Green Gas Support Scheme Regulations 2021

Lord Naseby Excerpts

Tuesday 9th November 2021 Grand Committee

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)]

My Lords, since this draft SI was laid before the House on 9 September, a minor correction has been made to the Explanatory Note to highlight that the scheme is intended to end in March 2041.

The UK is the first major economy in the world to set a legally binding target to achieve net zero greenhouse gas emissions by 2050. Between 1990 and 2019, our emissions have decreased by 44%, which is the fastest reduction in the G7, and we are continuing to advance sustainability through the Government’s Ten Point Plan for a Green Industrial Revolution, the net-zero strategy and, most relevant to this policy, the heat and buildings strategy.

Currently, the heating of our homes, businesses and industry is responsible for 21% of the UK’s greenhouse gas emissions. The decarbonisation of heat is recognised as one of the biggest challenges in meeting our climate targets, requiring virtually all heat and buildings to be decarbonised. Increasing the proportion of green gas in the grid is a practical, established and cost-effective way of reducing carbon emissions and contributing to the UK’s net-zero target, lowering carbon emissions from both domestic and industrial gas boiler use.

The green gas support scheme is a Great Britain-wide tariff-based scheme supporting new biomethane plants injecting biomethane produced by anaerobic digestion into the mains gas grid. It is expected to contribute 3.7 million tonnes of CO equivalent of carbon savings over carbon budgets 4 and 5, and 8.2 million tonnes of CO equivalent of carbon savings over its total lifetime. This is equivalent to taking approximately 3.6 million cars off the road for a year. The green gas support scheme is expected to help support high quality jobs in the renewable energy sector at a time when economic recovery is, of course, so important. It is anticipated that, when taking into account both direct and indirect jobs, the green gas support scheme could support up to 1,600 jobs per year during the construction phase of plants and up to 1,000 jobs once plants are fully operational.

Our analysis suggests that over two-thirds of existing biomethane plants are in fact located in rural areas, with 80% of all GB plants located in areas with a lower than average gross value added. We expect plants supported by the scheme to follow similar trends and therefore contribute to the Government’s levelling-up agenda. The Government believe that it is appropriate for gas consumers to pay towards decarbonising the gas grid, and therefore we have taken the decision to fund the green gas support scheme through a levy. The levy will be the sole funding source for the green gas support scheme and will be applied to all licensed fuel gas suppliers.

Of course, the Government acknowledge the impact of rising gas prices on consumer energy bills, and we are implementing stringent budget control measures to ensure that the costs of the levy are as low as possible and cannot rise unexpectedly. The cost to an annual gas bill will be relatively low, starting at around £2.50 per year, and it will peak at around £4.70 per year in 2028 for an average gas bill, assuming that we make a transition to a volumetric levy.

During peak years of production, biomethane plants incentivised by the green gas support scheme will produce enough green gas to heat around 200,000 homes, which would otherwise have been heated by natural gas.

While we are launching with a per-meter point levy that provides a high certainty of costs to both suppliers and consumers, the Government recognise the benefits of a volumetric levy that aligns costs more closely to gas consumption. We have committed to transition to a volumetric levy as soon as possible, subject to overcoming the feasibility issues, which include the impact on energy-intensive industries and other important UK businesses.

In conclusion, the scheme established by this statutory instrument will support ongoing investment in the biomethane industry and enable the development of new production plants for the injection of biomethane into the gas grid. In supporting this investment in new anaerobic digestion capacity, we expect to support more jobs, growth and innovation in the biomethane industry, while delivering important carbon savings, which are a vital part of meeting our overall net zero targets. I therefore commend these draft regulations to the House.

[Lord Naseby (Con)]

My Lords, I have come to learn rather than to criticise or analyse in much depth. I was on the Select Committee on energy in the other place and I have tried to keep up to date with developments. I congratulate my noble friend on the fact that, according to his statement, we are the first in the world to go down this track.

My questions are really exploratory. I looked particularly at page 70 of the extensive documentation. First, I have a question about energy crops. It seems that if we are starting in a new area, the bringing together of waste collection is quite a challenge, whereas energy crops by definition are probably on a 12-month cycle. Therefore, the 50% limitation that is mentioned here, while probably the right strategy in the medium term, seems a bit of wishful thinking, certainly in the initial stages. You have to have energy crops to get the thing going.

Secondly, what is the estimated time required to set up any of these plants? Are we talking about a year, 18 months or two years? That is fairly key.

Thirdly, there is the question of the intermix of the gas provided by this route alongside gas from the North Sea. As far as I can see—I have not done an in-depth analysis—there is no reference to this. Is there complete compatibility or does there need to be treatment one way or the other to ensure compatibility in the mix of gases going into the grid?

There is another area that concerns me. Like so many others, I was previously in local government. How will we ensure that local government waste collections collect food waste and other waste suitable to feed these new plants? I do not know the proportions, but at this point in time we in central Bedfordshire are separating only recyclable and non-recyclable waste. I do not know what is happening in the rest of the country, and an update on that would be very helpful.

I thank my noble friend for taking this forward; it is crucially important. I will do my very best to help him on the journey forward.

[Lord Grantchester (Lab)]

I thank the Minister for his explanation of the regulations before the Committee. They are important, because they establish the new green gas support scheme as a replacement for the renewable heat incentive, which closed to new applicants on 31 March this year. This scheme will begin on 1 April 2022, with a reach back to the scheme’s launch date, due to be 30 November this year.

This new scheme is for new deployment and excludes equipment and plants used to register under the RHI scheme, so can the Minister confirm that there will be no crossover of payments between the schemes and that there is therefore little likelihood of much new biomethane coming forward, certainly during the retrospective six months but also for some time to come as new plants come on stream? How soon, and in what number, does the Minister’s department expect applications for new plants to be built and come on stream? It would appear to be quite quickly, as payments will last for only 15 years in a scheme of 19 years until 2041. I presume that the department has confidence in the speed of decision-making, the planning process and the construction phase, all of which will need to go smoothly to encourage speedy deployment.

I must also admit to having some déjà vu moments as I read through the details of the scheme, with recollections of how Conservative Governments regarded such schemes in the past. When I read under paragraph 7.3 of the Explanatory Memorandum that tariff rates

“will be set at a level that aims to encourage continued deployment and ensure value for money”,

and, then, under the very next paragraph, that

“a degression mechanism … will reduce tariffs if certain triggers are met”,

I recall the devastating cutbacks introduced by the Conservative Cameron Government, which slashed support for wind and solar, devastating the industry and undermining investor confidence so tragically. The misprint in paragraph 7.4—

“compromise of an annual tariff review”—

only underlines the impression that undermining support for deployment, especially in conjunction with some sort of levy control framework coming back disguised as a budget cap, will be another feature of this scheme.

It also suggests that few lessons have been learned by the Government. The levy control framework became a politicised mechanism that defied industry understanding and eventually had to be scrapped. Can the Minister give more details today to give confidence that the balance between encouraging deployment and payback to investors will not suddenly lurch towards ill-defined value-for-money analysis being undertaken at the stroke of the department’s pen? Those lost years after those experiences for the solar industry, as well the jobs that were lost, have contributed to the climate emergency that is yet to be recognised fully across government.

Continuing further into the details, I commend the Government on the impact assessment accompanying the regulations. It gave greater insight into the set-up of the scheme and the changes from the RHI regime. This scheme will mandate biomethane producers to produce at least 50% of their biomethane from waste. On page 70 of the impact assessment, the full feedstock energy mix is identified, with 50% of the waste expected to be food waste. Can the Minister confirm whether there is a full definition of food waste that includes food waste in all its various unfortunate and distinguishing forms? My understanding is that this refers not merely to restaurant, domestic household and other post-consumption end-of-the-food-chain waste. It should also include waste that does not even reach the food chain, such as food being rejected or suddenly no longer wanted by supermarkets; this can befall farmers and growers, especially in salad crops and vegetables.

Has the Minister’s department worked closely with colleagues at Defra who are working to reduce food waste through recycling schemes and local authorities? Can he also say what analysis has been undertaken by the department to consider the effects on the renewable fuel obligation undertaken by the Department for Transport, which reuses cooking oils?

I am not aware of the definitions and analysis of “food waste” under the RHI scheme, but I remember that, at one time, miscanthus growing was an important feature of biomethane production plants. In the department’s analysis, maize is the next important feedstock, at 20%, along with agricultural waste. However, I note, under “Non-monetised costs and benefits”, which the Minister mentioned in his opening remarks, the effect on the rural economy. The analysis states that

“two thirds of … plants are located in rural areas, with 80% of all GB plants located in areas with a lower than average GVA.”

I welcome the positive effect that this will have on rural areas. I also note that many properties are not on the gas grid in these rural areas.

National Security and Investment Bill

Lord Naseby Excerpts

Committee stage
Tuesday 16th March 2021 Lords Chamber

[Baroness McIntosh of Pickering (Con)]

My Lords, I am delighted to support Amendment 67 and, by the same token, everything that my noble friend Lady Noakes said in connection with her amendment. The two dovetail nicely together. It will be for the Government to determine which drafting is the best. I welcome my noble friend Lady Bloomfield to her position. I am delighted to be in the Chamber rather than in the virtual Chamber; it is an altogether more pleasant experience.

The consequences of the current drafting of Clause 18, as so ably set out by my noble friend Lord Hodgson of Astley Abbotts, together with Clause 2(2), leave everyone in a very precarious position, as the parties involved would have literally no clarity as to any certainty or finality. My understanding is that the parties would have to proceed to complete the transaction before any time limit started to run. Perhaps my noble friend the Minister could clarify that.

I welcome Amendment 67 in particular as giving clarity. I thank the Law Society for bringing it to our attention and my noble friend Lord Hodgson for bringing it forward, with the able support of the noble Lords, Lord Clement-Jones and Lord Bilimoria. I hope that my noble friend the Minister will look favourably on these amendments. If she is not minded to, will she undertake to bring forward amendments of her own? It would be very unfortunate to leave the parties in what my noble friend Lord Hodgson described as a no man’s land, without any degree of clarity or finality.

[Lord Naseby (Con) [V]]

My Lords, I very much welcome the amendments from my noble friends Lady Noakes and Lord Hodgson. Any of us who has worked in financial services, either before we came into Parliament or while we were in Parliament at certain stages, knows that it is difficult enough to put together a financial situation, but that the worst thing in the world is to not know the date by which something must be concluded.

Indeed, I reflect that London is, and I hope always will be, a leading financial centre in the world. In that context, we need certainty. Noble Lords will know that I have worked in south Asia. There was continually a degree of uncertainty there on some aspects of financial matters. In fact, major companies always had somebody to explain things to them, or to manoeuvre, in the nicest possible way, a situation. We do not want any of that. We really do want certainty and not this no man’s land that has been referred to.

I wonder about just one point, though. There might at some point be a situation where circumstances are such that, if these amendments are made or made in a slightly revised form, there must be some reserved power for national security. We have possibly experienced it in the pandemic that we are currently in. Some countries smaller than ours have suffered major power failure, and one could see the whole of the City of London being taken off the grid and everything else due to some unexpected event.

I am very much behind what my noble friends said in their amendments. I hope that the Government will respond to them, because they are needed, but I will understand if there is some national security dimension to the Bill that is not immediately obvious.

--- Later in debate ---

[Lord Naseby (Con) [V]]

My Lords, I am grateful to my noble friend Lord Hodgson for tabling the amendment because what is behind it is absolutely right, as a number of my noble friends have said in the debate. That is fine, particularly in a situation whereby we are hoping to set the environment in which new companies can be created. After the pandemic, we are highly likely to see a number of movements in that area that would not normally happen.

One area on which I have a slight query is the preference to be given to someone who has done it before, particularly if they are not a company but someone who is handling the matter. That gives an advantage over someone who has not done it before. Therefore, regarding the point made by the noble Baroness, Lady Bowles, about a time limit or distance limit in terms of time, there needs to be some stop on that. Otherwise, an unfair advantage is given to one party over another.

Another element that I worry about a little, which covers security matters as much as anything, is that some people out there are enormously creative in terms of manoeuvring and so on. Two things may seem similar but can be yards apart—miles sometimes. Not all that is written on the outside packet of a product or company represents what is happening underneath.

While I support the broad thrust of my noble friend Lord Hodgson, I have those reservations and shall listen carefully to my noble friend on the Front Bench.

[Lord Clement-Jones (LD)]

My Lords, the noble Baroness, Lady Noakes, has coined another phrase that will run through this Bill—notably, “practical impact”. It is interesting that among those of us who have taken part in the debates on the Bill many have a practical understanding of what its impact could be. We have been in walks of life that have brought us into the investment community—not least the Minister himself—and we see the potential for major issues arising under the legislation because of the way in which it is drafted. This group of slightly disconnected amendments illustrates that. The noble Baroness, Lady Hodgson, and my noble friend Lady Bowles forensically took us through the amendment and Amendments 67B and 67C. I shall come to the question on whether Clause 30 should stand part of the Bill in a moment.

However, the amendment is definitely the kind of red tape-busting amendment that we need. My noble friend Lady Bowles said that we needed provisions that actually met the needs of the investment community and were tailored to it. The amendment is a classic example of what could be done in terms of making sure that we do not have a situation in which companies have to make notification after notification. The inter- twining of the mandatory and the voluntary notification aspects provided for in the amendment is extremely important.

Then we come to Clauses 19 and 24, and Amendments 67B and 67C. The noble Lord, Lord Hodgson, also has a way of coining a phrase, such as “stop the clock” provisions, which again give the Government all the cards and the poor old investor could be stuck for some period of time. As the noble Lord pointed out, the extent of the powers in terms of the periods are already quite long—75 working days or 15 working weeks for a national security assessment, or 30 working days or six working weeks for the initial screening period. We are not talking about modest periods but, rather like the referee in a rugby match, the Government can stop the clock and there is no control over that, as far as I can see. Therefore, we on these Benches firmly support those amendments.

On Clause 30 stand part, I liked the phrase of the noble Baroness, Lady Noakes: “stuff these companies with public money”. If that was the case, it would be pretty egregious. Now that noble Lords have drawn our attention to it, we can see that the Explanatory Notes on Clause 30 are vanishingly small. There is virtually nothing in there: there is no control over what the Secretary of State does. He may have to give a report if it is over a mere £100 million—and what is £100 million but small change in the circumstances? The Secretary of State can make more or less any decision and then say, “We have made the decision, but we have plenty of cash that we can stuff into your pocket.” It is the opacity, the lack of reporting and any real control in Clause 30 to which the noble Lord, Lord Hodgson, has rightly drawn attention. This is another area where I hope the Minister has something to say that not only gives quite a lot of further assurance but undertakes to create greater control over the powers in that clause.

After a bit, one gets a feeling for a Bill, and this one seems overly weighted in favour of the Secretary of State. The Secretary of State is more or less footloose and fancy free, and it is the poor old investor who will have to bear all the consequences.

--- Later in debate ---

[Baroness Bowles of Berkhamsted (LD) [V]]

My Lords, I added my name to the amendments of the noble Baroness, Lady Noakes, as they are yet another way to incrementally reduce the various points of uncertainty. It is notable how many of these can be found as we go through the Bill. As the noble Baroness explained, these amendments relate to the time for accepting a mandatory notice, from which other time periods can also flow, and then shortens the time for deciding whether to issue a call-in notice. As she explained, this is not meant to be part of the assessment and can therefore be short.

Now that the noble Lord, Lord Lansley, has explained his take on solving what is basically the same problem, I wonder whether it is better to look at the whole period, or to keep it cut up into segments so that people know where they are as they go along. As the noble Lord explained, it is very important not to start the process with two “as soon as practicable” requirements, because that just looks like a bottomless pit.

I will not repeat what has been said, and I am sure I can anticipate the Minister’s answer, but it seems that at every point in the Bill, the balance of convenience rests with the Secretary of State and the department. It does not make for a good business environment when there is no pressure put on the department. It reminds me of conversations I had not that long ago when I was chairing a regulatory strategy group looking at doing business in China. The repeated refrain from the business side was, “How do we get legal certainty?” The answer was always that you cannot; it is when the party decides. That is where this Bill puts us, and I fear the collateral damage it will create. I regret that I have to use the language of warfare and bombs to bring that home, but this should be made much more business-friendly.

[Lord Naseby (Con) [V]]

My Lords, I shall be very brief. I am full of admiration for my dear noble friend Lady Noakes for the thoroughness with which she has trawled through the Bill and these particular aspects. I have been in and have knowledge of a situation of a mandatory notice—I make no comment on the other aspect—and my noble friend is absolutely right: we need certainty in life. Whether five working days is the appropriate length of time I personally am not able to judge, but it seems entirely reasonable, and if its sponsors and their experienced colleagues from the City believe in it, I am more than happy to go with it. It does not seem to allow for any wriggle room; the worst thing in politics and making law is to allow for wriggle room, so I am absolutely behind Amendment 49.

[Baroness Bennett of Manor Castle (GP) [V]]

My Lords, the noble Baroness, Lady Noakes, outlined very clearly what this group is about. She may not be entirely surprised that I am coming from the opposite angle, although we can perhaps agree that this is a question of balancing public good—making decisions about national security—versus private profit and convenience. The financial and other implications that might arise from more time being taken over whether or not to progress are weighed against both the chance of missing something important and using significant public resources, making a fuller assessment unnecessary.

I am here, rather unusually, to defend the Bill against the amendments. Broadly, in this debate we have heard a great deal of uncertainty about how the Bill, once enacted, will work: how the details will play out in practice, how many firms will be involved and what resources will be required. I am not sure how five days was arrived at as a firm deadline, given that there is such uncertainty about the actual operation of the Bill. As it currently stands, deciding whether to accept a mandatory notification should take as long as it takes; it should not be subject to an arbitrary—a very short —deadline.

National Security and Investment Bill

Lord Naseby Excerpts

2nd reading & 2nd reading (Hansard) & 2nd reading (Hansard): House of Lords
Thursday 4th February 2021 Lords Chamber

[Lord Naseby (Con) [V]]

My Lords, I too welcome the Bill. It follows on from the Financial Services Bill and the Trade Bill, and all of them follow on from the Brexit Bill. I know it is unusual, but I thank in particular my noble friend Lord Callanan on the Front Bench. He has been involved in all these Bills and frankly his work output is quite exciting to say the least.

Our nation has a clear determination to build our economy worldwide. As one who has lived and worked in south and south-east Asia, I find this period very stimulating. On the Bill specifically, I welcome the powers to call in and the extension to small and medium-sized enterprises. I have a small question: am I right to assume that “small” includes partnerships? I am also not clear what the linkage is with the City of London Corporation, particularly in the remembrancer’s department—that is the corporation’s legal side—and those commercial lawyers specifically dealing with international trade and inward and outward investment. That is something we can look at in Committee.

I have looked at the sensitive areas—all 17 of them. I wonder why the pharmaceutical and chemical industries are still not there. In addition, unsurprisingly as an ex-pilot, I wonder why aviation is excluded. If I added these three there would be 20, but at the moment all 17 will be watched over by this new investment security unit in the Department for Business Energy and Industrial Strategy. That is quite a challenge for those civil servants. I question what we are doing about having a closer link with the Foreign, Commonwealth and Development Office. Our embassies and high commissions could be our eyes and ears if they are properly briefed and if, at the coalface of wherever our representatives are, there is somebody senior who is properly briefed.

I note that there was concern in the Commons, particularly from the chairman of the Foreign Affairs Committee. He tabled new Clause 4, which would have added a framework of factors that the Secretary of State would have to consider when assessing a risk to national security. The chairman of the Intelligence and Security Committee also expressed concern and stated that there was a “scrutiny gap”. Have the Government reflected on the new clause, which was unsuccessful in the Commons, or certainly on the concerns raised? If so, will Her Majesty’s Government respond with their own amendment?

The Government are enthusiastically championing free trade. That is really good and exciting, but I have just one word of warning. There was considerable discussion on the Trade Bill on whether we should not trade with people allegedly committing genocide. The first reaction to that is: yes, correct. However, there are all sorts of allegations of genocide and we need to tread carefully. Far more frequently we have issues of alleged human rights abuses. We had that in the Overseas Operations (Service Personnel and Veterans) Bill and other Bills. Here in the UK we often see groups of former asylum seekers who seek to get back at the country where they were before with extensive lobbying against that country and any involvement with it. Yes we must have our own high standards, but we must take care not to be overinfluenced by every vested interest or pressure group. Equally, we must avoid a quagmire of mandatory and voluntary notifications, as highlighted by the Global Infrastructure Investor Association. Having said all of that, this is a hugely important Bill for the future of our nation.

Retail Sector: Unemployment

Lord Naseby Excerpts

Wednesday 27th January 2021 Lords Chamber

[Lord Callanan (Con)]

I am delighted to hear that the noble Lord is speaking up for Colne and for many other high streets, because they play a critical role in our smaller towns. We have brought forward £81.5 million from the £3.6 billion towns fund to kick-start local investment projects of the exact kind that he refers to. Of course, we have to accept that we cannot protect every job during this crisis, but we will help people to get through it and help them get back into work at the end of it.

[Lord Naseby (Con) [V]]

My Lords, I declare an interest as a trustee of the parliamentary pension fund. What action will Her Majesty’s Government take to ensure that the pensions of thousands of redundant employers, who mainly will be female and will have given years of service, will be protected and that these employees will be told exactly what is happening with regard to their pensions?

[Lord Callanan (Con)]

My noble friend makes a very good point. I appreciate that these will be concerning times for members of these pension schemes, but there are measures in place for these situations. We will ensure that we do everything we can to provide support for those who potentially will be impacted. The Pensions Regulator is working closely with both the company and the scheme to ensure that all prior commitments entered into are fulfilled.

Covid-19: Vaccine Trials

Lord Naseby Excerpts

Wednesday 13th January 2021 Lords Chamber

[Lord Callanan (Con)]

I pay tribute to the work the noble Baroness has done on this important subject. It is vital to point out that the vaccines have been deployed only as they have been proven to be safe and effective by our independent medicines regulator. Everyone from all communities can be absolutely confident that no corners have been cut. The Government are sponsoring content on social media channels and on a range of news media outlets to get this message out to provide information and advice to communities, in many different languages. I can tell the noble Baroness that, in the Oxford trial, 830 BAME participants took part out of a total of 9,531, which is just under 9%. That data is from September 2020.

[Lord Naseby (Con) [V]]

Is it not the case, though, that the key point is the sample profile, not just the raw numbers? In the case of Covid-19, the research looked at efficacy in adults across all ethnic groups, with some skewing for the older age groups. Against that, will the Minister confirm that the regulator would have been party to signing off the research in the first place?

[Lord Callanan (Con)]

The audio was a little unclear and I did not quite catch all of that question, but I can certainly confirm that the regulator is of course aware of all the information supplied on the research and the trials, and on the participants in the scheme, and signed it off for use by all communities.

Green Homes Grant Scheme

Lord Naseby Excerpts

Wednesday 6th January 2021 Lords Chamber

[Lord Callanan (Con)]

More than 1,300 companies are registered with TrustMark so far, of which 765 are registered with the scheme, including many businesses that operate nationally with substantial capacity to carry out work across the country, but the noble Lord makes a good point. We are well aware that we need to get more contractors and installers signed up to the scheme. We are actively working with TrustMark and the certification bodies to do that, but we need to ensure that the essential quality standards are met.

[Lord Naseby (Con) [V]]

My Lords, is my noble friend aware that he has made an excellent start with the Green Homes Grant scheme? I spoke to former constituents. However, just one element causes a problem: the need for an urgent review of the smart meter installation programme, particularly for those who want to take up this green project and have an old smart meter, which means they cannot switch suppliers. Will my noble friend look at this small handicap to those taking part?

[Lord Callanan (Con)]

I thank my noble friend for his question. The smart meter scheme is not part of the Green Homes Grant scheme. It is a separate scheme, for which I also have responsibility, but I would be happy to talk to him separately about the issues he raises.

United Kingdom Internal Market Bill

Lord Naseby Excerpts

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

[Lord Moylan (Con)]

This is very much how I read the clauses, but if noble Lords generally feel that I have got the wrong bit of the Bill, then I shall subside at that point.

[Lord Naseby (Con)]

My Lords, the news that my noble friend from the Front Bench gave us this afternoon is encouraging. Clearly, discussions have been taking place and issues have evolved from them. I do not think that any of us in your Lordships’ House expected every single one of the agreements necessarily to be in a state to be written in and accepted in toto. To hear that 30 agreements have been agreed in broad principle is very encouraging news.

As someone who had a commercial life before coming into the political world, I wonder sometimes whether all your Lordships really understand. A chief executive—such as I was for a division of Reckitt and Colman Group—needs to know, as a certainty, what is happening. They cannot call in the company lawyer and say, “Well, it’s no good, George, you telling me on the one hand this and on the other hand that.” They have spent 15 months producing a new product—or whatever it may be. I sat as MP for an industrial town, Northampton, and I know the industrialists there. I spoke to them on Zoom only yesterday morning, and they are deeply concerned. I then read that the reason why the Commons have disagreed with our Amendments 1, 19 and 34 is

“Because they will create legal uncertainty, which will be disruptive to business.”


I also reflect that I had the privilege—as some of my noble friends in the Chamber did—of being in the other place. They are elected by the people. They have close contact with industry and commerce. When I am told, in writing, that it will be disruptive to business and that is why these Motions A and A1 are before us, I accept it. We have done our part. We are a Chamber that asks people to reflect. We have done that bit and we have done it well. The time comes, at a certain point, when you have to decide one way or the other. In my judgment, Her Majesty’s Government have got it right at this point.

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

Two other Members in the Chamber have indicated that they wish to speak—the noble Lords, Lord Adonis and Lord Foulkes, and I will call them in that order. I call the noble Lord, Lord Adonis.

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[Baroness Hoey (Non-Afl)]

My Lords, I understand the pleasure that many noble Lords have in the fact that the Government have withdrawn—or want and are likely to withdraw—these clauses. However, it is a pity, in a way, that this House did not have the Statement from the Cabinet Office Secretary, heard already today in the other place, before discussing this. It is very wrong that that Statement will not come to this House before last business tomorrow. If you read it, you will find that much of what has been said is not set in stone. Yes, an agreement in principle was made yesterday—it is important to mention the words “in principle”—by the Secretary of State going over to Brussels. After all this time, he suddenly came back, after a cup of tea or, perhaps, a lunch, with something that was meant to make everything okay. It is important that your Lordships consider today what we are doing about this protocol and are under no illusion about what has now been agreed in principle by the Secretary of State and the European Union, and the co-chairs of the committee.

Noble Lords should look at why these clauses were originally put in. I accept that the noble and learned Lord, Lord Judge, has been very clear about the breaking of international law; he talked about the constitutional improperty. I urge your Lordships to think about the constitutional improperty of what is being done to a part of the United Kingdom. Let us be clear: nearly 45% of Northern Ireland people voted to leave the European Union; they voted to leave as the United Kingdom. We are not now in a position where Northern Ireland is leaving with the rest of the United Kingdom. This is important, because of all the safeguards that were being put in by these clauses. For example, the Commons Reason says:

“Because the regulation-making power conferred by clause 44 provides a necessary safety net to ensure Ministers can secure that qualifying Northern Ireland goods have full, unfettered access to the whole of the UK internal market.”


The other clauses were all designed as a safety net. Let us be clear: that safety net has now gone. We are now in a position where Northern Ireland will still be subject to the European Court of Justice, which will still exercise control there. Northern Ireland will be subject to any new European rules to do with trade. Much of the agreement announced by the Secretary of State is only for six months. What happens after six months when we have seen it on the ground? The proof of all this will be in the implementation. For example, we have already seen the very welcome announcement that, now we have left the EU, the Government can ban the export of live animals. That will not apply to Northern Ireland. There are even discussions that, if you move your dog from Great Britain to Northern Ireland, you will need a special permit. So let us not kid ourselves—to use words that are not very House of Lords—that we are not starting down the road of setting up Northern Ireland to be different and a place apart. We were promised that we would leave as a United Kingdom. Northern Ireland is not leaving the European Union in the same way as the rest of the United Kingdom. In future, noble Lords will look back on this as a very sad day for the unity of our United Kingdom.

[Lord Naseby (Con)]

My Lords, I think I am brave enough to suggest to the noble and learned Lord, Lord Judge, that his ruling or reading that Part 5 was illegal is not shared by those I have consulted since. David Wolfson QC said:

“The mere act of laying a bill before parliament which, if it were passed into statute, would breach a treaty obligation (and would amend domestic legislation bringing that treaty obligation into effect in domestic law) is not itself a breach of the treaty or of international law. Nor would merely laying such a bill be itself a breach of the rule of law”.


The noble Baroness who has just spoken is absolutely right. I had the privilege of being a very junior Minister in Northern Ireland. The safeguards of Part 5 of the Bill were there for a purpose, for a very difficult area of the United Kingdom. We all know that it needs sensitivity, understanding and, as anyone who has served in Northern Ireland will know, patience. Things do not happen quickly there—and against that particularly the Belfast/Good Friday agreement.

I welcome the joint statement received from the co-chairs of the EU-UK Joint Committee that:

“Following intensive and constructive work over the past weeks by the EU and the UK, the two co-chairs can now announce their agreement in principle on all issues, in particular with regard to the Protocol on Ireland and Northern Ireland.”


In my judgment, as a practical man, the original procedure has worked, not the threats from a certain section of the upper House. I therefore thank my noble friend on the Front Bench, who I imagine has been in detailed discussion with those who have come to this decision.

As an aside, I am someone who looks at votes and the results of Divisions. Noble Lords may have noticed that, in the first Division this afternoon, the votes of those voting for the Motion and, therefore, against the Government, appear to have dropped by about 100 from last time. On the second Division it dropped to 45. I venture to suggest that the Government have taken action, worked hard and made progress. It would be good if this House now got on and accepted some of the proposals from Her Majesty’s Government.

[Lord Cormack (Con)]

I do not think this is the occasion for a heated and contentious debate, although I say to my friend, the noble Baroness, Lady Hoey, that 56% of the people of Northern Ireland did vote to remain in the European Union. To assert superiority from a position of inferiority does not really do justice to the noble Baroness, whom I have known for many years, who served on my Northern Ireland Affairs Select Committee, and whom I admire.

I believe very strongly that the noble and learned Lord, Lord Judge, did this House, and this country, a service when he introduced his Motion at the end of Committee, which deleted the whole of Part 5. I was proud to support him, as I know my noble friend Lord Howard of Lympne was. We were devastated at the thought of a British Government—particularly, for the two of us, a Conservative one—putting themselves in a position where they were not destroying but tarnishing their reputation in the wider world.

However, we are we where we are, and I am extremely grateful to my noble friend for what he said this afternoon. Inspired by sitting on the same Bench as a Bishop, I say that there is more joy in heaven—as she well knows—over one sinner that repenteth; and there is more joy in the House of Lords over one Government who see the light than over many that are benighted.

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.

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Lord Naseby Excerpts

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

[Lord Empey (UUP)]

My Lords, the starting point for this group of amendments is, I suppose, that not one of the devolved Administrations has given its consent to this legislation. That is an unfortunate place to be.

However, I welcome the changes that my noble friend the Minister has introduced so far. Listening to the debate, it seems that the gap between the different amendments and the Government’s position is not huge; to be honest, I would have thought it perfectly capable of being bridged. I certainly urge that efforts to ensure it is bridged be pursued, because there is no point in having unnecessary divisions if they can be avoided.

I must say to my noble friend that consultation is in the eye of the beholder. Having been a devolved Minister for just under seven years, I have a little experience of what consultation actually amounts to from time to time. Occasionally, it can be extensive, planned and productive. On other occasions, you read about it in the Daily Mail before you have even got into the office. There is a coherent argument for having a codified process to ensure that consultation happens, and within a framework. We all know that Ministers and departments are sometimes very good at it, but occasionally and, sadly, all too frequently, that is not the case.

I totally accept that no devolved Administration can be permitted to have a veto over what happens in the whole of the United Kingdom, because, as my noble friend Lord Cormack just stated, the buck ultimately stops with the Westminster Parliament; that is totally correct. But one is brought to a position by one’s experience in these matters. What is being asked for in some of these amendments is not unreasonable and would be beneficial. We know that, as has already been referred to, vociferous nationalism is attacking at every opportunity the legitimacy of the United Kingdom. It has been used and abused. So, even though some sections in government may find it a bit tedious, having a structured consultation mechanism is a protection against those who would use it as an anti-unionist argument.

To give an example, due to the action of some of its parties, the Northern Ireland Assembly was unfortunately out of business for three years during the critical Brexit negotiations. We repeatedly asked Ministers what mechanisms they were going to use to consult the people of Northern Ireland about the huge issues arising from those negotiations; indeed, barely a day goes by now without another obstacle and tank trap appearing in the process. We were given assurances that the consultation would be very significant, but I can tell noble Lords that that did not come to pass. It was sporadic and haphazard—it certainly was not structured—and we have ended up today in the most awful mess, which, sadly, we will no doubt return to frequently in the months ahead.

We should not really have to have an argument over these issues because there is a broad level of agreement. I urge my noble friend to harness the different threads of the argument and ensure that we take a united position as we move forward with this legislation, whatever we happen to think of it. Setting out clearly that there must be consultation and that it must be done in a formal, structured way without any devolved Administration being able to frustrate the operation of the UK single market—as it will be referred to—is entirely reasonable. I hope that my noble friend will reflect on that when he sums up.

[Lord Naseby (Con)]

My Lords, one of the pleasant features of this Bill is the extent to which probing amendments have been put down by all sides. It is clear to me from the consultations we have had between debates and the periodic guidance we have received that, for once—this is not true too often—we have on the Front Bench two Ministers who have tried very hard to find a way forward in a controversial and difficult area. I pay tribute to that; it is particularly reflected in the amendment before us today.

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[Baroness Noakes (Con)]

My Lords, I am glad that my noble friend Lady Neville-Rolfe’s Amendment 30 is only a probing amendment. I very strongly believe that the UK’s internal market will be more robust as a result of this Bill and that it needs to cover all aspects of trade and professional activity occurring between the four parts of the United Kingdom.

However, like my noble friend, I have been struggling to work out just how important Part 2 is to businesses throughout the UK at the moment, and I also understand that there is relatively little current data on trade in services across the four nations. Given the exemptions that will apply to Part 2, the Government presumably do not think that the Bill will have very much real-world impact, at least in the short to medium term. I can see that it may be necessary to protect service providers in the future, if one or more of the devolved nations chooses to make it difficult for out-of-nation services providers, and, to that extent, I can see why we may well need Part 2 of this Bill. It would be good to hear from the Minister what he sees as the biggest problems that this Bill is trying to tackle.

[Lord Naseby (Con)]

My Lords, I think the House should be very grateful to my noble friend for putting this probing amendment down. All of us who have worked in the services industry, as I did before going to the other place, understand it very well. However, despite this, it is very difficult to comply with this part of the Bill.

The underlying problems I have are that, first, the services industry is a real growth market for the UK and shows every sign of continuing to be so. We must be very careful not to undermine it. I note my noble friend’s mention of consultation, which I am a great believer in; I have probably spoken about it on more amendments than anybody else. At any rate, consultation of only one month is not acceptable in any industry, particularly not at this crucial point.

I have two technical questions, having read and thought about this. First, what happens to those service industries that have no regulator, which would be a fair number of them? Sometimes they are in a licensed area, and sometimes they are not in any particular area, so it is not clear to me what happens to them. Secondly, will the register, when it appears, automatically approve every existing business in the services industry and transfer them across? If not, is there to be an appeal mechanism? Again, I ask these questions on a probing basis and look forward to my noble friend giving us some guidance.

[Lord Purvis of Tweed (LD)]

My Lords, it is very telling that three of the Minister’s noble friends were seeking clarification as to the purpose of this part of the Bill. The fact that answers are still being sought on Report in the House of Lords should be quite worrying for the Government. The noble Baroness, Lady Neville-Rolfe, is clearly an optimistic person. She believes that there are good reasons and it is just that, at this late stage of the legislation, the Government have not said what they are. We will give the Minister another chance to explain, in clear terms, what these good reasons are, and I wish the noble Baroness luck in trying to find out.

I also agree with the comments made about the grey area of businesses and people who are service providers and sellers of goods in the 21st-century economy. As the noble Baroness said, the previous reports of her committee show that a colossal part of the UK economy now sells goods and associated services. As my noble friend said, it is now commonplace for a huge enterprise such as Rolls-Royce to provide engine services but to retain the good and sell the service of providing that engine to many other markets; or, in effect, to provide generators on leasehold for UK engineering. That is just one example; there are many others, such as the sale of cars to many different households.

If a good is sold but the service is provided by the business enterprise, which part of this legislation will take precedence? If there is a dispute regarding a person who is selling a good that can be sold only if it is part of a service provision, what takes priority in this legislation? Is it the service component or the good component? Regarding those operating in other areas, be it creative services or other key areas, what legislative requirement would be considered first if there is going to be a restriction? We already know that there have been problems within the part of the legislation dealing with services. The next group of amendments, on teaching, illustrates that—the Government have had to clarify the position on education services. I am glad they have, to an extent; that is welcome.

The provision of water services brought into sharp focus the distinction between goods and services. When we raised in Committee the fact that Wales and Scotland operate under a different legislative model for the provision of water services, the Minister kindly wrote to me saying that the distinction in the legislation is between water services that are connected with an infrastructure and those that are not. How does that distinction come about in reality under Part 2? If Scottish Water, a service company that has one shareholder—the Minister—and the infrastructure of which is owned by the Minister, seeks to deliver different services in the future, that will come under the scope of this legislation. It is exactly the same enterprise and the same entity, but if he wanted to sell the infrastructure, that is excluded. I simply do not understand that. The Minister said in his correspondence to me that the question of whether the process needs to be extended is being looked at actively. The question is: when the Government have finished the process of looking at the areas to exempt, what will be left? That was the point made by the noble Baroness, Lady Noakes. What are the problem areas the Government are seeking to identify?

I turn to an issue that has not been addressed sufficiently in Committee. I asked the Minister why the legislation excluded the Isle of Man from consideration as part of the UK for goods but not services. Under the Bill, any services provided from the Isle of Man are considered to be within the United Kingdom; goods sold from the Isle of Man are not. We all know that service provision from the Isle of Man is huge—financial services, et cetera. That is no surprise, because if you are a service provider who wants to operate in a part of these islands that has no corporation tax and a wholly different set of beneficial conditions for your business, why would you not want to be based in the Isle of Man? If the Isle of Man is considered to be covered by this legislation, why have the Government brought forward amendments for consultation that do not include the Government of the Isle of Man? If services being provided from the Isle of Man fall within the scope of this legislation, there is a clear gap. Why would you not consult the Manx Government regarding any regulations that are going to be put in place?

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It worries me that, on all these matters, we are some way off bottoming out the detail of this section of the Bill. It is now quite clear that it raises issues around other parts of the education services and the professional services in the care sector. I would be grateful for any observations the Minister can make to clarify this, if, looking forward—as this Bill must do, because it must be in place for forward legislation—we will come across more difficulties in what we might now regard as essential areas of our life.

[Lord Naseby (Con)]

My Lords, I have a couple of probing questions. I find the word “school” difficult to work out in terms of what happens on the ground. There are universities, many of which have teachers—some have professors, et cetera—and I do not quite see how you can exclude them, particularly the Open University, where some noble Lords may have taken courses. I have friends who have taken courses at it and, from the evidence of two people I spoke to at the weekend, there are teachers there. As someone who takes an interest in flying, having flown in the RAF, I thought also of flying schools. There are also driving schools. I am not sure whether the Government are anticipating that whole area. I look forward to my noble friend’s response; if she cannot respond this evening, perhaps I could have a note in writing.

[Lord Flight (Con)]

My Lords, I am not clear what being “excluded” means. I do not know whether other territories are excluded or how far they go up and down the range of teachers. More particularly, what is the reason for having excluded groups? Why should lawyers be excluded? Are any other groups excluded? This area wants a bit of tidying up and further explanation.

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[Baroness Randerson (LD) [V]]

My Lords, I am pleased to see some amendments from the Government in this group. It may be the start of a little bit of emotional intelligence on the Government’s part, to see the damage that has been done to trust and confidence between the UK Government and the devolved Administrations on this issue.

However, on its own, government Amendment 55, for example, is too weak, in saying that in order to be appointed to the OIM panel, all you need is knowledge of the internal market in the different countries of the UK. That implies to me that anyone who worked, for example, for Tesco—I am not picking on Tesco; other supermarkets are available—in its London head office would, of course, know that there are different markets in different parts of the UK. However, they would not have the depth of knowledge to understand, for example, the importance of signage in the Welsh language in different parts of Wales or the difference in marketing approach required in different parts of Northern Ireland, bearing in mind the history of those parts. It is a subtle business, and it needs strength and understanding in depth.

The truth is that the OIM is being shoehorned into the CMA simply because the Government have made a promise that they are not going to create any more such bodies. They can go ahead saying, hand on heart, that the CMA is the body and the OIM is simply an arm of it—no new body has been created. But, to be honest, it is not a neat and natural fit.

Amendment 56 goes a little way towards seeking the consent of the devolved Administrations to an appointment, but it still leaves all the cards in the Government’s hand. Taken alongside Amendment 57, it makes it clear that if the devolved Administrations withhold agreement, after one month the Government can go ahead anyway—yet they might be withholding agreement for a very good and clear reason. I urge the Minister to look again at the stronger amendments, Amendments 54 and 59, tabled in the name of the noble and learned Lord, Lord Thomas of Cwmgiedd. If the Government mean what they say about genuinely wanting to respect the devolved Administrations and treat them with respect, what harm do the Government think it would do to allow them to appoint one board member each? The Government’s response is that it would make the CMA political. That in itself portrays the fact that the Government have a political approach of their own to this problem.

In conclusion, as the noble and learned Lord, Lord Thomas, pointed out, UK government Ministers are in fact—[Inaudible]—and then they change hats to become Ministers of the UK. This is a problem, and if anyone does not understand that that is a problem, it underlines a lack of understanding and experience of devolution. Anyone who had that experience and understanding would realise that the Government must give a little bit more to satisfy trust among the different Governments of the UK.

[Lord Naseby (Con)]

My Lords, I congratulate my noble friend on the Front Bench. Once again we see the benefit of a good Committee stage, with someone listening and coming back with a series of amendments which all strengthen the Bill. I particularly like the clarification in Amendment 56, and I was delighted to read Amendment 61. However, regarding Amendment 54, I have had the privilege of chairing four different companies and sitting on other boards, some of which had certain dimensions to them as a business that any wise chairman would wish to make sure were covered.

I am also a political animal. Anybody who has sat for a marginal seat and kept it understands the sensitivity of varying wards, varying interests et cetera, and I ask my noble friend to reflect a little on Amendment 54. Certainly I do not believe that there is anything in Amendment 59 worth having, but Amendment 54 is crucial. Whether the wording is right or not, nevertheless, the devolved powers are a very important dimension of the whole of this internal market. Somehow, as other noble Lords have said, they must have ownership of it. The CMA board is in essence one of the absolutely key elements of that. I do not expect an answer tonight, but I suggest that the Minister and his colleagues should sit back and argue this through. I understand what my noble friend Lady Noakes said. In one sense she is right but, with my political hat on, I am not so sure. So I ask the Minister to reflect a little on Amendment 54, although I do not expect him to accept it tonight.

United Kingdom Internal Market Bill

Lord Naseby Excerpts

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

Finally, I say to beware of wolves in sheep’s clothing: if you throw meat at them they just ask for more. Beware: it is sometimes better that, from time to time, they be tethered. It is better that, from time to time, we give the people of the countries of the devolved Administrations the opportunity of looking forward to having Governments that look after the interests of the people, not their own political aims and ideals. What we have in Scotland now, sadly, is a Government who put that above everything else. We have seen it in some of the services in education, in the health service and in justice that have been neglected. It is something that I ask colleagues in this debate—I hope it will become more of a debate—to remember.

[Lord Naseby (Con)]

My Lords, it is always a privilege to follow the noble Lord, particularly in his plea that we parliamentarians should debate in depth with all who want to take part in this Chamber. This is my first opportunity to thank colleagues on the Front Bench, my noble friends Lord True and Lord Callanan, for the way they handled Committee stage. It was not an easy Committee; nevertheless, one notes that among the amendments on Report there are a number of government amendments that follow some quite long debates on issues. We should reflect as colleagues and thank them for listening and coming forward with those amendments.

Subject to rereading the debates on the final day, I also hope that it is now recognised in the House that there is nothing illegal about the Bill. Noble Lords may disagree with it and with the politics of it, but its legality is now without question.

I am sure everybody is pleased, as I am, that there appears to be total agreement that the common framework is complementary to this Bill as matters stand and that—we have listened to noble Lords from Wales, Scotland and Northern Ireland—it appears to have worked well. That is to be cherished but, having spent five years in the chair looking at this, I note that it is pretty unusual to have a linkage across one Bill that becomes an Act and another Bill that hopes to become an Act. If there is to be such a linkage, the evidence must be absolutely conclusive, because if you go down that road you will find a clash of interests at some point. As a parliamentarian, for me that is the worst of all worlds.

At some point, arising from the dimensions of some of the contributions today, we may well need a further Bill reflecting some of the issues voiced this afternoon. However, we should not impose a new clause which appears to undermine to a degree the drive of this Bill. We need to reflect that this is a UK government Bill. It is all about the powers of the UK Government, particularly regarding the internal market but nevertheless recognising that the UK Government are responsible for external matters.

This amendment appears to me, having looked at and thought about it quite a lot, to undermine this. I am really concerned that, as it stands today, this may undermine devolution to a degree. I fully accept and understand that we may well want a full debate on a different Bill on the powers that rest with the Northern Ireland, Welsh and Scottish Governments and with the central UK Government, but this is not the Bill for that. I understand people’s concern about it, but this Bill focuses totally—and I believe should continue to focus totally—on making a success of leaving the EU.

[Lord Rooker (Lab) [V]]

My Lords, I reflect from the debate so far that the leadership of the main political parties at Westminster would do themselves a favour if they studied the speech of my noble friend Lord Foulkes. I will not go over the detail, but there were sufficient warnings there from someone who has had experience of the Scottish Parliament, the House of Commons and the House of Lords that really need to be listened to.

The first four speeches, from the noble and learned Lord, Lord Hope, the noble Baroness, Lady Finlay, the noble and learned Lord, Lord Mackay of Clashfern, and the noble Lord, Lord Bourne, were masterclasses in argument in favour of the union, going well beyond this amendment. To be honest, I must tell the Minister that this is not a modest amendment, as far as I am concerned; no way is it a modest technical adjustment of the Bill.

This Bill, as was said earlier, destroys policy divergence. It is a one-size-fits-all Bill; to that extent, it is a rejection of devolution. I well remember the examples that my noble friend Lord Foulkes gave, as will the noble Lord, Lord Cormack. Take the 1974-79 Parliament; it was always at 10 o’clock at night that we got Scottish business, on housing and education, and we were on a three-line Whip, with slender government majorities or, most of the time, no government majority. We always thought, “Why can’t Scots deal with this themselves? This is a different legal system, which most of us do not understand.” Moreover, there was never enough time for those representing Scotland, who did understand it, to debate the matters fully. Born out of that was devolution.

My experience, which I will not go into in detail, was as a Minister at the ODPM and MAFF—which had massive contacts with the devolved Administrations simply because of the devolution of food, farming and agriculture—and then at the Food Standards Agency. At the time, the Scottish Government were in effect forced to set up their own food standards agency, as they were entitled to do by the legislation. Wales and Northern Ireland may well do the same—the legislation allows them to do it—because they will be forced into the situation as a result of issues such as this Bill.

I do not quite understand this issue of complementary arrangement. I spent a bit of time while listening to everybody’s speeches going through my dictionaries, thesaurus and everything, and I still do not understand it. There seems to be no connection between the common frameworks set-up and the Bill. If that is the case, I cannot for the life of me see how there can be any complementary arrangements. The Bill overrides the other processes; there is no connection whatever to that extent. Amendment 1 puts in a connection, which is crucial.

In terms of divergence over what is required with imports, the UK Government will take no account of what happens in the common frameworks process if the Bill goes unamended. Again, it will be one size fits all. The trade department will do the trade deals and take no account whatever of any desired or agreed policy divergence between the four constituent parts of the UK.

The Prime Minister has made the position crystal clear. It does not matter how much spin he puts on it or how many weasel words come from him and his acolytes; the fact is that he said that

“devolution has been a disaster north of the border”.

That is a fundamental attack on devolution; it would not matter who was in charge north of the border. He said it was a fundamental mistake of Tony Blair, but he later tied it to the actions of the current Government in Scotland; he did not say that to start with. He was fundamentally opposed to devolution. You cannot compare the devolution of the Mayor of London with what happens in the Governments of Scotland, Wales and Northern Ireland.

The union is at stake. Ministers seem to gloss over this. I think we are on our way to a federal Great Britain. I give full support to this amendment, which is fundamentally required. This is nothing personal, but I have never seen a spark of conciliation from the noble Lord, Lord True—I am sure he will take that from me as an absolute compliment—and I do not expect him to be at all conciliatory to what the noble and learned Lord, Lord Hope, has said, and in due course I expect to vote for the amendment.

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[Baroness Neville-Rolfe (Con)]

My Lords, I speak to this group of amendments in the name of my noble friend Lady McIntosh of Pickering and the noble Lord, Lord Foulkes of Cumnock, applying a super-affirmative resolution procedure to changes to the reach of Clause 8 on indirect discrimination on services— the goods, equivalent and various other clauses having fallen. Amendment 9 requires publication of the results of consultation and reasons for decisions reached, and Amendment 74 tries to overcome the Minister’s objection to the super-affirmative procedure on the grounds that it could cause needless delay, by providing for rapid approval in cases of urgency.

I agree with the need for consultation and explanation, but I am not sure that this needs to be in the Bill. There should indeed be an opt-out in cases of urgency, but only if this route were to find favour with our House. However, I do not believe that the case has been made that the super-affirmative procedure is needed, certainly not on the scale proposed and in the light of the amendments already made by the Government in respect of mutual recognition of goods.

I echo what the noble Lord, Lord Foulkes, said about the Minister’s readiness to listen to the experts in this House and to make changes to make this legislation work. I was involved in securing the procedures used very selectively in the withdrawal Act, when the then Minister, my noble friend Lord Callanan, was very helpful. I am a practical person, and I have not seen any real evidence here of the need for the use of the super-affirmative procedure. We need much more specific and concrete concerns to justify my noble friend Lady McIntosh of Pickering’s amendment. If the proposers of the amendment are just fearful, that is not enough to merit the super-affirmative procedure.

Perhaps the Minister can provide examples of how the powers in the clauses will be used and, perhaps more important, why he believes that the super-affirmative procedure is over the top in this case. That would sit on the record, Pepper v Hart style, and minimise the risk from the use of the powers in the Bill.

[Lord Naseby (Con)]

My Lords, given my five years in the Chair in the other place, noble Lords will not be surprised that I had a closer look at the super-affirmative procedure, where it has been used and where it should be used.

First, we all acknowledge that this is a very important Bill, which is why there is an affirmative resolution procedure in various clauses. We start with that. Secondly, as noble Lords have said, the super-affirmative procedure involves an additional stage of scrutiny where Parliament considers a proposal for a statutory instrument before it is formally presented—what we call laid. This procedure is used for statutory instruments that are considered to need a particularly high level of scrutiny. That is self-evident, I think.

I then checked where they had been used. The statutory instruments used so far usually amend or repeal Acts of Parliament. Examples would include legislative reform orders, localism orders, public bodies orders, regulatory reform orders and remedial orders. Although I have had only a short time to do it, I have not found it within primary legislation—I stand to be corrected, but I have not found it myself. Indeed, listening to my noble friend proposing that this procedure should be used, it seemed to me that it was a sort of grapeshot approach, scattered throughout the Bill, suggesting that all the bits in these amendments are absolutely vital and must be taken specially. I just do not think that stacks up.

Furthermore, because this Bill is important, and because we are dealing with devolved powers who will be consulted and worked with, it will just add further delay. That is not in the interests of Parliament, business, commerce, or the people of the United Kingdom. So quite frankly, I certainly will not be supporting this at all—I think it is almost out of order.

[Lord Beith (LD) [V]]

My Lords, in answer to the noble Lord, Lord Naseby, the fact that the super-affirmative powers have not been very widely used in the past is really no excuse for not using them where they are an appropriate way of dealing with important statutory instruments and providing a higher level of scrutiny. If the noble Baroness, Lady Neville-Rolfe, doubts the need for more use of the procedure, she should recall all those occasions when we have felt that a statutory instrument should be amended but have had no capacity to do so, and our dislike of a particular feature of it was not sufficient to justify blocking it or turning it down—something, of course, that this House very rarely does. It does address, although not by providing power of amendment, the lack of amendment power which is a characteristic of almost the whole of the statutory instrument system.

An alternative to heckling is the constructive tabling of an amendment, so we should welcome that, and I think that the noble Baroness, Lady McIntosh, and the noble Lord, Lord Foulkes—this new coalition, the Foulkes-McIntosh group—have done us a service in bringing this matter forward. If you worry, as I have done over many years, about the inadequacy of our procedures for dealing with statutory instruments, especially those which try to change primary legislation, super-affirmative procedure, as its name suggests, is better than ordinary affirmative procedure and better still than negative procedure, because it opens up fresh opportunities for how the matter can be dealt with. Because it takes more time, there should be some caution over which things we think it is right to use it for, but it could be much more usefully employed than it has been in recent years. Of course, it is not a single procedure; it is a category of procedure which is usually spelled out individually in the legislation which employs it, as in this case—and the noble Baroness, Lady McIntosh, has improved and added to the process in the version of it that is now before us.

The procedure allows for measured consideration. Sometimes measured consideration is impossible because of urgency, but things are not always as urgent as the Government say they are. Usually the urgency has arisen from the fact that the Government have taken too long dealing with it and have brought it to the House at a very late stage. Throughout the coronavirus epidemic we have had all these occasions when the House has suddenly been told that something is very urgent which the Government have been dealing with for weeks, and probably even announced many days previously, but are now giving the House minimum time to address. The Government cannot always claim that there is an inherent urgency in the situation; rather, they have created urgency by delay at their stages of the process.

Where measured consideration is appropriate, the super-affirmative procedures allow for it and allow the House to suggest amendments to a Bill, which the Government can then go back and consider. I think it has advantages and would have advantages for some of the processes in this Bill. So it is not the wild suggestion that the noble Lord, Lord Naseby, and the noble Baroness, Lady Neville-Rolfe, seem to think that it is. I think it has many advantages which ought to be deployed in circumstances such as this.

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[Baroness Northover (LD) [V]]

My Lords, I support Amendment 10 and other amendments in this group. Powerful arguments have been made this afternoon about devolution. Common frameworks must continue to allow divergences within the devolved Administrations and between them and England. The Bill must not undermine this. The amendment relating to that, in the name of the noble and learned Lord, Lord Hope, was passed overwhelmingly.

At Second Reading the noble and learned Lord, Lord Judge, introduced his regret amendment by expressing shock at the Government’s plans to break international law. At the end of the debate he concluded that, stunned as he had been by these proposals, he had perhaps overlooked the extent to which the Bill also undermined devolution.

In this group we flag up some of the areas in which the devolved Administrations currently have flexibility. The Bill could prevent this, as my noble friend Lady Bowles and others have pointed out. As the noble Lord, Lord Anderson, said, these differences exist in the EU, even with its powerful single market. I am not sure how deliberate the removal of the existing flexibilities has been, or whether this simply reflects that devolution is not in this Government’s DNA.

I agree with what has been said about the environment. I want, briefly, to flag up public health, as did the noble Lord, Lord Young of Cookham. In the middle of a pandemic, this Bill potentially undermines our ability to move forward in this area. We see variations in public health which may well have played a part in encouraging the devolved Administrations to take more ambitious actions. The rates of alcohol-related deaths are more than 60% higher in the most deprived areas than in the least deprived. The highest rates of smoking are consistently found among the most disadvantaged. Scotland has the highest rate of alcohol-related deaths in the United Kingdom. Its Government have introduced a range of policies to address this. The Welsh Government have said that they will do more to extend non-smoking areas. This is also welcome.

These amendments seek to ensure that, when one devolved Administration move ahead of another, they can do so. We hope that they may be able to pull the others along with them. Undermining devolution is clearly one of the fundamental problems with this Bill.

[Lord Naseby (Con)]

My Lords, I respect the views of the noble Baroness who has just spoken, but I have to say that there is little in what she said that I agree with. Amendments 21, 48 and 49 are quite different from Amendments 10 and 11. They go, in my judgment, way beyond what is necessary for a successful free trade market. Really they amount to micromanaging, and on the whole Her Majesty’s Government in any form, whether it be devolved or central, certainly are not terribly good at managing commercial activities. So I suggest that those amendments are unacceptable.

Amendment 11 is one that I warm to because the environment is absolutely crucial. In that context we include climate change, which we know is affecting every nation in the world, so that is a very serious area. Whether this amendment is the right one or not is almost for the Government to decide. I care deeply about the environment. I am privileged to live outside London. I shall drive home tonight, 50 miles to Bedfordshire, and it is a very nice environment there. It is essentially a horticultural one, which brings me to the point that horticulture is changing, not least because we are looking to achieve a fair degree of import substitution. All sorts of new challenges arise from that. We virtually gave up in the glasshouse world, losing out to Holland. There is all sorts of experimentation going on—growing vegetables just in water and so on—but this is not the time to go into that.

I do worry that there are products at the margin, where there is always somebody lobbying against them. Smoking has been mentioned. I have never smoked, but I accept the current situation in which people have the right to smoke if they wish to, and there are clear frameworks in which they can follow that. Pesticides are important in the horticultural world because they affect yields; again, that is a controversial area. So I will listen to my noble friend, particularly on Amendment 11, about which I have a reasonably open mind. I know that the environment is absolutely crucial, but I do not want to see areas of our society and our market squeezed out because of some heavy lobbying from one particular group who do not like the particular industry involved.

[Lord Callanan (Con)]

My Lords, Amendments 10, 11 and 41 would expand the list of legitimate aims used to justify where statutory requirements in one part of the UK can indirectly discriminate against goods or services from another part of the UK. So I will start by saying that the Bill provides an updated, coherent market structure which will help to avoid future complexities and prevent costs being passed on to customers through an increase in prices or a decrease in choices. An expansive list of legitimate aims would increase the potential discrimination faced by businesses or service providers, eroding the benefits of the internal market and creating damaging costs and internal barriers to trade.

The current list in the Bill is targeted to allow nations to meet their respective goals while avoiding unnecessary damage to the internal market—a point that was well made by my noble friend Lady Neville-Rolfe. For example, the Bill already includes the protection of public, plant and animal health, and in some cases, of course, this will align with the protection of the environment. However—I cannot stress this enough—the Government have repeatedly committed to maintaining our world-leading standards across a number of different areas, whether that is in consumer protection, the environment, social and labour standards or public, animal and plant health. The Bill does not undermine the great strides that we have taken in these areas, and we will continue to be at the forefront of improving and protecting our high standards.

Under this Bill, the devolved Administrations will retain the right to legislate in devolved policy areas. Legislative innovation remains a central feature and, indeed, a strength of our union. The Government are committed to ensuring that this power of innovation does not lead to any worry about a possible lowering of standards, by both working with the devolved Administrations via the common frameworks programme and by continuing to uphold our own commitment to the highest possible standards. It is important to remember that the market access principles do not prevent the UK Government or the devolved Administrations adopting divergent rules for goods or services.