places most in need across the country, such as ex-industrial areas, deprived towns and rural and coastal communities.

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[Baroness Penn (Con)]

My Lords, the Government made a number of commitments on the shared prosperity fund in the manifesto, both about the overall quantum of the fund and the funding that different parts of the UK can expect to receive. We set out in the spending review that that would ramp up to £1.5 billion per year as the structural funds tail off. Our approach will be guided by that but, as I say, more detail will be set out in advance of the operation of the fund in spring next year, with the multiyear settlement coming in the following year.

[Lord Thomas of Cwmgiedd (CB) [V]]

I thank all noble Lords who have spoken in this short but interesting debate. I will deal with the Minister’s points in turn.

First, it seems clear that these powers—the Minister actually said this in Committee—were being taken to give the UK Government power to spend across the United Kingdom. These powers would plainly not be needed unless they were encroaching on devolved powers. City deals can be done without them; the Government can spend without them. I say respectfully to the Minister and to those who say this is a financial matter that it is not. When powers are devolved, the spending power goes with them. The reason of financial privilege is not correct.

Secondly, on how the funding works, I find it difficult to understand why, in light of what the Minister has said, she cannot agree to the very short amendment I have put forward. It spells out the principles, deals with consultation and ensures that, within the areas of devolved spending only—the amendment is clear on this—there should be agreement so that funds are spent together. With respect, the importance of this amendment is to show that, as we go forward, we do so as a United Kingdom with the central UK Government and the devolved Governments working closely together. Putting this provision in the Bill, particularly the structure under which this is to be done in this area, would be an enormous reassurance. It would strengthen the union, not imperil it, by enabling inconsistent spending to occur in devolved areas. Having listened to the debate and heard what all noble Lords have said, I seek to take the opinion of the House on this issue.