Workers’ Rights

Lord Fox Excerpts

Tuesday 26th January 2021 Lords Chamber

[Lord Callanan (Con)]

There is no plan to make vulnerable workers more vulnerable, as he put it. The House should be in no doubt that the Government will always stand behind workers and continue to stamp out unscrupulous practices where they occur.

[Lord Fox (LD) [V]]

My Lords, I know of no business organisation calling for the Government to cut back workers’ rights, but no matter how much the Minister protests, the Government did sound the working time dog whistle to Back-Bench Tories. Business are calling for help to retain and recruit people through, for example, a cut in employers’ national insurance contributions. Will the Minister undertake to redirect the activities of his department to ensure that the Treasury brings in this vital support to our businesses?

[Lord Callanan (Con)]

I am sure the noble Lord is well aware that I cannot speculate on tax changes. They are a matter for the Chancellor. I would get myself into serious bother if I tried to pre-empt what he might decide to do.

Trade Bill

Lord Fox Excerpts

3rd reading & 3rd reading (Hansard) & 3rd reading (Hansard): House of Lords
Monday 18th January 2021 Lords Chamber

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

My Lords, I welcome this group of amendments. I pay tribute to my noble friend and his colleagues, who have successfully engaged the legislative consent from the Scottish Parliament. I say that as someone of Scottish descent, and a non-practising member of the Faculty of Advocates.

I honestly do not believe that we would have got to this pass if it had not been for the intervention of a number of noble Lords, but especially the noble and learned Lord, Lord Hope of Craighead, among others, who intervened at all stages of what is now the United Kingdom Internal Market Act. I hope my noble friend will join me in paying tribute to the ongoing discussions on the framework agreements between the four nations that will be increasingly important as we develop trade, agriculture and environmental policy. But I am sure that there was more than a minor hiccup in engaging with the Scottish Parliament, so I congratulate him and I welcome these amendments in bringing us to that pass. Although he describes them as technical and not significant, I think they are a major step along the path to securing the passing of the Bill as it proceeds to the Commons.

[Lord Fox (LD) [V]]

Following two previous attempts spread over years, the Trade Bill seems finally to be making its way towards the statute book, perhaps by way of ping-pong. These amendments were described by the Minister as essentially technical housekeeping. I agree with him and certainly with the amendments, but perhaps it is appropriate that the final amendments we will discuss focus on inserting the Bill into the devolution settlement, as symbolised by the Scotland Act.

As the noble Baroness, Lady McIntosh, said, the Trade Bill is about setting Westminster’s role for the future, just as the internal market Bill did. I am pleased to hear about the legislative consent from Scotland and Wales, but in the past months these Benches have shown that we disagree with the way the Bill has avoided the effective involvement of Parliaments and Assemblies in the United Kingdom, taking a lot of power for the Executive.

But we have had those debates, and I will use this time to focus on some elements of the application the Trade Bill might enjoy. It is worth pointing out that the UK will be embarking on this so-called independent trade policy when the global trading environment is—how should I put it?—challenging. Even before the massive uncertainty of the global pandemic there were increasing trade tensions and a slowdown in the global economy.

Yet when I listen to the words coming from government mouths, I often hear echoes of British exceptionalism. Phrases such as “sovereign island nation”, when trotted out, seem to hark back to the 19th century. It is this backward view of the world that most disturbs me. I hear overtones that reflect the use of trade deals in a way that European nations did to compete for imperial domination in the 1800s.

At the heart of this is a total lack of understanding of the nature of modern global supply chains. Despite ministerial remonstrations when debating the Bill, it is impossible for me not to take the recent deals as examples of trade policy and how they are being applied. Of course, we could look at the rollover deals, but none of these has delivered anything material that we did not have before, so there is not much material there.

Then we come to the EU and UK deal. Clearly, there are substantial changes here that point to the direction we are travelling in. It is hard. It demonstrates this lack of understanding of how the flow of goods and services is facilitated by supply chains. Such flows are no longer maintained by access to the clipper ships of the East India Company, as this nostalgia seems to reflect, but nurtured by standards, people and data—three areas the EU trade agreement fails to enhance.

The role of shared standards and regulations is becoming only too apparent to our exporters struggling with serious border friction. Meanwhile, the lubricating effect to trade of mobility frameworks and mutual recognition of skills has yet to impinge on the wider public. However, I believe the tone of the Government’s responses to amendments addressing these issues will ultimately be seen as foolish. Finally, there has been no progress on data flows. That problem has just started.

Christmas Eve was not the end of this story; it was one step in a long process of negotiation. There will be protracted and difficult discussions about implementing the provisions covering trade in goods. We are starting to see this. Then there are two key areas outstanding. The first is financial services. Talks on an equivalence deal are taking place over the next three months, but this will exclude core banking services such as lending, payments and deposit-taking. If the EU and the UK fail to secure agreement, the UK will be left with the task of negotiating separately with 27 member states.

Then, as I said, there is data adequacy. The EU Parliament has severe reservations regarding sharing data with the UK. There is great suspicion over the potential onward transfer of data to the USA. Overcoming these fears will require much more than the Prime Minister looking into the eyes of MEPs and saying, “Trust me”.

However these go, the EU and the UK will remain in low-level dispute on all sorts of issues far into the future. Through all this, the UK will have to calculate the impact of whatever is agreed with the EU on its efforts to conclude bilateral trade agreements with other countries.

I question how the Government will use the much-vaunted freedom that they and the Prime Minister parade. As my noble friend Lord Purvis indicated, the UK Government are already looking for opportunities to diverge from the EU to demonstrate the symbolic value of Brexit and perhaps to pursue what they see as an advantage. Yet each change, each extra difference adds new friction to the EU-UK trade border. For every action there stands a possible reaction and a cost. We will see as time goes on whether the UK trade machine has the depth and sophistication to walk these lines. The weekend leaks on the working time directive and the Chancellor’s “big bang 2” speech seem to indicate otherwise.

The Bill sets a framework for trade. The Executive have taken upon themselves such powers that they will have no one else to blame for the results.

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

My Lords, these are minor and technical amendments. Agreeing to them should pose no difficulty to us. In introducing them the Minister spoke very warmly about his commitment to working with the devolved Administrations. It is very good to hear that two of the three have now passed their required legislative consent Motions. It is a pity that Northern Ireland simply was not able to do so, but it does speak to progress.

The noble Baroness, Lady McIntosh, made a good point about the need to keep an eye on the ball here, because these issues go far wider than just the trade debate. They certainly came up on the internal market Act, but they go further than that as well. We need to be sure that those who work and operate outside central London feel confident that the responsibilities available and open to them to achieve what they want for their communities will not be obstructed by any centralising force in government. This will come out of this Bill, but it also needs to be taken account of much more widely.

I look forward to the Minister’s response to the points that the noble Lord, Lord Curry, made on the TAC. This body is still shrouded in a certain amount of mystery. Maybe we can reach some further development on that with Amendment 1, which we discussed earlier, but we still need to spend some time talking about how we might take forward the issues that remain unresolved as the Bill goes from here to the Commons.

The noble Baroness, Lady Neville-Rolfe, was extremely agile in finding a way to bring back an issue she had raised previously. I respect her ability to do that. I also look forward to the Minister’s response. There seem to be two big issues here. There is the question about how the trade information will be gathered: will it be tick-box, voluntary or otherwise? If it is voluntary and tick-box, why is it necessary to use such an extraordinary amount of legislative time, and in particular the Henry VIII power in the Bill? The legislation seems to require only a very minor change to encourage people to register their interests in exports. If that is the case, why on earth does the Minister need to take powers that might change primary legislation? I look forward to his full response to that.

The noble Baroness also raised confidentiality, which I know she feels very strongly about. It can perhaps be dealt with without too much consideration, because it seems obvious, but it could bear further examination. Perhaps further discussions can take place, if not today, on what is happening with the information that has been gathered.

We have no objection on the narrow point of the government amendments before us. I am sure that they will pass.

Trade Bill

Lord Fox Excerpts

Report stage & Report: 2nd sitting (Hansard) & Report: 2nd sitting (Hansard): House of Lords
Tuesday 15th December 2020 Lords Chamber

Moved by

[Lord Fox]

13: After Clause 2, insert the following new Clause—
“Mobility framework with the European Union
For the purposes of facilitating the continuation of trade with the European Union, the Secretary of State must take all necessary steps to secure a mobility framework with the European Union that enables all UK and EU citizens to exercise the same reciprocal rights to work, for the purpose of the provision of trade in services.”Member’s explanatory statement
The new Clause places an obligation on the Secretary of State to take all necessary steps to secure a mobility framework with the European Union.

[Lord Fox (LD)]

My Lords, the amendment is in my name and I thank other Peers who have put their names to it. It would insert a new clause that places an obligation on the Secretary of State

“to take all necessary steps to secure a mobility framework with the European Union”.

For some time, there was an assumption that any free trade agreement with the EU would include a chapter on mobility and mutual recognition of qualifications. It is clear that even if there is an FTA, no such provision would emerge by 31 December. Therefore, the amendment is a way in which to address the need for the Government to think again and focus on this issue, whether it is through the FTA or in some other way.

At Second Reading, the Minister—the noble Lord, Lord Grimstone—said that his aim was to maximise economic benefit. As I said in Committee, it is surprising, given the Secretary of State’s acknowledgement of the importance of services to trade, that Her Majesty’s Government are so blind to what they are doing by cutting off or making much more difficult the essential movement of people. In truth, the need for mobility has already been recognised in other deals. Indeed, other trade deals have mobility frameworks such as those agreed with Japan, which was presumably put there by the Japanese to facilitate the support of their manufacturing industry and financial sector, and with Switzerland, to allow the free movement of certain financial industry functions. However, in this context, movement between the UK and the EU is much more important in terms of meeting the Minister’s aims of maximising the economy.

As the noble Viscount, the Minister, knows, the UK services industry accounted for over 40% of the UK’s exports to the EU in 2018. As well as the acknowledged financial and banking industries, those exports include legal, accounting, advertising, research and development, architectural and other professional and technical services. Then there are all the creative, musical and artistic areas that involve people who have been moving seamlessly through Europe, adding not just to the cultural richness of our relationship with Europe but to the financial performance of the UK. From January, these sorts of movements will either not be possible or be extremely difficult.

In her speech in Committee to a similar amendment, the noble Baroness, Lady Bull, set out clearly the five modes of services traded across borders. I recommend that the Minister rereads her speech if he can. One of the modes that she raised was fly-in, fly-out. Every month, according to industry, around 10,000 people move between UK and EU manufacturing, more than the Government’s estimate of 53,000 per year. As the Minister will appreciate, they include engineers, technicians and the like, who are providing the services that keep manufacturing going. In return, EU people come the other way.

Let me give an example. I am using the Germany-to-the-UK version and I declare my interest as a vice- president of the German-British Forum. Let us say a German company sells machinery to British industry—as many of them have, to a great extent. That could include the transport, power supply or car industries. In many cases, both the installation of and ongoing technical support for that machinery comes from technicians who come from Germany. They are not necessarily German, but they come from Germany, sometimes at very short notice. If something goes wrong, as of today, a technical team of people who are specialists in particular pieces of equipment, which are often wide-ranging, will fly in. The number of people sent and the individuals in question depend on their availability and the other contracts that the company has.

As it stands, the current immigration policy for tier 5 temporary workers does not appear to cater for this sort of situation, which requires a reliable approach as individuals generally cannot be named in advance and the length and frequency of the stint that they perform when they are in this country are unknown. This is a real issue that has not been borne in mind. I understand that we are talking about the Trade Bill but trade involves the free movement of people to make things happen and make things flow.

Cross-border work is further hampered by the absence of mutual recognition of qualifications. In Committee in September, during the debate on a similar amendment, the Minister—the noble Viscount, Lord Younger of Leckie—said that negotiations with the EU were opening on this matter. That seemed late then, 90 days before the end of the transition period. It would be helpful if the Minister could update us on how those negotiations are going, what sort of mutual recognition regime we can expect on 1 January and, if there is no agreement, what the contingency plan is, so that we can make sure that the valuable skills of the people from the European Union working in this country are recognised and the valuable livelihoods of British people are still alive and kicking.

We are about to plunge into high unemployment; the figures show that unemployment is a very serious developing issue. However, the people being cut off are the sort of people who can to help to grow the UK out of this unprecedented situation. This sort of immigration policy and the lack of a mobility framework sends a message to would-be entrepreneurs from across Europe—people who tended to flock to the United Kingdom because they saw it as a great place, where they were welcome and could work to the advantage of everybody in the country. It is not just about them; it is also about the movement of the people who are not necessarily well paid but form their teams.

This amendment proposes a new clause that places an obligation on the Secretary of State to take all necessary steps to secure a mobility framework with the European Union. Trade is increasingly about people and this Trade Bill ignores this. This amendment requires the UK to negotiate that mobility framework. To fail to do this is to invite the law firms, architectural practices and many other service industries to set up offices that were in this country in the rest of Europe. To fail to do this is surrendering jobs and the considerable tax take they bring to other countries. It is cutting off cultural interchange and opting to make manufacturing in this country harder and less attractive. In short, the process we are entering is disrupting the human supply chain which keeps this country running and growing. I beg to move.

[The Earl of Clancarty (CB)]

My Lords, I am grateful to the noble Lord, Lord Fox, to be able to support this amendment. We do not yet know whether we will get a deal with the EU or what exactly the deal will look like if we do. What we can say is that a no-deal on services will be a no-deal for the country, irrespective of whether we get a deal. The Government and the media have consistently underestimated the importance of service industries, both to this country and as part of our trade with Europe. Service industries are 80% of our GDP, a statistic we have repeated many times in this House. Our services trade with Europe makes up 51% of our services exports. As it stands, Europe is a hugely important market for services—the most important. Due to the significance of geography to service industries, it is one that is frankly irreplaceable.

Services have not been ignored in all quarters. In an interview with the Observer on 1 November before stepping down as director-general of the CBI, Carolyn Fairbairn said that her “really big disappointment”—her exact words—was the lack of help for services in the potential deal. The recent report by the EU Services Sub-Committee, The Future UK-EU Relationship on Professional and Business Services, raises similar concerns —not least those shown by the creative industries. The amendment moved by the noble Lord, Lord Fox, does not specify what the precise nature of the mobility framework should look like. The so-called mobility arrangement that Liz Truss has just signed with Switzerland agrees 90 days’ visa-free work a year. If this a sign of what is to come for EU countries, it will still not be enough on its own for much of the sector—which demands longer stays and ease of movement between European countries. This will be—

--- Later in debate ---

To summarise, the Government are already open to measures in negotiations that seek to provide reciprocal arrangements. This would allow businesses to send their employees to deliver services on a temporary basis. Therefore, I ask that this amendment be withdrawn.

[Lord Fox (LD)]

My Lords, I thank your Lordships for a good debate, and I thank the noble Earl, Lord Clancarty, for giving his speech twice. In the main, your Lordships spoke in favour of the amendment. Indeed, I even heard the noble Viscount, Lord Trenchard, say “The noble Lord, Lord Fox, is right”—words I had never expected to hear on this planet.

I am fascinated by the “take back control” defence because, first, it defines control as slamming the door. It does not define control as having the confidence to negotiate mutual relationships that will create opportunities for people. It is a very narrow definition of control—almost, frankly, paranoia. If indeed that was the Government’s definition, would they have negotiated the sort of deal with Switzerland that we just heard about? Would the Japanese deal have been negotiated?

It seems to me that the Government are not adhering to the definition of “take back control” of the noble Baroness, Lady Noakes; for that we should be grateful. However, it seems that the baggage that comes with negotiating a similar deal with the European Union is harder to overcome. I think I heard the Minister make some slightly positive noises about future opportunities to create mutually recognised structures to move people around. Frankly, the point of this amendment was to move us in that direction.

The noble Baroness, Lady Bennett, was keen for a vote. Unfortunately, that enthusiasm is not shared by everybody on this side of the House—at least, not on these Benches. For that reason, as well as our having spent quite a lot of time waiting for the House to be rebooted, I beg leave to withdraw the amendment.

Amendment 13 withdrawn.

United Kingdom Internal Market Bill

Lord Fox Excerpts

Consideration of Commons amendments
Tuesday 15th December 2020 Lords Chamber

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

My Lords, a stranger to our Parliament would find this whole ping-pong process completely bizarre and almost impossible to follow. I have some sympathy, as this is my first time going right through ping-pong from beginning to end, even though I have been in the House for over 10 years. However, the Motion paper before us today, which I think has reached everybody, although superficially complex, tells the story rather well—over eight pages, it must be said.

In essence, we are where we are because we took the view that the internal market Bill as originally drafted was unbalanced between market access principles, which we felt might provoke a race to the bottom on standards, and the managed but limited divergence of standards which we thought would naturally flow from the wish of the devolved Administrations to reflect the views of those who elected them and the particular circumstances, as the Minister says, of their areas. We wanted to make sure that market access principles do not always trump the common frameworks process. We believe that that process has many benefits to offer in building coherence and a feeling of engagement with the UK internal market.

We made that position clear to the Ministers involved in this Bill in our first meeting. Motion A tells the story of the progress in recent weeks. As the Minister said, the meetings were often robust. That is not to be regretted because it is only through real engagement with some of the deeper issues raised by Bills that you can understand the positions of the two sides and make progress, where it is clear one has to compromise one way or another. There were, as the Minister said, many meetings and exchanges of drafts. It is fair to say that when Bills involve many departments—in this case, three separate departments—it is difficult to work across them and sometimes it is hard to manage meetings that necessarily involve 20 or even 30 advisers and others, who need to be involved in developing the thinking behind them.

To cut a reasonably long story short, the meeting that unblocked the situation took place last week, when the noble and learned Lord, Lord Hope, found the key by building a dialogue with Ministers on where and in what form the changes he wanted to see, which we supported, could be made, and in such a way that the issues raised by those responsible for the original drafting would not be sacrificed.

I would like to thank the Ministers—in particular, Chloe Smith, Martin Callanan and Nick True—for sticking the course with us. It would have been easy for them to stamp their feet and say, “Get lost; we have a majority of 80 and we’re going to see this through”, but they did not. I think they sensed there was an issue that needed to be bottomed out for the good of the country as a whole, and I admire them for that.

A special mention needs to be made of the noble and learned Lord, Lord Hope. He is the last person who would want to be singled out for praise, but we would not be where we are today had he not spotted an issue he wanted to address early on, and used his skill and experience in drafting and interpreting the law to pick away at the issues and come up with a solution. He said in his last speech to your Lordships’ House on this issue that it was a bit like unwrapping a Christmas present overenthusiastically wrapped with lots of paper that concealed a rather small present. I said to him that he should have extended the metaphor and said that good things come in small packages. He felt that that was not the way to go, but I will use it now, because it gets to the point of what I am saying.

What the noble and learned Lord has drafted and we and the Minister have accepted is a very small change to the Bill as originally drafted. But it is really important, because it restores the balance that we feared was lost without giving undue prominence or unbalancing the general principles underlying the Bill. It respects how we do things in this country, and the devolution settlement in particular. The noble and learned Lord, Lord Hope, should accept the plaudits offered to him for having the idea in the first place, seeing it through and finding the key that unlocked the differences between us. The differences were real and important, and we have resolved them. I am very grateful to the Minister for what he said today. It has been a good process, and I recommend accepting the measure; we hope it will work well in practice.

[Lord Fox (LD)]

My Lords, I will not go through the same list of people to thank as the noble Lord, Lord Stevenson, and the Minister did. I just want to add my thanks and express my admiration for the dogged wisdom of the noble and learned Lord, Lord Hope, in getting us to this point.

Never knowingly unchurlish, I would say that this Bill is not the direction we would have chosen to go in—that is a fact—but, over the course of the past five weeks, I have become absolutely convinced that, thanks to the dialogue between all the parties involved, this Bill has been improved substantially. The illegality was taken out, of course, but the sensitivity toward the devolution settlements, which was not there to start with, has been gradually installed, piece by piece. To get there, we have talked of Welsh coal. We have talked of Scottish teachers. We have talked of drinking straws and Scotch whisky, and of many other examples.

In our thoughtful debate, we have heard from people—including Members on these Benches—who care passionately about the union and felt that things had to happen to this Bill. It is with great pleasure that I can say that many of those things have happened; we are in a much better place and, clearly, look forward to hearing what the devolved authorities have to say.

If I have one reservation, it is about the mechanics of how this market will work and how the office for the internal market will sit alongside the CMA going forward. Clearly, that story may well run but, as the Minister set out, the OIM will have a pivotal role in monitoring how this market runs and in informing the process. How that is configured, who is in it and what its process are will, in the end, be the measure of how successful, smooth and, frankly, unfettered this internal market ends up being.

With those words, I again thank the Minister and his colleagues, and give a special mention to the Bill team, which has also worked relentlessly on this. We look forward to sending the Bill away from this place unmolested by any further amendments.

[Baroness Hayter of Kentish Town (Lab)]

I also welcome the Motion moved by the noble Lord, Lord Callanan.

We are delighted that the Government have responded to the repeated and really quite strongly supported urgings from this House to hardwire, if you like, the common frameworks process into the Bill. After all, as we have heard, the Bill was introduced to deal with powers returning from the EU—powers that are devolved but might need to be used in ways that would not interfere with the development of our own UK single market.

Indeed, it was for that reason that the common frameworks process was established in 2017. The Government are about to write into the Bill—in a few moments’ time, when we will vote for it—that, in cases where a particular divergence in a market area is agreed under the common framework, such an agreement can be exempted from the market access principles. This recognises in law that uniformity is not always necessary in an internal market, allowing some divergence and differences to suit the particular circumstances of parts of our union.

Furthermore, as has been said, a review will take place to judge how that interplay between the framework and the market access principles is working in this new internal market. We hope that this review will show that a consensual approach to these issues works well with the wider aim of achieving a successful internal market. However, as the noble Lord, Lord Fox, said, it will also be interesting to see whether the review looks at how this works with the CMA and the OIM. We all have a lot to learn on this.

The Motion means that the frameworks are included in the Bill, which was lacking at the beginning. I thank Ministers for finding a route forward. I think they sometimes have to break more arms on their side than on ours—though they would know more about that than we do. We join them tonight in confirming the recognition of the devolved settlements and our wish to strengthen both devolution and the future of the union. We see those two aims as entirely compatible and I think they do too.

As we close this chapter of our adjustment to the post-Brexit situation, we also thank the Ministers for their other amendments, to ensure that the OIM appointments and most regulations are agreed with the devolved authorities. I think the Minister had a hand in the recognition of my particular pet project of recognising the importance of the internal market working for computers—sorry, consumers; too much time on Zoom. I do thank him personally; I know he had more than a little hand in that.

I thank all concerned. The Bill team have worked wonders. All those who have voted have enabled us to push on this. I thank the magnificent Lords clerks who have worked against the clock and conflicting interests to get this done, our colleague Dan Harris, my noble and learned friend Lord Falconer and my noble friend Lord Stevenson, who has led us on the Bill so well. I also thank our very special Leader, who gets us all here, my noble friend Lady Smith of Basildon. For the moment, let us put this Bill to bed.

United Kingdom Internal Market Bill

Lord Fox Excerpts

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

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

My Lords, I fear I will not match the eloquence of my noble friend Lord Adonis. I want to say a few words in support of the amendments of the noble and learned Lord, Lord Hope, who, like me, is a member of the Common Frameworks Scrutiny Committee. In his introduction, the noble Lord, Lord True, praised my noble friend Lady Andrews and the work she and that committee are doing. If the Minister thinks that method is so good, why does he not accept these amendments, since that is exactly what we are suggesting—that it should be done through the kind of procedure that the Common Frameworks Scrutiny Committee is operating? He argued that case, perhaps without realising it, from the Dispatch Box.

Yesterday, I heard a very interesting debate. On one side of the argument was the importance of a level playing field for an internal market—I thought the United Kingdom Government were arguing that case in relation to what we are discussing—and on the other was sovereignty. I thought it might have been the Scottish or Welsh Governments arguing that case. Ironically, it was not. It was the European Union arguing the case for a level playing field for a common internal market and the United Kingdom Government arguing the case in relation to sovereignty. The tables were turned; the UK Government were arguing entirely the opposite case in relation to Europe that they argue in their dealings with the devolved authorities. It is about time they got their arguments right on this and accepted these amendments.

[Lord Fox (LD)]

My Lords, throughout the many stages of this debate the common frameworks have been given a great airing, and many of your Lordships have had a chance to vent their respective spleens on the subject. The Minister may be assured that my spleen will remain in its correct place, because enough has been said on this issue. Indeed, he observed that noble Lords have made their position on common frameworks very clear.

However, the Government have shown great and steadfast reticence on writing the common frameworks into this Bill. The Minister set out two reasons for this: first, in stressing the word “voluntary” on several occasions, and, secondly, in pointing out the joint ownership of the common frameworks between the devolved authorities and the UK Government. On that second point, have any of the devolved authorities objected to the idea that common frameworks might be a central part of this Bill? I have seen no such objections; on the contrary, I have seen enthusiasm from devolved authorities that this might happen.

The noble and learned Lord, Lord Hope, has drafted elegant solutions in his amendments, which I hope will help the Minister to get to the point of developing the market access principles and legal certainties—the Minister is right to say that we need them—but, at the same time, respecting the devolution settlement. A key part of the noble and learned Lord’s speech was about the respect that this Bill needs to show the devolved authorities and the settlement that has developed so well there.

I was impressed by the tone of conciliation and consultation in the Minister’s speech, which came through in his “willingness to continue to engage in discussion”, “discussions have not been exhausted” and “open to discussions.” The door is clearly open. With respect to the noble Lord, Lord Naseby, there is time; I have also worked in commercial life and while the idea of “give me certainty” works within a correct framework, if it is “give me certainty” in a terrible framework then I would rather wait a little and get it right. We can spend a few days more getting this right. A vote for the amendments set out by the noble and learned Lord, Lord Hope, would help keep the door open for those discussions with the Minister. That is why we on these Benches will vote in favour of them.

[Baroness Hayter of Kentish Town (Lab)]

My Lords, the noble Lord, Lord Callanan, who is not in his place, will recall how the notion of common frameworks evolved. When we were doing the first EU withdrawal Bill, it became clear that some of the powers returning from Brussels clearly fell within devolved competences. It was therefore widely understood that, to facilitate trade throughout the UK—as otherwise the rules affecting trade could vary across internal borders—a coming together of the four authorities would be needed to balance the desire for, and attraction of, diversity on some issues with a UK-wide approach to help consumers buy and manufacturers trade throughout the UK.

From the start, it was agreed that such frameworks would be established where needed—this is from the communiqué of October 2017—to

“enable the functioning of the UK internal market, while acknowledging policy divergence”

and that they would

“respect the devolution settlements … based on established conventions … including that the competence of the devolved institutions will not normally be adjusted without their consent”.

That was how they started. At that point, a list of 24 such topics was identified and, with a lot of good faith and hard work—as the Minister has acknowledged—the initial three Governments, along with Northern Ireland officials, set to work developing frameworks to enable that UK-wide market to flourish while recognising where devolved authorities might want variations for whatever reason. The basis was, to quote again from that document signed by the Government, to

“maintain, as a minimum, equivalent flexibility for tailoring policies to the specific needs of each territory”.

Until this Bill arrived, everyone thought the system was working well and would accomplish the aims set for it. This should have been something for the Government to celebrate, as they have today, and build on. In fact, it has never been necessary for the Government to use their powers to freeze any devolved authority’s power—a provision set into the EU withdrawal Act, as the Minister has acknowledged.

While this Bill was anticipated, the expectation was that it would help build a new, in some ways unique, internal market across our four nations, which have different cultural, linguistic, agricultural, geographical and industrial histories and realities. Above all, our nations have different democratic governance structures from when we ceded rule-making to the EU in 1973. We thought the Bill would respect the devolution realities while helping to ensure the UK market could prosper for the sake of business, consumers, workers, our agriculture and the environment. As we now know, in addition to throwing the quite unnecessary Part 5 grenade into the Bill, the Government pulled the pin on another grenade by writing into the Bill market access rules which trumped, rather than solidified, the common frameworks programme, which is an approach built on consensus rather than top-down diktat.

The noble and learned Lord, Lord Hope, is not a revolutionary. He is not trying to rewrite the Bill. He is seeking—rather like the Minister himself through the Government’s welcome amendments on regulation-making, for which we will give thanks when we come to them later—to start the process on the basis of consent across the four devolved authorities, and, where that is not possible, leaving it to the UK Parliament, rightly, to legislate. We support a union, and therefore we support Parliament’s right at that point to have its proper role. But we start with consent, and then move to Parliament. What we do not support is starting here in Parliament and government, rather than with the four-party common frameworks. So, we welcome the noble and learned Lord’s upending of the procedure, starting with common frameworks and, where or if those do not work, using the market access approach of the Bill in areas obviously otherwise within devolved competencies.

I think we would all warn the Government to be very careful about clawing back decisions from our now quite long-established devolved settlements. I find today’s vote in the Senedd, by 36 to 15, to deny legislative consent to this Bill extraordinarily regrettable. It is an important Bill; it is not a small one. That was denied because of the message sent to Wales and the other devolveds by the rejection in the Commons last night of this approach. So we need a backstop for any failure to agree, but we fail to understand that what should be a backstop has become the starting gun.

The amendments in the name of the noble and learned Lord, Lord Hope, build on the devolution settlements and would support and strengthen the union, as well as creating what we all want: a successful, growing internal market, which is in the interest of all our citizens. We are right, as my noble friend Lord Adonis said, to ask the Government very genuinely to think again about the mechanisms—because that is what we are discussing—to achieve what I think we all want.

The noble and learned Lord, Lord Hope, said that if there was a will on the Government’s part to make the common frameworks system work, a solution could be found. Along with the noble Lord, Lord Fox, we concur with that view, and we welcome the Minister’s saying that “discussions are not exhausted”—I think I have his words right. Whether we do that by recognising the framework system in some way, extending the freeze provisions when they expire or pausing market access for a period of time while the four Governments talk—as mentioned by my noble friend Lord Adonis—there is surely a way forward. But I believe we need this amendment to get the Government to continue to discuss, so that we can get that way forward. That is why we will support the noble and learned Lord, Lord Hope, when he calls for a vote shortly.

--- Later in debate ---

[The Deputy Speaker (Lord Faulkner of Worcester) (Lab)]

Does any noble Lord in the Chamber wish to speak on this amendment? If not, I call the noble Lord, Lord Fox.

[Lord Fox (LD)]

My Lords, like the noble Lord, Lord Stevenson, I will take the amendments in the opposite order to the Minister, if the House is happy with that.

The delegated powers issue has almost become a ritual in your Lordships’ House. A Bill is published and in it are many very draconian powers, which seek to change almost everything the Bill can do at the will of the Minister. There is then a report from the DPRRC which condemns it, and then there is a debate and we start to move towards a more reasonable situation. I hope, perhaps, that we can learn from this and maybe cut out a few of the steps, so that we can get to the reasonable situation. The Government have given considerable ground on this, and for that we should all be accepting and reasonable and, I suppose, grateful, although perhaps gratitude is the wrong word.

With respect to Clause 12, I think we will all be watching quite closely to see how those powers are exercised, because advice can come in many forms and we will be seeking to observe that.

The characterisation that these delegated powers are required in order for the Government to react and act with speed has been absolutely confounded by the way in which the Covid crisis has been addressed by the Government. There has been very rapid legislation and very rapid reaction. Looking forward, we have got to a better place than we were in when we started. I still do not think that we would call it perfect, but we have taken a long time to get there.

My reading of the amendment proposed by the noble Lord, Lord Stevenson, is that it is the return of Amendment 21, or at least most of it. Listening to his very reasonable presentation of the amendment and having listened to the debates on Report, I am somewhat surprised that the Government continue to dig their heels in. I can understand that the list in subsection (2) of the proposed new clause might have raised some concerns, and it can of course be subject to negotiation, but as the list now stands—with environmental standards and protection; animal welfare; consumer standards, including digital; employment rights and protections; the health and life of humans, animals or plants; the protection of public health; or equality entitlements—it seems that the Government could not possibly object to it, so I am surprised. The Minister has set out his concerns about an ordered market, but it is very clear that any market that did not observe these things would not be one that we wanted anyway.

With that response, I suggest that we will be supporting the noble Lord, Lord Stevenson, when this Motion is put to a vote. We hope that the Government will be able to have discussions with the noble Lord and others, so that next time they can come back with something much closer to what we have seen today.

[Lord Callanan (Con)]

I thank both noble Lords for a good, albeit brief, debate. To summarise, earlier I expressed my concerns about Amendment 8L and the expansive list of exclusions from the market access principles that it introduces. The list that we have included has been carefully drafted to strike what is, in our view, a measured balance. It protects the ability of the devolved Administrations and the UK Government to deliver policy, while avoiding harmful or costly barriers to trade within the UK internal market. The Bill does nothing to stop all nations working together to achieve mutual goals and build on our shared high standards.

On the delegated powers in the Bill, it is not proportionate to remove the Government’s ability to ensure that the list of exclusions and legitimate aims remains appropriate. The Government have already set out a comprehensive package of changes to the delegated powers in the Bill, including for the removal of certain powers and for reviews and reporting to Parliament, and new amendments on the role of the devolved Administrations. This provides for effective transparency and scrutiny of the remaining powers.

We believe that there is a reasonable middle ground here. Many noble Lords tabled and supported amendments to alter, but not remove, the powers in the Bill. We agree with those colleagues. These powers are necessary, and we believe that the changes we have proposed should address their concerns. I therefore hope that noble Lords will be able to support the Government’s approach to reinstating these powers in the Bill.

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[Baroness Fox of Buckley (Non-Afl)]

I would like to remind noble Lords, especially on the Government side, that the clauses being removed were themselves argued for as a necessary legal shield for the internal integrity of the United Kingdom and its sovereignty. I am told now that the Government are content with assurances. I am not sure that many leave voters are content simply to be assured. Goodness knows, he might be surprised when I say this, but the noble Lord, Lord Adonis, made a very important point when he said that at the beginning of the week, he did not anticipate this debate. Many in the House did not expect these clauses to be removed, and now we are told to be assured; yet they were crucial clauses only last week. I therefore at least want to raise the question of trust and whether we should be expected simply to trust. It sometimes feels as though some of us have been marched up a hill and marched down it again.

[Noble Lords]

By whom?

[Baroness Fox of Buckley (Non-Afl)]

We know by whom. As an aside, I rather like a heckling atmosphere, but I would prefer it if it happened not just when I am speaking.

With absolute due respect to the noble and learned Lord, Lord Judge, who speaks so eloquently about constitutional and unconstitutional principles—I have listened very carefully to him for many years, not simply in recent weeks—I would be rather disappointed, and I think it would tarnish those principles, if it was thought that the decision was made because of the strength of feeling in this House. I would rather think that it was because the Government were satisfied by the debates, not that this House, rather unconstitutionally, might have got in the way of parliamentary sovereignty. There is a danger that some of the comments being made are self-aggrandising and self-congratulatory.

However, the main point for me—made clearly by the noble Baroness, Lady Hoey, and emphasised by the noble Lord, Lord Dodds—is that Northern Ireland is being treated separately, as a different entity. I am afraid that some seem to relish this: in many debates that I have sat through in this House, I have felt as though the 2016 referendum of the whole United Kingdom was being used as an excuse to interpret devolution as some kind of federalisation of the United Kingdom. Interestingly, even today, one noble Lord noted that 56% of Northern Ireland voted to remain in the European Union—that is of no matter, indeed no interest, if you believe in the United Kingdom.

--- Later in debate ---

[The Deputy Speaker (Lord Russell of Liverpool) (CB)]

Does any Member in the Chamber wish to speak? No? Then I call the noble Lord, Lord Fox.

[Lord Fox (LD)]

My Lords, this has been, again, a short but important debate. I thank the previous speakers and I thank the noble and learned Lord, Lord Thomas of Cwmgiedd, for his detailed proposal.

First, I will address the comprehensive and well-laid out response by the Minister on why your Lordships’ amendment has been knocked back. I will not come between the noble and learned Lord and the Minister when it comes to deciding whether it is a financial issue; I shall leave those two to have that argument. However, I will pick up on the second issue. The Minister painted a genuinely exciting picture of all this wonderful investment that will happen across the country—I am not being ironic—and I agree that there needs to be a response to what we have seen this year, and it needs to be comprehensive, co-ordinated and well organised. This cuts to the point made by the noble and learned Lord, Lord Thomas, and the noble Lord, Lord Adonis: without working with the devolved authorities, the efficiency and the effectiveness of any investment are massively undermined. Leaving aside the devolution issue for now, the efficiency issue raised by the noble and learned Lord, Lord Thomas, is absolutely called into question here. The measures from the noble and learned Lord in Motion K1 bring the devolved authorities back into this process. It recognises the importance of the devolved settlement, as set out by the noble Lord, Lord Adonis, and makes sure that this investment, which will be so important to the future prosperity of this country—if indeed there is enough of it and it is delivered properly—can be made efficiently and in keeping with the needs of the people of that particular country.

As someone who comes from Herefordshire, which is a far-flung part of England, I wish that we had similar regional structures in England, whereby the same level of consultation that should be coming through this amendment could also be offered to the regions of England. While some parts of England have unitary mayors and some parts have negotiations directly with Government, places such as Herefordshire that are in as much need as some of the worst-affected places across the United Kingdom, do not have the benefit of that access. This is not the place, but going forward, I ask that when these proposals are brought, an approach towards the English regions that the Government have towards the devolved authorities would be appreciated.

With that, we look forward to supporting the noble and learned Lord, Lord Thomas, when he presses this.

[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.

--- Later in debate ---

[The Deputy Speaker (Lord Russell of Liverpool) (CB)]

I have received a request to ask a short question of elucidation from the noble Lord, Lord Fox.

[Lord Fox (LD)]

The Minister will be aware that the current structural fund does not reach many regions across the United Kingdom, compared, I think, to the planned extent of the new shared prosperity fund. Can the Minister confirm whether that is true? If it is, and the money put into the shared prosperity fund is only—I use the word advisedly—as much as that put into the structural fund, it will be spread more widely. There will be losers among those who have been able to take advantage of the structural fund, because the money they would bid for will be spread to other regions and countries. Will the Minister acknowledge that? Is that perhaps one reason that the Government are rather reluctant to allow the devolved authorities any more involvement in this, because they know there will be issues around losing out on money that would have come through the structural fund but is now to be spread more widely across the United Kingdom?

--- Later in debate ---

[The Deputy Speaker (Lord Faulkner of Worcester) (Lab)]

Does any other noble Lord in the Chamber wish to speak? No noble Lord does, so I call the noble Lord, Lord Fox.

[Lord Fox (LD)]

My Lords, as the Minister set out, this group relates to state aid, the Competition and Markets Authority and the office for the internal market. At Report, your Lordships removed a clause that changed the devolution statutes to specify that state aid powers are a matter exclusively for the UK Government. This was overturned in the Commons. Notwithstanding that, the Government have come back with the proposals set out by the Minister, which are welcome. My noble friend Lady Bowles set out where they have come from and should be congratulated for her work on this Bill.

Notwithstanding that, the noble Baroness, Lady Finlay, has tabled Motion L1, which would enable the devolved Administrations to appoint people to the CMA board. The Minister has stressed that the OIM, while being within the CMA, will be independently governed. One of the reasons for not allowing previous amendments was a financial rule. This indicates clearly that the CMA will be holding the OIM’s purse strings. In that respect, culture is one thing, but budget is something completely different. We have heard from the noble Baroness, Lady Neville-Rolfe, and from my noble friend Lady Bowles, and as I have said, we remain extremely concerned about the culture and role of the OIM. The Minister again stressed the technical expertise in the CMA, but the OIM is being asked to do something that is essentially different from the CMA. Frankly, this technical expertise, if deployed in the way the Minister hopes, is the problem we are warning the Government about. That accepted, one of the small ways of dealing with this issue is to support the amendment from the noble Baroness, Lady Finlay, and to make sure that there is at least some board-level representation from the devolved authorities.

Motion L2, from the noble and learned Lord, Lord Thomas, would insert a new provision relating to Clause 50, on state aid. As the Minister has acknowledged, it would create a common framework process whereby state aid is managed.

The noble Lord, Lord Liddle, and others have talked about the message all this sends to the devolved authorities, at a time of great fragility and change. To set this up in this way sends a bad and dangerous message to the devolved authorities. The noble and learned Lord, Lord Thomas, set out a reasonable response—a reasonable way of involving the devolved authorities centrally in the process of delivering the structures and frameworks for, and areas of, state aid. To simply consult with the devolved authorities on draft and not go back on the final decision is a little derisory, to say the least. The Government need to understand the message they are sending—a message clearly articulated in the Senedd vote today.

We are pleased that the noble and learned Lord, Lord Thomas, is going to test the mood of the House regarding his Motion, and we will support it when he does.

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

My Lords, this has been an interesting debate, covering a wide range of issues previously discussed in Committee and on Report. I will not go through them in detail but I will say three important things. First, I welcome the Government’s movement on the matters raised in the Minister’s opening address on the OIM: its membership, the review within three to five years of the potential location of the OIM, and the firm commitment to ensuring that the DAs are consulted and their views fed in to this report. That was not as much as we wanted, but it is certainly a positive step forward that we welcome at this stage.

Trade Bill

Lord Fox Excerpts

Report stage & Report stage (Hansard): House of Lords & Report: 1st sitting & Report: 1st sitting: House of Lords
Monday 7th December 2020 Lords Chamber

[Lord Patel (CB) [V]]

My Lords, I speak strongly in support of Amendment 11, in the name of the noble Baroness, Lady Thornton. The hour is late, and we spent a long time discussing the matter in Committee. The noble Baroness, Lady Thornton, and others have dealt with the subject in detail and eloquently. Hence, I will be brief, as the last speaker before the Front-Bench speakers.

No matter what the Government say about the NHS not being on the table for any trade negotiations with the USA, it is naive to think that that will be so. Members of the US Congress and big pharma have made it clear that they expect the NHS to be part of any negotiation of a United States trade deal. In fact, the chair of the Senate finance committee—a committee that will have a final say in any trade deal that will be made—said that it is clear that all goods and services are part of the negotiation and, furthermore, that the NHS would benefit from competition from US companies. US big pharma has always complained that the UK, with its regulatory and medicines pricing regime, does not pay full price for medicines. It has even suggested that, as a result, US patients end up paying a higher price.

The US data and tech firms see an opportunity in our NHS patients’ records to develop patient management platforms and an opportunity to conduct clinical trials on cohorts of stratified patient and much more. I can quote an example: the company Palantir that has been involved in data mining and in security and intelligence. It was given a contract for the price of £1, at the beginning of the pandemic in March, to develop a platform for Covid-19 data. The contract was to be re-examined three months later. It was extended briefly and now I gather that, without any public debate, it has been granted a contract for five more years. Why would a data mining company be interested in having data related to health and health management? The answer is quite obvious: data is gold. In the absence of any government policy in relation to security and governance of health and patient data, it is an open goal for tech companies.

As I mentioned in Committee, several US firms are already involved in managing services worth billions of pounds. The prize for running services and exploiting patient and service-based data will be worth tens of billions of pounds. In market-driven self-service, the losers will be the patients and taxpayers.

Recently, it was reported that there was a meeting, organised by the Office for Life Sciences, between NHS England and big pharma and big tech with the intention to digitise and use the data of tens of millions of patients. Such an exercise would cost billions of pounds, which might be funded by the tech firms, but there was discussion about who would hold the IP. The risk we run, not only concerning data but also about how the services are managed in the NHS, is that they will be given to overseas companies, particularly American companies, that will benefit and profit from it. The NHS will be the loser, and therefore I strongly support this amendment.

[Lord Fox (LD)]

My Lords, this has been necessarily a short debate, but it has been an incredibly high quality debate. We have heard, from all the speakers, a high level of understanding of the issue and the dangers that Amendment 11 is seeking to address. I speak as one of those who signed Amendment 11. I support Amendment 43 and congratulate my noble friend Lady Sheehan on her eloquent presentation, but I am going to focus on Amendment 11 because it is a really important issue. We heard a lot about data from people who know a lot about data.

Sitting above this is the fact that the Government have no published cross-border data transfer policy. Without that, it seems as though each trade deal will be a series of negotiations without a framework. The noble Lord, Lord Freyberg, and my noble friend Lord Clement-Jones set out the benefits of having constraints and frameworks for this. It is clear from the Japan trade deal that the Government have indicated a level of flexibility around data. Once that has been delivered for one trade deal, it becomes a necessity for the next—and a bit more and a bit more. Even if that is not what will happen, I am sure the Minister understands that this fuels the fires of people’s suspicion and concern about the way in which data is being treated in this country.

From his position of great knowledge, the noble Lord, Lord Patel, set out some specific examples—not of a trade deal but of trade in this country—where data is already being parlayed. One things that has not been said is that, for patients to consent to their data being used, they have to believe that there will be a benefit. They do not want that benefit to flow across these borders through trade; they want it to accrue to the NHS. That is why Amendment 11 is important, and why I hope that it goes to a vote shortly and gets the support of Members from these Benches and beyond.

The noble Baroness, Lady Thornton, spoke very clearly in moving this amendment. Like me, she recognises the benefits of trade, but only when health takes the central place in our trade policy. That is what Amendment 11 seeks to achieve.

[Viscount Younger of Leckie (Con)]

My Lords, I will now address Amendment 11, tabled by the noble Lords, Lord Freyberg, Lord Patel and Lord Fox, alongside the noble Baroness, Lady Thornton. This amendment would place a range of restrictions on the regulations that we can make to implement continuity agreements. I will be relatively brief and will write to all noble Lords who asked questions to be sure that they are answered.

New subsection (2), proposed by this amendment, stipulates that regulations can be made only using Clause 2 of the Trade Bill if the agreement does not undermine the way in which the NHS is delivered, operated or regulated, but we believe that the conditions set out in subsection (2) are unnecessary. We have demonstrated time and again that we are not selling off the NHS, and this will not change.

I listened carefully to the remarks of the noble Lord, Lord Freyberg. In response, the Government are clear that health and care data should only ever be used or shared where it is used lawfully, treated with respect and is held securely, with the right safeguards in place.

The conditions set out in proposed new subsection (3) would defeat the purpose of having a Clause 2 power. It stipulates that no agreement can be implemented through Clause 2 regulations, unless it contains a range of explicit exclusions and inclusions in the text of the agreement. Importantly, this would effectively prohibit the implementation via Clause 2 of any continuity trade agreement that the Government have signed, which does not explicitly meet these requirements, even though this amendment did not exist at the time of their negotiation. Every single continuity agreement that we have negotiated over the past three years would be left null and void, without an implementing power. We would be forced to reopen negotiations with every single continuity partner, which would no doubt be used to extract costly concessions.

Rigorous protections for public services can be achieved in both positive and negative lists in services and investment schedules for FTAs. The sectoral commitments outlined in a schedule are only one part of a tapestry of protections for public services, which can also include scope exclusions and exceptions set out elsewhere in the FTA. The UK is party to agreements that use both positive and negative lists, and neither outcome has interfered with the Government’s right to regulate and ability to protect public services.

This amendment would also place a new requirement for exclusions on the sale of patient data—another condition that was not in place at the time of negotiation. There are already strict legal, privacy and security controls on how companies can use patient data, including principles set out by the National Data Guardian and the common law of confidentiality. We have clearly set out our principles governing data-sharing agreements entered into by NHS organisations, published in July 2019.

Finally, subsection (4) of this amendment stipulates that regulations can be made using Clause 2 of the Trade Bill only if they allow for the scrutiny of

“medical algorithms, technology or devices”

with respect to their

“methodology for processing sensitive data”.

I reassure your Lordships that before any medical device can be placed on the UK market it must be compliant with the Medical Devices Regulations 2002, which cannot be superseded by a trade negotiation without further legislation.

I now turn, quickly, to Amendment 43, proposed by the noble Baroness, Lady Sheehan, and the noble Lords, Lord Purvis of Tweed and Lord Alton of Liverpool. It would mean that the commencement power in Clause 32 could be used only to commence the substantive provisions of the Trade Bill if they do not restrict UK citizens’ access to medicines, if they do not curtail the Government’s power to use the safeguard provisions of the agreement on trade-related aspects of intellectual property rights, if they do not delay the market entry of lower-priced generic health technologies and if they do not lower the bar for patentability. Similar to Amendment 11, it also seeks to exclude health-related matters from the scope of ISDS provisions.

I also note that the voluntary scheme for branded medicines pricing and access—the so-called VPAS—which is the latest voluntary pricing scheme negotiated with industry, will continue to control the prices of branded medicines and their cost to the NHS. The VPAS runs in conjunction with the statutory pricing scheme, NHS England and NHS Improvement commercial arrangements, and the process for NICE appraisals. The 2019 VPAS will run until 2023 and, through a series of measures, supports patient access to innovative new medicines.

Furthermore, the UK remains committed to the Doha declaration on the TRIPS agreement and public health, which recognises the right to public health and the importance of intellectual property protection, while noting that the flexibilities contained in the IP system can be enacted to address public health needs. In addition to our commitment to our international obligations, we will also be bound by IP provisions designed to facilitate public health that are enshrined in domestic law. For example, the Patents Act 1977 provides for compulsory licensing in the unlikely circumstances that this is required. With that, I ask noble Lords not to press their amendments.

United Kingdom Internal Market Bill

Lord Fox Excerpts

3rd reading & 3rd reading (Hansard) & 3rd reading (Hansard): House of Lords
Wednesday 2nd December 2020 Lords Chamber

[Lord Fox (LD)]

My Lords, when the Bill entered your Lordships’ House, it presented many problems—not to put too fine a point on it. It is a great honour to follow the noble and learned Lord, Lord Garnier, who, among his many pieces of advice, advised Peers not to rehearse the arguments that we have heard over the course of the Bill. So I will not do that, but I agree that the Bill leaves your Lordships’ House in a better state than when it arrived, though it is of course still far from perfect.

During the scrutiny process, as the noble Baroness, Lady Finlay, alluded to, over 30 amendments have been inserted into the Bill through your Lordships’ overwhelming votes. At the same time, as other Peers have said, large and important parts of the Bill were removed as a result of this process. I hope this gives Her Majesty’s Government cause to reflect further, rather than simply trying to move on.

Additionally, the Government themselves have made more than 30 amendments to the Bill, and that indicates that the Ministers have been listening to and participating in this debate. I thank the noble Baronesses, Lady Bloomfield, Lady Penn and Lady Scott, and the noble Lords, Lord True and Lord Callanan—the full cadre of Ministers—for their stamina and general good humour through this process. I agree that the Ministers listened, and the government amendments are testimony to that. The departmental Bill teams must get much credit for keeping Ministers on the straight and narrow—if indeed they did. The Bill has been drafted and debated on an extremely tight schedule, and I am sure that the Bill team lost many weekends and evenings as it stewarded Ministers through this process—as well as drafting the many letters for my noble friend Lord Purvis that have emerged.

I thank all the Cross-Bench and Labour speakers, the Bishops and their teams for the great collective effort on the Bill. It is invidious to pull out names but I would like to thank the noble Baronesses, Lady Hayter and Lady Finlay, the noble Lord, Lord Stevenson, and the noble and learned Lords, Lord Judge, Lord Hope, Lord Thomas and Lord Falconer, who put in many hours to get us to where we are today. Perhaps the Law Society of Scotland and the Welsh Government should also get a special mention for the hours that they have put into drafting amendments.

I would also like to mention the parliamentary clerks, as well as the Whips’ Office and the usual channels, for helping to get the Bill timetabled and get us through it. It was not an easy task in the circumstances. From our team, I would single out Elizabeth Plummer and Sarah Pughe in the Lib Dem Whips’ Office, who have done a fantastic job. Finally, I thank the cadre of colleagues I have on the Benches today, my noble friends Lady Bowles and Lord Purvis, and the 20 other Lib Dem Peers who have participated in the various stages of the Bill.

It is clear from what I have been saying over the past weeks that this is not the way the Liberal Democrats would have done it, but I feel that the debates have been deep as well as wide, and serious and well considered on all sides. It is important that this is considered as the Bill leaves this House and goes forward.

The Minister mentioned legislative consent. Other speakers have said how important it is that Part 5 remain out of the Bill; that is very true. Many of the other amendments were also targeted at the grab at devolution that the Bill seeks. The principle of legislative consent requires that those amendments be given full consideration in the other place. If they are summarily dispatched, as is often the case with your Lordships’ amendments, the message will be sent clearly to the devolved authorities about what this Government consider to be important in terms of the devolution settlement. That runs far past this Bill, and far past the term of this Parliament. It is a very important issue—and not one that I think the Government, in the end, want to have on their hands.

I am wont to give Ministers advice, and they are wont to ignore it, but there are many other people wiser than me who are also giving Her Majesty’s Government this advice. I hope that, when it all comes out in the wash, that advice will be listened to— because this issue is far more important than just this Bill.

United Kingdom Internal Market Bill

Lord Fox Excerpts

Report stage & Report: 3rd sitting (Hansard) & Report: 3rd sitting (Hansard): House of Lords
Wednesday 25th November 2020 Lords Chamber

[The Deputy Speaker (Lord Lexden) (Con)]

My Lords, the next speaker on the list, the noble Lord, Lord Flight, has withdrawn, so I call the noble Lord, Lord Fox.

[Lord Fox (LD)]

My Lords, many noble Lords have railed against the virtual process, but the serendipitous arrival of the noble Lord, Lord Rooker, is perhaps justification for having a virtual Parliament after all.

I thank the Minister and other speakers in this short debate. I should like to put this issue into context. Back in the day, when I worked in the real world, in many cases the sort of inquiry that we are talking about would have come across my desk. I worked for large international corporate companies and, even for us, it was difficult to find the resources to respond to some of these requests. So this is a real problem and Amendment 62A seeks to address a real issue that will genuinely cross the desks of small businesses in this country.

The Minister tried to corral these requests, saying that they would occur only when the office for the internal market needed credible and accurate information. Well, I trust that it always needs credible and accurate information, so that is no restriction on the office. He also talked about the word “proportionate”. I should correct the noble Lord, Lord Liddle: the Minister did not use the word “voluntary”. He said “proportionate”. This is not a voluntary process but a compulsory one, as it stands in the Bill. That is the problem. And proportionate to whom? Is it proportionate to the desire of the office for the internal market to get credible and accurate information, or proportionate to the fact that five, six or seven people occupy an important part of the market but do not necessarily have the resources to respond to these requests?

The Minister also said that only in a small number of cases did he expect that a formal information notice would be required. Well, that is where some of the clarification can come. What are the circumstances around which a formal information notice would be required? How do we ring-fence it and make sure that we understand what “proportionate” means in the context of this discussion? The Minister also said that leaving out, or giving this exemption to, small businesses would set a terrible precedent. However, my sense is that precedents have already been set in other Acts. I cannot remember exactly, but I think that the Corporate Insolvency and Governance Act has carve-outs for small businesses, and there are many other Acts in which small businesses already have carve-outs. So the precedent already exists; it is just a question of which precedent one chooses to select.

The nub of the problem is that the Minister said that the powers were carved out of the existing powers of the CMA. However, just as the noble Baroness, Lady Noakes, said, the powers are used for an entirely different purpose—to investigate and identify potential irregularities and law-breaking. That is not the nature of what we are saying.

When I entered this debate, I expected, for once, to be on the same side of the argument as the noble Baroness, Lady Noakes, and the noble Lord, Lord Naseby, and that proved the case. The noble Baroness, Lady Noakes, gave a very powerful and detailed explanation about why the Minister should be serious about this issue. It is absolutely true that the Trade Bill has taken a different route; it acknowledges that this information is essential but has gone down the route of gathering it voluntarily. If the Minister is in the business of precedence, perhaps that would be a better precedent for him to take.

It seems bizarre that a Conservative Government would push this level of red tape on the small, enterprising and innovative businesses of this country. It seems strange that we should be the flag carriers of this case, rather than the Minister, and it was important to hear the noble Baroness, Lady Noakes, pick this up.

My noble friend Lady Bowles talked about the possibility of something being agreed for Third Reading. I am no expert in body language, but I saw a faint shaking of the head cross the Minister’s personage when my noble friend mentioned the idea of some sort of negotiation or compromise being reached in time for Third Reading. In light of what the Minister has heard, not just from this side of the House but from his staunchest supporters throughout the Bill, making serious and important comments about this issue, I ask that, whatever decision he comes to, he makes it very clear verbally. We are in a hybrid House, and not all of us can benefit from the subtle nuances of the Minister’s demeanour in working out whether he will or will not be negotiating at Third Reading. Can the Minister be clear about his intentions between now and Third Reading, then we can be clear about whether to vote in support of this amendment?

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The noble Lord, Lord Wigley, talked about “the bad old days before devolution”. Does he remember that less than 25% of the electorate of Wales supported even the limited degree of devolution at that time? The noble Lord’s Amendment 67 seems to me to be aggressively nationalistic. The noble Baroness, Lady Bennett of Manor Castle, spoke in favour of what Baroness Thatcher called “subsidiarity”—but I have not heard her, or the noble Lord, Lord Wigley, or other noble Lords opposite criticise the EU as it moves to centralise and harmonise fiscal and other powers at the expense of the nation states.

[Lord Fox (LD)]

My Lords, once again, this has been a very widespread and high-quality debate. To the Minister, who has not had the benefit of the soap opera that you tend to have on Report, I say that we have reached the point that—here I agree with the noble Viscount, Lord Trenchard—is the meat of this Bill. At Second Reading, in Committee and on Report, many of your Lordships asked why this Bill was necessary. Of course, there was the political and negotiating posturing that came with Part 5, but I put it to your Lordships that one of the central, driving reasons for this Bill is exactly what we are discussing here today: it is so that central government can get its hands on this money and administer it through whatever means it sees fit, because there is no detail on that administration —here, again, I echo the point made by the noble Viscount, Lord Trenchard.

Some people called it pork-barrel; I would perhaps call it a hobby horse. We saw the benefit of the Prime Minister’s attempts at hobby horses when he was the Mayor of London: we saw the amount of public money that was spent on “Boris Island”, the green bridge and the Emirates wire crossing of the Thames. These are just small potatoes compared to what we could look forward to.

In her speech, the noble Baroness, Lady Noakes, characterised those of us on these Benches and in Her Majesty’s Opposition as, somehow, thinking that the Government are evil in this. I make it absolutely clear to the noble Baroness and the Minister that I do not think that she is evil, and we do not have a policy of thinking that the Government are evil. However, we do think that the Government are wrong, and we are allowed to do so. Many of the speeches on the Benches opposite have also been factually wrong on the subject of devolution, and I will correct some of those facts.

However, I will err on the side of giving the benefit of the doubt, because I do not believe that the people who drafted this Bill misunderstood devolution in the way that many of the speeches we have heard today have. I believe that there is a very deliberate attempt in this Bill to bypass the processes that have become normal in devolved government and, unless we see actual details as to how this will go forward, this suspicion will only get greater.

Very recently, the Government introduced the notion of the role of local councils. This has come along only in the last 24 to 48 hours in relation to their possibly getting involved in the process of disbursing. I can only assume that it is the antidote to the Prime Minister’s loose lips around devolution, but perhaps the Minister can explain what role the Government see in any future disbursement process for local councils—and, if there is not one, perhaps they can disabuse us of that as well.

My noble friend Lord Purvis set out how the multiannual financial framework works. In answer to the noble Baroness, Lady Noakes, who said that the devolved authorities are not having financial powers taken away from them, I say that they most definitely are, because they had functions under EU structural funds and state aid within the fiscal framework which are being withdrawn.

I am afraid that the noble Baroness was similarly wrong on the subject of public finance and tax. If you happen to live in Scotland, as my noble friend Lord Purvis will tell you on many occasions that he does, you pay Scottish income tax, which is set by the Scottish Government: it is a different tax. Perhaps the noble Baroness, Lady Noakes, would acknowledge that there are differences across this country in the fiscal arrangements for the people who live in the nations of the United Kingdom. Those differences arise through the devolved process, which, somehow, is now being withdrawn and pulled back by this Government under the misapprehension that, by being seen to spend this money, they will somehow become popular. That is not the way to be popular, and it will fail. The noble Lord, Lord Naseby, spoke about ferrets. My experience of ferrets is that they usually bite the people who are handling them—so perhaps he should be warned.

I have one final point, which is a question that I really do want an answer to—it is not a rhetorical question. The noble Baroness, Lady McIntosh, raised the interesting point about how the markets could get distorted. I would like the Minister to explain the role of the office for the internal market in this. As we have discussed in previous amendments, considerable powers are being vested in the OIM, not least Clause 31 powers, so can the Minister confirm that the OIM will be able to investigate the UK Government’s use of the powers that they seek in Clauses 42 and 43 to investigate whether this distorts the market? Can the Minister also confirm that devolved authorities will be able to request such an investigation from the CMA?

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

My Lords, I am going to say much the same things as the noble Lord, Lord Fox, but I will focus a little on my Amendment 65, which has been supported by the noble Baroness, Lady Finlay, as well as offering support from the Opposition Benches for Amendment 64 in the name of the noble and learned Lord, Lord Thomas, and—if it is treated as consequential—Amendment 68.

The last time she joined us, the noble Baroness, Lady Penn, responded to my amendment on the shared prosperity fund with a very full and useful speech, part of which the noble and learned Lord, Lord Thomas, has already quoted. It was helpful to hear, because it was so clear what the purpose behind the new approach to the shared prosperity fund was to be. Although she may have to slightly change the way she expresses it when she responds in a few minutes, she confirmed, stressing the collaborative nature of the future, that this would

“allow the UK Government to complement and strengthen the support given to citizens in Scotland, Northern Ireland and Wales, without taking away devolved Administrations’ responsibilities.”

That is all good stuff, but she went on to say—this was not quoted by the noble and learned Lord earlier—that

“the response to Covid has shown how the UK Government … can save jobs and support communities. This could only have been delivered strategically and at that scale by the UK Government.”

That interesting formulation has been much explored during this debate. I do not think the Minister will find much support across the House for that statement.

The Minister went on to say:

“The UK Government are uniquely positioned to level up across every part of the UK”. —[Official Report, 2/11/20; col. 596.]


That also needs to be challenged. It is the sort of thinking from which comes the “Westminster knows best” process, which has been criticised, and spending decisions being taken against the advice of those in the best position to know about them. As the noble Lord, Lord Fox, said, this may lead to follies of the type of the garden bridge and, perhaps, the much-mooted bridge between Scotland and Northern Ireland, which seems to be the answer to the Northern Ireland protocol problem.

I will talk a little about Amendment 65. I was grateful to my noble friend Lord Rooker for talking about the work done in your Lordships’ House on a critique of the Barnett formula. He is absolutely right: if that formula had been replaced by something of a different nature, the funding levels in Wales and Scotland would have changed, because of inward immigration to Wales and external emigration from Scotland. There has been a change in the population levels which has not been reflected in settlements. The system does not command much love and affection, let alone support.

The proposal in Amendment 65 challenges the Government to think again about how they might wish to do the shared prosperity fund. If it is not clear, because the drafting is somewhat complicated, it is based on a model to which the closest analogue would be the Low Pay Commission. Despite allegations to the contrary, it weighs heavily on subsidiarity and proportionality as the principles under which it might be set up. Under the proposal in Amendment 65, it is the Secretary of State who sets the level of the fund, it is clearly the Government’s funding and their authority to set a level every year for that is not, in any sense, taken away. What the amendment does is to mandate consultation and provide an alternative, needs-based basis for judging the bids. As set out in proposed new subsection (11), this approach looks at an area’s proportion of children below the poverty line, low income, economic weakness, the age structure of the population, the impact of the pandemic and the impact of climate change—something we might want to consider more fully, though it has also been picked up today.

I thank the noble Baroness, Lady Finlay, for her kind words. For anyone in the Official Opposition to be ruled as “intelligent and thoughtful” is almost too much to take, but it probably rules out any further consideration of my amendment. It would not do to be seen to be endorsing that, would it?

As the noble Lord, Lord Purvis, said, if Amendments 64 and 68 are passed, there will be a bit of a hole in the Government’s thinking on this area. They might want to think again about how do to that by looking at this amendment, certainly in the context of the responses to the now notorious box 3.1. I congratulate the noble and learned Lord, Lord Thomas, on being able to adapt his speech to take account of the fact that he could have had only a few minutes to look at that box. His critique of it was spot on. As the noble Baroness, Lady Finlay, said, box 3.1 is based on the assumption that the Government will receive the new financial assistance powers in this Bill—it says so straight out, at the beginning. It is also interesting that this is clearly a top-down approach:

“The government will develop a UK-wide framework for investment in places receiving funding and prioritising: investment in people … investment in communities … investment for local businesses”.


There is nothing exceptional or egregious about the list of things to do, but the idea that there is a top-down approach jars with everything we have been doing in the last 20 years to develop a much more responsive, local environment.

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[Baroness Penn (Con)]

My Lords, I do not think that I can go any further than what has been announced in the spending review today: that it is the Government’s intention to use the powers under this Bill to deliver the shared prosperity fund.

[Lord Fox (LD)]

My Lords, I thank the Minister for attempting to answer my final question but I fear that she may have been wrongly advised. Clause 31 states:

“The CMA may from time to time undertake a review”.


Subsection 1(b) certainly points to “Parts 1 to 3”, as in the Minister’s answer. However, subsection 1(a) says that such a review can refer to

“the internal market in the United Kingdom”,

which is a far broader swathe than the narrow answer given just now.

While I am up and reading the legislation, subsection (2) states:

“The CMA may receive and consider any proposals that may be made or referred to it for undertaking a review”.


Can the Minister confirm that the devolved authorities are one of the bodies that can request such a review of the whole UK internal market as in Clause 31(1)(a), rather than the answer that was just given?

[Baroness Penn (Con)]

The noble Lord will probably be unsurprised to know that the advice I have received has not changed in the short time since he asked his further question. I will commit to reviewing that advice; if any part of it was not accurate, I will write to the noble Lord. My understanding is that those reviews do not refer to the powers in this Bill, and whether the devolved Administrations or others can refer matters to the CMA for review relates to other parts of this Bill.

--- Later in debate ---

[Lord Flight (Con)]

I am certain I was.

[Lord Fox (LD)]

My Lords, the debate on this amendment has been relatively short, but the Minister should not conclude from that that it is unimportant. The reason why the debate has been short is that it crystallises points that have recurred since Second Reading, through Committee and in various discussions on other groups of amendments, around the basic suitability of the CMA as a home for the OIM. That is the central point.

I am pleased to follow the noble Baronesses, Lady Noakes and Lady Neville-Rolfe, whose analysis of the concerns around the location of the OIM I completely concur with. They conclude that they do not necessarily like the full nature of this amendment, and I respect that point. This amendment is the culmination of several other attempted amendments but, without it, we will not get the focus on this issue that we need from the Minister. Even though it may be a bitter pill to swallow for the noble Baronesses, Lady Noakes and Lady Neville-Rolfe, we need to get somewhere to concentrate minds—and this is the amendment.

It was ably set out by my noble friend Lady Bowles, and I know that the noble Lord, Lord Stevenson, will also set out a good case, so I will not point to any more issues. I simply say that this is a really important issue, which will colour the culture of the market in this country and how it is run. I had not considered the point brought up by the noble Baroness, Lady Noakes, that it may also jeopardise the CMA’s current role, which is a good point and well made. This is an important amendment to get behind. Noble Lords on the Liberal Democrat Benches will vote for this amendment when it is put, and I hope that other noble Lords, who find problems with some words in this amendment, will stave that to one side and consider that, without it, we cannot change the culture of how the market will be run in future.

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

I am going to disappoint the noble Lord, Lord Fox, as I will not go through my arguments at length, because they have been made so well by the noble Baroness, Lady Bowles, and the noble Lord, Lord Wigley. I put on record my absolute support for the noble Baronesses, Lady Noakes and Lady Neville-Rolfe, who, while they have comments about the detail of the amendment, support the principle of it. I am grateful to them for that.

It is a simple proposition: the internal market must work and be seen to work for all and, therefore, must have buy-in and support from all. It should not favour one geographical area or country over another. It is important that we do not upset the balance struck in the CMA and its functions. The noble Baroness, Lady Noakes, is right that there may be an adverse impact on the CMA, if it is forced to take on something that is not its primary purpose. Thirdly, the devolved Administrations need to be part of the organisation, its process and appointments.

There are reservations about proposed new subsections (3) and (4) in the amendment. It is beyond our hopes, but perhaps the Minister will consider bringing forward an agreed amendment at Third Reading. If he did, we would support it but, if he will not do that, we will support the noble Baroness if she tests the opinion of the House.

--- Later in debate ---

[The Duke of Montrose (Con) [V]]

My Lords, it is a pleasure to follow my noble friend Lord Trenchard, who has contributed so much to the different stages of this Bill. Once again, it has also been a great pleasure to support my noble and learned friend Lord Mackay of Clashfern as he tries to prompt the Government to outline a process of devolved consultation on any major disputes in the creation of regulations or statutory instruments that future Administrations will consider adequate to the task under this Bill.

Almost all the issues discussed today fall very much into the area that recalls the off-the-cuff remark that slipped from the lips of my right honourable friend the Prime Minister, which he has since spent some time trying to explain in any way that fits with government policies going forward. Speaking as a Scotsman, however, I believe that the First Minister of Scotland should take some comfort from what the Prime Minister said and the fact that as devolution has progressed she has been able to move many Scots institutions and practices—never as far as she might like, but always in the direction that she would like, towards an independent nation. The situation in Wales has not been the same; it has been much healthier. Naturally, this is the approach that we can expect the First Minister to use with any future changes, and it presumably explains the lack of consent from that area.

Like my noble friend Lord Cormack, today I wish to support a Government who aim to maintain a United Kingdom. The Government are looking for support and settlements in structures and frameworks that can support devolution within, and as part of, the United Kingdom. In supporting my noble and learned friend, we are all seeking a truly robust mechanism that has the possibility of overcoming disagreements at the highest level. The debates in your Lordships House today are more and more an illustration of the levels of disagreement that will have to be solved.

In Committee, my noble friend the Minister in his reply gave some idea and suggestions of the criteria that the Government have in mind for resolving disputes at a more mundane level. Some of it sounded quite good, as far as it went. Disputes such as those he outlined are frequently liable to comprise very technical elements, and the Government would like to resolve these at a departmental level, or, as they say, at as low a level as possible—whatever that is.

In Committee, my noble and learned friend Lord Mackay insisted that his suggestion for working these things out through the Joint Ministerial Committee on EU Negotiations was exactly what is needed. However, he is hoping that the amendments the Government have now introduced will move it some way in that direction.

In his response in Committee, my noble friend the Minister enticed us—and it was repeated at a briefing I received today—with the thought that there is in train a revision of the workings of the Joint Ministerial Committee, where already

“The proposal for reforming the formal process for avoiding and resolving intergovernmental disputes was jointly drafted”.—[Official Report, 2/11/20; cols. 529-30]


Having said that, the Minister was then asked by the noble Lord, Lord Purvis of Tweed—who has also prompted us today—whether we would be given some indication of what this reform contained, as it is of consequence to our consideration of disputes under this Bill. But the Minister would not be drawn, and we are being asked to consider this Bill without this knowledge and without the proper mechanism. It sounds as if the Government are going to rely on some political bargaining somewhere along the line.

I have another question of clarification for my noble friend the Minister. Will the Competition and Markets Authority—which is above political interference —and its office of the internal market task force be given the support they need to face disputes in a court of law? That appears to be where this is all heading.

[Lord Fox (LD)]

My Lords, this has again been a high-quality debate. It is an honour to follow the noble Duke, the Duke of Montrose, who spoke with great wisdom. In offering Her Majesty’s Government support, that support was heavily nuanced with some important questions, which I look forward to hearing the Minister answer.

In the previous debate, on Amendment 69, the noble and learned Lord, Lord Thomas of Cwmgiedd, set the question of whether it was diktat versus consensus. It is the same with group. I am pleased to speak in a group which has heard the contribution of the noble and learned Lord, Lord Mackay, and I share in the admiration of the noble Lord, Lord Cormack, for his contribution. He painted a rather half-full picture of where we have got to in the Bill, and the noble Lord, Lord Cormack, was a little more half-empty. I am afraid that I side with the concerns of the noble Lord, Lord Cormack. Those concerns were further illustrated by my noble friend Lord Bruce, who set out the flaws and problems that remain with the Bill.

I am speaking to Amendment 75, in my name, and I am grateful for the support of my noble friend Lord Purvis of Tweed, the noble Baroness, Lady Bennett, and the noble Lord, Lord Wigley. Overall, my noble friends have been very clear and helpful in setting out the purpose of this amendment. It is essentially to help drive a process whereby the consensus that the noble and learned Lord, Lord Thomas, talked about in the last group can be delivered—an explicit process.

Why do we need an explicit process? One thing that has come through the Bill, and through amendments brought by both Ministers, is an acknowledgement of the need for consultation. However, as we heard from the noble Lord, Lord Empey, who was here just a few minutes ago and I am afraid is not here now, one Minister’s consultation is not necessarily one recipient’s feeling consulted. There is a process that is called consultation, whereby people are informed marginally before the general public, and then there is genuine consultation. All Governments practice both these forms of consultation.

Amendment 75 sets out a process whereby consensus is driven, rather than relying on the Minister or the Government of the day, whether this one or future ones, to deliver that consensus around the Joint Ministerial Committee. That process has been set out, as I said, by my colleagues. The purpose is, in a sense, to bookend the amendment of the noble and learned Lord, Lord Hope. After Part 5 discussions, we started these discussions with the amendment of the noble and learned Lord, Lord Hope, which pushed the common frameworks to the forefront of how the future internal market should be organised. Amendment 75 seeks to put in place a process by which this can happen and, as my noble friend set out, avoids the pitfall of a veto.

The noble Lord, Lord Cormack, said that he had concerns about the union. I have concerns about the union. It is only by delivering a truly consensual process that is seen to be transparent and set out, rather than optional, for people, that that danger can start to be averted. That is why I will be pressing Amendment 75 to a vote—unless, of course, there is a damascene conversion on the Benches opposite.

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

My Lords, like others, I congratulate the noble and learned Lord, Lord Mackay, on his campaign. The Government have listened to it and that has resulted in a number of good and important changes to the Bill. He exerts great influence on our work, and long may it continue.

I admire the thinking that has gone into Amendment 75, in the name of the noble Lord, Lord Fox, and his supporters. It proposes a response to another of the gaps that we keep encountering in the Bill—the need to reform the JMC system and the need for a mechanism for getting agreement, with particular reference, in this case, to the market access principles, about which we have different views. This may not be the time to bring this particular proposal in, but it shows us the way forward and I hope that that will influence the Government’s thinking in other ways and in other parts of our political consciousness.

Amendment 76, in my name, was intended as a fallback, in case our plans for ensuring that the common frameworks programme was made the centrepiece of the process for agreeing the rules required to underpin the UK internal market fell by the wayside. However, this House has strongly supported the amendments of the noble and learned Lord, Lord Hope, on the common frameworks, and we hope that, in time, we can persuade the Government that they can and should do likewise.

I am less sure that we have persuaded the Government about the damage they will do to the devolution settlement if they do not change tack on how state aid is to be organised and their current top-down plans for the shared prosperity fund. I urge them to reflect on the opportunity they have been given by the votes today, but I do not think Amendment 76 will actually take the trick that it was intended to in this case, so I shall not be pressing it to a vote.

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Moved by

[Lord Fox]

75: Clause 50, page 39, line 5, at end insert “, subject to subsection (3A).
(3A) A statutory instrument containing regulations under subsection (3) may not appoint a day for the commencement of Part 1, 2, 3 or 4 until the following requirements are met—(a) the requirement in subsection (3B), and(b) the requirement in subsection (3C) or the requirement in subsection (3D).(3B) The requirement in this subsection is that the Prime Minister must convene a plenary session of the Joint Ministerial Council in order to seek agreement of the market access principles set out in section 1(2).(3C) If an agreement on the market access principles is reached at the conclusion of the Joint Ministerial Council session, the requirement in this subsection is that the Secretary of State must lay before Parliament a memorandum of understanding which sets out—(a) details of the agreed principles; and(b) proposals for the establishment of an agreed dispute resolution mechanism relating to the internal market in the United Kingdom for any disputes among the Secretary of State, the Welsh Ministers, the Scottish Ministers, and a Northern Ireland department.(3D) If unanimous agreement is not reached at the conclusion of the Joint Ministerial Council session, the requirement in this subsection is that the Secretary of State must lay before Parliament a report outlining—(a) why unanimous agreement could not be reached; and(b) proposals for the operation of the internal market in the United Kingdom in light of the fact that an agreement under subsection (3B) was not reached unanimously.”

[Lord Fox (LD)]

My Lords, it has been very helpful to hear the Minister. His description of the intergovernmental discussions is very important and we wish the Government good speed on that. If the Minister or his colleagues can keep us updated on the progress of those very important discussions, we would be grateful.

On Amendment 75, the Minister made great play about the timetable, but it should be noted that the Bill does not affect any existing legislation on day one. Furthermore, the devolved authorities have agreed to a standstill arrangement. The Minister is creating a false timetable pressure on your Lordships. I do not believe that your Lordships need to be constrained on time for this.

In conclusion, the noble and learned Lord, Lord Mackay, spoke about the internal market as a living, breathing, changing process. To run that, there needs to be a structure with the JMC and the devolved authorities. Amendment 75 would set in place one way of doing that and I am sure we would be very happy to discuss other ways of doing that with the Government if they have ideas. To put that pressure on, I would like to test the will of the House.

United Kingdom Internal Market Bill

Lord Fox Excerpts

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

[Baroness Neville-Rolfe (Con)]

My Lords, I thank my noble friend Lord Callanan for his amendments, which, as many have said, represent a real readiness to listen. The changes all seem very sensible, especially the proposal for the CMA to lay an annual plan before Parliament and before the devolved legislatures. Perhaps a similar procedure could be derived in relation to the common frameworks, over which there has been so much grief and debate. In my experience, when things go well, such reports become routine and are not even debated, but they are a good way of keeping the Executive —public servants, any boards involved and the Ministers they serve—objective, efficient and thoughtful.

However, I am afraid that I do not support Amendment 54. Board members of the CMA should not be “representative” of a territorial interest in the way this would inevitably turn out. The interests of the four nations should be taken into account in coming up with a balanced, objective board, but this is not the right way to do it. My noble friend Lady Noakes summarised the balance issues very well from her own wide experience. The amendment would also jeopardise the very objectivity and pursuit of the public interest which is vital to a better CMA.

By the way, Tesco’s head office is not in London; that was a bad example for the noble Baroness, Lady Randerson, to choose. At least in my time, we had a very high degree of sensitivity to Welsh issues, sold more Welsh food elsewhere in the UK than anybody else, and indeed from time to time had Welsh individuals of great independence sitting on the board.

[Lord Fox (LD)]

That is just proof that you can take the Peer out of Tesco but not Tesco out of the Peer.

My noble friend Lady Randerson hinted that she thought the Minister might be developing emotional intelligence—or perhaps we will see signs of that later. However, I think that most of your Lordships have welcomed the government amendments in this group. They are showing movement in the right direction and are an improvement on what you would expect those of us on these Benches to condemn as a deeply flawed Bill.

My noble friends Lady Bowles and Lord Bruce both made the point about where the OIM is and its presence in the CMA. We are not debating that in this group, although we will be some other time. However, Amendment 54 and consequential Amendment 59 should be seen as the safety belt in the event that the OIM remains within the CMA.

The noble Lord, Lord Naseby, made a powerful speech against Amendment 54. I did not see him in his seat when the noble and learned Lord, Lord Thomas of Cwmgiedd, was giving his strong endorsement of his amendment. He may have been oscillating somewhere between virtual and physical; if he was, I apologise. In his speech, the noble and learned Lord, Lord Thomas, put forward a very important point. The CMA is getting considerably more powers as a result of the Bill. The point he did not make but inferred is that those powers move from being reserved powers to those that step into the realm of devolved powers—there can be no doubt about that.

There is therefore a significant change in the nature of the task that the CMA is overseeing. The Government may say it is too much trouble to change the nature of the governance of the CMA, but its focus is changing from reserved issues to those which cover devolved matters, so that change should be reflected in its governance.

My noble friend Lord Bruce talked about unintended rather than intended consequences. The Government need to create a board that can reduce the number of unknown unknowns that it encounters. Amendment 54 is a perfectly reasonable amendment, which would make sure that there are people on the board who understand the nature of the markets in the devolved countries.

To take the point made by the noble Baroness, Lady Noakes, one would hope that the careful construction of a board would understand the need for that. I have to tell your Lordships—and perhaps the principles of my noble friend Lady Bowles could be passed to some Cabinet members—that the construction of boards and organisations over the course of the last 12 months has been nothing like a careful assembly of the right people. It has been a gathering of friends and known people to do the bidding of the Secretary of State. Therefore, it is right for the opposition to be very suspicious about the future board of the CMA, which will have this extraordinarily bumped-up role. That is the reason for Amendment 54 and also for consequential Amendment 59.

The noble Baroness, Lady Noakes, is correct. In a sensible world, what she suggests would happen. However, we cannot trust that to go forward, and trust is going to be very important with regard to the devolved authorities and how they work with the CMA if, indeed, the office for the internal market is located within it.

The noble Lord, Lord Wigley, the noble Baroness, Lady Finlay, and my noble friend Lady Randerson gave wise advice: rather than politicise the CMA, this is helping to inoculate it from political suspicions. That is why, if the noble and learned Lord, Lord Thomas, seeks to put it to the House, we Liberal Democrats will support Amendment 54.

[Baroness Hayter of Kentish Town (Lab)]

I join others in thanking the Minister for some significant moves in the amendments that he has introduced today. As others have said, it is testament to his having listened. He sometimes thinks that means “listened at length”, but he listened, considered and responded, and we welcome all the changes. I am particularly pleased about the acknowledgement in the amendments of the interests of consumers in the mapping out of the new internal market. The House will be pleased about the recognition of the need for experience across the kingdom in the appointment of the OIM panel and the need to seek the consent of the devolved authorities to such appointments.

Similarly, we welcome, perhaps unsurprisingly, the new requirement for the CMA to lay its key documents before all four legislatures. It is possible that they already do it, albeit perhaps as a courtesy rather than a legal requirement. We also strongly welcome Amendments 56 and 57, which require devolved authorities to give their consent within a month to appointments to the OIM panel. We like that—consent within a month; we have heard it before. We pinched the idea from the Minister’s words, but it is a good one. As we proposed in our amendments, if the Government proceed with an appointment despite consent not being forthcoming, they will have to explain why they are doing so. Therefore, we will not move Amendment 59.

However, the Minister will not be surprised to hear that, although we welcome these changes, we would like to nudge them a little further. On Wednesday, as others have said, we will seek to move the OIM out of the CMA. Just in case it remains in the CMA, it is vital, as the noble and learned Lord, Lord Thomas of Cwmgiedd, and others have said, that the CMA, in accepting this new role, amends its structure to accommodate the change. It is impossible to think of any other national organisation, when its remit changes, not revisiting its governance and appointments. It should not just continue with business as usual when taking on a whole new responsibility.

Indeed, although we welcome Amendments 56 and 57, we were surprised that they did not apply to the CMA as well as to the OIM panel. For an overarching body with a purview of the development of the new internal market architecture, not having to feel the pulse of, understand and have input from the constituent parts is a little odd, to say the least. For all its board members to be appointed by just one of the four Governments is particularly hard to understand, because it is a body covering the competences of all four Governments. If it was covering only the reserve competences, one could understand, but it will cover powers that affect the area of all four Governments.

As was said by, I think, the noble Baroness, Lady Noakes, if you are appointed by one place you somehow feel like a representative from it. I must say something about other boards and committees that I have sat on. It may not be a board of this nature, but the National Consumer Council included someone from the Northern Ireland Consumer Council, as I think it was called, someone from the Welsh Consumer Council and someone from the Scottish Consumer Council, but once they got on the board, they had responsibility to it as a board member. Just because we brought in someone with different responsibilities, it did not suddenly make them a representative. Similarly, the chairs of the different sub-committees of the Financial Reporting Council sat on the board. They came with that experience but, once they sat on the whole-council board, their responsibilities included that.

It is slightly hard to say that just because people are appointed by different Governments, they are then answerable only to them. Given that they would be appointed by only one Government, and given that people are saying that if you are appointed by the Welsh Government, you are then a representative of the Welsh Government, surely if you are appointed by the UK Government you also are not independent. It does not quite make sense to me.

We will shortly vote on Amendment 54 in the name of the noble and learned Lord, Lord Thomas. The Opposition will be happy to support it, to ensure that the CMA really does act on behalf of the whole of the United Kingdom.

United Kingdom Internal Market Bill

Lord Fox Excerpts

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

[Baroness Noakes (Con)]

My Lords, I start by saying how much I agree with what a number of noble Lords have said about the nature of debate in this sterile House, and I hope that we can certainly move on. I think it is important to say that because, as noble Lords might expect, I am not going to be saying much else which will find favour with other noble Lords who have spoken in this debate.

I respect the concerns about protecting the powers of the devolved Administrations which lie behind the amendments in this group, but I believe that these amendments would not be helpful in the context of the internal market and might well be very harmful. There is no exact correlation between what the common frameworks cover and the UK’s internal market covered by the Bill. Indeed, the functioning of the internal market is only one of six objectives of the common frameworks programme. Not every common framework will have a UK internal market dimension, and not every aspect of the UK internal market is included in the common frameworks programme.

So if Amendment 1 is agreed to, we will have uncertainty from day one about which bits of the common frameworks would override the market access principles. Uncertainty kills businesses. Uncertainty might be resolved only by the courts, and that could take five, maybe 10, years to bring to conclusion. Businesses cannot in general cope with timeframes of that nature, and that is especially true in today’s lockdown-harmed business environment.

The common frameworks are by their very nature detailed and specific. They are practical solutions to well-defined problems, such as compliance with international obligations. They do, however, have two big weaknesses. First, they have no guiding star, or no guiding principle, and they cannot, by their nature, cope with future change. By contrast, the internal market enshrined in the Bill is based on the overarching and enduring principles of market access, namely, mutual recognition and non-discrimination.

I am very clear that businesses want the Government to deliver an internal market which has as few barriers to trade as possible. They do not want to have to master thousands of pages of common frameworks, which may or may not impact the internal market, just to do business 10 miles away if that is over one of the UK’s internal borders. I have to say to the noble Baroness, Lady Randerson, that I have never even heard of the Aldersgate Group she referred to as representing business opinion, and I do not believe it represents the opinion of the whole business community.

In Committee, I urged noble Lords to consider the provisions of the Bill through the lens of businesses and individuals who will be trying to live, work and trade within the United Kingdom—that is what the Bill is about. By viewing the Bill through the lens of what the devolved Administrations think they might lose in terms of devolved competence, I believe that they may end up inflicting acts of self-harm on the people and businesses in their own territories.

I remind noble Lords of the high degree of dependence of the devolved nations on trade with other parts of the United Kingdom. This is an issue for Scottish businesses and residents, Welsh businesses and residents and Northern Ireland businesses and residents. It is important but not such a big issue for English businesses and residents. If trade is made more difficult, the result, as night follows day, will be higher cost and less choice for consumers. At a time of economic stress, that does not seem a sensible route to follow.

I have heard many arguments of principle adduced by the supporters of the amendments, but I have heard less about the practical issues. We heard about Scottish concerns on minimum alcohol pricing, but that was debunked in Committee. I believe that building regulations are a new red herring that has been introduced and will not conflict with the Bill. The Bill does not outlaw every variation within the UK, as some have tried to suggest. More importantly, I am still waiting to hear what will make life better for the businesses and residents of the devolved nations if the amendments are passed.

More than 90% of UK small and medium-sized enterprises, and nearly 60% of large businesses, trade only within the UK. That is the scale of the issues we are facing with the amendments. I hope that noble Lords will not jeopardise the aims of an internal market which works for the whole of the United Kingdom by pressing the amendments.

[Lord Fox (LD)]

My Lords, the noble Baroness, Lady Noakes, is right: I found cause to agree with her opening statement, as I did with the noble Lords, Lord Foulkes and Lord Cormack, and others. The need to have proper debate—not least to allow the noble Lord, Lord Foulkes, to go back to his heckling—would add to the debate.

Congratulations should go to the proposers of the amendments and to the noble and learned Lord, Lord Falconer and my noble friend Lord Newby, who have managed to create a debate which gives your Lordships a proper choice. That choice centres around the words “mutual respect”, because the Bill as it stands, unamended, is disrespectful to the devolved authorities and to the process of devolution. The amendment gives your Lordships a chance to build that respect back into the Bill.

On many occasions, Ministers have freely used the word “complement” and expressed the view that the common frameworks complement the process devised by the Bill. Unless those common frameworks can be built into the Bill, and unless the Minister can explicitly explain how they complement, there is no complementary process; there is replacement, which I believe is sought by the Bill. The noble Lord, Lord Naseby, spoke of the common frameworks as if they were some Bolshevik plot. I remind him that they were the policies of a Conservative Government whom he probably supported and voted for at some point in the recent past.

The amendments give an opportunity to put respect back into the Bill, but there is also a practical element to them. We should remember, as we were reminded by, I believe, the noble and learned Lord, Lord Mackay, that trade and the internal market are flexible: they move, they change. The common frameworks are designed to be a flexible, living document. As many Peers have pointed out, they are also there to manage divergence. The common frameworks are there to manage divergence and, as we have heard from a number of speakers, not least my noble friend Lady Randerson, that divergence delivers innovation, progress and better things for this country.

My noble and learned friend Lord Wallace brought up something very important. In the words of the Minister, the Bill seeks to do that which the common frameworks do not do. The common frameworks do that which is being transferred from the European Union. Therefore, the Bill is trying to do more than was being transferred from the European Union. This is a zero-sum game. Where is that power coming from? It is being reserved by the Government from what was previously devolved. My noble and learned friend showed that that is the clear plan that sits underneath the Bill.

--- Later in debate ---

[The Deputy Speaker (Baroness Garden of Frognal) (LD)]

I am sorry. I call the noble Lord, Lord Fox.

[Lord Fox (LD)]

My Lords, I apologise for creating such a fuss, and I thank the Whip for intervening on my behalf.

The Minister has made a lot of the need to future-proof this Bill. Indeed, part of the justification of the last debate was around future-proofing. My noble friend Lady Suttie made a very clear case on where future digressions in conditions between Northern Ireland and the rest of the United Kingdom could create issues. Does the Minister not admit that this is a problem and concede that Amendment 24 is a way round that problem becoming difficult in future?