Continuity Trade Agreements: Parliamentary Scrutiny

Lord Stevenson of Balmacara Excerpts

Wednesday 18th November 2020 Lords Chamber

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

My Lords, in the Commons, the Minister stated that parliamentary scrutiny was central to the ongoing continuity FTA rollovers. That was good to hear. He also said that nearly half these treaties will be agreed under the provisional agreement mechanism, which excludes parliamentary debate before the FTA is implemented. That is not so good. We have the opportunity to put things right when the Trade Bill returns to your Lordships’ House in early December. Will the noble Lord the Minister agree to continue our discussions to see if we can formalise a protocol for scrutiny, building on his good work in ensuring that the International Agreements Sub-Committee of this House has the papers and information it needs to carry out its valuable work?

[The Minister of State, Department for Business, Energy and Industrial Strategy and Department for International Trade (Lord Grimstone of Boscobel) (Con)]

My Lords, I welcome the constructive exchanges which the noble Lord and I have had on this matter. We have a mutual interest in ensuring that Parliament is able to carry out its scrutiny processes effectively. I look forward to continuing our debate on this important topic during Report on the Trade Bill.

Canada-UK Trade Deal

Lord Stevenson of Balmacara Excerpts

Tuesday 17th November 2020 Lords Chamber

[Lord Grimstone of Boscobel (Con)]

It would not be appropriate for me to go into the detail of ongoing negotiations. But I assure noble Lords that talks are at an advanced stage and I am confident that they will be concluded satisfactorily.

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

My Lords, the Government promised that 40 rollover agreements would be in place by the end of the transition period. Only 20 have been considered so far under the CRaG procedure. We have fewer than 21 sitting days before 31 December, so it is not physically possible to ratify the remaining trade agreements under normal procedures. What advice can the Minister offer the country’s importers and exporters about what they should be doing if their trade engages with, for example, Canada, Singapore, Mexico or Vietnam?

[Lord Grimstone of Boscobel (Con)]

My Lords, first, I must correct the noble Lord: 23 agreements have now been signed. This is a moving target. I encourage British businesses to watch this space. I assure the House that all agreements will be put through the CRaG process. Some may need to be provisionally applied, but they will all be ratified by our standard agreements in due course.

Competition (Amendment etc.) (EU Exit) Regulations 2020

Lord Stevenson of Balmacara Excerpts

Monday 16th November 2020 Grand Committee

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

My Lords, I join others in thanking the Minister for a very clear and comprehensive exposition of the SI before us. The SI is very logical and I do not have much detail to raise on it, which is surprising, but I am sure the Minister will be delighted to hear that. I will instead raise three points from the rather good discussion we have had on competition matters more generally, and possibly in the light of future changes.

First is the shadow thrown on all our work in this area by the continuing, drawn-out EU FTA discussions, with particular reference to what would happen if the rumours are to believed—one never listens to rumours, of course—that there will need to be some form of independent competition authority looking at the UK’s competition regime to make sure that the EU has confidence that we are operating a level playing field. Can the Minister give us any detail on this? Is this in some sense a way of replacing the CMA, or is the CMA secure in the hands of the Government as we currently view it?

The second point is the shadow that is also cast by the National Security and Investment Bill. I have had the benefit of an introduction from one of its co-sponsors at the Department for International Trade—the Minister, the noble Lord, Lord Grimstone—so I do not need to ask for details at this stage. However, as the noble Lord, Lord Lansley, pointed out, the rather odd situation that we are in—the enormous irony—is that, after the National Security and Investment Bill is introduced, as I am sure it will be shortly, the country will probably have a more interventionist competition authority, but, as he said, one that is more limited in terms of the issues defined in the Bill as “national security”. He pointed out the difference between that and our present situation, particularly the concern about whether issues to do with elections, food and media interests will qualify as being considerations under this new legislation. That is something that I think we will have to return to when the Bill reaches your Lordships’ House. In passing, I agree with the noble Lord, Lord Lansley, that there are areas of the Enterprise Act in relation to media that need to be updated sooner rather than later.

My final point is the one made by the noble Baroness, Lady Neville-Rolfe. In a very interesting speech, she drew attention to the wider ramifications of the culture created by the CMA and the dangers that that poses for small businesses, which I know are close to her heart: the freezing effect of an investigation on the ability of small enterprises to carry on working and to recruit the specialist staff they might need to fight off any question of their behaviour being in any way in jeopardy. The whole question about how that works and the economy as a whole is beyond the scope of this statutory instrument, but I hope that it is something that we will come back to.

We place a lot of faith in the CMA, most of which is adequately repaid by the skills and stability it has brought to the sector over the years, but it is a judge and jury in its own court and we have to be very concerned about that in the long run. With that, I am very happy to support the SI.

United Kingdom Internal Market Bill

Lord Stevenson of Balmacara Excerpts

Committee stage & Committee: 5th sitting (Hansard) & Committee: 5th sitting (Hansard): House of Lords
Monday 9th November 2020 Lords Chamber

[The Deputy Chairman of Committees (Lord Alderdice) (LD)]

The noble Baroness, Lady Bennett of Manor Castle, has also withdrawn, so I call Lord Stevenson of Balmacara.

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

My Lords, I thank the noble Baroness, Lady Rawlings, for introducing her amendment. She made her case extremely well: R&D is important, and the Government could easily, with advantage, accept all three of the amendments as they stand. However, her introductory speech raised all the issues that have subsequently been picked up by other speakers, because we are facing what appears to be another black hole in this Bill. The noble and learned Lord, Lord Thomas, the noble Baroness, Lady Finlay, the noble Lord, Lord Fox and I have signed up to an amendment more in frustration than any genuine feeling that the existing clause is wrong, although the noble and learned Lord, Lord Thomas, does make a very good case for how the procedures adopted there are not the ones that should be seen in the final version of this Bill.

The question really seems to be about what our state aid regime is going to be. Is it going to be central or devolved in terms of both its process and delivery? Is there going to be a central body that will be charged with making sure that all those participants who benefit from state aid do so on a fair and open basis, and are they going to be able to review and make recommendations for how it is taken forward?

It seems to me this is another area where common frameworks have an opportunity to provide the solution to a problem the Government are facing. I hope that whichever way we go on this, time will be taken to make sure we get it right, do it properly and come forward with something that will justify the effort that has been placed in it, because it will be worth it.

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

My Lords, I thank noble Lords who have taken part in this debate. I recognise that the hour is late, so I will attempt to be as brief as possible. I begin by setting out why Clause 50 should stand part of the Bill, before moving on to discuss Amendments 169A, 169B and 169C.

Clause 50 reserves for the UK Parliament the exclusive ability to legislate for a UK subsidy control regime in future. The Government have always been clear in their view that the regulation of state aid, which is the EU approach to subsidy control, is a reserved matter. Let me say in reply to the noble Lord, Lord Fox, that the devolved Administrations have never previously been able to set their own subsidy control reviews, as this was covered by the EU state aid framework. Now we have left the EU, we have an opportunity to design our own subsidy control regime that works for the UK economy.

It is important, in our view, that there continues to be a uniform position across the United Kingdom. Reserving will ensure we take a coherent and consistent approach to the way public authorities within the UK subsidise businesses, supporting the smooth functioning of the UK’s internal market. A unified approach will reduce uncertainty for UK businesses and prevent additional costs in supply chains and to consumers.

Also in reply to the noble Lord, Lord Fox, I say this reservation does not impact the devolved Administrations’ existing spending powers. The devolved Administrations will continue to make decisions about devolved spending on subsidies—how much, to whom and for what—within any future UK-wide subsidy control regime.

The Government announced in September that the UK will follow World Trade Organization rules for subsidy control from 1 January. These are internationally recognised common standards for subsidies. Before the end of the year, the Government will publish guidance for UK public authorities to explain these rules and any related commitments the Government have agreed in fair trade agreements. We will also publish a consultation in the coming months on whether we should go further than those existing commitments, including whether or not legislation is necessary, because we want a modern system for supporting British business in a way that fulfils our interests. We do not want a return to the 1970s approach of Government trying to run the economy or bailing out unsustainable companies. We will take the necessary time to listen closely to all those with an interest in this subject.

UK government officials have been meeting, and will continue to meet, their devolved Administration counterparts on a regular basis. We are keen to ensure that the devolved Administrations are involved in the upcoming consultation process. I hope that noble Lords will agree that this approach is the best, and indeed the only, way to ensure that the whole of the UK can benefit from having a consistent and coherent system of subsidy control, which is necessary to support the smooth running of the UK internal market. I therefore commend that Clause 50 stands part of the Bill. I hope that I have answered at least some of the questions from the noble Lord, Lord Fox. If not, I will write to him to confirm the other points.

I turn to Amendments 169A, 169B and 169C, in the name of my noble friend Lady Rawlings. They seek to amend the definition of a subsidy for the purpose of their reservation. They would add to this definition that a subsidy will also include “research and development grants”. The interpretation provisions contained in Clause 50 set out what is classed as a subsidy for the purpose of this reservation. We define a subsidy as including assistance provided to a person, directly or indirectly, financially or otherwise. The definition includes examples of this assistance as income or price support, grants, loans and guarantees.

For the purpose of the reservation of subsidy control, the definition of a subsidy is deliberately broad to ensure that we have sufficient scope to design a future domestic regime that meets the needs of the United Kingdom. To ensure that we cover a broad range of financial interventions, the definition is not currently limited by reference to any specific policy purpose or sector. Subsidies may be given for a variety of purposes, and it would be anomalous to single out just one of them here. The current wording in the clause already encompasses assistance provided to a person directly or indirectly by way of grants and is therefore sufficient to cover research and development grants as my noble friend intends. Therefore, the Government do not think that the amendments are legally necessary. I hope that, in the light of that information, my noble friend will be able to withdraw her amendment.

United Kingdom Internal Market Bill

Lord Stevenson of Balmacara Excerpts

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

[Lord Fox (LD)]

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

My Lords, I thank all noble Lords who have taken part in this debate. The noble Lord, Lord Fox, raised issues around university tuition fees and water services. As he said, I have written to him and to the noble Lord, Lord Purvis, about the points they raised in earlier debates. I am told that these letters have been submitted to the Library but there may be a slight delay in their publication. I confirm what I said there about the exemption in the legislation for public services. More details are set out in the letters. If for some reason they have not yet been published, the noble Lords, Lord Fox and Lord Purvis, should get in touch with my office, which will be happy to furnish them with a copy.

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[The Deputy Chairman of Committees (Baroness Henig) (Lab)]

The noble Lord, Lord Stevenson, and the noble Baroness, Lady Neville-Rolfe, also wish to speak after the Minister.

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

I asked the Minister a specific question on whether the framing of Clauses 38 to 40 was exactly the same, or differed from, the existing powers of the CMA. He did not answer that. I do not want to delay us too much today but perhaps he could write to me about it.

[Lord Callanan (Con)]

I would be happy to write to the noble Lord but, as I said, the powers to date have functioned effectively and are based on the CMA’s existing powers.

United Kingdom Internal Market Bill

Lord Stevenson of Balmacara Excerpts

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

Moved by

[Lord Stevenson of Balmacara]

115: After Clause 30, insert the following new Clause—
“Office for the Internal Market: establishment as a body corporate
(1) Within the period of six months beginning on the day on which section 30 comes into force, the Secretary of State must by regulations establish the Office for the Internal Market (“the OIM”) as a body corporate.(2) Regulations under subsection (1) may amend or modify any enactment including this Act for the purposes of requiring or authorising the OIM to do anything required or authorised to be done by the CMA under this Part.(3) Schedule (Office for the Internal Market) contains further provision about the OIM once it has been established as a body corporate.(4) Regulations under this section are subject to the affirmative resolution procedure.”

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

My Lords, I move Amendment 115 and speak to Amendment 131. They need to be taken together. We have covered a lot of ground in the last couple of groups, so I will be brief. We have looked at the role, functions and operational mechanisms of the Bill’s proposed office for the internal market and have also covered what happens if and when things go wrong.

The emerging view—although it is not shared by the Minister—is that the Bill has not got this right. Amendments 115 and 131 which, as I said, need to be considered together, take us in a new direction. I take the feeling of the Committee that we are talking about an independent body, which has to be a UK body. As was rightly said by the noble Baroness, Lady Noakes, being a UK body does not mean that it also part of the individuals it is supervising.

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[The Deputy Chairman of Committees (Baroness McIntosh of Hudnall) (Lab)]

My Lords, I have had no request to speak after the Minister, so I call the noble Lord, Lord Stevenson of Balmacara.

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

My Lords, I thank those who have spoken in support of the amendments, particularly the noble Baroness, Lady Bowles, who accepted the principles despite having doubts about some of the factual points, and the noble Baroness, Lady McIntosh, for covering a lot of ground and raising questions that will need to be addressed by Ministers. In fact, I do not think that they were addressed in the response this evening. I thank my noble friend Lord Judd for bouncing back after having been ignored and making some very good points about why it is important to seek principles as we go through the Bill, because they are sadly lacking at the moment. The legislation seems a formulaic response, almost an early policy draft of what one might do if one were to regulate an internal market. It does not smack of having had a lot of discussion and debate or even wider consultation. The Government do not seem to have in mind a process whereby they can arrive at a solution to the problem of how we get shared ownership and trust into a system which is broadly voluntary in its basis without it looking as though it is a top-down, heavy-handed approach. There may be political advantages in that in the short term, but in the long term it is not the way to go.

This was a probing amendment to which we heard some responses, but there are still one or two to come. I am left with the feeling that, whatever we call the body and wherever we locate it, if it is capable only of providing non-binding advice and has no powers, it leaves the question of who will police the whole system. What happens, for instance, if the devolved Administration in Scotland decide they want to do something in particular in relation to whisky, chicken or flour—and we now know an awful lot about flour adulteration? Who will police that? Will it be BEIS? If so, can the Government really say, hand on heart, that the right way to approach what is effectively a devolution issue is through a top-down, UK Government-organised structure? I wonder. I beg leave to withdraw the amendment.

Amendment 115 withdrawn.

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Moved by

[Lord Stevenson of Balmacara]

132: After Schedule 3, insert the following new Schedule—
“UK SHARED PROSPERITY COMMISSION1_(1) A body corporate called the UK Shared Prosperity Commission is established.(2) The UK Shared Prosperity Commission is not to be regarded—(a) as the servant or agent of the Crown, or(b) as enjoying any status, immunity or privilege of the Crown. (3) The UK Shared Prosperity Commission’s property is not to be regarded—(a) as the property of the Crown, or(b) as property held on behalf of the Crown.Membership
2_(1) The UK Shared Prosperity Commission is to consist of—(a) a Chair and five members appointed by the Secretary of State,(b) a member appointed by the Scottish Ministers,(c) a member appointed by the Welsh Ministers,(d) a member appointed by the Department for the Economy in Northern Ireland.(2) Before appointing a chair and member under sub-paragraph (2)(1)(a) the Secretary of State must consult the Scottish Ministers, the Welsh Ministers, and the Department for the Economy in Northern Ireland.(3) Before a chair can be appointed under sub-paragraph (2)(1)(a), the appointment must be confirmed by the Treasury Select Committee or a committee of either House whose remit covers the Treasury.Funding
3__ The Treasury must pay to the UK Shared Prosperity Commission such sums as the Her Majesty’s Government considers appropriate for the purpose of enabling the UK Shared Prosperity Commission to perform its functions.Powers
4_(1) The UK Shared Prosperity Commission may distribute sums from the Treasury across the four nations and regions of the United Kingdom following an assessment of relative need.(2) The UK Shared Prosperity Commission may conduct an assessment of relative need across the four nations and regions of the United Kingdom.(3) The UK Shared Prosperity Commission may do anything which appears to it to be necessary or expedient for the purpose of, or in connection with, the performance of its duties in sub-paragraphs 5(1) and 5(2).Accounts and audit
5__ The UK Shared Prosperity Commission must—(a) keep proper accounts and proper records in relation to them, and(b) prepare a statement of accounts in respect of each financial year.Annual report
6_(1) The UK Shared Prosperity Commission must prepare a report on the performance of its functions during each financial year.(2) The report must include the statement of accounts in respect of that year.(3) The report must be prepared as soon as reasonably practicable after the end of the financial year to which it relates.(4) The UK Shared Prosperity Commission must send the report to the Secretary of State.(5) The Secretary of State must lay the report before Parliament.Public records
7__ In subparagraph 2 of the Table in paragraph 3 of Schedule 1 to the Public Records Act 1958 (definition of public records), at the appropriate place insert—“UK Shared Prosperity Commission.” Investigation by the Parliamentary Commissioner
8__ In Schedule 2 to the Parliamentary Commissioner Act 1967 (departments subject to investigation), at the appropriate place insert—“UK Shared Prosperity Commission.”House of Commons disqualification
9__ In Part 2 of Schedule 1 to the House of Commons Disqualification Act 1975 (bodies of which all members are disqualified), at the appropriate place insert “UK Shared Prosperity Commission.”Northern Ireland Assembly disqualification
10__ In Part 2 of Schedule 1 to the Northern Ireland Assembly Disqualification Act 1975 (bodies of which all members are disqualified), at the appropriate place insert—“UK Shared Prosperity Commission”Freedom of information
11__ In Part 6 of Schedule 1 to the Freedom of Information Act 2000 (other public bodies and offices: general), at the appropriate place insert—“UK Shared Prosperity Commission.”Public sector equality duty
12__ In Part 1 of Schedule 19 to the Equality Act 2010 (public authorities: general), in the group of entries under the heading “Industry, business, finance etc”, at the appropriate place insert—“UK Shared Prosperity Commission.””

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

My Lords, I will also speak to Amendments 167 and 168, which are also in my name. I am grateful to other Members for contributing to this group. The group is about another of the black holes that we are discovering in the Bill. This one is about state aid or, as we must learn to call it, subsidy—or, as the Government would have us call it, “the UK shared prosperity fund”, although details about that are incredibly difficult to find.

State aid matters. It particularly matters if people think money is being stolen from them and used for other purposes. The Government have quite a lot to do to try to explain where they are going with this state aid issue, the timescale and how they intend to make progress in bridging the gap between people’s expectations and where they currently are.

We currently get an awful lot of money through state aid; it is certainly money that would be felt if it were not there. It is hard to get a complete picture of it; the best figures that I have been able to find come from the Institute for Government, which suggests that about £20.7 billion is currently available through state aid in two main forms, the European Regional Development Fund and the European structural funds. The regional development fund focuses on physical development—physical capital, as it were—while the ESF, the structural funds, are about employment and young people and are probably best described as human capital. The combination is a significant quantum of money, held by people who I think regard it as not being money provided directly by the UK Government, although of course money technically circulates around and presumably was originally from taxation in the first place.

Two significant points come from that. First, the headline funding from the EU at the moment is matchable. We currently think that about 40% is added on top of the just over £10 billion—£10.6 billion, I believe—that is available directly from Europe to the UK agencies that spend it, so that gives us the figure of about £20 billion when it is matched with local authority and central government funding and from the lottery.

An issue that is hidden, or at least more opaque, in terms of how state aid is organised is the way in which it seems to come in response to different requirements. For instance, the long-standing convention is that there is a regional bias based on deprivation, which takes into account the broader picture across the whole of Europe. In the UK, there are only two counties currently in the most deprived areas—or most in-need areas, I think they are described as—which are west Wales and Cornwall and the Scilly Isles. However, there were recently rumours that, had we stayed in the EU, which we are not, four more might have been put into that higher-needs category. That leaves the question: will the Government continue that process? Will they also think in terms of how individual parts of the country are treated in relation to that?

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[Baroness Penn (Con)]

My Lords, all I can say to the noble Lord is that the attitude and approach of this Government is one where we intend to work in partnership both with the devolved Administrations and with local communities to ensure that these new powers are used to the best effect and that the UK’s shared prosperity fund supports citizens across the United Kingdom.

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

My Lords, I thank all those who have contributed to this wide-ranging debate, which was conducted throughout at a very high level indeed with respect to the very important issues that we had in front of us. I am grateful to the Minister for her quick-fire response. She covered a lot of ground; I will have to read Hansard carefully to be sure that I picked up all her points.

I have three responses to make. First, I do not think she was convincing in her defence of why the new powers contained in Clause 48 are required. The noble and learned Lords, Lord Thomas and Lord Hope, among others, were incredulous about the reasons for them and put their case very well. I do not think she was able to be as convincing on that as perhaps she hoped to be.

However, the Minister was very positive in response to the questions that a number of us asked about the replacement for the current level of EU funds, saying that the level of funding will be a minimum to match, it will be based on need and will tackle inequality and level up spending for these issues around the UK, and there will be time for a smooth transition. She stressed the collaborative approach that will be taken, but I will want to come back to that. She also left a few serious concerns about how exactly the process would go.

I think she will want to look again at the words of the noble Lord, Lord Dunlop, who spoke with great power; he made a number of points about additionality, accountability and co-operation as the necessary building blocks for any process which involves the insertion of UK Government-led funding in areas which have previously been done on a co-operative basis—bottom up rather than top down. Part of that was also raised by the noble Lord, Lord Bruce of Bennachie, who asked the Minister to recognise the differences that have arisen over time.

I shall leave with her two points. At this stage in the process when it is not certain how things will develop—even if the total amount of money and other things being said around funding are convincing—lack of information and engagement will breed distrust and suspicion. The Government need to think very hard about what approach they will take on a consultative and other basis, or else they will bring instability with them as they move forward.

Secondly, the case made by a number of people who spoke—not just those concerned about the direct impact on devolution but those concerned about other matters to do with climate change—has not been properly answered. There will not be any real return for the Government on this if they think that devolution will be assisted by what looks like a power grab without collateral arrangements being put in place. These funds need to be administered locally and planned co-operatively. At the end of the day, as one person said in the debate, the levers that are used to fund the people who are going to see the money will be local. If the Government do not get that right at the beginning, the rest will not work. However, we will read carefully in Hansard what was said. It has been a good debate on all sides. I beg leave to withdraw the amendment.

Amendment 132 withdrawn.

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[Lord Fox (LD)]

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

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

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

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

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

then moves on to consider

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

and other issues that have come forward.

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

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

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

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

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

[Lord Callanan (Con)]

I thank those hardy souls who have stayed for this brief debate. Amendment 143, tabled by the noble Baroness, Lady Finlay, is concerned with a proposed role for the CMA in the laying of regulations on the application of the market access principles. It builds on the earlier Amendments 6, 78 and 104, which concerned the scope within which the UK market access principles proposed in the Bill will apply. I understand that the noble Baroness has tabled this amendment on behalf of the Welsh Government, and I thank the Welsh Government for their positive engagement on the Bill so far. The UK Government look forward to continued and constructive future engagement with them on more aspects of these proposals.

Before I turn to the detail of this amendment, I note the previous discussion on similar amendments also tabled by the noble Baroness, Lady Finlay, which would have narrowed the scope of the market access principles. As I set out then, those amendments would, in combination, prevent the market access principles from applying in time, at the end of the transition period. Earlier, I set out that the lengthy process the amendments put in place before the principles can apply, including the need to exhaust the framework discussions first, would mean a considerable delay in securing business certainty that trade can continue unhindered within the UK’s internal market. Amendment 143 would add an additional layer of bureaucracy to that process.

In our view, it would also problematically risk bringing the CMA into potentially contentious decision-making and mean its role was weighted towards supporting the Secretary of State over the devolved Administration counterparts. This contrasts sharply with our vision for this, which is to ensure that the OIM’s expert reporting is available to all four administrations equally. Above all, however, the advice provided by the OIM will be economic in nature. Its panel will have expertise across intra-UK trade, regulatory impacts on business and competition effects, which is one reason why the Government chose to establish it within the CMA. We had that debate earlier.

The office for the internal market will not be equipped, therefore, to opine on matters related to animal welfare or environmental protection. To lay this obligation on the OIM would bring a significant risk of duplication of the remit of other public bodies, which would cause considerable confusion for the many stakeholders in this field. For these reasons, and the uncertainty and confusion that this and other related amendments would generate for businesses and citizens, the Government regretfully cannot support them, and I hope the noble Baroness is able to withdraw.

Covid-19: Small Businesses

Lord Stevenson of Balmacara Excerpts

Thursday 29th October 2020 Lords Chamber

[Lord Callanan (Con)]

Again, the noble Baroness is tempting me to enter the territory of the Chancellor. We have been clear that the digital services tax is temporary, and businesses are liable to it only when they have worldwide revenues of more than £500 million, and more than £25 million of those revenues is derived from UK users. So it applies only to the very largest businesses.

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

My Lords, the AAT reports that during the pandemic more than 50% of businesses have seen an increase in late payments, and nearly one-third admit to delaying payments that are contractually due. The Government have taken emergency powers, so this is a matter for BEIS, and these powers do help businesses. The FSB says that sorting the scourge of late payments would be a huge boost in these difficult times, and would aid the recovery when it comes. Will the Government act?

[Lord Callanan (Con)]

I totally accept the noble Lord’s point; he raises an important issue. But accepted payment terms vary from sector to sector, and a one-size-fits-all approach is not, in our view, the best way to deliver a culture change. Government would be restricting businesses’ ability to negotiate terms, which could have a negative effect on the UK economy by making business more difficult to do.

United Kingdom Internal Market Bill

Lord Stevenson of Balmacara Excerpts

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

[Lord Purvis of Tweed (LD)]

My Lords, I am grateful to the Minister for clearing this up, because any confusion beforehand may be ongoing. Since he was so clear, perhaps he will not mind my asking a couple more questions.

As the Committee knows, I live on the border, and some of these things are very relevant for traders, especially rural traders living on either side of the border. When I was a Member of the Scottish Parliament, one of the big areas of debate when minimum unit pricing was introduced was the concern about the cross-border selling of alcohol, which avoided the decision being made in Scotland concerning the price of that alcohol. This is not hypothetical; these were real sales. It did not apply to the more expensive malt whiskies et cetera. The minimum unit pricing of alcohol was, by and large, about the low-value alcohol which could be brought across the border in large quantities to be sold in Scotland. That was a valid issue, and a key area of consideration when it was debated by the European court. The justification, which the ability of the public authorities to prevent that happening relied on, was that this was against market access principles but justified on public health grounds. The Government have chosen not to do this, so they will be relying on the market access principles.

Can the Minister clarify something that I genuinely do not know? I am not trying to catch him off guard. On the sale areas of goods, does the Bill permit alcohol for use within Scotland to be sold in Scotland on English grounds? Can alcohol be sold in Scotland by using mutual recognition, to avoid the minimum unit price stipulated for alcohol that is then sold in Scotland? I have a fear that it may be. It will be reassuring if the Minister indicates that this is not the case, because Clause 13 is about the sale of goods complying with local law and states:

“Nothing in this Part prevents goods produced in or imported into a part of the United Kingdom from being sold in another part of the United Kingdom if … the sale complies with any requirements applicable in that other part of the United Kingdom”.


Therefore, if we say that, rather than biscuits, it is gin or vodka, and a policy has a direct impact on the price of that gin or vodka because of the Scottish legislation, then Clause 13 suggests that if that alcohol was brought over from Northumberland and sold in the borders, the selling of it to a wholesaler within the borders would have to be done as if it had taken place in Berwick, Northumberland.

I ask this because there is currently a lot of cross-border trade in agricultural business. Many Scottish producers will sell livestock at the Wooler market in England. A lot of this is happening. It has been worked through with regard to the different agricultural standards. Therefore, I am anxious that Clause 13 could inadvertently be used to bypass what are correct elements.

This leads me to my final question. We will come to the definition of “goods” and “sale” with Amendments 66 and 67, but there is nothing in the definition of “sale”, or the other parts of the Bill, relating to the price. If policies are in place which directly impact on the price of an item to be sold, rather than standards, labelling or marketing, is price also considered within that? I would be very grateful and give him top marks if the Minister can answer those questions clearly.

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

My Lords, I have mainly technical, minor drafting points, which do not require much discussion. The Minister was consumed during his speech because of the hypothetical tin of biscuits that he brought into play. I am so glad that we do not have details of what pig semen is carried in. I much prefer us sticking with the tin of biscuits as our main metaphor in these issues.

Like the noble Baroness, Lady McIntosh, I wonder why these amendments are being tabled now. After all, the Bill has been through the other place and been republished. Only now are we getting evidence of “scrubbing the text” to ensure that the sorts of issues raised in this group of amendments will not get into the final version of the Bill. It is a minor criticism of a very minor issue, and I am happy to await the answers to the questions raised by the noble Lord, Lord Purvis, which would bear substantial response and will need to be dealt with at the appropriate time.

[Lord Callanan (Con)]

My Lords, I apologise to noble Lords for hesitating in my answer earlier. There is a danger of this “tin of biscuits” example assuming the same significance that the maiden aunts of the noble Lord, Lord Lisvane, did, during the EU withdrawal Bills. I see smiles from noble Lords who were involved in those debates. However, I am not sure that we should pursue the “pig semen” argument of the noble Lord, Lord Stevenson.

To answer my noble friend Lady McIntosh, these are technical changes relating to drafting errors that became apparent in further studying the text following amendments tabled by noble Lords. Following further examination by government lawyers, the Bill was drafted fairly speedily over the summer. Our intention was to avoid government amendments, but we wanted to hear the replies to the consultation and the White Paper. They are technical and legal clarifications that change none of the policy intent.

I assure the noble Lord, Lord Purvis, that the minimum unit alcohol pricing policy is unaffected, because it is an existing measure that is excluded, and because it is specifically excluded in addition to that, via various clauses. I will write to reassure him of that. Regarding his points about gin and vodka, I am not an expert on the Scottish measure, but I think it affects the retail price of the sale and not wholesale prices, and therefore the product would need to be sold at a different price, as specified in the Scottish measure. However, I consulted officials when we first debated this legislation and was assured that the Scottish measure would be unaffected by this legislation. I am happy to write reassuring the noble Lord on that point.

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

My Lords, I join the noble Lord, Lord Thomas of Gresford, in thanking the Scottish Law Commission for its contribution to this debate; it keeps an eagle eye on issues in front of your Lordships’ House and from time to time delivers material that is very useful to us as we go through our duties.

As the noble Baroness, Lady McIntosh, said, these are probing amendments. They are about the possible uses of super-affirmative procedures and, as she says, relate to issues in the Bill that might well qualify under her heading for a higher degree of scrutiny.

The noble Lord, Lord Thomas, gave us a useful tour d’horizon of the available ways of doing super-affirmative. I agree with him that there is a case to be made here for looking at them in more detail to make sure that they are picked up and looked at regarding their best purpose, but that perhaps is not for today; there are bigger issues here and they should be looked at, but not in this Bill.

My noble friend Lord Judd asked whether the Government really welcome scrutiny or are simply pursuing their normal process—which seems almost inevitable for any Government—to try to obtain absolute control over the legislation they are bringing forward. I suspect the answer to that question is not to be found in providing for better scrutiny. This is a Bill with deeper problems. I do not think that these proposals, although they have their merits, are the right way forward in trying to unscramble those deeper difficulties. I look forward to hearing the Minister respond.

[The Minister of State, Cabinet Office (Lord True) (Con)]

My Lords, I thank my noble friend for tabling her amendments, which relate, as she explained to the Committee, to the implementation of a super-affirmative resolution procedure. This debate is something of a coda to the previous group. It teases at the questions that many of your Lordships raised there and to which my noble friend Lord Callanan responded in some detail, so, if the House will forgive me, I will not repeat those general arguments in relation to these matters, although I repeat that the Government believe that these powers are important for our internal market. As my noble friend Lord Naseby said, we are dealing with trade matters. I repeat that the Government will not take lightly our responsibility in administering these powers.

I thank all those who took part in this debate for the interesting speeches we heard. On a personal note, I always welcome seeing the noble Lord, Lord Judd. I agree with his expression of admiration for noble Lords and Baronesses on the Front Benches opposite for their work on this Bill. Perhaps he will allow me to extend that sentiment to my noble friends Lord Callanan, Lady Scott and Lady Bloomfield and my colleagues.

Pleasantries apart, of course we acknowledge that the Bill gives the Secretary of State the ability to amend the list of legitimate aims, relevant requirements and schedule exclusions through a draft affirmative statutory instrument, with just one time-limited made-affirmative power, which relates to the services exclusions in Clause 17(4). We are fully committed to ensuring that the use of these powers is subject to effective oversight and consultation. That is why any use of the power would require an affirmative regulation to be passed in both Houses of Parliament. This will ensure that Parliament would be able to scrutinise and vote on any changes.

Turning to the substance of my noble friend’s amendments, if we were to accept Amendments 14, 29, 40, 76, 77, 101, 133 and 176, to which my noble friend spoke in this group and which call for the super-affirmative resolution procedure, it would cause unnecessary delay when a change was urgently needed. That point was very forcefully made by my noble friend Lord Naseby in a compelling speech made from the standpoint of his immense experience in chairing the proceedings of the other place.

Although your Lordships’ Delegated Powers Committee had many observations on this legislation, it did not propose the super-affirmative resolution procedure. I repeat: there is a risk of undue delay in a situation that may arise where it appears necessary to act swiftly to prevent undesirable outcomes. My noble friend Lord Callanan gave a number of examples on the previous group. The Government may need to respond quickly and effectively to maintain the status quo after the transition period has ended.

We believe that the draft affirmative resolution procedure—noting that the made-affirmative power is time-limited—offers sufficient parliamentary scrutiny while enabling the Government to act quickly. I therefore ask my noble friend to withdraw the amendment. While I think her amendments attracted the interest of the Committee, and I am grateful to her for bringing them forward, I think it would be fair to say they did not carry the support of the Committee.

As my noble friend has acknowledged, Amendment 24 is consequential so I will not address it in detail. Amendment 25 seeks to probe the Government’s understanding of what is meant by “substantive change” in Clause 4. I can tell my noble friend that it means that any changes that re-enact regulation in a way that changes its outcome count as substantive. Where existing legislation receives technical or minor amendments that do not alter its substance, that does not count as a substantive change.

I hope these responses address the concerns of my noble friend and therefore ask her to withdraw her amendment.

--- Later in debate ---

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

My Lords, we are obviously in competition to make the shortest speech of the evening; I cannot imagine why, because this is quite an interesting question, although we had a partial answer to it in an earlier debate. My take on it was not so much about the points raised clearly by the noble Baroness, Lady McIntosh; I am worried about how acceptably these phrases, put into this Bill at this time, work in a digital world. It is clearly stated in the clause that we are talking about businesses that are local and not local, businesses which are located or not located in an area. We are talking about propinquity and the ability of those who have to interpret these clauses to understand where there are real businesses and how they are operating if they are to be seen to be local.

That does not work for Amazon or quite a lot of the shopping we will be doing between now and Christmas, which will be largely digital in form. Is “hypothetical” to mean virtual? I leave that rather complicated philosophical question for the Minister to respond to.

[Baroness Bloomfield of Hinton Waldrist (Con)]

My Lords, I understand that the purpose of this amendment from my noble friend Lady McIntosh is to probe the meaning of “actual or hypothetical goods” in the Bill, which has foxed a number of other noble Lords. I am very happy to provide further information on that. The inclusion of actual and hypothetical goods in this clause is critical, as it means the provisions work effectively in scenarios that could arise where there are no actual local goods against which impacts on incoming goods can be compared.

If a company has a product which is subject to a patent, it can therefore be made by only one company in the UK. If an authority were to regulate against that product because of where it is produced, there could not possibly be a local good to compare it against to determine relative disadvantage. Being able to compare it to a hypothetical good addresses this and allows the rules against direct discrimination to operate properly and protect all businesses across the UK.

Let us take as an example a new technology which takes an innovative approach to food processing, cutting production times by half. The technology may be completely unique, novel and unlike other technologies for food processing on the market. Without being able to compare this against a hypothetical good, it would be very challenging to deem whether any new measures taken by Administrations were discriminatory or not. Equally, as a further example, if a Scottish company patented a technological breakthrough in quantum computing, this same technology would not be present on the English market and we would therefore need a hypothetical good to be able to compare this innovation to in order to determine whether new English regulations discriminated against this Scottish technology and otherwise created an unfair disadvantage.

The existing wording is also important to deal with situations where arguments could be posited that a local good is similar to, but not the same as, an incoming good, and therefore would not be a good comparator in determining whether discrimination exists. Being able to compare a hypothetical good that is the same as the incoming good, save for location, enables that determination to take place.

I was also asked who determines what a hypothetical good actually is. Ultimately, it would be the courts, but a business would bring forward the challenge and claim discrimination.

I turn to the stand part debate on Clause 7, which sets out the test for direct discrimination. Direct discrimination is where a requirement applies explicitly differently to local goods and goods from elsewhere in the UK and that difference results in disadvantage for the goods from elsewhere. This means, for example, that a Scottish regulator cannot impose additional licensing requirements for Welsh goods unless it does the same for Scottish goods. As another example, take a scenario where Scotland regulated that only Scottish whisky could be sold in pubs; this would be directly discriminatory against the very fine Penderyn whisky produced in Wales, as they would have a clear disadvantage against similar goods on the Scottish market—I see that meets with approval.

“Disadvantage” simply means that it is more difficult or less attractive for those incoming goods to be bought or sold. In this example, any additional licensing requirements on Welsh goods may impose additional costs and potentially increase the price of the Welsh good, meaning it would be less attractive to buy. To be clear, the goods that we are comparing here are the local equivalents of the incoming goods that are materially the same, or materially share the same characteristics, but do not have the same connection to the originating part of the UK. For example, a potato produced in Wales is compared with a potato produced in Scotland. This clause will ensure that directly discriminatory barriers cannot be created by rules that aim at the way in which a good is sold to circumvent the effect of mutual recognition. For example, if English butchers were banned from selling Welsh lamb, this would be directly discriminatory.

It is worth noting that Schedule 1 to the Bill allows for direct discrimination where a requirement discriminates in a reasonable way, as a response to a public health emergency, ensuring that the rules leave scope to react to such situations. I ask my noble friend to withdraw her amendment.

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[Lord Fox (LD)]

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

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

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

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

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

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

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

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

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

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

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[Lord Fox (LD)]

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

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

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

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

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

[Lord Callanan (Con)]

I thank noble Lords for the brevity of their contributions, particularly given the late hour, and I shall endeavour—they shall be pleased to hear—to match that brevity.

We think that these amendments make the test significantly clearer. The relevant concepts are unpacked in distinct subsections, and the new subsections more clearly express policy intention on how the test for indirect discrimination will function. The additional clarity ensures that businesses can operate with certainty, which is what this Bill is intended to ensure.

I have noted the requests from my noble friend Lady Neville-Rolfe—the noble Lord, Lord Purvis, repeated them several times—for details of how the service provisions will operate in things like marketing, language tests, et cetera, and for the legal definition of what “adverse market effect” means in practice. I will, of course, provide those for them in writing. With that, I commend these amendments to the Committee.

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

My Lords, on the next group I will explain that the drafting of some clauses of Part 3 is complex and not as straightforward as it could be. One way or another, it would be useful to have a statement clarifying whether the end result is the status quo, either as a general objective or for certain circumstances.

However, as the hour is late, and as I will elaborate a specific instance on Monday, I do not need to say any more, other than to support what has been said by my noble friends Lord Fox and Lord German. This appears to be a rather complex topic. Maybe taking time to sort it out and make sure that the drafting is as clear as possible would be a good exercise.

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

My Lords, as we grope our way through the Bill and get to what seem even more complex and difficult to understand parts of it, we seem to reach a point where the Bill either does not add anything or is currently so badly drafted that it might destroy what we currently have. I may be being harsh, and I realise that I am asking quite a lot of the Minister, who has probably not been directly involved in any of these parts of the Bill, or concerned with some of the issues we had to deal with earlier this evening, but it seems to me that with every group, and every minute we spend on the Bill, there is a growing understanding that, as the noble Lord, Lord German, said, the Government are trying to push ahead with something that does not take the trick, as far as we are concerned, in relation to the issues before us.

The Government need to step back, take their time, concentrate on the things that they and only they can do, and encourage those who have other responsibilities that bear on what we are talking about to develop them, and out of the gloom will emerge—because they are the answer—the common frameworks. Why do the Government not realise that that is where we are heading? Why do they not get it into their heads that we need to stop being so concerned about the possibilities—the far ranges and the sunny uplands—that may be available in some nirvana they have yet to describe accurately, and work from where we are to try to get somewhere sensible in the time we have?

[Baroness Scott of Bybrook (Con)]

My Lords, I do not intend to have a debate on the union tonight, but I am sure it will come up later in the Bill. However, I reiterate to the noble Lord, Lord Fox, what I said on, I think, the group before last: the General Teaching Council for Scotland will still be able to set the standards in Scotland, as it does now, and will control who can teach in Scotland. That goes back to Scotland having control over its own education system. Similarly, the noble Lord, Lord German, brought up the Welsh language. If Welsh language requirements were introduced in respect of a profession in any other way—for example, by bringing in requirements for ongoing training—it could come under the equal treatment provisions of the Bill. As such, it would be possible for the regulator to impose Welsh language requirements on professionals qualified outside Wales if equally required of professionals qualifying in Wales. So there is an equality here.

I turn to the amendments in the group, which test and attempt to change the way in which professions would be in scope of Part 3. The purpose of the professional qualification provisions in the internal market Bill is to ensure that professionals can, in most cases, access their profession in all parts of the UK, by ensuring that there is an overarching system for recognition. It is important to ensure that, regardless of future policy changes, UK-qualified professionals will be able to practise across the whole of the UK. Divergence in professional regulation between the four nations of the UK should not increase barriers for professionals living and working in different parts of the UK.

The noble Lord, Lord Fox, has sought, with his Amendment 102A, to understand whether these provisions are covered in existing UK law. Currently, while recognition of professional qualifications between the four nations can and does occur, there is no overarching framework that ensures that it happens consistently. The Bill will create this overarching framework to guarantee that recognition of qualifications between the four nations of the UK will be possible, and that barriers to access will be minimised, so that professionals are not unduly limited in where they may work.

To that end, I must oppose the process that Amendments 104 and 105 seek to establish for bringing professions within scope of the internal market provisions. The Government’s approach ensures that nearly all professions are in scope and that barriers do not emerge. In contrast with the Government’s proposals, Amendment 104 lays out a bureaucratic process for adding professions. Amendment 105 builds on Amendment 104 and seeks to ensure that only professions that are specified in regulations are caught by automatic recognition. Ultimately, these amendments would result in delays and uncertainty, preventing barriers in the internal market being addressed. This would be to the detriment of all UK professionals.

I assure noble Lords that the Government acknowledge the importance of working with each devolved authority on the implementation of this Bill and will continue to do so, as they have done throughout this process. Clause 25 already ensures that existing divergence in professional qualification requirements across the UK is outside the scope of automatic recognition, until further changes are made. This means that there are no immediate changes for relevant authorities to make in respect of access to professions.

We must ensure the smooth functioning of the internal market for professionals. I therefore hope that the noble Lord will withdraw his amendment.

Covid-19: Financial Support for High Street Retailers

Lord Stevenson of Balmacara Excerpts

Tuesday 27th October 2020 Lords Chamber

[Lord Callanan (Con)]

The noble Baroness makes a powerful point, and I point out that we do not have these restrictions in England. I almost felt sorry for the Welsh Government yesterday in trying to navigate a way through this self-imposed error.

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

My Lords, with visits to the high street falling and the prospect of Christmas and new year being digital at best, why are the Government asking local authorities to pay back support originally designated for the high street fightback fund? Should not the focus be on reopening the fund to help businesses struggling under the new restrictions?

[Lord Callanan (Con)]

As the noble Lord will be aware, the retail, hospitality and leisure sectors have been helped considerably. We allocated £12.3 billion to local authorities in England to pay grants to businesses under the small business grants fund. This support will continue and we need to do all we can to help our high streets.

Corporate Insolvency and Governance Act 2020 (Coronavirus) (Extension of the Relevant Period) Regulations 2020

Lord Stevenson of Balmacara Excerpts

Tuesday 27th October 2020 Grand Committee

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

My Lords, I thank the Minister for introducing the SI in his customary clear way. We support the measures that are in it. The speeches from the Minister and other noble Lords who have spoken today have recalled for me the happy days, and indeed nights, that we spent on the Bill. It is good to see that some of the debate’s issues are still very live.

Most of the questions that I was going to ask have been asked by others, and I look forward to them getting a response from the Minister. The two that were most interesting, in my mind, included why the Government had chosen not to extend the measure about wrongful trading from directors. We had reservations about that when it was introduced in the Bill in the first place; it has not been continued, and I wonder whether he could explain the Government’s thinking on that point, a point made by the noble Lord, Lord Bourne of Aberystwyth as well.

On the Explanatory Memorandum, the noble Baroness, Lady McIntosh, raised the question of the numbers. We do not seem to know quite how many companies are taking advantage of the breathing space; perhaps the Minister could throw a bit more light on to that. She also raised the arrangements for temporary procedural rules to enable an operational moratorium and the question of whether they might become permanent—and, if so, on what timescale.

The noble Lord, Lord Bourne, asked why we were not moving forward with the technology to allow AGMs to be held virtually. I note that at paragraph 11.1 in the Explanatory Memorandum, the Government plan to produce best practice guidance on holding AGMs flexibly—better late than never, perhaps. I would be grateful to know what the timetable might be for making it permanent.

I have two points to finish. My noble friend Lord Blunkett’s points were really interesting. I hope that the Government will think hard about how they might anticipate the differential effect of the crisis across the country. My noble friend talked about the north, but it is also true in Scotland, Wales and Northern Ireland, where there are very different responses by companies, corporate bodies and individuals to this. Some consideration will need to be given to the differential impact of tiers 1, 2 and 3—and, possibly, 4 and 5, if they ever come—on companies big and small, and how we might deal with that. I hope that there has been some thinking done.

Finally, I noticed that the word “viable” comes a lot from Ministers when speaking about the crisis and on funding that might be available from the Government to take us through. What definition of viable is being used here, exactly? I am an accountant by background, although I did not practise very much, but I do not recognise viable as a term used in the accountancy profession. It is usually much harder edged and backed up by figures. “Viable” seems a very soggy way in which to approach this. Perhaps the Minister could expand on that when he comes to respond. However, to reassure him, we back this SI.