Professional Qualifications Bill [HL]

Debate between Lord Fox and Baroness Hayter of Kentish Town

Report stage
Tuesday 9th November 2021 Lords Chamber

[Baroness Hayter of Kentish Town (Lab)]

My Lords, like the noble Lord, Lord Lansley, I welcome Amendment 12, which the Minister will speak to shortly. As has been said, right from the start we worried about the independence of regulators and indeed, as I suggested earlier today, the Law Society still retains a slight frisson of concern there, although I note the Minister’s words. Regulators have been worried about their independent ability to decide who was fit to practise in this country and that that might be undermined by a government diktat to co-operate with another country to accept their professionals or to drop standards in order to meet a government trade objective. As the Minister mentioned earlier, given that I am now looking at trade deals, I think he realises that I will be able to keep a beady eye on that as we go forward, along with the noble Lord, Lord Lansley, who will be looking at that as well.

As I mentioned before, it was also of concern to the users of regulated services in case their trust in professionals, which stems from a regulator keeping to standards and high quality of enforcement, might be in any way in jeopardy. However, the Government have recognised these concerns and have come forward with the very welcome Amendment 12; it must be good because there is even a Lib Dem name attached to it, so we know that this government amendment is well received. Needless to say, of course I still prefer the wording of Amendment 15, which was short and to the point, but I am content not to press it in favour of the Government’s own amendment.

[Lord Fox (LD)]

On the subject of Amendment 11, I have full sympathy with the point made by the noble Lord, Lord Lansley. If my noble friend Lord Purvis were to speak, he would remind the Committee that at the outset we were promised primary legislation for trade deals, and I am gratified that at least two noble Lords will be keeping an eye on the overall process.

In Committee, back in July, the very first amendment that we discussed, in my name and that of my noble friend Lord Purvis, was very similar to Amendment 15. Its purpose from the outset was to protect the autonomy of the regulators. In that respect we are both delighted that the Minister has listened and, through the process of discussion, has come up with Amendment 12. It does a lot of the heavy lifting in dealing with what I referred to earlier as the Trojan horse of suspicion.

In protecting regulatory authorities from Clauses 1, 3 and 4, the amendment very much creates a situation where they are allowed to go about their business in the way that we want. It is for that reason that I took the unusual step—at least, unusual for me—of countersigning the Government’s amendment, which clearly indicates our support from these Benches for what we see as a welcome and important addition to the Bill.

Professional Qualifications Bill [HL]

Debate between Lord Fox and Baroness Hayter of Kentish Town

Committee stage
Tuesday 22nd June 2021 Lords Chamber

[Lord Fox (LD)]

I am grateful for the speeches we have heard so far. I am a cosignatory to this amendment and I would like to associate myself completely with the comments of the noble Lords, Lord Hunt and Lord Patel. However, if they will excuse me, I would like to single out the comments of the noble and learned Lord, Lord Thomas of Cwmgiedd, which were a clear, clarion call as to what we need to do with this clause: take it out. If we do not, we will let a Bill leave your Lordships’ House with so much power vested in the Minister and the department.

We are still struggling with what this Bill is for. If, as the Minister says, the first four clauses are its beating heart, then if things change, these issues can be picked up in primary legislation. Secretary of State Fox was very clear: trade deals will be brought to Parliament and debated as primary legislation. If and when the Government renege on that, perhaps it would be a problem of their own creating, but to leave this Henry VIII clause in the Bill is to pass too much untrammelled power going forward. I am sure that every department wants that ability not to have to worry about what Parliament says when it is making regulations and primary legislation, but your Lordships are here to stand up against things like that. We should remember the words of the noble and learned Lord, Lord Thomas, as we move forward to Report.

[Baroness Hayter of Kentish Town (Lab)]

My Lords, my noble friend Lord Hunt referred to “unease” about the Bill. I would put it slightly stronger: the “worry” about the Bill is threefold. First, as we have been hearing, it is badly thought out, badly drafted and not subject to proper consultation. Secondly, it is powerful: it allows statutory bodies—ones we thought autonomous —to have their roles, structures and working practices altered, not at their request to a Minister but to comply with government policy. Thirdly, as we have just been hearing, these changes to statutory bodies will be imposed by secondary legislation.

Hence, it is entirely legitimate to ask questions about Clause 13. Again, it is about whether there are two parts to the Bill. I have been focused on the idea that the Bill is about recognising international qualifications, but we are hearing from the various trade talks that the Government will indeed want to add professional services into the mix. As we have said before, this will often be really welcome and will be prioritised, I hope, in some of the trade talks—but only where it is judged good for our professions and not where it is imposed in a deal for something else.

Professional Qualifications Bill [HL]

Debate between Lord Fox and Baroness Hayter of Kentish Town

Committee stage
Monday 14th June 2021 Lords Chamber

[Lord Fox (LD)]

My Lords, we are indebted to the noble Lord, Lord Hunt, for opposing that this clause stand part. The way in which he set out the issues around delegated powers was excellent. I have nothing to add, but I would like to associate myself with what he said. His point about the severity of the sanction of a DPRRC report is very well made. I have tried to make in different ways. I think we will all be waiting to see how the Government react in legislative terms.

The term “encouragement” has come up and, clearly, Clause 4 is the encouraging end of a continuum that goes through “recommendation” and ends up in “compulsion”. Here, I come back to the question that my noble friend Lord Purvis asked when we were debating Amendment 30. The Minister confirmed that Clause 4 is voluntary, which we were all grateful for, but omitted to respond to my noble friend’s question about whether Clause 3 has the power to override Clause 4 and move that encouragement further down the continuum towards compulsion. Rather than ask it that way around, let us ask it the other way around. Are there any circumstances in which Clause 3 can be used? In other words, would the Minister rule out that Clause 3 can ever be used to compel regulators to do things as a result of Clause 4?

[Baroness Hayter of Kentish Town (Lab)]

My Lords, the Government need to justify why this clause is in the Bill. What would happen if it were not? What would we lose? What is the worse that could happen if it were not in the Bill?

UK regulators are free to enter into negotiations with other national regulators at the moment, so why is this clause needed? Could the Minister just answer that, how it would be used and why we need to give Ministers this power? It does not use the words “encourage” or “encouragement”; it says that the Government can authorise a regulator to enter into negotiations, but it is hard to understand when that would ever be needed. Can the Minister answer the question: what would happen if this were not there and why, if a regulator did not do it of its own free will, the Government would need this power to authorise it to do it?

Professional Qualifications Bill [HL]

Debate between Lord Fox and Baroness Hayter of Kentish Town

Committee stage
Wednesday 9th June 2021 Lords Chamber

[Lord Fox (LD)]

My Lords, I join noble Lords in congratulating the Minister on moving quickly on this. I also congratulate the GMC and the Nursing and Midwifery Council on moving quickly in terms of raising this issue with Her Majesty’s Government. Reflecting back on some of the things we heard in the debate on the first group of amendments, it seems that there are other professional groups in regulated professions that still have outstanding issues. I hope that the Minister can confirm that his door is just as widely open for them to bring their issues forward, albeit somewhat later, so that we can clear them up.

The Minister talked about whether we were assuaged and then stated that the Secretary of State for Health could bring forward statutory instruments concerning the health profession. We knew that. What we do not know, and what has not yet been answered, is how conditions set and laws made by this Bill that reflect on the consultation—as the noble Lord, Lord Purvis, set out frankly, this Bill and the DHSC consultation are travelling in highly contradictory directions—will affect the consultation and the health professions. It is that direction that we are more interested in, rather than the opposite.

I associate myself with the comments made by my noble friend Lady Garden of Frognal. These amendments are welcome. I note that, along with the noble Baroness, Lady Finlay of Llandaff, we expect to debate the word “substantially” later because we have some concerns around that. I also note her point about future regulators, so to speak. My assumption is that those regulators will be established by a different process somewhere else but, in order to add those additional regulators to this Bill, we will be seeing some more of the Minister’s statutory instruments in future. Perhaps the Minister can be clear about how future new regulators will be added to the terms of this Bill.

The noble Baroness, Lady Noakes, does not regard the noble Lord, Lord Lansley, as the Opposition, and I kind of do not, either. In this respect, I think the Minister would do well to listen to his very wise advice.

[Baroness Hayter of Kentish Town (Lab)]

My Lords, as has been said, the changes made are welcome. However, we should reflect that there are still concerns over the powers. On 7 June, the Delegated Powers Committee produced a report on the changes. It said that the Government had still failed

“to explain what such ‘additional requirements’ or ‘conditions’ might be”

and—this is the important bit—had failed

“to explain why the amendment would leave it to Ministers to determine … whether there are to be any such conditions and, if so, what those conditions are to be.”

The committee also said that the Government had failed

“to explain why all such conditions should be a matter for secondary legislation”

rather than primary legislation—a theme to which we will continue to return.

As the noble Lord, Lord Patel, said, the GMC welcomes the changes but has asked for a couple of things to be put on the record by the Minister today. For example, can the decision on whether a particular professional is able to join a register be based on an assessment of that individual’s knowledge, skills and experience, rather than on just their qualification? Also, will the regulators make that assessment? As the noble Lord said, the GMC has asked for that, but I must say, as a potential patient, that I too would like an absolute assurance that it will be the regulator who says that someone is fit to start cutting me open, or whatever else anyone would do.

On the little secret we heard about in the briefing from the other side of the House, perhaps the mistake next time could be calling my amendment a government amendment, because that way we might be able to get it through without anyone noticing. I live in hope.

The issue raised by the noble Lord, Lord Lansley, is a good one. I also wonder whether the Bill needs an “and/or”. That seems to go to the strength of putting this amendment to one side and putting it in on Report. The Minister should not think that there is any egg on his face or anything if we ask for a pause. As I am sure he will know, it is very normal for government amendments to be put in on Report; otherwise, they have to be brought back, slightly clunkily, at Third Reading, by which time we are normally rather tired and want to leave early. So if the noble Lord could not push his amendment today so that we can deal with it on Report, that might be the best way forward.

--- Later in debate ---

[Lord Fox (LD)]

My Lords, this group is perhaps the inevitable consequence of trying to reduce a highly complex system and situation, as the Minister has highlighted, into a small one-size-fits-all Bill. In other words, we have a mixed bag of amendments in this group. I will speak initially to Amendments 53 and 54 in my name and to Amendment 52 in the name of my noble friend Lord Palmer of Childs Hill.

I thank the noble Lord, Lord Patel, for his support of Amendment 53. He said that he was disappointed to be speaking before me. I have to say that I am not disappointed to be speaking after him because he gave a much better speech than I could possibly have managed myself. The noble Lord, Lord Lansley, is right, in that the innovation issue is hard to measure, but I think that the point made by the noble Lord, Lord Patel, that this is part of a cumulative effect on innovation is important.

I was hoping to probe the Minister on how the Government have joined the dots between the intention of the Bill and how it will drive the future nature of our economy. To some extent, the criticism of the noble Baroness, Lady Noakes, of these kinds of amendments as a way of trying to shoehorn in something else is true; I make no apology for that.

At the heart of the Bill, there is a central conceit. At Second Reading, the Minister said:

“The Bill will allow action to be taken in the public interest if it is judged that a shortage of professionals has arisen in a profession.”—[Official Report, 25/5/21; col. 908.]


What is a “shortage of professionals”, and what level of omniscience is required from the department in order to identify that particular need in the market for professionals?

Is there a danger that the Bill is in fact solving yesterday’s problems? That is the innovation question—because we need people to create the businesses of the future. Yet we have a Home Office that lets in only people who already have a job, and BEIS, which will measure the current need for people. The noble Lord, Lord Patel, was closer to the mark when he talked about early career researchers—I would add research technicians. Both find it extremely difficult to get Home Office visas because they are paid less than the limit for them to come in.

We are going to have a debate about the availability of people, in the group starting with Amendment 17, and I do not want to pre-empt that, but I want to hear the Minister’s playback on how the department and those drawing up the Bill drew the dots between the Bill and innovation. That is one of my objectives with this amendment.

Amendment 54 looks at a different kind of impact. In fact, in retrospect it should have been grouped with the amendment of the noble Baroness, Lady Noakes, Amendment 9, because in a sense it measures the effect that she has highlighted there. As happenstance will have it, she did not get an answer to her questions the first time around, so this gives us a chance to run through them again.

Minister, there is a strong belief that the regulators will come under great influence from the Government on the level of fees. That will either reduce their income or maintain their income at the expense of those registering. This amendment seeks to give transparency to that problem. If indeed it is not a problem, we will see that clearly. The noble Lord, Lord Lansley, gave it something of a thumbs-up, in that it is measurable—and I assume that it is data that BEIS is already collecting because, of course, it is going to create a model of the entire professional market in order to manage it on behalf of the national economy. I assume that the data is already available. Therefore, publishing it would be very helpful and perhaps give a lie to the fears or expose them, so that the Government can change things to stop them becoming an issue.

Very simply, the point from the noble Baroness, Lady Bennett, about some joined-up reporting is well made. Whether it is the whole hog or just a few key elements—and I would probably prefer the latter to the former—I think that the global south issue can be solved by having a geographic split on where people are coming from, for example, to highlight those issues.

My noble friend Lord Palmer spoke on Amendment 52 about the need for there to be a realisation within organisations of the impact of the Bill, particularly on SMEs. In the past, many SMEs have picked up employees from the European Union without having to give a moment’s thought to the accreditation of their skills. That is now changing, and I absolutely agree with my noble friend that there has been no dawning on the vast majority of Britain’s businesses of that change. I think he has a great point.

The noble Lord, Lord Foulkes, spoke strongly, as usual. I agree with him—I would like the opportunity to intervene and interrupt the noble Lord, although of course I would exercise it with great care. But in the main, I would like the Minister to push back on Amendments 53 and 54 and say how this affects innovation and whether we can see the numbers when it comes to costs and the financial effect on the regulators.

[Baroness Hayter of Kentish Town (Lab)]

I start by saying that I may have misheard what the noble Baroness, Lady McIntosh, said. I think she was asking about Amendment 27, which is in the next group.

I will speak to Amendments 19 and 29 in my name, but also thoroughly endorse all the pleas that we have heard for a very thorough—and, indeed, statutory—requirement on consultations with all the relevant parties. The impact of this will be felt; it could be felt on professionals and on service providers or users of those services. This is not a technical thing, so it is important that the consultation takes place.

Amendment 19 simply specifies that it is crucial that consumers are consulted. Consumers may be users, patients, clients—in the case of lawyers—or customers. When I was involved with the regulation and standard setting for actuaries, which I guess comes under the FRC in this, noble Lords will not be surprised that I chaired the user committee and was on the board. We had pension administrators, pension trustees and other people who used actuarial services, so that we were able to get their input as we were setting standards for actuaries.

The word “consumer” is a broad one and it is always difficult to say what it means, but it seems to me that if one were setting standards or one wanted more actuaries in the country, and the same could be true of other regulated areas, talking to the people who use those services would be highly appropriate. So, despite what the noble Baroness, Lady Noakes, says about the use of that word, it seems to me that the people who use the services of the professions covered in the Bill really should be consulted if there is going to be a different way of recognising and approving people to carry out that profession.

As I said earlier, regulation was always set up to protect the consumers or end-users, however they are defined, and therefore, in changing the procedure of how a regulator works in accepting professionals, it should be automatic that users of those services that the regulator was set up to protect should be involved. It certainly should not be just between the Government and the service provider—in other words, the professionals involved—because those affected by the decisions should surely not be excluded. Government always needs reminding that the end-user is what regulation is all about. I thank the noble Lord, Lord Lansley, for his support on this. It ought to be automatic; we should not have to think about putting it in a Bill, but so often it does not happen.

I was reading earlier in one of the government documents—sorry, I have had lots of letters from the Minister—about the call for comments in a consultation that was put on the BEIS website, I think. I have to say that most people would not think that a call for consultation on the regulation of professional qualifications would affect them as, say, a pension trustee, not realising that it will affect the professionals that they depend on in decisions they take, whether it is about pension holidays or, more likely, making up for deficiencies in a pension. One has to be on the front foot and go out looking for the input of users or consumers of professional services; they will not automatically happen to be watching the BEIS website to see that there is a consultation taking place.

Amendment 29 may be slightly cheeky, but it is really a nudge to the Government. It says that a regulator set up either to create or to maintain standards in the interest of consumers or users really ought to have those end-users or consumers on its board, its council or its executive. Therefore, when we are talking about regulators, we should require them to have this. I think this is possibly pushing the boundaries of the Bill a little far, but if the Minister will accept Amendment 19, I will go quiet on Amendment 29.

--- Later in debate ---

[Lord Fox (LD)]

My Lords, I thank the noble Lord, Lord Hunt, for putting this amendment forward, and I commend him on the forcefulness of his speech. I am not going to repeat things he said, but I agree with his points. During the opening group, I touched on this issue and outlined the powers that are being taken into this clause, to which the noble Baroness, Lady Noakes, referred just now. I am still trying to understand what the Government think they are going to improve by doing this.

In essence, because of Brexit, the simple reality is that we are losing access to a considerable source of professionals. That is a problem, or potentially a problem. There is absolutely no certainty that we can replace them in another way, but there is also no certainty—indeed, possibly the opposite—that these clauses are going to help that to happen. So the idea that “We are from the Government and we are here to help you recruit people” seems to be unfounded.

There are two problems with Clause 1. One is that it seems to be a misguided effort. The other, which was front and centre of the points the noble Lord, Lord Hunt, made, is that this is the Government overstretching themselves in taking powers upon themselves and grabbing secondary legislation opportunities. We know that there is virtually no chance to amend—there have been very few examples in my lifetime where secondary legislation has actually been turned down. So it is with that that we on these Benches are supporting this amendment, and, of course, similar arguments will be put forward later on in the evening.

[Baroness Hayter of Kentish Town (Lab)]

My Lords, Clause 1 enables regulations to be made—as we have heard, they are never overturned—to require a specific regulator to put in place a procedure for assessing whether to treat overseas qualifications as if they were UK ones. However, we still do not know how many of the 60 actually lack such a power. The Minister wants this Bill; he says that it is necessary. Could he please list those regulators which, if circumstances required extra skilled professionals, could find that their statutes were insufficient and thus that they would need to be mandated, by law, to introduce a new process? Because, frankly, if there are no regulators that need this power, we do not need a law to give it to them.

If the regulator wanted to introduce such a process, and had the statute, why would it have to be mandated to do it? If the regulator does not want to introduce such a process, how autonomous is a regulator if it can then be told by a Government that it must do so with the force of law? It may, as the Minister has said, be just a process that they have to introduce, but we are, nevertheless, talking about the Government mandating a regulator to do something that it does not want to do—because if it does want to do it, it will just do it.

So the Minister needs to list the regulators who do not already have the power to adopt such a process. I understand that there may well be some, but it would be nice to know which ones they are. If the regulator has such a power, but does not want to introduce a process to assess whether somebody’s qualifications should be agreed, how does he justify mandating the regulator by law to do that?

National Security and Investment Bill

Debate between Lord Fox and Baroness Hayter of Kentish Town

Wednesday 28th April 2021 Lords Chamber

[Lord Fox (LD)]

My Lords, the sands of dissent are passing through the hourglass of incredulity. The Minister is right; there has been a long debate. It is very nice to hear that he values the expertise and that he has been able to hear it. It is disappointing that, having valued it, he considers it insufficiently valuable to take the advice that the expertise came up with.

Some time between our last meeting and this one, an email came through from Darren Jones, the chair of the Business, Energy and Industrial Strategy Committee, setting out the fact that an MoU has been exchanged on the subject that we are debating. There is one curious sentence in there, which states:

“I have had to protect the position of my own committee …”.


It is late and I will not press that, but it smacks a little of someone being strong-armed, which is a shame.

The other sentence comes at the end of the email’s penultimate paragraph, which states:

“Should my Committee find any of our scrutiny of the Investment Security Unit is inadequate, we will of course make that clear on the record.”


That is somewhat reassuring. I know that Darren Jones is someone whom one can trust, and I am sure that if he and his committee find that to be the case, that is what will happen and we will of course be listening and watching for it.

We look forward to the Statement being brought forward for debate in both Houses as a consequence of the Bill, and we look forward to debating the technologies that will be put into the Bill.

[Baroness Hayter of Kentish Town (Lab)]

My Lords, it is a treat for us to have the Minister here again. He says that there is some scepticism in the House about this matter. I think that there is some mystification, actually. It is said that when he heard about Talleyrand’s death, Metternich said, “What did he mean by that?” There is a bit of me that, as a historian, wonders how historians looking at this in the future will ask, “What was going on? What did they mean by that?”—to have such a squabble, and to go back and forward at the end of a Bill that we all agree is important, over the possible addition of five words in a memorandum of understanding. That is what we have got down to. And I remain mystified. One day, maybe long into the future, when the noble Lord and I have gone on to other things but are still in the land of the living, we may sup together and hear what was really behind the resistance to amending the memorandum of understanding simply to allow one committee to look at the work of the unit.

Having said that, we are pleased that we are now at the end of the Bill. We wish it and the new unit in the Minister’s department well. We talked previously about the number of notifications that it may have to deal with. There is a real challenge there. We seriously wish that unit well as it begins to take on and embed what this soon-to-be Act will enable it to do.

Post Office Court of Appeal Judgment

Debate between Lord Fox and Baroness Hayter of Kentish Town

Wednesday 28th April 2021 Lords Chamber

[Baroness Hayter of Kentish Town (Lab)]

I start by paying tribute to the noble Lord, Lord Arbuthnot, and others, including “Panorama” and Nick Wallis on Radio 4, whose championing of the postmasters’ cause helped, finally, to move this towards a just outcome.

Like other noble Lords, I have heard this dismal story many times, but I still have that mixture of shock, horror, shame and some anger with every new hearing. How is it possible that no one in a position of authority noticed that, all of a sudden, hundreds of some of the most upright and respected members of local communities had, almost at the same time, taken it on themselves to start pilfering? How come nobody thought to ask some simple questions? How come the Post Office, adding insult to injury, continued to pursue loyal employees, often with expensive lawyers, long after it was clear that something was amiss? This has been perhaps the most widespread legal miscarriage of justice that I know of; justice has been a long time coming.

Naturally, we welcome the Court of Appeal’s ruling overturning the convictions of 39 postmasters, but, as Lord Justice Holroyde said, the Post Office

“knew there were serious issues about the reliability of Horizon”

and had a “clear duty to investigate” the system’s defects. Despite this, the Post Office

“consistently asserted that Horizon was robust and reliable”,

and

“effectively steamrolled over any sub-postmaster who sought to challenge its accuracy”.

Was the Post Office not curious about this sudden outbreak of illegality? Did it not read the specialist press? As early as 2015, possibly before, Computer Weekly was warning of problems and, even worse, it now reports that Fujitsu bosses knew about Horizon’s flaws all along, yet allowed it to be rolled out to the Post Office network, despite being told that it was not fit for purpose. Back in 2019, a High Court judge ruled that Horizon was “not remotely reliable” for the first 10 years of its existence, which was obvious to Fujitsu and surely evident to the Post Office. Even when the Post Office knew that there were “serious issues” about the reliability of the system, it continued bringing

“serious criminal charges against the sub-postmasters on the basis of Horizon data”

and “effectively steamrolled” anyone who challenged its accuracy.

Even after the High Court vindicated postmasters in 2019, the Government refused to intervene, allowing the Post Office to abuse its power over postmasters. Will the Minister acknowledge the Government’s failure of oversight?

The Post Office let individual postmasters pay a terrible price for its incompetence and cowardice. Seema Misra, falsely accused of stealing £75,000, was sentenced to 15 months in jail while pregnant with her second child. Rubbina Shaheen, accused of stealing over £40,000, spent 12 months in jail. Jo Hamilton, accused of taking £36,000, gave up her shop and, because of her criminal record, found it impossible to get another job. While these convictions have finally been quashed, the hurt, damage and enormous costs remain—to say nothing about those who died before they could be vindicated by last week’s ruling.

So there are questions that the Government must answer. Why are Ministers refusing a statutory inquiry, with subpoena powers and a remit to consider compensation? Given that postmasters are having to spend some of their compensation on legal fees, will the Minister confirm that additional support will be made available to cover such costs? What steps will the Government take to hold Fujitsu to account? Given that it was found to be complicit in covering up the software bugs that led to the false Post Office prosecutions, will it be asked to pay for the monstrous damage that it has done to hundreds of lives?

Given the acknowledgement in the Minister’s letter that steps need to be taken to ensure fair compensation, will he promise—not just undertake, but promise to this House—that it will be done speedily, generously and with no more of the foot-dragging that has besmirched this whole saga? Does the Minister agree that there should now be a criminal investigation into potential wrongdoing, given the knowing cover-ups that led to false prosecutions?

There is one other point I want to make. These postmasters were criminalised by a culture that assumed that technology is infallible and workers dishonest. Given that in future, technology will play an ever-larger role in the world of work, stringent protections will be needed against this “computer says” culture. We must not get to the point where directors, and Governments, automatically side with technology over their workers—or, indeed, over claimants or consumers. If ever technology is trusted without question, or there is inadequate human oversight and challenge, I fear that this will not be the last time that individuals are unfairly treated by a Big Brother who is neither infallible nor accountable.

This has been a sad story. It now rests with the Government to provide fast and full compensation, and to put right the ills that many people have suffered.

[Lord Fox (LD)]

My Lords, I thank the Minister for bringing this Statement to your Lordships’ House, and for his two letters to all Peers over the last five weeks. I should say that I have been a member of the Post Offices APPG for some time.

Looking back, the Government have said that they will determine what went wrong. Of course, we absolutely support that. To this end, their route has been to ask Sir Wyn Williams to lead the Post Office Horizon IT inquiry. The inquiry, they say, will work

“to fully understand these events, gather available evidence and ensure lessons have been learnt so that this cannot occur again.”

I am sure that this will be a thorough investigation, which will shine a bright light on systems and programmes, and their implementation. But can the Minister reassure us that it will also illuminate the overriding issue of how this business behaved? As the noble Baroness, Lady Hayter, has just eloquently set out, the moral shortcomings of the management are central to why this happened. To fully understand this issue, as the Government want to, they need a thorough appraisal of the management culture of the Post Office. It is changing the culture that makes sure that something never happens again, not updating an operating system or rewriting a computer programme.

Can the Minister please make available the full terms of reference according to which Sir Wyn will conduct his inquiry? Government communications include the phrase:

“The Government look forward to receiving Sir Wyn’s report in the summer”.


Does the Minister expect the report to be completed by this summer, or have I misunderstood? If so, what support will the investigation have to run to such a tight timetable? I am concerned because this is not a statutory inquiry. What will happen if individuals retain lawyers to represent their interests? How will Sir Wyn proceed in those circumstances?

I echo the praise given by the noble Baroness, Lady Hayter, to the noble Lord, Lord Arbuthnot of Edrom. He has tenaciously pursued this issue, and in February last year he asked a question of the then Under-Secretary of State at BEIS, the noble Lord, Lord Duncan of Springbank:

“To ask Her Majesty’s Government what recent assessment they have made of the Post Office’s powers to conduct prosecutions.”-


The response was that

“the Post Office’s powers to bring a private prosecution, which fall under section 6(1) of the Prosecution of Offences Act 1985, are not specific to that company.”—[Official Report, 4/2/20; col. 1709.]

I forewarned the Minister that I would bring this up, because my understanding is that while it has not been granted investigative powers, the Post Office has regularly undertaken joint investigations with the police and other investigative bodies that do have statutory investigating powers. It was granted access to the national police computer system for intelligence and prosecution purposes; it had financial investigators appointed by the National Crime Agency for the purpose of undertaking financial investigations for restraint and confiscation proceedings; and Royal Mail was included in the list of relevant public authorities, under the Regulation of Investigatory Powers Act 2000, designated to grant authorisations for the carrying out of directed surveillance to investigate crime. The Minister’s views on that would be welcome. Is it really still appropriate that this organisation should enjoy those powers?

This is by no means the end of the road, as the Statement makes clear. In yesterday’s debate in the House of Commons, my honourable friend Christine Jardine MP asked the Parliamentary Under-Secretary, Paul Scully, to give an assurance that the Government will commit to treating each of the former sub-postmasters as individuals. The Minister acknowledged that, as well as those prosecuted, there were those whose lives had been blighted by incorrect accusations. I am pleased to report that he acknowledged the human cost. However, it is not clear to me what this acknowledgment means in practice. How will the Government embark on treating everybody individually? As part of the settlement, we have the historical shortfall scheme and it has been explained that this had received over 2,400 applications when it closed last August. First, although this is more than the Post Office anticipated, is the Minister satisfied that everybody who could have applied for this was aware of it and did? Secondly, the Minister was clear that Her Majesty’s Government will support the Post Office with resources. We of course endorse that. We do not yet know what form compensation will take and how it will be calculated. However, in a Written Answer, the noble Lord, Lord Callanan, said:

“we will not spend more of taxpayer’s money than is necessary to ensure that the Scheme meets its objectives.”

That sounds like a management expectation exercise and is a bit ominous. This is not an area, or a time, for penny pinching.

However financially generous the scheme turns out to be, the Government have to be clear that they can never fully compensate for the emotional and social damage that has been visited on many thousands of innocent people in this country.

National Security and Investment Bill

Debate between Lord Fox and Baroness Hayter of Kentish Town

Committee stage
Tuesday 16th March 2021 Lords Chamber

[Lord Fox (LD)]

My Lords, it is nice to be in the Chamber rather than the glass cubes in which we have been confined. I assure your Lordships, and agree with the noble Lord, Lord Lansley, that noble Lords not only on those Benches but on this side of the House want this Bill to succeed; I think that I can speak for Her Majesty’s loyal Opposition as well. However, the measure of that success will be its efficiency, its certainty and the way it manages this important element of investment.

I listened to the answer that the Minister gave to the last set of amendments; I do not expect the noble Lord, Lord Grimstone, as Minister for this set, to comment on that. However, although it is probably irregular, I ask both Ministers to listen back to the answer that was given there and answer the same questions with their departments: how would they manage a company for five years that is still sitting in that kind of limbo? How would they make investment decisions for that business while it is still not approved but not denied? I ask them to think about the management decisions that they would make. When they have come to a conclusion, I think the Ministers will agree with the proposers of those amendments that some degree of certainty needs to be delivered quickly and efficiently—and that brings us to this set of amendments. The noble Lord, Lord Lansley, has eloquently set out an alternative to the—we might say—digital approach that the Bill has taken, with the option of remedies. Businesses are familiar with remedies, I would say, having worked with the CMA and others. The merits as set out by the noble Lord of speed, flexibility and durability are all things to be aspired to.

I know this sounds patronising, but I remind the Government that the title of the Bill includes the words “security and investment”—the investment part should have equal weight to that of security. It is straight- forward to stop things happening and tick a security box; it is harder to make sure that we have a regime that continues to encourage investment. Everything that takes time or injects uncertainty pushes investment away. The Ministers should listen to the wise words of the noble Lord, Lord Lansley, and think about this middle way, which can move things quickly, keep investment in the game and make sure that, at the same time as getting investment, we are also getting the security that the title of the Bill demands.

[Baroness Hayter of Kentish Town (Lab)]

My Lords, there is something going around my mind now about letting foxes out of their glass cubes—I am not sure how dangerous that is.

These amendments would allow for undertakings to be accepted instead of a final order—a case well made by the noble Lord, Lord Lansley. During Committee in the other place, Dr Lenihan from the LSE said:

“There are many cases in which a threat to national security can be mitigated by agreements and undertakings without needing to block a deal.”


Perhaps the Minister could inform the House what thought was given to that proposal.

As we have heard, Amendment 71 is in a way a probing amendment to learn more about the type of person the Secretary of State could appoint to supervise a final order. We will be particularly interested to hear the Minister’s reply on this. What sort of specialism would be involved? Would the person need to have any relevant training, background or experience? It would be interesting to know how they would be selected and whether the job description would be included in the report that would in any case be made, so that one could see the basis on which the selection happened.

Clause 26(4) states:

“Before making a final order the Secretary of State must consider any representations made”.


We are interested in what exactly is meant by the word “consider”. Would that be part of a dialogue, perhaps as part of the negotiations, or simply a requirement that representations are in the dossier submitted to the Secretary of State for ratification? Assuming that the representations had not been successful—if there were a final order, that would presumably be against the wishes of the parties—it would be interesting to know whether the reasoning for rejecting them would be noted and reported on elsewhere, possibly to the ISC. It would be important for someone to be able to reflect on the decision-making that had taken place.

National Security and Investment Bill

Debate between Lord Fox and Baroness Hayter of Kentish Town

Committee stage
Tuesday 9th March 2021 Grand Committee

[Lord Fox (LD)]

My Lords, I agree with the analysis of the noble Lord, Lord Vaizey, that Her Majesty’s Government have underestimated the potential workload that this unit will get, but I am not convinced that his solution to reducing that workload is the right one. We have heard many speeches but I would single out those of my noble friend Lady Bowles, the noble Baroness, Lady Noakes, and the noble Lord, Lord Lansley, as reasons why we should not be separating out one set of companies due to their nationality. The noble Lord made the point clearly that the criterion should be: is it or is it not a national security risk, rather than, does it or does it not come from Hampshire or New Hampshire? That should be the rule running through this.

The noble Lord, Lord Leigh, when moving into caveat territory, started to explain why singling out foreign companies becomes an extraordinarily difficult thing to do. First, what is one, and is it a shell company? Is it listed on NASDAQ but actually resident in Beijing? Those kinds of complications start to point to the Government’s analysis that all companies are in. Clearly, it will be easier for the company whose owner your friend meets in a pub to get through the process and not be called in, compared with one that hails from the Far East, for example. Surely, the process should be the efficiency with which the unit can deal with and dismiss issues quickly, rather than accidentally filtering out things that we should not.

On the concept that, “Our friends are our friends, so we include them as ourselves”, the noble Baroness, Lady Noakes, made the wider point about access to the technology. Access can be cut off by our friends as much as by ourselves or, indeed, by external companies. I am sorry, but I am going to repeat the example I gave at Second Reading. A British company with a US-based subsidiary took the technology to the United States, started to produce it and made one small amendment to that technology. The use and sale of the technology back to the UK was then blocked by the Department of Defense under export controls, because it considered it to then be United States strategic technology. I am sure that such things happen all the time—this example is just one that I happen to know about.

Regional agnosticism, the gospel according to the noble Lord, Lord Lansley, is the sensible approach here, and I hope that the Minister can explain his views on this issue.

[Baroness Hayter of Kentish Town (Lab)]

My Lords, we have some sympathy with the intention here, which is to seek clarification about whether certain investors or countries should be more or less encouraged to invest here, although this may not be exactly the right way to achieve that. Such clarification is clearly needed and is sought in a different way by Amendment 91, which we will reach next week, I think, and which stands in the name of my noble friend Lord West.

--- Later in debate ---

[Lord Fox (LD)]

My Lords, it would seem, when looking at Clause 29 and listening to the reasoned arguments of the noble Lords, Lord Hodgson and Lord Clement-Jones, that the Government would be hard put not to agree with the objectives they set out for this amendment, so I suppose we have to listen to the Minister to hear why the Government think that the Bill already does the things which this amendment seeks to achieve, unless the Minister wants to explain why those objectives are wrong. There is a similar argument to be made about Amendment 72, which is more complex. Again, why would the Government not wish to achieve what this amendment is seeking to achieve? If they do, it is not clear in the Bill.

I dubbed Amendment 97 the Gilbert and Sullivan amendment, because you have the cousins, the sisters and the aunts all lining up in the connected parties list, or perhaps not. The noble Lord, Lord Lansley, would probably have made a fabulous argument, but in his stead the noble Baroness, Lady Noakes, makes very good points.

Coming back to the substantive point about Clause 8, we have had a long debate on the group beginning with Amendment 15A, and a smaller, shorter debate that has focused on similar issues. My noble friend Lord Clement-Jones called Clause 8 a hybrid, being both specific and broad. I hope the Minister and the Bill team will take from this that there is work to be done on this clause. It is quite clear from the debate we have had that tightening and clarifying are required to take the Bill into Report. Otherwise, I suspect there will be a lot of recalls coming from the sort of debate we have seen, particularly in the Amendment 15A group, but also, to some extent, from this one.

[Baroness Hayter of Kentish Town (Lab)]

My Lords, I am still slightly reeling from having to find names of people long since in my past, but maybe Hansard can piece things together.

We have heard today, both in this group and in others, and in the representations that we have all seen, that there are considerable investor concerns about bits of the Bill, some of which Amendments 29 and 72 in particular seek to address. It is important to recognise, although it has been made clear by people in Committee, that the Bill marks a radical transformation of national security screening for mergers and acquisitions. It is a new and different regime, so it is essential that the Government not only maintain business confidence but gain more confidence from businesses and the investors in them. That was why, on the first day of Committee, we set out why we thought we needed a definition of national security to provide clarity for businesses and investors and to build trust in the regime.

However, as has been said in this group, one of the things that would help that confidence is better drafting. The noble Lord, Lord Fox, is right when he says that more work is needed. I know it is the second day back at school, but it feels as if the homework has been self-marked and now needs a slightly more thorough look. As everyone has said, it is not that anyone has objections to the purpose of the Bill; the concerns are about the wording and perhaps the breadth of its scope.

Clause 8 defines the circumstances in which a person gains control of a qualifying entity, thus constituting a trigger event that may be subject to assessment under the regime. This is clearly a key part that must be got right. Amendment 29 would narrow the third circumstance to make sure that it does not capture minority investor veto rights, as has already been mentioned. Perhaps the Minister could clarify whether it is expected that minority investment veto rights would be captured.

The group of amendments raises some broad questions about the number of cases in which a person gains control of a qualifying entity. We are interested in why other cases are not included. We do not necessarily want them included but want to work out the limits that brought certain things to be put in the Bill. It is quite interesting to know what is not there. For example, is an acquisition involving state-owned entities or investors originating in a country of risk to UK national security not a concern? It is not mentioned. Neither is a person who becomes a major debt holder and could therefore gain influence over the entity’s operation and policy. Is that not of interest? It is not that I want to include them, but I am really interested in how the definitions were put together. Maybe the Government, either in writing afterwards because it may be more detailed, or in answer today could spell out why these particular cases were selected and the sort of advice that was taken in the selection process.

Amendment 97, which the noble Baroness, Lady Noakes, has discussed, raises the question of why a former partner should remain a person of concern. Probably all of us here have had difficulties with being a politically exposed person, a PEP. We have found it very difficult sometimes just to open or become a signatory to a charity’s accounts because of being a PEP. A number of difficulties were had, but I think they have been got over now after some work in this House. It really did affect those of us who have step-children and former partners and siblings we never see, and things like that.

This issue needs a little more clarification and protection, if you like. No investor or anybody involved in this wants to get caught up by something which they could not have thought at the time was of any interest. I understand that it might look suspicious if somebody divorced their partner two days before to get rid of some assets, but this is a very wide net. Perhaps the Minister can explain why this clause is needed and needs to be drawn quite as widely. This is a net that would catch whales, never mind tiddlers.

--- Later in debate ---

[Lord Fox (LD)]

I remind the noble Lord, Lord Rooker, that this is a particular Bill designed to do a particular thing. It is not a higher education Bill. While he may feel strongly about many of the issues, I will not comment on them, because they do not fall into the remit of the Bill. I point out that I am also not a university vice-chancellor.

The noble Lord, Lord Lansley, set out the danger, and this was supported by my noble friend Lord Clement-Jones. If this Bill is used to police these issues, the deluge that will fall on the agency will be huge. We are back to the point that my noble friend made on the previous group: we are creating a Bill that does everything, then the Government will gradually calibrate what they do and do not need to do. That is not the best legislative approach.

There are issues with the research relationships that universities may have, but this Bill is not the policing agency that we should be using for them. I do not 100% agree about the outset of a relationship, as set out by the noble Lord, Lord Vaizey, in his and my noble friend’s amendment. Sometimes that has to be looked at, as well as the outcome of that relationship, but I do not think this Bill is the place to do it.

To steal a word that was used earlier and use it differently, we are also looking at the nexus between this and export control. Universities seem much more comfortable with export control, and if there is an issue with universities it could be addressed through the increased and more rigorous use of these measures, not through this Bill.

I return to the point which I asked the noble Lord, Lord Grimstone, about last time and which I put to ask the Minister now, what are we seeking to stop? In other words, in putting this Bill together, how many partnership agreements does the Bill team imagine would have been stopped by this process? What sort of things are the Government seeking to arrest, stop or cancel compared to that which the export control regime would be doing anyway?

[Baroness Hayter of Kentish Town (Lab)]

My Lords, as the Minister knows and as has been said, there is considerable concern in the higher education and research sector about the potential impact of the Bill on research partnerships. We agree with the intention of Amendment 40, which is, as we have heard, to provide clarity for the sector. Indeed, it reflects a recommendation from the Russell group which said that a key concern is that it is unclear which type of asset transactions should be referred for screening. That will cause problems for the group as well as to the unit, which could have simply too many referrals. Amendment 40 is also to ensure that research and development partnerships, such as those between commercial organisations and universities to create new intellectual property and potentially qualifying assets, are not required to provide notification of the creation of such partnerships.

Amendment 88 in my name and that of the noble Lord, Lord Clement-Jones, reflects similar concerns. I hope it takes an approach that the Government are able to accept. It would require the Government to publish specific guidance for the HE and research sector, including a clear explanation of asset transactions indicating how contract research, consultancy work and collaborative research and development are affected and how the provisions apply to strategic security partnerships and domestic partners. The amendment also requires—and this is key—the Government to consult the higher education and research sector in a meaningful way in advance of the guidance so that the published guidance reflects what is workable for both sides, particularly in relation to that definition of assets which otherwise could lead to great uncertainty. The amendment therefore is about developing guidance and promoting good practice in that it should be done in co-operation with the sector. I thank my noble friend Lord Rooker and the noble Lord, Lord Lansley, for their support for this approach. The wording of my amendment may not be perfect, and we could perhaps tweak that on Report, but it will be important to have this in the Bill.

Perhaps the Minister who is about to reply—or may be doing that next week—would indicate the Government’s acceptance of this need for guidance as well as the way of getting it. As the Russell group says, without clear guidance a significant proportion of universities’ routine engagement with British business could be inadvertently captured by the Bill. We are all in favour of that engagement between universities and business. We want to make sure it happens. Any hiccups could delay time-sensitive research deals if the unit was preoccupied with this.

Universities want to help make this Bill work. They acknowledge that there are risks. I disagree with the noble Lord, Lord Fox. I think that the issue raised by my noble friend Lord Rooker about the amount of collaboration with certain countries is key and we must face up to it. I think that the leaders of the universities are aware of that. They want to be part of the solution, so I hope that the Minister will accept Amendment 88.

National Security and Investment Bill

Debate between Lord Fox and Baroness Hayter of Kentish Town

Committee stage & Lords Hansard
Tuesday 2nd March 2021 Grand Committee

[Lord Fox (LD)]

My Lords, as the noble Lord, Lord Lansley, said, government Amendments 37 and 75 are technical and Amendment 12 covers the ground of Amendment 11, so I will speak to the latter. I am broadly supportive. Clearly, this is an issue about “may”—my noble friend Lady Bowles and the noble Baroness, Lady McIntosh, asked the same question. If “may publish” means “may not publish”, where are we in this process, given that the statement is such an important part of setting out the modus operandi of the whole Bill? This is quite an important area.

I support Amendment 11 but it will be important to listen to the Minister’s response to decide how this might go forward in the next stage. I believe that some degree of accountability should not be left as an option to the Secretary of State; there should be an obligation on the Secretary of State to make that statement and, as the Government have said, to have the ability to remake it.

[Baroness Hayter of Kentish Town (Lab)]

My Lords, we welcome the Government’s Amendment 12 to make changes to the sectors statement in respect of feedback from stakeholders. Can the Minister confirm whether all the suggested changes that come back in that consultation will actually be published?

I will make a comment about the document that has arrived in front of us today because, in a sense, it gives a very good description of how good consultation works—never mind the timing; we have made that point—in relation to the degree of change that looks as if it is going to happen as a result of conversation on that particular issue. However, it then feeds into what happens if, had this been the statement, changes were wanting to be made. For example, what we have heard today, as a result of some very good consultation, is that the definition of AI has been narrowed significantly to focus on three high-risk applications: identification of objects, people and events; advanced robotics; and cybersecurity.

The interesting thing is what happens after you have had a consultation that has got the Government to rethink and that may then have other implications. In this case, with those changes, does this change the Government’s estimate of the number of notifications that that might give rise to, in relation to the change in definition? It is that sort of issue that might come up, and it would want the dialogue that I think is being referred to in the amendment, in relation to whether there is a second stage—if it is turned down, so to speak—about having to go on further. As such, how we handle the feedback is about both the transparency of what has come back in and the full implications of any changes that that has made.

We keep coming up with the figures where, even though the Government have increased the assumption of how many notifications there would be—less than 1% or so—the CBI and other commentators feel it would be much greater. As such, that degree of dialogue is needed in relation to consultation over these very big issues. Some assurance about the results of such a consultation, as well as a second stage, seems very helpful, along the lines in the amendment.

On the Government’s Amendment 75, it would be interesting to know what advice led to the change—we are not questioning it but wondering why it has been made—to extend the regulatory power from a notice or serving an order to include all documents as well. It would be helpful, certainly to me and possibly to other Members of the Committee, to know what other types of additional documents will thus be added to this regulatory power—could the Minister spell that out?

United Kingdom Internal Market Bill

Debate between Lord Fox and Baroness Hayter of Kentish Town

Consideration of Commons amendments
Tuesday 15th December 2020 Lords Chamber

[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

Debate between Lord Fox and Baroness Hayter of Kentish Town

Consideration of Commons amendments
Monday 14th December 2020 Lords Chamber

[Lord Fox (LD)]

My Lords, I thank the Minister for clearly setting out his objections to the last set of amendments. In his closing words he said that the Government view the common frameworks process as complementary to the market access principles. Listening to the noble and learned Lord, Lord Hope, it was very clear that there is a discontinuity—a lack of complementariness—between the two positions. As the noble and learned Lord set out, a central feature of the framework agreement is to come to an agreed process for divergence between the four nations, within which the UK has a major role. That divergence is killed off by the automatic nature of the market access principles. That is the central point that the noble and learned Lord’s amendments address. In doing so, the new versions of the amendments have taken on board the comments that have come back from the other place, having recognised the level of uncertainty that could have been injected by a previous proposed new clause, which has now been removed. The amendments adopt the regulations within the Bill to facilitate that decision, so that it is consistent with the way that the Bill seeks to operate, but also consistent with the principles of devolution that have served this country so well to date.

[Baroness Hayter of Kentish Town (Lab)]

My Lords, perhaps we need to remember why we are here. It is really quite simple. When the case for Brexit was all about “taking back control”, we failed to understand that the Government meant taking control to themselves, even over issues that were fully devolved. However, when the Bill was published—without any involvement from the devolved authorities, remember—we soon discovered that it ran roughshod over devolved competences, as the noble Lord, Lord Fox, said, trumping the common frameworks programme.

I have often wondered whether this was deliberate or an oversight, though the lack of prior consultation suggests the former. However, that makes the statement on the publication of the Bill, on 9 September, signed by the Scottish Secretary but not the Welsh Secretary, and by Mr Sharma and Mr Gove, a bit strange in the light of this Bill. It says that the devolved Administrations will enjoy a “power surge” when the transition period ends.

Let us take that at face value. Perhaps the particular construction of the Bill was clumsy—as an oversight rather than deliberate—and perhaps it is right that the Government did not intend to bring back to themselves all the powers long devolved to the other three authorities, but in that case the amendments tabled by the noble and learned Lord, Lord Hope, would rectify the problem. They would simply restrict the market access powers in the Bill, which of course are only about devolved competences, to those where the four-party process failed to reach agreement.

As the Government are one of those four parties, they will be in a very strong position to revert to the Bill, and to Parliament, for the powers they feel are vital for an internal market on areas where disagreement cannot be overcome. That seems, to this side of the House, a simple, clean solution. It would hard-wire in a common frameworks process which the Government themselves described last week in the latest of their three-monthly reports on the frameworks—reports which, I think, we added to Schedule 3 to the EU withdrawal Bill as a requirement for the Government to publish—as

“an agreed approach to ensuring regulatory coherence”

in devolved areas. That is absolutely spot on—coherence, not uniformity—and that is probably where we are trying to get to. The problem is that, as written, the Bill adopts “uniformity”.

The same document, which has just been published, despite having talked about coherence, then asserts:

“Common Frameworks cannot guarantee the integrity of the entire UK Internal Market.”


However, the document does not provide any evidence of why the frameworks will not work. It gives no examples of where, within devolved competences, any agreements might not work. Indeed, the Minister, in introducing the debate, again asserted that it would have to be for Parliament alone to decide when the market access rules would not be used, but he did not explain why the four-party process would not be able to deal with that and why they would come to Parliament only when there was a failure to agree. The same document notes the “freezing power” contained in the withdrawal Act, and it also notes that it has never needed to be used, but it fails to suggest where it might be needed.

Therefore, in the Bill the Government are saying that on the one hand the frameworks are very good and have been able to produce coherence but, on the other hand, the Bill allows the market access principles to trump that process, even if it produces agreement.

We have it said before and I say it again: we on this side of the House want an internal market which thrives and serves the needs of business, the professions, consumers and the environment, but it has to be one that respects rather than dismantles devolution. These amendments seem to us to offer the path to achieve that, so we will support the noble and learned Lord when, as I am sure he will do, he asks the House to vote. I hope that in the light of that vote we can, as the Minister suggested, continue the dialogue so that we can reach an agreed position that would safeguard all that has been going on with the devolution settlements and the common frameworks process but, in the last analysis, would of course come back here.

United Kingdom Internal Market Bill

Debate between Lord Fox and Baroness Hayter of Kentish Town

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

[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.

United Kingdom Internal Market Bill

Debate between Lord Fox and Baroness Hayter of Kentish Town

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

[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.