United Kingdom Internal Market Bill

Lord Naseby Excerpts

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

[Baroness Noakes (Con)]

My Lords, I support the government amendments in this group, but I put my name down to speak in order to address the other amendments tabled by the noble Baroness, Lady Bowles of Berkhamsted. Like her, I am concerned about the heavy-handed penalties that could apply in respect of the CMA’s information powers under the Bill.

The CMA has extensive information powers under the Enterprise Act 2002, as the noble Baroness, Lady Bowles, explained, which are needed so that it can carry out its competition functions effectively, in particular in the face of companies or sectors that are resistant to one of the CMA studies. However, there has to be a serious question about the information powers put into the Bill in respect of the office for the internal market. It should be remembered there was no clear consultation on this during the summer, so the proposals have not had a lot of serious attention.

The OIM will of course be focused on the effectiveness of the internal market rather than the behaviour of companies or sectors. I understand that the OIM needs to build up a picture of intra-UK trade flows in order to understand the scope of what it is looking at, and it should have the ability to request that information. However, to back up that kind of information gathering with extensive penalties is not right. It stands in stark contrast with the Trade Bill, which sets up the possibility of requesting information from businesses in respect of international trade—but it is very clearly a request, with no compulsion. My noble friend Lord Grimstone of Boscobel confirmed that in Committee on the Trade Bill.

The office for the internal market may well want to gather information from the devolved Administrations or regulatory bodies within the devolved territories. For example, it could be looking at whether particular provisions have a detrimental effect. That sort of information gathering is largely within the public sector, and the enforcement provisions in Clauses 39 and 40 do not make sense in that context.

Can the Minister say who the “persons” in Clause 39, whom the Government expect to be served with a penalty notice, are? Could one of them be, for example, the First Minister in Scotland, or one of her Ministers? If not, why not? I suspect that the serious information that may need to be extracted at some stage will come from the devolved Administrations. Why should businesses, which will be the victims of any abuses of the internal market, be treated in the way envisaged in the Bill?

So I support the noble Baroness, Lady Bowles, in particular in her Amendment 62A to try to shield small companies from these powers. I listened carefully to what the Minister said in his introductory remarks, which were very helpful, but I remain concerned that the CMA will use inappropriately the powers given to it by the Bill. There are no safeguards against that, so I hope that my noble friend will take this away for further discussions between Report and Third Reading.

[Lord Naseby (Con)]

My Lords, I should declare an interest in that I have a partnership with my wife to look after 40 acres of woodland in Bedfordshire. I thank my noble friend on the Front Bench. I have worked on a great number of Bills in this and the other place, and it is good that when we discuss things in depth, right across the Chamber, problems are raised and the Minister listens. I welcome enormously Amendments 62 and 63.

However, I share the concerns of some other noble Lords about the implications of Amendment 62A. It raises questions that ought to be considered—although I am not in a position to repeat what my noble friend Lady Noakes said. I hope that the Minister has listened to the concerns expressed from both sides of the Chamber and will find a means of ensuring that what might be very unusual cannot happen. I am sure that my noble friend on the Front Bench is listening. Some consideration should be given to including Amendment 62A, or something comparable, in the Bill.

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[Baroness Humphreys (LD) [V]]

My Lords, I support Amendment 64, which seeks to remove Clause 42 from the Bill. I thank the noble and learned Lord, Lord Thomas of Cwmgiedd, for tabling such an important amendment and for his excellent explanation and analysis of its intent.

Clause 42 empowers the UK Government to provide financial assistance for economic development in any area of the UK. At the outset, I want to make it clear that I have absolutely no objection to the UK Government making investments for economic development in Wales—nor, I believe, would anyone else in Wales. It is the intrusion into devolved powers that is so offensive. Those of us who live in the Objective 1 area of West Wales and the Valleys understand that our economy is weaker than those in other areas of the UK and that we live in one of the poorer regions of Europe. We have appreciated the EU’s investment in the past 20 years; for example, the investment in the A55, which provides such a vital transport link across north Wales, and the projects that we have seen come to fruition under the rural development fund.

In my contributions on Second Reading and in Committee, I said that investment in our region is desperately needed—it was before we received Objective 1 funding and it will be when it ends—but this clause gives the Government extraordinary powers to act in areas of devolved competence and in areas where the EU structural funds have never operated. It is extremely disappointing that, throughout this clause, there is no mention of consultation, joint planning of schemes, joint programmes of work or joint management of projects—all examples of the collaborative approach to investment programmes initiated by the EU that we have become used to. There appears to be no clear setting of objectives, other than, I suspect, that the Government’s prime objective is to see projects in the UK—in the Prime Minister’s words—emblazoned with the union flag. I have no problem with that either. In West Wales and the Valleys we are used to seeing EU blue flags or plaques on projects. They are an indication that the needs of our area have been recognised, and so it would be with the union flag.

There is, however, still no clarity on how needs will be determined and recognised in the UK under the shared prosperity fund, whether projects will be imposed or applications sought and, crucially for us in Wales, what impact there would be on our financial settlement. We still do not know whether a UK Government investment in a road-building programme, for example, would lead to a reduction in the Barnett allocation, or whether projects imposed on us would be financed by loans that require repayment by the Welsh Government. All this curtails the Senedd’s ability to deliver on its objectives and will have an impact on its ability to deliver on its manifesto commitments.

Of all the attacks on the devolution settlements in this Bill, this is probably the most blatant—so much so that the powers and responsibilities of our Parliaments do not even merit a mention. It is another example of the introduction of a new constitutional settlement by stealth, as I referred to in my speech on Monday. It is another item to add to the list of examples fuelling the interest in independence, which, under this UK Government, is reaching a level never seen before in Wales. People are witnessing the performance of an almost colonial Government emanating from Whitehall and comparing it with the more progressive Government and Senedd we see in Wales—a progressive Senedd that voted last week to allow councils to change the electoral system for local elections by introducing the STV system and open up the franchise for local elections to 16 and 17 year-olds in addition to their existing rights to vote in Senedd elections; importantly, it supported voter participation by paving the way for automatic voter registration.

I must admit, I am surprised that, after listening to concerns expressed by the noble and learned Lord in Committee and hearing the support for his stance from other noble Lords, the Government have not come back on Report with an amendment of their own that recognises and ameliorates the impact of this clause on the devolved Parliaments.

In a Bill about the regulation of the UK internal market, this clause and its assault on the devolution settlements has no place, and I support Amendment 64 to remove it. I hope that the noble and learned Lord will be minded to call a Division on the amendment. If he does, he will have the support of these Liberal Democrat Benches.

[Lord Naseby (Con)]

My Lords, I will speak first to government Amendment 66, on how the power in Section 42 will be used. There is a very welcome statement that there is to be an annual report, which can be fully debated in Parliament. We had some discussions about this in Committee, and this amendment is very welcome.

Turning to Amendment 64, I hope that the noble and learned Lord, Lord Thomas, will not find it offensive if I allude to the fact that I used to own ferrets. Ferrets are beautiful animals, very ingenious and very inquisitive—but of course they have one failing. Sometimes they succeed in catching or flushing out rabbits, but quite often they turn around, get distracted and think of something far less important. Listening to the noble and learned Lord’s introduction to his amendment, it was based, according to him, on finding in paragraph 3.1 of the Red Book something that he thought was relevant to this debate on Clause 42.

I am sufficiently brave to suggest that he has perhaps forgotten what the basic elements of this Bill are. On the front page, it says:

“To make provision in connection with the internal market for goods and services in the United Kingdom … to authorise the provision of financial assistance by Ministers of the Crown in connection with economic development, infrastructure, culture, sport and educational or training activities and exchanges”.


This is what the whole Bill is about. So here we have before us an amendment which is a pretty wide-sweeping reversal of that primary purpose of the Bill. A whole new concept is being proposed in this new clause, at a time when the whole country faces massive challenges arising from Brexit.

After five days looking exhaustively at the Bill in Committee, lo and behold, here we are on Report, and this pretty revolutionary amendment is put forward. For me it is basically pre-empting the role of the Chancellor of the Exchequer and the Government of the day. It does not matter what the colour of the Government is: in structural terms it pre-empts the Westminster Government, setting up a whole new semi-department, with little oversight and, frankly, huge costs. There does not seem to be any constraint on it at all. In my judgment it is way outside the scope of the Bill and should be rejected.

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

The noble Lord, Lord Flight, does not appear to be present in the Chamber and the noble Baroness, Lady McIntosh of Pickering, has withdrawn from this group, so I call the noble Lord, Lord Naseby.

[Lord Naseby (Con)]

My Lords, I cannot support this amendment. We had a considerable debate on the OIM in Committee. There are already too many examples in the United Kingdom of where a service can be challenged, one way or the other, particularly in the financial services area, where there is the Financial Services Authority and the appeal mechanism of the Financial Ombudsman Service.

My experience is in the area of what are called doorstep loans. There is, of course, a rogue element, and that must be dealt with, but genuine operators have been servicing that market for decades, including the credit unions and two or three other companies of the highest repute. However, at some point the FSA may say that what they are doing is absolutely right, while five minutes later somebody has appealed and the ombudsman says the opposite.

We must have a uniform, single agency to deal with. The decision made by the Government to put the OIM underneath—for want of a better phrase—the CMA is absolutely right. This amendment would be a retrograde step that would confuse everybody.