Telecommunications Infrastructure (Leasehold Property) Bill

Debate between Lord Fox and Lord Stevenson of Balmacara

3rd reading & 3rd reading (Hansard) & 3rd reading (Hansard): House of Lords
Thursday 28th January 2021 Lords Chamber

[Lord Fox (LD)]

My Lords, on Report, the noble Lord, Lord Alton, said that this amendment would empower the Government to deny infrastructure access to operators whom, they believed, were abusing human rights. This is part of an important conversation about how modern slavery legislation might apply to the digital economy and especially its supply chain.

Since Report, this argument has been rehearsed on a number of occasions in other places. That reflects the tenacity of the noble Lord, Lord Alton, and his colleagues. Each time the argument is repeated, it is no less powerful, horrifying or revolting to hear what is happening.

As we heard from the noble Lord, the Trade Bill has been one focus for this discussion. The Government spurned a real opportunity when they whipped Conservative MPs to vote against the so-called genocide amendment earlier this month. That amendment reflected the discussions during the passage of the Trade Bill in your Lordships’ House. It sought to introduce a mechanism to allow British courts to determine whether a foreign country had committed genocide. The amendment was introduced in your Lordships’ House to deal not just with the Uighurs but with other human rights issues as well. I hope that your Lordships will listen sympathetically next Tuesday when the amendment is reintroduced.

I, too, thank the Minister both for her comments and for her detailed letter, which showed empathy on this issue and explained why her department had been unable to bring forward the amendment previously promised. My admiration for the ingenuity of the noble Lord, Lord Alton, and others has increased. They have managed to table this amendment to a Bill that, as the noble Baroness, Lady Morgan, correctly characterised it, is intended to help tenants obtain broadband.

The noble Baroness, Lady Morgan, also implied that the issue had, as a result of these discussions, somehow been dealt with. Although there has been welcome movement on the Government’s part over Huawei, it would be wrong to say that the issue has been dealt with. I asked the House of Lords Library whether a law exists that prevents telecommunications operators from using their infrastructure to breach human rights. I thank the Library for its thorough work, but it was unable to find evidence of legislation preventing telecoms operators from using tele- communications infrastructure to breach human rights. In other words, there is no such legislation. The Library asked Ofcom whether it was aware of any such requirement in legislation; Ofcom said that it was not. Legal experts were also unaware of anything in telecoms legislation. In other words, the noble Lord, Lord Alton, and the signatories to this amendment have identified a gap in the legislation.

The Human Rights Act applies only to public authorities and other bodies—public or private—that perform public functions. There is no general requirement on companies to comply with human rights obligations, although that has sometimes been applied to the relationship between companies and private individuals. As others have said, there are UN guiding principles on human rights and business. The Companies Act 2006, the EU non-financial reporting directive 2014 and the Modern Slavery Act all contain commentary on human rights but none deals with this particular issue.

It is a shame that we have had to have this debate almost by proxy. Even the noble Lord, Lord Alton, would admit that this Bill was not designed to address this issue. Such a Bill is needed so that we can have this discussion in a discrete environment. I understand that my noble friend Lord Clement-Jones was promised that there would be a communications security Bill. I assume that the National Security and Investment Bill is what that has metamorphosised into—perhaps the Minister could confirm that. As my noble friend Lady Northover suggested, this issue could be discussed in that context. I am working on that Bill, but it seems to me to have to been drawn very narrowly. Given this legislative absence, it is appropriate that the noble Lord, Lord Alton, and others have brought forward this amendment now. If the noble Lord, Lord Alton, decides to push it to a vote, we on the Liberal Democrat Benches will support it. If he does not, we shall support an amendment to the Trade Bill. Even if the noble Lord decides not to push for a vote today, the Government can be sure that this issue is not done with and will not go away.

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

My Lords, I am glad that the noble Lord, Lord Alton, has rehearsed the background to his Report stage amendment and explained the reasons for bringing it back to your Lordships’ House today. We simply cannot turn a blind eye. Standing aside or ignoring what is happening in China is tantamount to condoning the appalling actions described by the noble Lord in his powerful and moving speech.

A lot has changed since June. I am sure that the Minister will update us on subsequent government action, particularly in relation to Huawei equipment. As a number of noble Lords have said, other legislation—including the Trade Bill, before your Lordships’ House again next Tuesday—has amendments bearing on this issue. The case made by the noble Lord, Lord Alton, is unanswerable, as I have made clear. However, tabling this amendment to this Bill is perhaps not the best way of achieving his wider objectives. It might, I suppose, adversely affect the chances of the big win that we hope to achieve on Tuesday with his amendment to the Trade Bill.

Everyone who has spoken today has supported the noble Lord, Lord Alton, and paid tribute to his campaigning and his ceaseless tenacity on this cause. If he chooses to divide the House, we will support him, but I hope that he will feel able to accept the Government’s position on this narrowly focused Bill and that it would be better to defer the decision to Tuesday’s debate on the Trade Bill.

Trade Bill

Debate between Lord Fox and Lord Stevenson of Balmacara

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

[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.

United Kingdom Internal Market Bill

Debate between Lord Fox and Lord Stevenson of Balmacara

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.

United Kingdom Internal Market Bill

Debate between Lord Fox and Lord Stevenson of Balmacara

Consideration of Commons amendments
Monday 14th December 2020 Lords Chamber

[Lord Fox (LD)]

There is almost no one left in the Chamber who has not spoken. This has been an interesting debate and, no doubt, the Minister is carrying away lots of advice from some of the Benches. I thank the noble Lords, Lord Adonis and Lord Liddle, for their passion. If that passion is matched by votes in the event that the noble and learned Lord, Lord Thomas, decides to ignore the advice of the noble Baroness, Lady Noakes, and press this to a vote, I will have more excitement because otherwise, it is merely a rhetorical gesture.

The noble and learned Lord set out his view on devolution. It is quite clear, as was set out a number of occasions, that in the structural fund process, which this will herald the replacement for, the devolved authorities were in the driving seat of deciding where and on what the money was spent. It is not clear from anything the Minister said today, or in answer to questions last time, that the Government will not seek to impose things on the devolved authorities. The Minister said there would be governance structures; it would be interesting to hear how those governance structures will be introduced and what the Government envisage. In other words, do central Government have the veto in deciding what goes where? In the end, that is the difference between this being genuinely consultative and, as we have heard described around the House, a Westminster-knows-best process. Consultation is fine but only if it is adhered to.

My final point on the quantum of money and its distribution comes back to a question I asked earlier. I think the Minister said that the amount of money envisaged to go into the shared prosperity fund is equivalent to that which came through the structural fund. The Minister also indicated a much broader remit for spreading that money around than was the practical reality of the structural fund. How will the Government manage the process of certain areas that have been particularly well funded through the structural fund, such as Cornwall and Wales, getting less money if there is no increase in funds and they are spread more widely? Furthermore, the European Union distributed that money using classifications of need, so how will the UK Government develop those? Do the Government envisage that they will be different, and can they undertake that they are transparent?

In conclusion, if the noble and learned Lord, Lord Thomas, decides to call a vote, we on these Benches would support it, but there are a lot of questions we would be grateful if the Minister could answer.

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

My Lords—[Inaudible]—on earlier discussions around this issue and the issue that will come up in the next group of amendments on state aid and spending as a result of moneys which may be available to support that. We should pause and take note of the fact that the noble and learned Lord, Lord Thomas, has engaged with this issue again despite the view taken in the other place that it is a financial privilege. The noble Baroness, Lady Noakes, is right in saying we are in a difficult area. I am not sure how the comments from the noble and learned Lord, Lord Thomas, will take him forward. He certainly has a point, but I do not think this is the right amendment or place to explore it. It needs a wider perspective. Many of these issues date from time immemorial; it is important to respect them and understand where they come from, but they should not block debate and discussion on key issues.

The issue the noble and learned Lord is raising, which has also been picked up the Minister, is how, in the future, possibly using statecraft—whatever that is—we will manage spending in the devolved areas, which are not reserved, when the funding mechanisms are different and have to be adapted to meet current arrangements. There are issues that will need to be addressed in the future, but we covered a lot of ground in earlier debates, and I thought the points made by the Minister on the shared prosperity fund were sufficient to ensure that we do not need to go back over this again. It is not our view, as Her Majesty’s loyal Opposition, that we need to divide the House on this issue again.

If the issue is common between us, we need to understand where we can get to in respect of comments made from the Dispatch Box. The noble and learned Lord, Lord Thomas, made a number of good points and asked a number of questions, and I am sure the Minister will respond to them. I do not think the points added by my noble friends Lord Adonis and Lord Liddle vitiate that approach; they made a good case that we will need more in this area in the future, but this is not the right amendment to take us down that route.

United Kingdom Internal Market Bill

Debate between Lord Fox and Lord Stevenson of Balmacara

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

[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 ---

[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.

United Kingdom Internal Market Bill

Debate between Lord Fox and Lord Stevenson of Balmacara

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

[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.

--- Later in debate ---

[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 ---

[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.

United Kingdom Internal Market Bill

Debate between Lord Fox and Lord Stevenson of Balmacara

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

[Lord Fox (LD)]

My Lords, I support Amendments 150 and 156, and indeed broadly support Amendment 149. My noble friend Lady Bowles, in characterising the information-gathering powers that are attempted to be brought in through this Bill, ably described the wide, broad remit that is being given to the CMA. I fully support and share her case, which was well put, as to why we should be concerned about this.

This is not just a burden on small businesses. Like the noble Baroness, Lady Neville-Rolfe, I have experienced the sharp end of a market study. It is a lot of work. This Bill envisages more than that for all businesses. No such undertaking should be given lightly without understanding what it will do—particularly, as many speakers have said—for smaller and medium-sized businesses. There should be limits.

More broadly, as prefaced by my noble friend Lady Bowles, during the debate on Clause 31, my noble friends and others raised the potential for universities to be dragged into the ambit of the CMA and the OIM—not least because of the different tuition fee regimes that exist within our nations. As we all know, this is a devolved responsibility. Despite their efforts, Ministers did not satisfactorily explain how this would happen, including in the letter.

We now turn to Clause 38, which, once again, broadens the powers of the CMA and enables it to be involved in these matters. The powers which are envisioned, though extensive and with little or no restraint, further stoke the fears harboured by Scottish universities. It could work the other way around. It could be the English university fee policy that is being challenged. This power is wider, with very few limitations.

I wish to probe the potential role of the office for the internal market under Part 4 of the Bill in relation to tuition fees. According to Universities Scotland’s brief, the powers in the Bill could

“give the OIM/Competition and Markets Authority (CMA) the power to investigate and reach a view on whether differential student fees represent a distortion of the new UK internal market. Regardless of the non-binding nature of the reports and advice of the OIM/CMA, it would have to be taken seriously by Parliament (Holyrood or Westminster). This could introduce new and greater basis for individual challenges to the variable fee regime within the UK, brought by individuals who feel they are discriminated against. … If this understanding is correct, this would apply in both directions, with possible challenges brought by Scottish domiciled students/individuals who consider the fee policy as administered by universities in England to discriminate against their options.”

That is one example of the consequences of this Bill. Will the Minister tell your Lordships’ House whether it is intended or unintended? If it is intended, why do Her Majesty’s Government see fit to mess with this devolved responsibility? If it is unintended, can the Minister acknowledge the issues that pervade this Bill?

In the Minister’s letter to my noble friend Lord Purvis of Tweed, which I hope has been placed in the Library, the Government accept that there are issues about university services. It highlights the power to amend exclusions after the Bill is enacted. This should be clarified by a government amendment before Report, not afterwards.

There are many other examples. In the short time we have had to examine this Bill, we have uncovered anomalies, irregularities and mistakes not just in relation to universities but in the food, alcohol and energy sectors. The noble Baroness, Lady McIntosh, also raised queries about the legal profession. In the spirit of whack-a-mole, I can add more, such as the water industry. Powers under Clauses 31 and 38 could mean that the CMA could be asked by an investor in an English water service company to investigate, let us say, the mutual Welsh Water company. Water is to be considered as a UK market, where it was not before. Once a case is opened, who knows where it will end up? Is this accidental or deliberate?

At the same time as the Government accrue these badly-defined powers to the new OIM and CMA, corporate lawyers on behalf of big businesses headquartered in the UK and beyond are sharpening their pencils. As the Government seek to regulate on a UK-wide basis services that until now have managed very well without Her Majesty’s Government’s help, consumer lawyers are looking into their practice development strategies and preparing to sell litigation ideas to future clients. As the noble and learned Lord, Lord Falconer, put it, this will be “a lawyer’s paradise”. At its heart is the Government’s decision to sideline the flexibility of the common frameworks and pursue the central ambition of trying to create a rigid one-size-fits-all regulatory structure to deliver a one-size-fits-all United Kingdom. The persistent and obvious flaws in this Bill demonstrate that this one-size-fits-all approach is impossible, even if it were desirable, which it is not.

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

My Lords, this debate has raised some interesting and important issues. I have listened with care to all the speakers and particularly to the contribution of the noble Baroness, Lady McIntosh, based on information provided by the Scottish Law Commission, whose help I also acknowledge. I look forward to the Minister’s response. The noble Baroness, Lady Bowles of Berkhamsted, raised a number of issues to which I wish to return. Other speakers have made small but important points on SMEs and the role of Northern Ireland.

The noble Lord, Lord Fox, picked up on the recent letter from Ministers about university fees, particularly in Scotland, and questioned whether this could constitute indirect discrimination. This was also raised in an earlier group. Like the noble Lord, I wonder why this could not be better dealt with by the common frameworks approach. This should be applied to all aspects of managed divergence, in relation not just to goods but also to services and the regulation of professions. We will return to this on Report.

In respect of the amendments tabled by the noble Baroness, Lady Bowles of Berkhamsted, the powers included in Clauses 38,39 and 40 are quite extensive and detailed. Do they go beyond the existing powers of the CMA? Are they new because of the responsibilities that will accrue to the CMA or the office for the internal market under this Bill? Or do they simply repeat existing powers reframed in some way to suit the new circumstances? I would appreciate the Minister’s response. As other speakers have said, this additional activity is very detailed and gives specific examples of what can and cannot be done and how it is to operate. Does this not play to the concerns raised by the noble Baroness, Lady Noakes, in an earlier amendment that asking the CMA to extend its focus and the range of its work might blur the good work it does at the moment? Does the Minister accept that there might be a problem here?

United Kingdom Internal Market Bill

Debate between Lord Fox and Lord Stevenson of Balmacara

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

[Lord Fox (LD)]

My Lords, my name is on this amendment, and I am pleased to support it and to follow the very clear explanation that we have just heard.

I speak briefly to subsections (3) and (4) of the proposed new clause. The former calls for the report to deal with

“indirect or cumulative effects … distortion of competition or trade”

and, as I am sure that the noble Baroness, Lady Hayter, would be pleased to hear were she still here

“impacts on prices, the quality of goods and services or choice for consumers”

then moves on to consider

“the health and safety of humans, animals and plants … standards of environmental protection”

and other issues that have come forward.

This is another way of trying to do many of the same things that have come through the variety of amendments that your Lordships have heard over the course of the last three days in Committee. All the Ministers have all talked about level playing fields, and the purpose of this legislation is to create a level playing field. We all subscribe to that. The purpose of subsection (4) is to create an informational level playing field, to ensure that all the Governments are receiving the same information and create some transparency so that the outside world—indeed, the companies involved and the people involved—also receives that information.

I am sure that the Minister will stand up in a few minutes and give us very good reasons why this amendment should be withdrawn, but before he does, can he undertake to ensure that the level playing field applies not only to the commercial and trading issues, but also to the information that all the players receive when these decisions are being taken?

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

My Lords, it will be interesting to hear how the Minister responds to this request, which has been well described as a bit of a coda. On the other hand, it also contains teeth, which would be there to be used, if someone wished to. It is important to get this right and understand, if it is rejected, why it is. I look forward to that.

Ministers know that we on the Labour side think that the common frameworks are at the centre of the managed divergence that we want to see and allow to happen across the devolved Administrations. It is important that the process continues and that is at the centre of the Bill, because it is not at the moment; it is hardly mentioned, except in passing. If that is the case, we look for some additional reassurance from the Minister that the powers that might be available to the Government, when they feel the common frameworks are not working, are not used too early or vicariously just to show the devolved Administrations who is in charge. As we were reminded by the noble Lord, Lord Dunlop, on day one, the Government already have powers to deal with any default they feel is present in the common frameworks. The questions raised by this amendment are important, and I look forward to hearing the Minister’s response.

United Kingdom Internal Market Bill

Debate between Lord Fox and Lord Stevenson of Balmacara

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

[Lord Fox (LD)]

My Lords, my name is on Amendments 33, 34, 50, 55, 56, 60, 80 and 95 but, to be honest, all these amendments are trying to cover similar ground in slightly different ways. I suggest that they are trying to meet the gap that the noble Lord, Lord Anderson, in his exceptional speech, characterised —in my words, not his—as the paucity of ambition that lies within the Bill. He also effectively highlighted some of the inconsistencies that crop up throughout it.

Amendment 50 seeks to add a range of additional conditions around the aim of legislation, and Amendment 51 does much the same. The noble Lords, Lord Young and Lord Faulkner, talked specifically about public health, animal welfare came up with the noble Baroness, Lady Hayman, and my noble friend Lord Teverson and the noble Baroness, Lady Boycott, and other noble Lords, spoke very powerfully about climate change.

The last two speakers, and in particular the noble Lord, Lord Whitty, in a way characterised where I had got to; the penny had dropped. I will use slightly different language. I am slow; after 15 hours of Committee I think I am getting there. The problem is that Her Majesty’s Government may hate devolution, or they may want to grab hold of the money and spend it in Scotland—those might be by-products of the Bill. The fundamental philosophy and thinking from the Government’s position, however, is that the only way to have to have a properly ordered internal market is, essentially, for everything to be the same. With non-discrimination and mutual recognition, in the end that is what you will get.

Your Lordships’ House, with the exception of the noble Baroness, Lady Noakes— who very ably put once again the minority view, which is actually the government view—has taken a diverse approach and believes that there can be an ordered internal market that is not the same, but diverse. That is what the common frameworks are there to do. A number of noble Lords raised my noble friend Lord German’s twin highways and questioned how they will ever come together. The answer is that they do not because the Bill rides over the diversity that the common frameworks will deliver. Why are the two things happening together? One can speculate. One started three years ago with a different Government who probably had a different philosophy, and killing it is probably harder than letting it die.

I know that the Minister has been assailed with examples. He has had chlorinated chicken, whisky, all sorts of things—he even brought in hypothetical biscuits. I will give him an example that is the other way round. It is of where the devolved authorities could do things to England. England, very wisely, has banned the household burning of coal. Wales and Scotland have not. If I lived in Herefordshire all the time, I could nip over the border to Harry Tuffins, which is just the other side of Offa’s Dyke, buy a bag of coal, take it home and burn it on my fire in Leominster. So far, so good.

Within the terms of the Bill, I could—[Interruption.] Minister, you will have your chance. If I were heckling you, I suspect I would be told to sit down; I look forward to the debate. If I was a businessperson living in Leominster, I could go to Wales and import that coal. If the Minister tried to stop me, I would go to law and use this Bill to assert my right to sell that coal in England. Whether or not I won we would see, but all those things will be happening all the time. Because of the non-legislative common framework that it is covered by, where does it sit in law beside the iron-clad rules of non-discrimination and mutual recognition?

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

My Lords, this has been a very good and wide-ranging debate—one of the best we have had so far on the Bill. We have heard several notable speeches and some new voices. I look forward to reading their speeches in Hansard and learning from them. The main focus has been the necessary tension between the wish to have unfettered frictionless trade in our internal market and the wish to preserve our existing high standards. This was well expressed by my noble friend Lady Hayman.

My amendments cover this ground. Amendment 35, which I am delighted is also signed by the noble Lord, Lord Anderson of Ipswich, and the noble Baroness, Lady Jones of Moulsecoomb, tries to expand the legitimate aims to include some of the standards to which I have already referred. Amendment 51 expands that and provides for a slightly wider context within which legislative aims are discussed and slightly expanded. It also comes back to the basics: standards of activity within which trading takes place and where we have rightly set high standards that are enjoyed by our consumers.

Amendment 57 deals with conditions excluded by market principles and amends the schedule only as consequential to earlier amendments, I think. Amendment 58 deals with an issue raised by the noble Lord, Lord Anderson of Ipswich, in his very good speech in which he quoted Peter Oliver, who pointed out that some of the restraints that are allowed within the Bill are very limited indeed. Our amendment tries to expand that to make sure that it is not restricted just to basic considerations.

--- Later in debate ---

[Lord Fox (LD)]

My Lords, the Minister will be pleased to hear that I have got very little to add.

On the question of an adverse market effect, there are also questions around adverse to whom and adverse to what. Is it merely the price and the amount of choice, which is what the Minister appears to fall back on every time the market is described, or is there a wider adversity that comes into this?

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

My Lords, like other speakers, I welcome the idea that this is a clarification of the language currently used in the Bill. However, like the noble Baroness, Lady Neville-Rolfe, I wonder whether what we have got is in fact any clearer, or makes us any more clear about what we are supposed to be doing with this part of the Bill.

The language is, in places, incredibly archaic and obscure. There seems to be no recognition of the digital world. Services provided through the internet are not going to be provided locally; they are not going to be provided “in a region” and there are not going to be local service providers, and yet there seems no reference to them or how they are to be treated. Even if that were not that case—even if we were not living in the virtual world—the idea that somehow a service provider has a relevant connection to a part of the United Kingdom if it has a registered office seems to ignore hundreds of years of the use of brass plates outside solicitors’ offices which provide registered offices but no services, no people, no contribution and no economic effect. Where is all this heading?

Trade Bill

Debate between Lord Fox and Lord Stevenson of Balmacara

Committee stage & Committee: 2nd sitting (Hansard) & Committee: 2nd sitting (Hansard): House of Lords
Thursday 1st October 2020 Grand Committee

[Lord Fox (LD)]

My Lords, in responding to the last group of amendments, the Minster, the noble Lord, Lord Grimstone, expressed surprise at the broad nature of the debate. I would say to him, perhaps facetiously, “Welcome to the House of Lords”. I fear that this group may tempt his colleague, the noble Viscount, Lord Younger, to make a similar observation, but I ask that he does not. As the noble Baroness, Lady Thornton, said at the end of the previous debate, the nature of these debates highlights serious concerns that noble Lords have, and the Government should take them seriously, even when they are not necessarily on the face of the Bill.

This is a very good example of that. I shall not speak in detail about Amendment 34, because the noble Baroness, Lady Kidron, made a very powerful speech. I am also glad that Lady Sheikh managed to get the noble Lord, Lord Sheikh, online, because he made a very strident contribution on something that is extremely important.

Similarly, I am not going to talk much about intellectual property. On this issue I bend the knee to my noble friend Lord Clement-Jones—and, frankly, so should Her Majesty’s Government. I suggest that the Minister should give my noble friend’s words, and particularly his questions, special attention, because they are serious and important issues that face a lot of companies in this country.

The noble Baroness, Lady Neville-Rolfe, spoke strongly on data flow. At the risk of provoking the ire of my noble friend Lord Clement-Jones, I have to say that I agree with her. Her issue is absolutely fundamental—and I shall expand a bit on that.

I have previously quoted the “exuberant” Secretary of State, as the noble Baroness, Lady Neville-Rolfe, describes her. Here is another quote, from a speech she made to the WTO almost exactly a year ago:

“We believe it is high time to reform digital trade rules so that they are fit for the 21st century, reducing restrictions to market access to support e-commerce and ensure the free flow of data across borders.”


Yet despite this enthusiasm or exuberance, I sense that there are problems when it comes to squaring the conflicting pressures that are mounting around the free flow of data across borders. Indeed, when the Minister kindly invited myself and others to a facilitated discussion on the progress of the US-UK trade deal, I was surprised and shocked by the insouciant response to my question on data adequacy and the issue of reconciling US and EU data rules. It was a very short answer, and to us, it did not show a full understanding of the challenge.

However, it is not just about GDPR. I will talk in a little detail about Schrems II, which my noble friend Lord Clement-Jones raised, because it is an important cloud hanging over what we seek to achieve. To remind your Lordships, in that ruling the European Court of Justice, the highest court of the EU, found on the adequacy of the protection provided by the EU-US data protection shield. To explain, it wrote in its press release that

“the requirements of US national security, public interest and law enforcement have primacy, thus condoning interference with the fundamental rights of persons whose data are transferred to that third country.”

It added that

“mechanisms in the EU-US Privacy Shield ostensibly intended to mitigate this interference are not up the required legal standard of ‘essential equivalence’ with EU law.”

Broadly, the US’s prioritization of digital surveillance in the view of the court collides directly with European fundamental rights.

That is a sobering ruling, which spells danger for UK trade aspirations and sets some alarm bells ringing regarding the UK’s surveillance regime. Her Majesty’s Government need to reflect on this very seriously when talking up the potential for a UK-US trade deal that includes data, and they should contrast that stark ruling with the freebooting statement from the Secretary of State with which I opened. By the way, I assume that Her Majesty’s Government are probably having to reflect on this ruling in their efforts to tie down data adequacy with the EU when the transition period runs out. Perhaps the Minister can use this opportunity to update us on progress with these discussions with the EU.

This is not a trivial issue, and we need to demonstrate in this country that we take it seriously. As a starting point, accepting Amendments 15, 16 and 34 would be a very good idea.

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

My Lords, I will be relatively brief because much of what I want to say has been covered by the other speakers, not that I could ever have competed with the tour d’horizon that was the speech by the noble Lord, Lord Clement-Jones, and the expertise also shown by the former Minister, the noble Baroness, Lady Neville-Rolfe. It was also a bit of a tour de force, since it touched on every issue there is to touch on in terms of intellectual property. Indeed, if the noble Lords were minded to follow that up with amendments to back up some of the points they were making, the glacial progress we are making so far on the Bill would turn into a complete and utter standstill. So much is going on here, and so many things need to be addressed, that I am almost tempted to go into cahoots with them to try to see whether we can pick them out. Perhaps I will resist that one.

Both Amendments 15 and 16, taken together or separately, are helpful in the sense that, as others have said, they pick up some of the rather considerable concerns that we are all hearing from the IP sector about the future, about what is going to happen to personal data flows and, indeed, about what is going to happen to our IP industry, which is so vital to the UK economy and our cultural industries. They seem to be very sensible information-gathering amendments that do not impose any great burden on the Government, and they would help to inform the situation as we reach the turning points at the end of this year. I hope that they commend themselves at least in outline to the Minister.

Corporate Insolvency and Governance Bill

Debate between Lord Fox and Lord Stevenson of Balmacara

Report stage & Report stage (Hansard) & Report stage (Hansard): House of Lords
Tuesday 23rd June 2020 Lords Chamber

[Lord Fox (LD)]

My Lords, we have heard a number of your Lordships speak with great authority, not least the previous speaker, on this important subject. As the noble and learned Lord, Lord Hope, set out, there is a great number of amendments in this group, and I shall not attempt to speak to all of them. I have sympathy with the spirit of the amendments set out by the noble Lord, Lord Leigh. Like the noble Viscount, Lord Trenchard, I shall listen to the Minister’s response to those questions.

I also thank the Minister and the departmental team for listening to what was said in Committee and coming up with the first of a set of government amendments that were sensitive to that debate. However, I shall speak to two amendments in this group that carry my name, Amendments 14 and 75. Amendment 14 has been elegantly spoken to by my noble friends Lady Bowles, Lady Kramer and Lord Palmer and, on the Bench opposite, by the noble Lord, Lord Hodgson, and others. It sets out the overriding issue in this debate: that of tiptoeing around the financial institutions.

My noble friend Lady Bowles set it out with great clarity: where all other groups within the company in a moratorium have to set aside and go into stasis, the banks do not. Even though it may be implied, it is important that the Bill is very clear that we expect a standstill. The noble Lord, Lord Hodgson, said that the Minister may yet star in legal disputes of the Pepper v Hart variety. One way for him to avoid such notoriety would be to accept Amendment 14 and accept that we need a clear undertaking that this behaviour cannot be allowed. As my noble friend Lady Kramer and the noble Lord, Lord Hodgson, set out, if it can happen, it will happen. Teams within banks will be under an obligation to their owners to do it. Therefore, it needs to be set aside.

A number of Peers talked about banks gaming the situation, but this is no game for employees or for creditors. If it were a game, the pawns could well be the employees. That is why Amendment 75, which also carries my name, is important—albeit modest, as the noble Baroness, Lady Bryan, said.

The noble Lord, Lord Hendy, set out in legal terms why some status for employees needs to be established; nothing else in the Bill does that. However, it should be more than workers just being in receipt of communication; they should have a seat at the table and be consulted. Somewhere there is a feeling coming through this that involving the employees is somehow anathema to saving the business. I should declare my interests, one of which is that I am a member of the German-British Forum. In Germany, this discussion would not be needed. Businesses in Germany know that workers have a central role in their strategic future —and what could be more strategic than the sort of things that we are discussing today? So Amendment 75 is a very modest suggestion, and any watering down of it by the Government would be disappointing.

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

My Lords, this has been a very good debate and I thank all those who have contributed. In a sense, the debate around this group of amendments reflects the problem that we have had with the Bill. The Government, rightly, want to progress and to press ahead, but the issues that we are covering are of such substance that they vastly outstrip the time that has been made available for us to do it—hence our needing the Minister to address at the Dispatch Box a wide range of points before many of us can decide how we will deal with our amendments.

The noble and learned Lord, Lord Hope, and the noble Baroness, Lady McIntosh of Pickering, asked about the exchange of letters over the simple question about whether a list of creditors should be provided. The noble Lord, Lord Leigh, and the noble Viscount, Lord Trenchard, asked a justifiable question about whether rescuing a business is the same as rescuing the company, given that in many cases the business is the important issue, particularly when it is linked to the jobs that would be involved. Does the Bill adequately deal with that?

My noble friends Lady Drake and Lady Warwick want to know from the Minister directly at the Dispatch Box whether Amendment 80 goes far enough to recognise the gaming and perverse behaviours that will inevitably follow the moratorium arrangements. In addition to that, my noble friend Lady Warwick specifically asked about the issue of super-priority for financial funds in relation to defined-benefit pensions. Will the Government, with their power, stay alert to the dangers? We need to know.

The noble Baroness, Lady Bowles, made a persuasive case about the way in which the breathing space set up by the moratorium would effectively be destroyed by accelerated payments, and the following speaker, the noble Baroness, Lady Kramer, made that point exactly by explaining why gaming is natural, or even appropriate, behaviour for banks and other lenders, which of course have to maximise the return they are likely to get. If that is inevitable, are the measures in the Bill sufficient? Will the Minister do what he can to reassure us about that? And the noble Lord, Lord Hodgson, whose extensive experience and anecdotes flowed through his speech, rightly raised the Pepper v Hart concern and the issues that will come through in future legislation in relation to what has been said today.

I suppose what I am getting at is that it would have been better if we had had proper amendments and time to debate them in individual groups—not all clumped together in different areas—and did not have to rely on the Minister’s very difficult task of covering all the points raised in today’s hour and a quarter of debate and being convincing about how the words that appear in the Bill, and in the Act when it is published, will be sufficient. However, we are where we are and we need to make progress.

Amendment 75 may be a rather modest issue, as has been said, but it is important in itself as well as for what it might say about the future. I thank the noble Lords, Lord Kerslake and Lord Fox, and the noble Baroness, Lady Altmann, for supporting me in this amendment, and I thank my noble friends Lady Bryan of Partick, Lord Hendy, Lord Hain, Lord Adonis and others for speaking in support. At heart, the amendment seeks to recognise that workers in a company care about its future and, like all other stakeholders, should be informed about what is going on. It supports the view that in a crisis situation all those who work in a company are in it together, and employees may have as much at stake as others who have a financial stake in the company. It also makes the point that those who work in the company in the round, or in the business that the company is carrying out, can and should make a contribution to save it if it is in crisis. Only good can come from a proper process of engagement, information exchange and an exchange of ideas.

I recognise that in a moratorium situation speed may be of the essence. Any arrangements set up that would slow that down also carry the risk that information will be fed out into the public, and that may promote creditor action. We must guard against that but, on the other hand, we should also aim to bring everyone together, not to split off certain groups who, as I hope to argue, could contribute. However, and I wait to hear the Minister deal with this issue when he comes to the Dispatch Box, there may be other ways of dealing with this—measures that could perhaps take into account evidence gained as we go forward. As we discovered in Committee, there may indeed be other issues that need to be wrapped into this first step—the beginnings, perhaps, of a movement to rebalance the relationship between employers and employees and to promote collective bargaining. This may not have been the right amendment or even the right Bill for that approach, but maybe this can be the first step on that journey.

--- Later in debate ---

[Lord Fox]

My Lords, this will be something of a novelty but I am going to be gracious. As is appropriate, I congratulate the Government on bringing forth Amendment 49, as did the noble Baroness, Lady Neville-Rolfe, and on sweeping away as many as possible of the Henry VIII clauses, as they are known. My noble friend Lady Barker set out the challenge for this Bill and the reasons for retaining some powers to change and mutate it as it goes forward. Because of the haste and scale of the Bill, there is a great challenge from non-conventional businesses, so to speak.

The point about museums is a very good example of where it is a question not just of the future of the museum but the future integrity of a collection, which suddenly becomes an asset. While it may not be possible to save a museum, it should be possible to save a collection—but, when very many collections are going up for sale at the same time, clearly the capacity to deal with that is eliminated; that is just one very niche example of the challenge for the Government. In this set of amendments, the Government have shown an ear to the debate and have reacted accordingly.

[Lord Stevenson of Balmacara [V]]

My Lords, as has already been said, this has been a good debate. While we must await the individual amendments, I think the judgment of the House so far is that the Government have changed their original proposals sufficiently to satisfy the House and, more importantly, the specialist committees that have been looking at particular details; we picked up from my noble friend Lady Taylor the considerable concerns that were around at the time.

The noble Earl, who is also the Deputy Leader of the House, might wish to swap hats when he comes to respond to the debate, as there are perhaps points that need to be taken back and listened to within the usual channels in relation to the dangers of fast-tracking complex legislation of this nature and the need to make sure that we have sufficient time and learn the lessons, as my noble friend Lady Taylor said. It is not something that we often hear in this House, but we do need to listen: this whole process of fast-tracking and then trying to pick up on the run the difficulties that come up and is really not an adequate way of scrutinising, as she put it. We hope that that lesson will be learned in a way that will allow us more time and more consideration.

Finally, I thank the noble Baroness, Lady Anelay of St Johns, for picking up the point that we both shared in Committee in relation to charities. Like her, I am pleased that the point has been noted and a response issued. I still think that there are concerns around some of the other bodies with which we as a Parliament and as a society should be concerned: the good work of credit unions, friendly societies, social enterprise companies, community-interest companies and co-ops. These, of course, share the common thread that they are often set up outside the norms of company law, for the reason that they can operate better when they are not part of the overall character of the Companies Act. But, inevitably, there are intersection points and issues, which have been picked up. The point made by the noble Baroness, Lady Barker, that certain independent companies trading as museums might find that the collections on which they depend may be at risk is obviously a worry that the Government will want to take back. I think those are the important points.

Corporate Insolvency and Governance Bill

Debate between Lord Fox and Lord Stevenson of Balmacara

3rd reading & 3rd reading (Hansard) & 3rd reading (Hansard): House of Lords
Tuesday 23rd June 2020 Lords Chamber

[Lord Fox]

My Lords, the Minister was right that this is an important Bill because it is about people’s jobs, livelihoods and future prosperity. I think we all agreed from the outset that that was the objective here, and in many respects we have managed to fulfil it. I join the Minister in thanking the Public Bill Office, which as usual has been extremely helpful when it comes to marshalling our amendments.

I especially pick out the Bill team. Normally when I look at the Box over there, there is a team looking tired, wan and reasonably pleased that their job is reaching the end. They must have had some very long days. I assume that the Bill team are somewhere out there in the ether, so I thank them for their work.

I thank my own team: my colleagues who have sat through this process, on the Benches and virtually, and Sarah Pughe, who has kept us more or less on the straight and narrow. I thank my opposite number the noble Lord, Lord Stevenson, and the ministerial team—the noble Lord, Lord Callanan, the noble Earl, Lord Howe, and the noble Baroness, Lady Bloomfield—for their open and cheerful approach to the Bill. I think we got a glimpse of why the noble Lord was cheerful: this Bill is nowhere near as bad as what he has just been doing.

That is true, but it was still a difficult Bill. It is a big Bill of mixed intent, in that some of it is permanent and some of it is not, and it was an accelerated process. It has not been easy, and of course we leave here wishing that things were different from the way they are. This feels like the end of something but I suspect, given the powers and the intent that the Government have to trim, modify and improve the Bill, it may be a question not of “Farewell” but rather of “See you later”.

[Lord Stevenson of Balmacara [V]]

My Lords, I apologise for my complete blankness when coming to the end of my peroration on Amendment 75. For the record, the second very important concession made by the Minister, who was very kind in not picking me up on not being able to remember it, was that the new monitor position will be strengthened in terms of guidance so that directors will have a responsibility for informing employees about the moratorium arrangements and reassuring them about their conditions in future. I thank him for that as well. If there is a way in which Hansard can reinsert that into my original statement then I would be more than grateful, but I am sure that is probably not allowed.

I join others in thanking all concerned for getting us through this process. It has been very interesting to do it. We started with a lot of meetings with Ministers, which was very good because the ground was clearly laid out, so we enjoyed that. We were introduced to officials, from whom we have had superb support through the whole process. I join the Minister in saying that they are a credit to the Civil Service, working in extraordinary conditions and coming up with the goods all the time.

I thank the noble Lord, Lord Fox, and his colleagues for their support. It is good to find that people have similar views about issues. It is sometimes hard to find the exact point at which we should work together but we have managed to do so despite the conditions. Thanks should also be said to the House officials for allowing us to operate in a hybrid House in a way that those who have been here for more than a few years would probably have thought impossible, given the difficulties involved and the changes required—but here we are. They have given us three and a half days of work and they have been superb in making sure that we had the service required in order to contribute. I have been doing this remotely throughout while others have been present, and even remotely it has been a satisfying situation.

All Bills are a trial of stamina, this one probably more than most. I think we all share a sense of exhaustion, having reached its final moments. It is interesting that having to do this in an accelerated way has also picked up a lot of issues that will need further work. I hope the various committees and other agencies in the House who are watching this will learn the lessons that have to be learned about how to do emergency legislation and accelerated legislation, what can be done well and what needs a bit more time spent on it.

Finally, it is a curious feature of the hybrid House that staring for hours into tiny screens and trying to talk to people through electronic devices that constantly let us down seems to build a much stronger working relationship. I have enjoyed this time very much. I have enjoyed working with everyone concerned, including my staff, Dan Harris, my Whip, Chris—my noble friend Lord Lennie—and others who have supported us. I have also enjoyed working with Ministers and others from across the House. Long may it last.

Corporate Insolvency and Governance Bill

Debate between Lord Fox and Lord Stevenson of Balmacara

Committee stage & Committee: 1st sitting (Hansard) & Committee: 1st sitting (Hansard): House of Lords
Tuesday 16th June 2020 Lords Chamber

[Lord Fox]

My Lords, the amendments in this group, along with those coming up in group six, are designed to pull back a Government seeking to overreach themselves and take on powers that should remain vested in Parliament. The Committee has heard strong arguments from the noble Lord, Lord Blencathra, and many members of the Constitution Committee, to back up this point. Amendment 66 hardens the requirement for the Secretary of State to keep the regulations under review by setting a timetable for those reviews and reporting them back to Parliament. This does not meet the idea of post-legislative scrutiny suggested by the noble Lord, Lord Liddle, but it does at least give Parliament the ability to review what is happening. Amendment 70 prevents the Clause 18 power being renewed on more than one occasion. In other words, it sets a hard stop of 30 April 2022.

Amendments 71, 76 and 140, tabled by my noble friend Lady Northover, to which I have added my name, seek to address the Henry VIII issues that were thrown up in such stark relief by the Delegated Powers and Regulatory Reform Committee. I do not need to add to the wisdom given by other noble Lords. It is absolutely clear that these could be transferred to an affirmative process. Were they to be so, this would not remove the Government’s ability to make the changes they think necessary to deliver the flexibility we may need in the crisis as it develops. The Government do not need to be frightened of this amendment. They can take it on board. It would calm down a lot of Peers.

[Lord Stevenson of Balmacara [V]]

My Lords, I am grateful to all noble Lords who have spoken in this interesting and wide-ranging debate. In contrast to that on the first group, it was quite well focused. There are only a couple of things that escaped the broader consideration of the two advisory committees we have been hearing from: the DPRRC and the Constitution Committee. Amendment 62, in my name, is oddly grouped in this debate but was meant to be helpful. I hoped that the Minister could reassure the Committee that all that needed to be done was being done to make sure the courts played their part appropriately—it is nothing to do with Parliament and, as the noble and learned Lord, Lord Thomas, said, nothing to do with the Government either.

Nevertheless, the funding needs to be there and the resources need to be available to ensure that the work is done properly to support the legislative attempts that have been made within the Bill. If it is of any interest, we tried in our amendment to add not just the judiciary but the staff of the courts, because they too have a part to play, but we found that that was out of scope, so the amendment focuses purely on the judiciary. But it should be understood to be about the court system as a whole helping and supporting the legislation moving through.

The noble Baroness, Lady Anelay of St Johns—who should know a thing or two—said very clearly that only a brave Government would ignore the DPRRC or Constitution Committee reports, and I am sure that it is not in the mind of the Minister to take them on at this stage. Our amendments are largely an attempt—and I acknowledge considerable assistance from the Public Bill Office—to put the aspirations of the DPRRC into a form that could be considered as amendments. They are not meant to be a statement of where we want to get to. They are probing amendments to provoke a response from the Government. I also think that the recommendations of the Constitution Committee, as outlined by my noble friend Lady Taylor and her supporters in Amendments 66 and 70, are exemplary because they quickly get to the heart of what we are about. They contrast slightly with the approach taken by the noble Lord, Lord Blencathra, whose excellent speech belied the fact that his way was simply to delete the clause. That would not achieve very much except make this Committee very happy but it would obviously remove the impulse which has led to where we are.

We are obviously in a situation where we need clear agreement between the various interests displayed in this debate. It really is up to the Government to assure the Committee that, in the words of the noble Baroness, Lady Neville-Rolfe—and I agree with the line she is taking—the analysis has been done properly. We need to better understand the interaction between the lengths and temporary measures—how long the temporary parts of the Bill will last and under what arrangements they can be sunset. If they are not to be sunset, what assurances and safeguards are available to this House and to Parliament as a whole? We need a full and mature consideration, but all that has to be done in a matter of days because the date for the final submission of amendments for Report is looming fast. Indeed, it will have to be the end of this week so that we can debate them in the middle of next week.

We are in a quandary. The Government need to give us an assurance about that, but I make it clear that we are happy to discuss with the Government any way in which we can help, and I am sure that others who have contributed would also do that. We are clearly at a bit of an impasse if we do not find a way out of this, but there seem to be solutions on the ground. The amendments tabled by my noble friend Lady Taylor are attractive and the idea, as the noble Lord, Lord Blencathra, put it, of taking up sensible safeguards such as making the “made affirmative” procedure the default position on this is probably the right way to go. We will need assurances that the Government will not attempt to ride straight through the long and distinguished history of Parliament trying to make sure that abuses are not perpetrated within legislation which it then cannot involve itself with. I look forward to hearing from the Minister on this and hope that he is able to reassure us.

--- Later in debate ---

[Lord Fox]

My Lords, the belated arrival of these amendments is further indication of the half-baked nature of this Bill. We were assured that the insurance for the permanent parts of this Bill was that they had already been through an extensive consultation period, which I guess they have. However, these important amendments have arrived in a lump afterwards, so that consultation process must have been flawed. I was looking forward to the Minister’s piece-by-piece description of each one. I can understand perhaps why he has decided not to do that, but at the very least, to paraphrase what was said earlier, we need to know how Her Majesty’s Government view these measures working. What problem are they intended to solve and what was the process by which these amendments arrived in the Government’s purview?

[Lord Stevenson of Balmacara [V]]

My Lords, I had the benefit of a brief discussion with the Minister yesterday on these amendments. If we can get a response to the points made by my noble friend Lord Mendelsohn and the questions asked by the noble Lord, Lord Fox, we will be well served.

Covid-19: Business

Debate between Lord Fox and Lord Stevenson of Balmacara

Wednesday 13th May 2020 Lords Chamber

[Lord Stevenson of Balmacara (Lab)]

My Lords, we do not underestimate the challenges of lifting the lockdown that has been in place since 23 March 2020. It is in all our interests for it to happen safely and we recognise that there are difficult decisions confronting the Government and the businesses that have to adapt to these unprecedented circumstances.

We are pleased to note that the Government have talked widely to stakeholders, unions, industry bodies and the devolved Administrations about their plans for the removal of the lockdown. I hope that this commitment to solidarity in what has often been a contested area of public life is a harbinger of a commitment to work together on all aspects of industrial life, not just what is required to beat this pandemic.

I have three main questions for the Minister. First, surely the acid test for the five-point plan, across the eight workplace settings identified in the Statement, is whether ordinary working people who cannot work from home will have sufficient protection when they commute to and from their workplace, and in the workplace itself, from the measures announced yesterday. The Statement says:

“First, people should work from home if they can … For those who cannot work from home and whose workplace has not been told to close, our message is clear: they should go to work.”


What have the Government put in place for those who have followed this instruction and returned to work? Can the Minister confirm that there is to be no new legislation for this? Absent that, existing statute and common law means that employers have a duty to assess the risk of workers being exposed to Covid-19 and to implement ways of reducing that risk. In practice, we are told that this will require changes in working practices—screens, barriers, floor markings, signage, hand sanitisers, face masks and potentially a whole range of other interventions. In larger companies the outcome of this assessment has to be shared with employees, although there may well be a case for making this mandatory for all but the smallest premises.

We accept that much of the advice published yesterday is sensible and may be effective in reducing the risk of infection, but does the Minister accept that it will take time to procure and set up, and does he have advice for employees who have serious concerns about whether their workplaces are safe now and will be during the period while the physical adaptations and changes in working practice are being undertaken? Who will decide whether workplaces are safe now and in the future? The answer seems to be the Health and Safety Executive, established under the Health and Safety at Work etc. Act 1974, and reliance on the Management of Health and Safety at Work Regulations 1992, as amended. Can the Minster confirm that this is the statutory provision that the Government are relying on and can he set out for us today the sanctions and penalties for employers who do not comply?

Secondly, can the Minister expand on the scientific advice that underpins this policy? As I understand it, the reproduction rate of the disease—the R number—is currently between 0.5 and 0.9. Given the large variation in the range given, can he explain precisely how this number has been calculated and give us a sense of the confidence limits that presumably must apply to it? More importantly, if we are going to rely on the R number, can he tell us when and how frequently information about R is going to be published and, in particular, what value of R would trigger the Government to review and possibly reverse the instruction to people to “go to work”? Is it when R is greater than 1.0? What R values will be specified before further lockdown relaxation stages can take place?

Finally, the recent ONS figures for sectoral mortality show that men working in the lowest skilled occupations had the highest rate of death involving Covid-19, with security guards having one of the highest rates. Men and women working in social care, a group that includes care workers and home carers, both had significantly raised rates of death involving Covid-19. There are also ethnicity and regional variations of significance. Does the Minister agree with me that these figures suggest that there may be a need to refine the measures recently introduced and that a case exists to go further, so that those currently carrying the highest risks of dying from Covid-19 have better protections from catching the disease in their workplace?

[Lord Fox (LD)]

I thank the Minister for repeating the Statement, and I wholeheartedly thank his department for adding a considerable degree of clarity to the shambles that we were treated to on Sunday. In bagging the “Countryfile” slot last weekend, the Prime Minister may have notched up high ratings, but did the Government really want 27 million people to witness him waffling on about non-specifics? For people to return to work requires confidence. Employees need to know that their employer is doing the right thing, and businesses need to know what they must do to keep employees safe. The Government, particularly the Prime Minister, set the foundations for that confidence. As one businessperson said to me this week, the way this has been sprung on people is ridiculous and shows no understanding of or regard for safety at work.

When these guidelines were published, they were very helpful, and the Statement notes that they have been broadly welcomed by the working world. However, the phasing should have included the drafting process and time for companies to start risk assessments and consult their staff and workers. Only then should the Government have announced a return to work.

I turn to some specifics. The noble Lord, Lord Stevenson, has ably approached the important issue of employee rights, and I endorse his comments. To avoid duplication, I shall probe the position of employers more deeply. Quite rightly, the guidance does not supersede any current legal obligations relating to employers’ health and safety practices. However, it is clear that coronavirus exposes businesses to additional risk beyond their experience. As the guidance states, each business will need to translate the guidelines into specific actions that it will need to take, and there are a great many variables. What is the formal process for checking that a business has translated the guidelines correctly? What constitutes an acceptable risk assessment? Should it be conducted in house or always by an independent third party? For example, can a business request an HSE audit to validate its approach? If it does, who would pay for it? In short, what constitutes sufficient due diligence?

It also seems that the complexity of supply chains has been hard to capture in the documentation. For example, a manufacturing business has many dozens of suppliers. For a tier 1 business to reopen, all those supply chain businesses have to reopen too, and they get smaller as the chain gets longer. The risk assessment process is even more onerous for smaller SMEs, so can the Minister tell us how the department will support SMEs to get back to work? For example, will the Government consider setting up a free service for SMEs to help them draw up their risk assessments? In the event that an employee falls ill and blames the company, who is liable? Have the management acted properly? What about insurance? We have seen problems with business interruption insurance. Have Her Majesty’s Government spoken with the insurance industry? Are compliant employers covered by their current insurance? In the event that the worst happens, how do employers demonstrate that they have done enough to avoid prosecution?

That takes us to the Health and Safety Executive. My noble friend Lord Newby spoke of the need financially to bolster the HSE, and we welcome the extra £14 million for its budget, but does the Minister agree that this sum is piffling compared to the cuts of £100 million or so that that organisation has experienced over the past decade? In the debate yesterday, the Leader of the House was asked whether the HSE is fit for purpose, and I do not think she responded, so I will rephrase that question and break it down. By how much does the HSE need to grow to do this job? What needs to change for it to take on this extra challenge? What is the timeline? When will it be ready to do this new job, and does it have the management capacity to do it? We must remember that, under Brexit, the HSE is already taking on other new, important functions.

Finally, I heard nothing about how the manufacturing and construction sectors will be supported with testing. As it stands, businesses that are deemed critical get particular access to testing. This week’s published advice talks about isolation in the event of an outbreak in manufacturing and construction firms, but what about testing? Can the Minister please acknowledge this challenge? Can he please undertake to deliver sufficient support on testing so that employees of these companies can really be kept safe? This is going to prove to be a really important issue. In the end, the Government need to do everything possible to ensure that back to work does not become back to square one.

UK-US Trade Deal Negotiating Objectives

Debate between Lord Fox and Lord Stevenson of Balmacara

Monday 2nd March 2020 Lords Chamber

[Lord Stevenson of Balmacara (Lab)]

My Lords, I first apologise for not being present at the very start of proceedings on this Statement. Unfortunately, my printer got stuck and I had to wait until I was able to clear it with technical help. I therefore missed the opening sentence, but I had been given a copy of the Statement and had read it before.

We support an ambitious trade agreement that unlocks economic growth, creates new jobs and elevates rights and standards. I thank the Minister for repeating the Statement following the publication of today’s negotiating mandate for the Government’s flagship trade agreement with the USA. Of course, some 20% of our current trade is already with the USA. It is our second-biggest market and we have enjoyed decades of two-way trade with no underlying trade agreement. So, while I welcome the publication today, I wonder whether it was quite necessary to do it in the way it has been done and to carry the tone it does.

The Statement says that an “ambitious” free trade agreement with the US could result in

“a £15.3 billion increase in bilateral trade and a £3.4 billion lift to the economy.”

These are substantial figures. However, can the Minister confirm that this is over a 15-year period? These results will be slow to come and indeed, given the length of time, are not very substantial on their own. Can he also confirm that, at the end of that time, the British economy would be only 0.16% larger by 2035? This hardly compares well with the loss in trade of some 5% of GDP—some argue it could be worse—if we fail to complete an ambitious free trade agreement with the EU.

Secondly, the Secretary of State has said positive things about the NHS and the price of medicines, and that there will be no compromise on environmental protection, animal welfare and food standards. However, the Government have so far failed to enshrine this in primary legislation. There is an amendment to the Trade Bill that left your Lordships’ House in a previous Session that would do it. Why do they continue to prevaricate on this point?

There is a lot in the Statement about tariffs and quotas, which are important, but there are already very low tariffs between the UK and the US. The main problem is regulation. To take food as an example, the US position is generally that its food is just as good as European food and our standards are just protectionism. The problem is that American food is not the same, by any standards. Farming in the US is mostly on a large, industrial scale, and the animals are kept in conditions so poor that they get ill or do not thrive unless they are also fed a lot of antibiotics and steroids, not to mention hormones that maximise growth. We, on the other hand, through the EU have a farm-to-fork policy that regulates conditions throughout the life cycle. So what you dunk a chicken in before it is presented for sale is really shorthand for a wider question of how that animal has lived. How are the Government going to square that circle?

In the same field, will the Government reaffirm their commitment to international labour standards and rights and require the US to sign up to the ILO conventions, which it has so far failed to do.

Thirdly, what is most striking about the document is that it seems to ignore the US negotiating position, although there was a mention of that in the Statement. The language of the US document is highly aggressive, demanding concessions but offering little in return. For example, it says:

“The United States seeks to support higher-paying jobs in the United States and to grow the U.S. economy by improving U.S. opportunities for trade and investment with the UK.”


That does not sound like a very open-ended commitment to work with the UK. The framework for negotiating the UK-US trade deal is centred around reducing tariffs and non-tariff barriers but only in ways that benefit the US. For example, we read that one of the negotiating objectives of the US is to

“Secure comprehensive duty-free market access for U.S. industrial goods and strengthen disciplines to address non-tariff barriers that constrain U.S. exports.”


I am a bit perplexed why the document published today does not confirm that the UK has properly analysed the US position and will have the necessary tools to negotiate round these difficult operations that are in print.

Finally, we accept that there has been wide public consultation, but this Statement does not constitute adequate parliamentary engagement on this process. We await the return of the Trade Bill, which left this House with a proposed structure for engagement with Parliament and its committees. Can the Minister tell us how the Government intend to enable effective scrutiny of this and future trade agreements?

[Lord Fox (LD)]

My Lords, I too thank the Minister for repeating the Statement given in the other place. As the noble Lord, Lord Stevenson, said, we are building on substantial trade with the United States, which receives some 20% of our exports and is our largest international market after the European Union. To be clear, business achieved those substantial numbers while the United Kingdom was still in the European Union. Leaving the European Union is not a prerequisite for doing business with other countries and regimes.

That said, the process of negotiation is now under way, so what light does the Statement throw up? First, could the Minister acknowledge that, with respect to services, our largest sector, it is often the states rather than the federal Government which hold sway? So there are severe limitations on any FTA going forward, because it is difficult to cover the services sector, which is very important for the United Kingdom.

Data appears a number of times in the Statement and plays a big role in the supporting documents. The Government say they are going to

“rewrite the rules of the game on digital trade”.

First, can the Minister confirm that this will mean the UK moving away from GDPR, as clearly that is important? In the Statement, the Minister also talks about including provisions to

“facilitate the free flow of data and prevent unjustified data localisation requirements”.

It would be interesting to know, either today or in a Written Statement, what “unjustified data localisation requirements” this refers to? This is a real issue. For example, is the Minister happy that UK users of Google are having their data moved from the EU domain into the United States’ domain, where there is no accountability from the EU, which until very recently provided democratic accountability for UK users. Does the Minister think that, in moving the data, Google is expecting to make more money from people’s lives or less?

On democratic accountability, as the noble Lord, Lord Stevenson, pointed out, there is considerable uncertainty. Congress, on the other hand, will get the job of approving this deal in the United States, as will the European Parliament in the event of an EU deal being struck. The Statement says that

“the Government will continue to engage collaboratively”,

but following the decision to shelve, or otherwise, the Trade Bill, Parliament has no formal role. Can the Minister explain what collaborative engagement actually means? There is a strong danger that every MP will be held accountable as time goes forward for the effects of trade deals, without having had any say over what the deal was. Perhaps MPs on all Benches will be considering that.

Furthermore, during negotiations—and I have heard this said in this House by those who have participated in negotiations—it is very handy for the US negotiators to have the get-out clause, “Well, I would agree with you on this, but Congress will not let me do it. My hands are tied.” UK negotiators will have no such constraints.

The absence of regulatory alignment, which is clearly something that the EU negotiations will continue go forward with, will ensure that no meaningful deal can be struck with the European Union. In reports, the Secretary of State and others have made it clear that Her Majesty’s Government are prepared to walk away from negotiations with the European Union in 2021. Does the Minister agree that, in this context, given the conflicting nature of regulatory alignment, an FTA deal with the EU is mutually exclusive with one with the United States? We could have a deal with the United States but at the expense of a meaningful FTA with the EU, or perhaps vice versa. I am interested to know the Government’s view on Boris Johnson’s “Cake and eat it” strategy. Can the Minister explain how that works in terms of regulatory alignment?

And what is this for? As the noble Lord, Lord Stevenson, said, in about 15 years we will have advanced our GDP by less than 0.2%—a quantum that pales into insignificance with the benefits that we were receiving due to our relationship with the European Union. This Statement fails: it fails to prioritise the livelihoods of people and their businesses over an ideological approach to trade and trade policy.

British Steel

Debate between Lord Fox and Lord Stevenson of Balmacara

Wednesday 22nd May 2019 Lords Chamber

[Lord Stevenson of Balmacara (Lab)]

My Lords, I am grateful to the Minister for repeating the Statement on British Steel made in the other place by his right honourable friend the Secretary of State for BEIS. It rather neatly demonstrates that there is a bit of a gap between what is happening in Parliament, with our discussions on Brexit, and the real world, in which our current political difficulties are causing real and lasting damage to our economy and to our country. If I may say so, the noble Lord rather gave the game away yesterday when his response to the Urgent Question on this same issue contained no information whatever about the state of play in what were ongoing negotiations with the company at the time and merely repeated the hollow sounding platitudes even he must get tired of hearing himself say about how, “Global economic conditions continue to be challenging for the industry”, and that the Government, “are working with the sector, unions and the devolved Administrations to support a sustainable, productive and modern UK steel sector”. Indeed, today’s Statement is almost a repeat of yesterday’s speech with a few added platitudes.

This is absolutely devastating news for the workers, their families and the communities who rely on British Steel directly in Scunthorpe, Skinningrove and on Teesside, and all the way through the supply chain. At least 25,000 people will have been worried sick this morning, wondering whether they will have a job this time next week and what the future holds for them. What plans do the Government have to support the 4,500 people employed directly by British Steel and the 20,000 or so employed by companies in the supply chain?

British Steel is our second-biggest steel-maker and one of only two integrated steel-making sites in the UK. It is the only UK steel plant that produces the rails we use on our tracks, providing almost all those procured by Network Rail and supplying ScotRail, TfL and Translink in Northern Ireland. It also exports a large volume of products across Europe. Surely, in any industrial strategy worth its name, British Steel would be one of the main pillars of our manufacturing capacity and the department would have detailed knowledge of its business plans, finances and operating strategy. Does the Minister agree that it seems to have been blindsided on this?

Yesterday’s UQ response was largely a rehash of an earlier Statement on how BEIS has put £120 million into the company as part of the ETS bailout. We have heard the same story again. The only question the Minister answered yesterday was the one I asked about whether the ETS bailout money would be at risk in an insolvency; he said that the money would be repaid. What due diligence did the Government carry out before agreeing that bailout? Were they really unaware that there were likely to be cash-flow problems in the company sufficient to cause it to go into administration within three weeks of this deal? Does he want to reflect on what he said yesterday?

Secondly, it is surely imperative now that the Government ensure that this business is stabilised and that confidence is given to customers, workers and businesses right across the supply chain. In this context, can the Minister tell us whether the Government have considered taking over the company? My understanding of the situation is that, given the strategic importance of the sector, this would almost certainly be allowed under state aid rules. It would be a good deal, given that it has been estimated that allowing British Steel to collapse could lead to about £2.8 billion in lost wages over a 10-year period and cost the Government about £1.1 billion in lost tax revenues and increased benefit payments.

Thirdly, it is reported that the owner, Greybull Capital, was asking the Government for a loan of £30 million, although there have also been reports that it wanted £75 million. The Minister refused to name a figure yesterday. Can he confirm today what the asks of British Steel were in the negotiations? Was it just the reported £30 million or more? Was a wider package of measures requested, including government action to support steel production? If so, why was that refused?

Finally, Greybull Capital acquired the asset now known as British Steel in 2016 for £1. It is reported that the plant returned to profitability within 100 days of that sale. Of course, the directors of Greybull Capital owe a duty of care to the company and its creditors in an insolvency. Can the Minister confirm whether it is likely that an investigation into possible wrongful or fraudulent trading under the Insolvency Act 1986 will be considered, with particular reference to the substantial management fees paid to directors since 2016, the accrued interest charged at 9% on £17 million of loans made by Greybull to the company, and the £42 million acquisition only last week of a company based in France?

[Lord Fox (LD)]

My Lords, I too thank the Minister for repeating the Statement made in the other place. Yesterday, we talked about the environment of uncertainty around Brexit, which has put pressure on this business. It certainly cannot have helped it in its struggle. I will not repeat those points today, because they have been well made.

Yesterday, the Minister stood at the Dispatch Box and metaphorically tapped his nose and said, “Wait and see”. We did not have to wait long, and what we see is really pretty terrible—for the employees and subcontractors, for Scunthorpe and the other areas in this business and, frankly, for the country. The Government can trumpet the proportion of British steel each department buys, but if this company goes down, there will be a significant lack of steel for these departments to buy.

The Minister says that the Government seek “the best possible outcome”. The best possible outcome for this business is the continuing making of steel in these furnaces. As I am sure the Minister acknowledges, the first job of the receiver is to do everything possible to keep this business going for future use. The priority is to keep the furnaces burning; once the furnaces go cold, the hope for those factories goes cold as well. Can the Minister confirm that this is the number one priority the Government have given the receiver? What other assistance will be available from the Government to keep those furnaces burning?

The Statement alludes to a sticking point around what future aid could be given and EU state aid rules, and reference was made to a letter from the accounting office. Can the Minister tell us what consultation has gone on with the European Union and the Commission, what response they have had in those discussions, who they talked to and when? I am slightly concerned that there is a level of scapegoating going on here.

As the noble Lord, Lord Stevenson, pointed out, there are a number of questions around Greybull Capital. I shall not repeat them, but there are suggestions that the private equity owner of Greybull was unwilling to play ball when it came to the amount of money required to show its commitment to this business. Perhaps the Minister would like to set the record straight on that.

Just up the road from where I live, there is an empty former My Local convenience store; some of my friends were stranded when Monarch went bust; and today, we have British Steel. What is the link? The link is that they all went down on Greybull’s watch. That might be unfortunate, it might be a coincidence, or it might be a pattern. Some would say that these kinds of businesses come with an attendant risk and that sometimes, because of that risk, they fail. But who is taking the risk? Is it Greybull, the private equity owner of this business, or is it the Government who are actually absorbing the risk? We heard yesterday and today about the £120 million granted as a bridging loan. We have heard that the negotiations to rescue this company failed. How much risk are the Swedish and Turkish owners of this private equity company prepared to take? For there to be reward, there should also be risk.

Yesterday, the Minister said that no stone would go unturned. Today, he talked about remorseless activity. Could he tell us which stones are being turned? What actions are open to the Government to make sure that they continue to make steel in those blast furnaces?

Insolvency (Amendment) (EU Exit) Regulations 2018

Debate between Lord Fox and Lord Stevenson of Balmacara

Tuesday 15th January 2019 Lords Chamber

[Lord Fox (LD)]

My Lords, in addition to the concerns which were very importantly raised on the nature of the drafting involved here and the use of powers, I have a couple of major technical quibbles. At the risk of treading into what may be the patented territory of asymmetry, which was just discussed, we seem to be back in an asymmetrical relationship here. We are changing our rules in the hope that Europe will reciprocate. That is my interpretation; if it is wrong, perhaps the Minister can update me. How forlorn or optimistic is this hope? What hope do those employees have of their rights and benefits being preserved—the Minister rightly highlighted that we need to have these processes in order to preserve them—for businesses which cross not just into the United Kingdom but into the rest of Europe?

The Minister’s point about courts was very interesting, because that of course was what the European Court of Justice was for: dealing with cross-border disputes over a similar group of rules. What the Minister describes is complicated, expensive and fraught with the possibility of failure. Perhaps the Minister can explain what benefits we will reap from substituting what we have today with what his department has set in front of us. So I have serious concerns that there are major problems with this SI.

[Lord Stevenson of Balmacara (Lab)]

My Lords, I thank the Minister for introducing this issue. The SI seems to be welcomed by many in the industry and deals with a particularly difficult issue in a very constructive way, according to reports from those who have written to us. I agree with the points made by the noble Lord, Lord Fox. When the Minister responds, it would be interesting if he could be quite clear about whether the SI covers the minimum necessary to get the statute book in order if there is no deal, or whether, as he suggests, the Government will go a little further and lay out some sort of attractive regulatory pas de deux for the EU post Brexit which would make it easier to legislate for an asymmetrical solution. That is probably not quite what is happening here, but it would certainly be interesting to get the Minister’s response.

Given that the results are coming in of the vote in another place in which the Government’s proposals have been roundly defeated, we may be witnessing a transition to a slightly different arrangement, which we do not need to comment on just yet. In the circumstances it would perhaps be best to let the Minister respond to the points made. I hope to hear from him very shortly.

Good Work Plan

Debate between Lord Fox and Lord Stevenson of Balmacara

Tuesday 18th December 2018 Lords Chamber

[Lord Stevenson of Balmacara (Lab)]

My Lords, I am grateful to the Minister for repeating the Statement made yesterday by his right honourable friend the Secretary of State.

Taken together, the Good Work Plan and the response to the first full strategy from the Director of Labour Market Enforcement make a very good start to putting flesh on the bones of the aspiration in the industrial strategy to put good work and developing better jobs at the centre of the vision for a full employment Britain. There is a lot to welcome in these documents. However, I venture to suggest that the most important decision announced yesterday was to accept the Taylor recommendation that the Secretary of State should take responsibility for promoting the quality of work. That should transform policy in the department, and we will be keeping a close eye as things go forward.

Indeed, Matthew Taylor should be very pleased that the Government have accepted the vast majority of his recommendations, and Sir David Metcalf ought to be similarly delighted that most of his 37 recommendations have also been accepted. Something must be happening in the water that they are drinking at 1 Victoria Street—or maybe that is the result of all this good news.

It is worth remembering, however, that nearly 4 million people are in insecure work in this country and 1.1 million work in the gig economy. At a time of low wages, stagnating productivity and growing insecurity because of Brexit, families across the country need reassurance and action so that our workforce feels valued and secure.

Some of the decisions announced yesterday—the introduction of labour market enforcement, abolishing Swedish derogation and ensuring that workers keep their tips—were originally Labour Party policies, but we welcome them without quibbling. We still have concerns about a number of points, which I hope that the Minister will be able to deal with when he responds.

First, although there has been some movement, can the Minister confirm that the question of abolishing the absurd difference between workers and employees in their employment status has been kicked into the long grass? If so, why? On zero-hours contracts, the Government will apparently legislate to allow workers to request a more predictable and stable contract, but the ability to request more stable hours exists already. Will the Government commit to placing an obligation on the employer to meet this request and, again, if not, why not? The agreement to the labour market enforcement recommendations is very welcome, but there is very little detail. Can the Minister confirm that the enforcement agency has the necessary powers and resources?

Finally, we welcome the increased penalties for successful employment tribunal claims, but these will make no difference if the current system for enforcing awards is not also strengthened. Some 35% of successful claimants currently do not receive their compensation. What additional action are the Government going to take to address the efficacy of tribunal award enforcement?

The Statement contains a very large number of instances of proposals for primary legislation to bring these announcements into being. I would be grateful if the noble Lord will confirm that, welcome though that is, realistic time will be made available for this in the near future. If so, can he give a recognised timetable?

[Lord Fox (LD)]

My Lords, I join the noble Lord, Lord Stevenson, in thanking the Minister for repeating the Secretary of State’s Statement. There is perhaps an inverse law here. We are at the end of a long day in a long Session and very few noble Lords are left in the Chamber. Despite that fact, this stands to affect more people than anything else the House has debated this week. It is important and it will genuinely help to improve the lives of millions of UK citizens. For that reason, we welcome the Government’s response to the Taylor review. We welcomed the review when it came out and the Statement sets in motion a number of important steps in the right direction. This has been a long time coming and it is unfortunate that the Minister’s department, along with every other part of government, has a lot of things to do around Brexit, meaning that important work such as this takes too long and is slow to come out.

The Government are right to reject open hostility to flexibility in the job market. Many people want and need the right sort of flexible job environment. Hopefully, these steps will move that forward. Flexibility should not be open to abuse. Workers need real control and choice over the work they take, which means giving them new rights and enforcing existing ones more stringently. The Government’s response has been a bit underwhelming in some cases. If the Minister will excuse me, I will go over a few areas where we think more work should be done.

The Government have said that they will bring forward legislation clarifying employment status and aligning tax and rights, but there is scant detail. Will the Minister fill out the detail or, if not, the process by which it will be forthcoming? The Government have also failed to genuinely address the need for a “dependent contractor”, set out as an employment status for people within the gig economy. The existing status of “worker” needs to be updated and redefined for the sort of 21st-century work that the noble Lord, Lord Stevenson, referred to. We need that status to guarantee gig economy workers minimum earnings, sick pay and holidays. The Government have ruled out a higher minimum wage for hours not guaranteed as part of a contract, and are now going through lengthy consultation. We welcome consultation and, in other environments, the Minister has been criticised for not consulting sufficiently—but it needs to be quick and direct and it needs to get to the point. Action to stamp out abuse of zero-hours contracts must be swift rather than convoluted and kicked into the long grass.

Ministers have refused to rule out reintroducing fees for employment tribunals after the Supreme Court ruled them illegal. They should take that step immediately and rule out reinstating those charges. The Government must show how they will help gig economy workers access occupational pensions. That does not seem to have been addressed and I will come back to it in a moment in relation to sexual equality.

To close, I have three other questions. The Taylor review said that those working in self-employment should receive the same state benefits as those in employment. Why, then, are self-employed workers with fluctuating incomes punished by universal credit? In a good month, their benefit is cut, but in a bad month, their benefit does not rise as much because the minimum-income floor kicks in. Therefore, will the Business Minister undertake to work with the Work and Pensions Secretary to ensure that universal credit is responsive to this kind of fluctuating income, perhaps by measuring incomes over a rolling 12-month period rather than on a month-by-month basis? This unfairness needs to be addressed.

Secondly, around 55% of workers on zero-hours contracts are female. The trade unions warn that the gender pensions gap now stands at about 40%. That means that disadvantages to pensions for zero-hours employees disproportionately affect female workers. Therefore, to avoid further disadvantaging women, the Government must act on Taylor’s recommendation to improve pension provision among the self-employed. What will the Government do to ensure that women in less stable forms of employment will be able to enjoy a secure retirement?

Finally, the University of Greenwich study from 2016 found that disabled workers on zero-hours contracts were often unable to get their bosses to make reasonable adjustments required by the law. They were often afraid to raise the issue because they felt that it might endanger their employment prospects and put them back on to benefits. What are the Government doing to protect disabled people in insecure forms of employment? How will they ensure that the 21st-century economy works for disabled people and not against them? I look forward to the Minister’s response to those questions.

Accounts and Reports (Amendment) (EU Exit) Regulations 2018

Debate between Lord Fox and Lord Stevenson of Balmacara

Tuesday 18th December 2018 Lords Chamber

[Lord Fox (LD)]

My Lords, I thank the noble Lord, Lord Henley, and his department for innovating and delivering two SIs in one package. I am not sure that this has been done before, but it is perhaps appropriate that the department that spearheads innovation should be leading on this.

I did a quick count back and I think that over the course of my career I have been responsible for 18 reports and accounts, all of which, I should say, were for UK-domiciled and listed companies, so many of the issues here do not apply. The Minister will be pleased to know that I will not be regaling your Lordships’ House with the benefit of that experience, because it is clear that there are many things that can be improved around financial reporting. There are an awful lot of deficiencies around reporting, but these are not the vehicles by which that improvement should be delivered, so the Minister can be pleased that I will not be using that for a long discourse.

I have two or three points on the annual reporting side and one very important problem that I think we have around the audit area. On the reporting side, the Minister mentioned the reporting protocols around payments to Governments for logging and mining activities. Will the Minister write to me and say what those are and underpin that there is no change planned between the two regimes as we move from one to the other? This is an area where a little more clarity would help.

Paragraph 7.12 of the Explanatory Memorandum covers where this instrument applies and when the change comes. I note that if a business is called on to restate its chart of accounts—which has happened in my knowledge, and happens from time to time—it has to go back through time and restate its accounts. I have to say that this change will make it an extraordinarily difficult activity in the event that any business needs to do that.

The Minister said that the Government have been working closely with business, but when we look at the consultation outcome we see that they have not been able to consult in order to minimise sensitivities in advance. It is not clear to me why they were not able to consult—perhaps the Minister will explain why it was felt not to be appropriate.

I turn to the audit side. This could hardly come on a more auspicious day, when we have the CMA making its comments about audit companies and we have the Kingman report with reflections on the fitness for purpose of the FRC. The Minister mentioned the FRC at least a dozen or 15 times. The role of the FRC in managing this rollover between the two regimes is crucial, yet we have, in the words of a very experienced practitioner in Sir John Kingman, the finding that the FRC is essentially unfit for purpose in how it is operating today, never mind with the extra responsibility that this SI puts on it. I would like to understand how the Minister thinks that this is going to be enacted by an FRC which is short of a leader and clearly short of the resources to manage its day-to-day job, without giving it extra responsibilities. I look forward to his response.

[Lord Stevenson of Balmacara (Lab)]

My Lords I am very grateful, as was the noble Lord, Lord Fox, to the Minister for giving a very concise and important overview of these two SIs. We are trying out a slightly different method here—trying to cut down on the amount of speaking that the noble Lord has to do at the Dispatch Box. I think that it has worked, so I hope it will be a model for others to come.

The three points I wanted to make have been covered by the noble Lord, Lord Fox, so I will not repeat them, but I want to say one thing in relation to scrutiny. The Secondary Legislation Scrutiny Committee has asked us to look at both these SIs with regard to a couple of points. I am happy that the Minister covered the points, so I do not need to delay the House on those matters. For the completeness of the record I also wanted to ask about extractive industries and whether there would be any impact in the way that those accounts will be treated consequent on the introduction of these SIs, if they are required. Again, a letter will be sufficient on that.

The noble Lord, Lord Fox, is right. It is a bit intriguing to find that the principal body which would have been responsible for this is going to be abolished before it has the chance to implement the changes made in the statutory instrument. I would be grateful if the Minister could confirm that, as I understand it, the independent review of the FRC, which I read with interest—it is a very good read indeed, full of spicy and rather spiky comments—is suggesting that the FRC needs to be replaced by a new, independent statutory regulator with stronger powers. Is that right and, if so, will it be completed in the timescale that is envisaged for this statutory instrument?

There is a letter—which is not the same as the report—which was sent to the right honourable Greg Clark MP by Sir John in parallel with his report, which looks at whether there is a case for a fundamental change in relation to who appoints company auditors. There are a number of extremely interesting ideas, particularly for PIEs—again, accompanied by well-phrased and rather pointed comments about the current state of play. They suggest quite strongly—although it is not clear whether the Secretary of State is going to accept this—that there would be a case for moving away from companies having responsibility themselves for appointing their auditors to a situation in which an independent, strong regulator, presumably the new body replacing the FRC, will have a probably quite significant role.. I assume that this decision will be undertaken by the new review, building on the work on the FRC, and of course the CMA review, which is rather surprising because that was only an interim report. I am a bit surprised that that is being taken forward already. If it is, fair enough—but will that review being undertaken by Donald Brydon, the chairman of the London Stock Exchange and Sage, take on the letter element of the Kingman report we have received today?

I have also looked at the CMA report. There is a considerable interest in how that might work. Obviously, it will considerably affect the viability, profitability and operating activity of the large companies that have been very successful in building up accountancy and audit-related functions in this country. It may not be a fatal change—it may be a necessary change—but, again, I would be grateful to get a steer from the Minister as to what exactly is going on here and what the pace of that would be, if it was decided to move forward.

Trade Barriers (Revocation) (EU Exit) Regulations 2018

Debate between Lord Fox and Lord Stevenson of Balmacara

Wednesday 28th November 2018 Lords Chamber

[Lord Fox (LD)]

My Lords, I thank the Minister for her presentation. I shall try to be brief but I do not want her to interpret my brevity as meaning that I think this is a well-presented policy. There are problems, and the problems are magnified by the nature of the challenge we will face. Assuming that Brexit happens—which these Benches do not—whatever the arrangements, non-tariff barriers will be a real issue for many businesses, big and small, across the country. So it is right that we are having this discussion.

I assume—because the Minister has not said otherwise—that, with or without an agreement, whether we crash out or agree, the Government intend that this is the direction we will travel in in dealing with non-tariff barriers. That is unusual because, in many of the other SIs we have discussed, we have tried to roll over or reproduce in British law things that exist now. That is a change.

The Minister mentioned the necessity of primary legislation if the statutory route were to continue. That pre-empted one of my questions. She then went on to make a virtue of a necessity—or a necessity as far as the Government are concerned—by justifying why a non-statutory route is preferable to a statutory one. We can perhaps come back to that.

The Explanatory Memorandum does a great job of explaining what we are not going to have any more. It goes into great detail about what the TBR does and then offers us eight lines on the proposal. If the Minister, in another life, was sitting on the board of directors of a large company and was presented with a paper making a big, important proposal that used eight lines of a full-page document, she might think that that was a little sloppy, a little cursory and lacking in detail. To some extent, it takes us for granted. There was more detail in the Minister’s presentation, however, and I thank her for that.

The Minister set out some reasons for the infrequent use and for some of the barriers and other issues. To some extent, as she said, we could have debated this in primary legislation and improved the system that we have now. However, it is not clear what is replacing it. It looks like a relatively informal system that is lacking in process. It is not clear how much resource the Government are prepared to put behind it or how individuals will operate within it.

The Minister has given a number of reasons and explanations and yet in paragraph 10 of the Explanatory Memorandum we see that there was no formal consultation. There are six paragraphs of anecdote. If you do not have a formal consultation process you are merely choosing the results; it is not a consultation. Essentially, the argument against a rolling-over of the TBR process is based on a series of anecdotes and not on a formal consultation. This lacks detail about what is to replace it, as well as a formal consultation.

As for what this process may or may not be able to achieve in the event that it is resourced, has a process and all the boxes and wires—which are not set out here—are joined up, we need to remember that the influence that we will be able to exert, compared with the influence that the European Union was able to exert, will be less because our market is smaller, about one-10th the size. So in dealing with the challenge of non-tariff barriers that our companies will definitely face, we might end up with a system that people have access to, but we will have a weaker punch and less of an opportunity to make anything happen. We will ultimately have a system where there is more friction, more problems for our businesses and a weaker way of resolving them. That is why I find this SI disappointing.

[Lord Stevenson of Balmacara (Lab)]

My Lords, I am grateful to the Minister for her detailed introduction to the SI. I agree almost entirely with the approach of the noble Lord, Lord Fox, and will follow a number of his points.

I am intrigued by this SI. The noble Baroness was right to point out that it does not do what the other SIs are trying to do, which is to replicate in a UK context what is currently happening because of our membership of the EU. I do not quite follow the logic. We are considering these SIs today in such large numbers because they transpose whereas this SI dismantles. The Government’s argument is that we cannot amend it but we can dismantle it. I do not get the logic of that. It seems that the Government could not do anything about it because anything they wanted to do would require primary legislation. That rather suggests that the Trade Bill, which is in limbo, is not appropriate for that. However, it seems to me to fit entirely within the parameters of the Trade Bill. I understand what the noble Baroness is saying but I do not get where we are going.

My second complaint is that the figures I have do not square with the figures that the noble Baroness used. I have just looked at the list of trade barriers which are currently reported to the Commission and, on a quick count, there appear to be about 1,000—there are 116 in agriculture and fisheries alone. If you count them by country—which I can do even as I speak—you will find that many of them are interesting countries, including the USA, which have a substantial number of trade barriers.

I am hearing a different story from the other side of the Dispatch Box about a pathetic structure which is hardly used and has industry turning away in droves. As the numbers show, however, that is not what seems to be happening; there are live cases covering a range of issues that play to this question of non-tariff barriers. It seems rather odd that we are trying to dismantle it. Those are my opening points. It is a system which the Government have taken against. They have decided in principle, for reasons I do not follow, that it would be much better if we were not part of the TBR scheme, or any TBR scheme, as we leave the EU, if we have to, on 29 March.

As the noble Lord, Lord Fox, said, there are clearly issues about trade barriers and how we are going to resolve them. Surely it must be the objective of the Government to make sure that we have a robust system in place to support our businesses and workers, who will otherwise be affected badly by countries which have decided, for reasons best known to themselves, that barriers should be erected. Given the new world order, in which might is right and where protections and tariffs are rife, we verge on the prospect of a very dangerous set of trade wars. It therefore must be appropriate for the UK Government to think hard about this, and it is not obvious that the right way to do it is to dismantle something that has some merit.

Why would the Government decide to replace the present statutory scheme, without formal consultation or proper notification, with a non-statutory reporting mechanism, which seems at its heart to simply rely on emails sent to local ambassadors in the hope that they will be able to do something about it? That does not seem to pass the test of a serious approach to supporting exporting.

I am intrigued why this responsibility—which clearly is not the flavour of the month within the department—is not given, to be beefed up and made more effective, to one of the two bodies that the Government will rely on if the Trade Bill ever goes forward. The Trade Remedies Authority deals with exactly these issues. Why does it not have this responsibility? If there is some doubt about whether it has the range or the skills to do it, the CMA will also be looking, through its state aid function, at similar areas. There is a perfectly good way of taking on this responsibility outside the department. Taking it outside the Department for Trade will give hope to those industries that do not naturally relate to BEIS or other departments such as Agriculture that the new body will set up expertise.

The Minister said that feedback on the effectiveness of the trade barriers regulatory system has been mixed. Without a formal impact statement being available—or maybe an informal one, as we have heard in other SIs—and without knowing what an adequate definition of “mixed” is, there are rather confusing messages coming back. “Mixed” does not mean a unanimity of views, so I take it that there were some dissenting voices. Would it not be sensible to set out clearly what the objective of the trade barriers system should be, what system is required to countermand these things, and to set up a proper consultation to come up with a solution that will command the support of those who have to be involved in it?

The argument seems also to rely on the fact that even though there is this system, it does not achieve very much and has rarely been used. The information I have—I do not know whether it is true—is that when the Confederation of European Paper Industries lodged a complaint that measures imposed by Turkey on the imports of certain varieties of paper were inconsistent with both the WTO and the EU-Turkey customs arrangements, Turkey immediately withdrew the unfair measures because of possible action through the statutory system. Even though it does not have a set of sanctions or a court behind it, the fact that this was formal and statutory-based was sufficient to get action. I do not understand why what might be a developing, long-term programme will be abandoned when the UK might have need of it.

If we are to get rid of it, what about the things that are present and still of value? The Minister did not give any detail. There is a market access advisory committee which monitors arrangements and puts forward recommendations, and there are lists published. Who will do that when we move into this new, semi-informal system? In particular, how will we organise in the UK the variable geometry that arises when different departments have responsibilities here? I do not think the issues that will be affecting Defra—such as the transport of live animals—will be in any way cognate with some of the other issues that have been raised. How will that be managed? In particular, in the future we will have a situation where the devolved Administrations—Scotland, Wales, and Northern Ireland if ever re-formed—will have direct trade responsibilities. How will their complaints be organised? Will that be done on an informal basis, and has that been cleared with the devolved Administrations? I suspect that they will have concerns about that. While we are on the topic of consultations, in the absence of a properly constituted market access advisory committee, where in the system will representatives, consumers, trade unions and businesses be able to feed in views and advice about this non-statutory system? Will this be done in some informal way, through Facebook perhaps?

The trade barriers regulations are only one area of EU legislation that deal with trade barriers and dumping. This SI before the House is part of a process, so where are the other pieces of EU legislation that deal with dumping and other matters? Specifically, what about Regulation (EU) 2016/1036 about protection against dumped imports and Regulation (EU) 2016/1037 on protection against subsidised imports? Can we expect those, and, if so, roughly what is the timescale?

There is also a transitional issue. There are a number of complaints apparently already in the system from the UK. What will happen to those if they have not been completed by 29 March 2019 and we have to leave the EU with no deal? What happens if there is a transition period? These are two separate issues. I put it to the Minister that the department should be issuing advice about those currently engaged. Even though they are small numbers, the issues are substantial.

I end by suggesting to the Minister that, rather than revoking the regulation, it might have been a good idea to make a greater effort to investigate whether the current system was truly effective and whether the fact that the statutory element was not used very often was a sign that it was working rather well, rather than the opposite. I generally agree with the noble Lord, Lord Fox, on this: this SI is somewhat undercooked.

European Union (Definition of Treaties) (Canada Trade Agreement) Order 2018

Debate between Lord Fox and Lord Stevenson of Balmacara

Monday 25th June 2018 Lords Chamber

[Lord Fox (LD)]

My Lords, the noble Lord, Lord Whitty, was right to highlight consumer and voter concerns about such matters—but I should point out that there are also business concerns about the Government’s stature in the trading environment. It is not just the content but the body language that goes with it. At the weekend we saw some appalling body language from senior Ministers about business and some of our most important exporters, so it is good that we can ameliorate that at least in some way with some positive body language here. It is good for us to be discussing this. Perhaps it is churlish of me to point out that the reason why we are discussing it is that we are in the EU, which has worked hard to deliver this treaty.

It is also heartening that we are discussing something that fits within the WTO legislative procedure rather than—sadly, and increasingly—within a worldview that is moving outside the WTO. So it ticks a number of multilateral boxes. As we have heard, Canada is of course an important current trading partner, and one that we hope to make larger. So CETA and its ratification are to be welcomed. It is a good arrangement and, clearly, as the Minister pointed out, the Canadians have made it clear that this is a framework by which a transition in the event of Brexit can be moved into a bilateral agreement between ourselves and Canada.

As the noble Baroness who spoke before me pointed out, it is clear that this does not include services—that is my understanding. I see that the Minister is shaking her head. Perhaps she might indicate which services are in and which are out. My sense is that very few are in. What would be the attitude towards a bilateral agreement on services between our two countries?

The Minister also pointed out that a working party to transition this has already been set up. Perhaps she could give us some sense of how long “swiftly and seamlessly” really means in terms of moving from one to the other. She used some examples; quite a lot of them were agricultural and food products. Clearly, Canada has a very strong agricultural industry. I would be interested to know what impact analysis has been done of the relative flows in both directions of agricultural and food products between our two countries. The Minister talked about growing trade—I think she used the phrase “hundreds of millions” in extra trade. What kinds of targets do the Government have for increasing the flow between the two countries?

It is all good—except the context in which CETA could be transitioned between our two countries really does depend on the nature of the arrangement we have with the European Union. Canada has already made that clear and has expressed unhappiness on, for example, the division of quotas and other such issues. Perhaps the Minister can tell us how these kinds of things feed in to our negotiations with the European Union.

The investment court system—ICS—has already come up. The Minister mentioned it, as did both the previous speakers. This is clearly an area that has raised people’s concerns. There is a perception that large multinationals will have an advantage in such a system. It is easy to understand that perception because this will be a complex and expensive process. How can the Government allay the fears of smaller traders and individuals that this will not be a charter for the larger, deeper-pocketed companies to play the system? Can the Government confirm that the ICS will be rolled over into any bilateral agreement should CETA be transitioned post Brexit?

Finally, the major exports between the two countries are in the engineering sphere, specifically nuclear reactors, boilers, machinery, vehicles and aircraft. I note that all these sectors could suffer severely under Brexit; for example, due to border friction, the restriction of movement of people, and exiting Euratom. There will be pressure on those businesses, so what assurances can the Minister give them? I note the particular importance in the aircraft industry of the Anglo-Canadian relationship at Bombardier in Belfast. Again, what assurances can the Minister give the workers there?

It is good that, instead of attacks on business by the Foreign Secretary or the Health Secretary, we are having a positive debate about business. CETA adds a long-term view to things, in respect of which business is desperately looking for stability. Within the context of those questions, we welcome this statutory instrument.

[Lord Stevenson of Balmacara (Lab)]

My Lords, I am grateful to the Minister for introducing the draft Order in Council which classifies CETA as an EU treaty, and to the others who chipped in to this debate. It is the second week running we have had a debate on trade. Let us keep the momentum going and have more of this. It is a good topic and will become even more so as we get on to the Bill that has been prefigured. This debate is important in itself but, as my noble friend Lord Whitty said, it is also a harbinger of how we might do deals in the future; in particular, how the Government might bring Parliament into the process.

It is interesting and therefore a bit ironic that this order is a draft of an Order in Council—one of the most obscure aspects of our legislative structure—and does not actually deal with the content of CETA at all. The Minister was kind enough to go over some of the main points in it, but of course, as the noble Baroness, Lady McIntosh, said, we lack an opportunity to discuss in detail some of the ways in which this framework agreement has been created. I hope that by the time we get to a rerun of this, or to any other free trade agreement that will be brought forward, we will have a much more substantial, engaged and expert debate on the mechanisms being created, the detail of what is or is not included in the free trade agreement and some idea of the process that we will be involved in.

US Imposition of Steel and Aluminium Import Tariffs

Debate between Lord Fox and Lord Stevenson of Balmacara

Monday 4th June 2018 Lords Chamber

[Lord Stevenson of Balmacara (Lab)]

My Lords, I am grateful to the Minister for repeating the Statement and I welcome her to the Front Bench—I think it is the first time we have had a chance to speak directly across the Dispatch Box. That was three pages’ worth and quite long on description but there was not very much on achievement. I wonder whether the balance was entirely right, given that it was mostly about the difficulties that firms and others will experience in the new situation and very little about what will happen to our own British firms and employees. I have to say that if the Government have been spending the last month seeking to change minds in the United States Government, it has been a spectacular failure, apart from making it very clear that they can do little themselves and that much has to be done in co-operation with the world’s larger trading blocs, including the EU.

The House of Commons Library briefing paper on the industry shows that the steel sector accounted for £1.6 billion of the UK’s economic output. Some 330,000 tonnes of steel are exported annually by British producers, roughly 15% of which are to the United States, so we are talking about a very substantial hit on the industry. The industry has about 600 businesses and 32,000 people are currently employed there. On this side, we make it very clear from the beginning that our concern and support is there for the employees of British steel firms, and their communities, which must be very worried about this questionable and ill-judged unilateral decision by the USA. What assessment have the Government made of the impact of this decision on jobs in the steel sector and the aluminium sector and the economic hit that will be felt, particularly on communities outside London? What representations had the Government made to the White House prior to this announcement, and what assurances were sought that these tariffs would not apply to the UK? Will the Minister put any documents relevant to that in the Library for us to look at?

Secondly, what other sectors of the economy are the Government concerned about? The President has mentioned in passing additional protection for intellectual property. Given the strength of our creativity industries, have the Government taken up that issue in particular? If so, will the Minister give us some detail? The Secretary of State announced the establishment of a US-UK trade and investment working group in July last year. What discussions have been had about steel and the other new tariffs at these meetings? Has it been convened to discuss this issue?

Turning to the Statement itself, I note that half way down page 2 it says that before the EU can take any direct action on countermeasures to come into effect, it has to consult member states. Will the Minister confirm that Parliament will have a chance to discuss these when this second round of discussions is requested? Secondly, although the Minister made it clear to the House that the department had been in regular contact with the UK steel and aluminium industries throughout all this and the Business Secretary had convened a steel council, will she give us details on who actually attends that council and what exactly are its programmes? What concrete steps, in short, will it take to help our industries?

[Lord Fox (LD)]

My Lords, I too welcome the repeating of the Statement in your Lordships’ House. I would not normally be speaking across the Dispatch Box and normal service will be resumed when my noble friend Lord Purvis is available. The noble Lord, Lord Stevenson, makes a good point in that this is very long on adjectives and very short on hope. He set out a very good analysis of the UK steel market. My understanding is that a large proportion of these exports are at the high-technology end of steel, so in a sense the bulk numbers we use for the amount of the total industry affected by this blind us to the fact that the high-technology end of our industry is disproportionately affected. I would like to understand the Government’s analysis of how this will hit that particularly important part of the UK steel offering, because this is an area in which we have excellent businesses and a recovering economy and this could be a very serious blow going forward.

The Statement says in robust terms that the tariffs have weak foundations in law. Elsewhere, Secretary of State Liam Fox is on the record as saying that they are illegal. Do the Government stand by the view that they are illegal, or are we going to continue to tiptoe around this issue?

The noble Lord, Lord Stevenson, also mentioned the US-UK trade working group. If it has not been discussing this issue, what is this group for? While the Minister is on her feet, can she tell us under what mandate this group operates? I am not aware that there has been extensive discussion in Parliament about the basis for future trade with the United States, so what is this group’s mandate and what has come back on steel?

It is clear from the Statement that if the EU decides to trigger its punitive measures, the Government will be part of that because we are part of the EU. If the WTO is brought in on a legal basis, it will be a drawn-out affair, going well past March next year. Assuming that the Government get their way and we exit the customs union, HMT will have a decision to make: will it continue to maintain the robust measures that we have talked about and sit in solidarity alongside our largest trading partner, or will the Government decide to side with the United States? Perhaps the Minister can talk us through that process.

Finally, Prime Minister Trudeau of Canada has been the most articulate in setting out how Trump’s use of the national security justification has been most hurtful and corrosive to the closest military allies of the United States. To some extent, that is alluded to, in a softer way, in the Statement. Can the Minister tell us if and when the UK will raise this in NATO and with NATO allies? If it has already been discussed, what was the result of those discussions?

Digital Economy Bill

Debate between Lord Fox and Lord Stevenson of Balmacara

Ping Pong (Hansard): House of Lords
Thursday 27th April 2017 Lords Chamber

[Lord Fox (LD)]

My Lords, as someone who has renovated a Victorian house, I know one thing to be true. It is all very well stripping off the anaglypta and the woodchip, slapping on some Farrow & Ball, improving the coving and putting up a dado rail, but if you do not tackle the fundamentals you are pretty soon raising the floorboards again. It is the roof, the electricals and the plumbing that call you out. I had hoped that the Bill would tackle the fundamentals of the nation’s digital plumbing. I hoped that it would put in train a really revolutionary revolution for our digital network and enable the whole country to participate in the digital economy I believe the Bill sets out to achieve. I still hope that is true, but I have my doubts.

Without a requirement for a fast digital delivery and a date for the arrival of that fast digital network, we will struggle. The notion of having a 75% threshold of subscription is a tricky way of going about this. We will have to use the reporting requirements that Ofcom is now obliged to follow—that is a move forward—to get it to report on how it is driving broadband usage. We are using the commercial arms of the same companies being asked to deliver broadband to promote the use of broadband itself. We have a closed loop that does not necessarily have an incentive to drive up to the 75% threshold. I would be more confident in the progress of this country in delivering this network if there was not a dominant player that sits on a Victorian asset of copper wire which it wants to sweat, and quite understandably. It has to be up to the Government and Ofcom to drive their desire to really move forward. We are closing the door on a fresh, shiny new Bill which still smells of new paint, but, just as with my house, I cannot help thinking that we will be raising the floorboards on this issue time and again in Parliaments to come.

[Lord Stevenson of Balmacara (Lab)]

My Lords, we welcome the amendments in lieu in the Motion moved by the Minister. Having said that, I think we are at liberty also to regret that they do not go further.

The issue that we are dealing with here, which I think has been well picked up by the noble Lord who has just spoken, is that 59% of rural Britain has no proper access to the internet and large parts of the country have not-spots. It is a cause for major concern. The root of the problem is that, while a USO sounds good and is an effective way of getting across the argument that the service should be for everyone, the reality is that, unless there are sanctions to make sure that it happens and an incentive in terms of investment to make sure that the funding is available for it to take place at an appropriate time, it will never happen. It is therefore only part of the story.

The narrative that we are unfortunately locked into appears to be one where the Government were initially unwilling even to have anything in statute which provided a floor for the activity here—we now have that with this amendment, although it is a very low floor—but they do not yet have the aspiration, embodied in amendments that this House agreed, to get the speeds up and widen the coverage as quickly as they can. We are stuck in a situation where the spirit may be willing but the flesh is certainly very weak. We are not in a position where we can say that we will be able to look forward to this in an immediate future.

The root of the problem has another source, which is the reliance on the European Commission’s requirements in this area. The Government have made great play of this, but the only legislative framework under which Europe is operating here, which will fall away in 2019 if the new Government get their way, is that there should be non-binding guidance on what constitutes a universal service, yet the Government have chosen to interpret that as a limit on what they do rather than an opportunity to go further. While we welcome what is here, we do not think that the mechanics chosen will do the trick, particularly when Ofcom has recommended a faster basic speed and a cheaper way of doing it, which would be at 30 megabits per second. As we have just heard, we may be back looking at this in very short order.

On mobile bill capping, which will help consumers who get themselves in trouble with their bills, we are delighted that the Government have accepted the amendment made by the Lords at an earlier stage.

Digital Economy Bill

Debate between Lord Fox and Lord Stevenson of Balmacara

Report: 3rd sitting (Hansard): House of Lords
Wednesday 29th March 2017 Lords Chamber

[Lord Fox (LD)]

My Lords, as someone who has proposed amendments that go some way in this direction, I welcome this move, which in some part meets what we propose elsewhere. I have one question around the wording:

“OFCOM must have regard to the statement when carrying out”,


its related functions. What exactly does that mean? Is that language replicated exactly for Ofwat and Ofgem? How should that regard be manifested by Ofcom?

[Lord Stevenson of Balmacara (Lab)]

My Lords, rather like the last speaker, I welcome this measure but am a bit nervous about it. The idea that the Government of the day should be able to set out their forward thinking in a way which is helpful to the regulatory functions is a good one. However, as other external viewers have sought to point out, it raises worries about whether the regulator is truly independent of government in that mode, and whether the Government might be accused of setting an agenda which would then be imposed through a well-respected regulator which everyone thinks is doing a good job in a way that might not have been the case had the process of primary legislation followed by regulations been the approach taken. I hope that when the Minister responds he will confirm that there is no intention for this measure to circumvent the clearly established arm’s-length relationships between the regulator and government. It would be helpful if he could do so.

In another Bill—I sometimes get confused, so I hope that I am discussing the right one—we talked about how the Secretary of State for Education has responsibilities in relation to the new body that is to be set up in higher education, the Office for Students. However, we think that it should be called the Office for Higher Education. In that Bill, the words “have regard to” the instructions given by the Minister are very much part of the way in which that system operates. However, that situation is different in the sense that the measure replaces an existing arrangement for a body which was not a regulator—HEFCE—and for which the only mechanism whereby higher education policy could be created was by letters of instruction. That usually takes the form of an annual letter to HEFCE which sets out the Government’s wishes for the future year, sometimes for several years ahead. I make that point simply because it would be helpful if the Minister could make it very clear that the model here is one of improving an arrangement which will be for the benefit of the exercise of the powers that already exist, and does not add new layers of bureaucracy or new powers, and that the intention is not to set an agenda or to curtail the independence of Ofcom, as I think the system would not work without it. Otherwise, I welcome what is proposed.

Digital Economy Bill

Debate between Lord Fox and Lord Stevenson of Balmacara

Committee: 1st sitting (Hansard - continued): House of Lords
Tuesday 31st January 2017 Lords Chamber

[Lord Stevenson of Balmacara]

My Lords, this is an interesting issue which has been drawn to our attention, and we thought it would be worth putting a probing amendment down. I am grateful that grouped with it is a more substantial amendment in many ways tabled by our colleagues from the Liberal Democrat Benches. Both bear on much the same thing.

It is quite common in commercial arrangements to find that there are limits set on ownership and control in proportions which are often around 30%, to reflect the ways in which people might control a market. Yet the way in which the Governments of the day have set up regulations to control the spectrum has not introduced any official cap. Amendment 54 suggests that it might be time now, given the intensity of concern about how much the spectrum is valued and how it is used, to have some form of competition cap, of about 30%. This probing amendment is there to invite the Government to comment on that.

Having said that, I am sure the Minister will want to cover another point, which I think will be the subject of other amendments later. We will come back to this, but I want to flag up now that the spectrum is not a single thing—I cannot think of the right word—and its value depends on which part of the spectrum we are talking about. Lower frequencies and higher frequencies are different, so to impose a 30% limit on the spectrum that any company can own would be slightly perverse, but the issue is important enough to raise the point. Future amendments may deal with the dispersion of the higher-value spectrum among operators, particularly in mobile telephony, where there is concern—I am sure that the Minister expects us to raise this at the appropriate point in the Bill—over the current way in which spectrum has been allocated among the existing players in this field, so that the larger ones tend to have more of the higher-value spectrum. This is an issue we will need to come back to, but it is not the subject of this amendment, which deals with a general concern about the possibility of a monopoly operating within this area, which might be dealt with perfectly properly by a regulator, but where it might also help if there was a specific cap. I beg to move.

[Lord Fox (LD)]

As the noble Lord, Lord Stevenson, intimated, Amendment 54A comes out of the same concern, but takes a slightly different view of the problem, placing the onus on the Secretary of State rather than Ofcom. The noble Lord, Lord Mitchell, spoke about fixed and mobile convergence, and at the heart of the concern here is that we are not talking about two separate markets when we talk about broadband and wireless; with the approval of BT’s acquisition of EE, one player not only has a dominant position in fixed line but already has the lion’s share of the spectrum already allocated, at 42%. As the noble Lord, Lord Stevenson, has said, this may come up in a different place, but it is at the heart of concerns expressed here.

Clearly the two weaker players were not allowed to join together, so we have an asymmetry in the wireless market, with two strong players and two weaker operators, which adds to the imbalance of spectrum allocation. We should be aware that spectrum allocation imbalance can clearly affect prices. It could affect access and also the speed with which technologies are rolled out: a land bank, or the equivalent, could be created.

It seems that Ofcom has already recognised this issue and is seeking to limit access to one of the bandwidths—the 2.3 gigahertz—but has not covered bands in the 3.4 gigahertz range so the principle appears to have been acknowledged by Ofcom but the measure has not been fully thought through. In a sense, we are debating how much of a problem this is, given that Ofcom has acknowledged that it is a problem.

This is, therefore, also a probing amendment, and it would place a requirement on the Government, rather than Ofcom, to assess the situation and come back with a thorough review of whether this really is an issue. Clearly there is a perception, but we need to measure that perception and publish some sort of assessment of whether 30% is the right limit and, indeed, whether there is a problem at all. I therefore ask your Lordships to consider this as a way of teasing out issues that, if they are not dealt with now, will come back to haunt us much later.