United Kingdom Internal Market Bill

Baroness Altmann Excerpts

2nd reading & 2nd reading (Hansard): House of Lords
Monday 19th October 2020 Lords Chamber

[Baroness Altmann (Con) [V]]

I join other noble Lords in congratulating the noble Baroness, Lady Hayman of Ullock, and my noble friend Lord Sarfraz on their maiden speeches, and I warmly welcome them to this House.

On the Bill before the House, I wholeheartedly support the amendment to the Motion in the name of the noble and learned Lord, Lord Judge, for all the reasons that he so admirably and eloquently laid out, and that in the name of my noble friend Lord Cormack. I share the deep regrets expressed by my noble friend Lord Bridges and agree with all the remarks of my noble and learned friend Lord Clarke.

The damning reports of three House of Lords Select Committees, and the exceptionally clear explanation presented to the House by my noble friend Lord Barwell, are clear indications of why it is our duty to ensure that the Bill, particularly Part 5, does not pass through this House. I cannot, in all good conscience, support the measures in the Bill, particularly Part 5 but much else, too. I am afraid that I will have to vote, on every occasion, against the Government’s intention to break international law. I congratulate the most reverend Primate the Archbishop of Canterbury on his brave intervention, and I join other noble Lords in warning about the potential of the Bill, as presented to this House, to pave the way to authoritarian rule.

Principle must come before party, and this is the moment of truth when we must face up to the consequences of seeking to have the same rules within the four countries of the UK while pretending that these rules can somehow differ from those of the EU, particularly Ireland, without erecting borders either in the Irish Sea or on the island of Ireland. Should those mythical alternative arrangements to do away with the need for such borders materialise—arrangements that were promised to us a year or two ago—that would have been fine, but in their absence we must ensure that the Bill does not pass through this House as presented to us today.

United Kingdom Internal Market Bill

Baroness Altmann Excerpts

Committee stage & Committee: 1st sitting (Hansard) & Committee: 1st sitting (Hansard): House of Lords
Monday 26th October 2020 Lords Chamber

There is an urgent need to remove the inherent illegality in this Bill and the threat to peace and prosperity in Northern Ireland. These amendments seek to ensure that that peace is protected, that the Good Friday agreement is protected, that the protocol is protected and that that is placed on the face of the Bill.

[Baroness Altmann (Con) [V]]

My Lords, I have added my name to these amendments, moved so excellently and explained clearly by the noble Lord, Lord Hain, and of course the noble Baroness, Lady Ritchie of Downpatrick. So I will not spend too much time going through the proposals of these particular amendments. I would just like to ask the Minister, from these Benches, why the Government are objecting to these amendments being in the Bill.

I understand that one of the arguments is that they are superfluous or not really required. However, given the clear lack of trust or concerns about some aspects of recent statements, and given that, I assume, the Conservative and Unionist Party is indeed committed to the Good Friday agreement, to no hard border on the island of Ireland and to the terms of the Northern Ireland protocol—on which this Government were so recently elected and which our Prime Minister signed up to—this amendment merely aims to ensure that measures in the Bill are fully compliant with both the Good Friday agreement and the Northern Ireland protocol, which was part of the great deal that the Government negotiated and put to the country. If Part 5 is a negotiating tactic and the Government really do not intend to use it and are aiming to get a deal, or if there is no deal, surely we still need to respect the Good Friday agreement, and our internal market needs to respect the promises made that this Northern Ireland protocol will be part of our future relationship with the EU.

I ask my noble friend to explain why the Government are unwilling to accept these amendments and to confirm that our party wishes to maintain our country’s reputation for upholding the legal agreements that we have reached with other countries in good faith.

[Lord Carlile of Berriew (CB) [V]]

My Lords, I start by apologising to the noble Baroness, Lady Ritchie, for speaking over her earlier; I had not realised that I had already been unmuted.

The issue of the Northern Ireland protocol is about nothing more nor less than peace and stability in Northern Ireland and peace and security in the United Kingdom. I share the view given with such clarity a moment ago by the noble Baroness, Lady Altmann, that this matter should be explicitly declared in the Bill. There is nothing more important to national security and public safety than the Good Friday agreement. It celebrates the 21st birthday of its effectiveness on 2 December this year. My interest in the Good Friday agreement arose from my time as Independent Reviewer of Terrorism Legislation and the years that followed. I have followed very closely both the sometimes fractious, but surviving, political process in Northern Ireland and the recent history of residual terrorism in Northern Ireland. Although it still exists, it is much reduced and is well understood, now, at least, by the authorities.

The Good Friday agreement has secured the United Kingdom. If you visit Northern Ireland and look at its political and business institutions and public authorities, you will see that it has given them a sense of benefit which is sometimes not matched in other parts of the United Kingdom.

I pay tribute to the political parties in Northern Ireland, some of which were regarded as enemies of the people until the Good Friday agreement—and whose presence at St Andrews caused a good deal of criticism of the then Government—for the way in which they embraced constitutional activity in the political issues of Northern Ireland. I once spent some time with some ex-terrorists who had, by then, become respected politicians. I was hugely impressed by the way in which they embraced those constitutional proprieties, both in Northern Ireland and the Republic of Ireland.

There is no more important issue in the context of Brexit than ensuring that nothing is done to undermine in any way the Good Friday agreement. Everything else fades into unimportance. We must be clear that no sacrifices of the stability that the Good Friday agreement has brought will be made in the name of Brexit.

I will listen with great care to what is said by the noble Lord, Lord True, in replying to this short debate. I hope we will hear unequivocally from him not only that nothing will be allowed to happen that undermines the Good Friday agreement but that the Government are prepared to declare that in the Bill.

--- Later in debate ---

[Baroness Ritchie of Downpatrick (Non-Afl) [V]]

My Lords, I declare an interest as a member of the Common Frameworks Scrutiny Select Committee, ably chaired by the noble Baroness, Lady Andrews. The noble Lord, Lord Foulkes, and the noble and learned Lord, Lord Hope of Craighead, are also members of the committee. I am a signatory to Amendment 175 along with the noble Lord, Lord Hain, and the noble Baronesses, Lady Altmann and Lady Suttie. The specific purpose of the amendment, as ably demonstrated by the noble Lord, Lord Hain, is to state that no new UK regulations can be made affecting any area that devolved prior to Brexit, including any area with cross-border impacts, without a common framework agreement with the devolved Governments concerned.

As has already been explained, these amendments, particularly this one and others in this group, focus on the primacy of the common frameworks and the importance of devolution. In many instances, throughout this Bill, the Government seem intent on power grabs from devolution to bring power directly to Whitehall. Quite clearly, the aim of our Amendment 175 is to protect devolution. I can think of those special devolution arrangements in Northern Ireland—of which I was once a part as a member the Northern Ireland Assembly and also as a former Minister—that arose out of the Northern Ireland Act 1998 and as a consequence of the Good Friday Agreement. They were based around those interlocking sets of three relationships within Northern Ireland: between north and south on the island and east-west between Ireland and Britain, and the accompanying infrastructure arrangements. These were reflected in the Northern Ireland protocol, and in the Withdrawal Agreement that the Government now seem intent on scuppering through this UK Internal Market Bill.

Interestingly—as the noble and learned Lord, Lord Hope of Craighead, and others have referred to—this Bill does not contain common frameworks. I was at a recent briefing with others, such as the noble and learned Lord, Lord Hope. It was very well organised by the Minister and the noble Lord, Lord Callanan. It was attended by the Minister for the constitution, Chloe Smith. She indicated that the reason why the frameworks were not in the legislation is because they are not all legislative. I found that reason very odd, but also very hollow and flimsy. As the Centre on Constitutional Change has stated, common frameworks are not mentioned in the Bill and it is unclear whether regulatory rules established through the common frameworks process will be subject to the market access principles. This is an issue that has also been addressed by the Lords Constitution Committee and by a group of academics for the Centre on Constitutional Change in their paper entitled UK Internal Market Bill Devolution and the Union, which was published last week.

To go back to the Lords Constitution Committee, it states at point 15 in its conclusions that:

“The Government should explain why the Bill does not mention common frameworks and how it expects the arrangements for the UK internal market will relate to the common frameworks.”


It further states at point 16 that:

“The Government has failed to explain why a combination of retained EU law, its existing powers to amend that law, and common frameworks could not provide the certainty required at the end of the transition period to secure an effective UK internal market. Such an approach would obviate the need for the Bill.”


Academics for the Centre on Constitutional Change who published their paper last week stated:

“By abstracting the internal market from these frameworks and pushing ahead unilaterally against opposition from the authorities in Scotland and Wales, the UK Government is putting the common frameworks approach at risk.”


They also state that the market access principles in the Bill weaken devolution, reduce divergence and risk undermining the objectives and principles that have guided frameworks discussions.

The market access principles within the Bill undermine devolution competences in two ways. The UK Internal Market Bill itself will become a protected enactment, which the devolved legislatures will be unable to repeal or modify—hence our Amendment 175.

The Bill also narrows the territorial scope of devolved legislation. Currently, devolved legislation applies to all relevant activity within the devolved territory. This will no longer be the case as a result of this Bill, if it is enacted. The effect of the market access principles would, therefore, significantly undermine the purpose of devolution, which was to enable the devolved nations and regions to legislate according to their own local needs and political preferences. While I am supporting and speaking to Amendment 175, I also support other amendments in this group because they clearly specify the importance of devolution and, above all, the common frameworks scheme.

[Baroness Altmann (Con) [V]]

My Lords, I have added my name to Amendment 175 in this group, led and excellently explained by the noble Lord, Lord Hain, and in the names of the noble Baronesses, Lady Ritchie of Downpatrick and Lady Suttie. I also support Amendments 5, 11 and 53, so excellently moved and spoken to by the noble and learned Lord, Lord Hope, and others that seek similar objectives.

This is not a party-political matter. Our devolution settlement was originally pioneered by a Labour Government, then deepened and extended by the Conservatives—as explained by my noble friend Lord Dunlop—and clearly supported by the Liberal Democrats, giving the devolved Administrations additional powers. As other noble Lords have said, common frameworks are important and our existing carefully crafted settlements have kept our union united. Surely, a successful devolution of power cannot consist of dictating to the constituent nations what will happen, informing them what they have to agree to and then saying that they have been consulted, so all is agreed. This is how the measures in this Bill have clearly been perceived by the devolved Parliaments.

We are a federal nation, comprising four proud countries. Until now, our devolution settlement has allowed divergence, even on matters such as taxation, where Scotland has different tax rates. These divergences have been well accepted across the country and ensure clear powers for each of our constituent nations. I will ask my noble friend two questions. First, is he able to confirm that the Government respect and accept the devolution settlement, which has served our United Kingdom so well? Secondly, Amendment 75 and others in this group merely insert proposals to ensure that future regulations will be introduced with a consensual approach. Could my noble friend explain the Government’s objection to such a consensual approach?

United Kingdom Internal Market Bill

Baroness Altmann Excerpts

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

[Baroness Hayman of Ullock (Lab)]

My Lords, I wish to speak in support of Amendments 35 and 58, in the name of my noble friend Lord Stevenson of Balmacara, particularly because I am concerned about the lack of standards protections. We have been assured that the Government have repeatedly stated their commitment to high standards and that this Bill does not change that commitment, but, as the noble Baroness, Lady Randerson, has just said, it does not alter the fact that there is no evidence of that commitment on the face of the Bill.

Amendment 35 would expand the legitimate aims laid out in Clause 8 to include protection of consumers, environmental standards, social and labour standards, public health and animal health. I do not intend to rerun the various concerns raised regarding devolution, but we need to ensure that environmental protections in the UK are maintained and enhanced after our exit from the EU. Provisions in this Bill must not derail the Government’s ambition to become the first generation to leave the environment in a better state than they found it. I would like to give some examples of why that is so very important.

Since the Second World War, we have lost 97% of our meadows, 80% of our chalk grassland and more than half of our ancient woodland. The recent State of Nature report from the Royal Society for the Protection of Birds found that 41% of UK species that it studied had declined since 1970. It found that 15% were threatened with extinction and 133 species were already extinct. The Natural Capital Committee has concluded that only half of our habitats currently meet minimum quality targets, with bees, butterflies, birds and many plant species continuing to decline. The BMA has called for a commitment to non-regression on all current UK-wide and devolved nation health, well-being, animal welfare and environmental standards to be written into the Bill.

The EU has been a leader in environmental legislation over the last 40 years, and the UK has played a very important part. Now, our domestic legislation must ensure that environmental protections in the UK are maintained and enhanced after our exit from the EU, and we must not risk losing any of those key protections or allow for any regression. Amendment 35 would help to ensure that those minimum standards were met.

I turn to animal welfare and food standards. UK farmers and producers are rightly proud of their high agriculture and animal welfare standards compared with those in many other parts of the world. They have been very clear that they do not want those standards lowered and are calling on the Government not to allow low-quality products to come into the UK.

It is also worth remembering that, when we reach the end of the transition period, the UK will find itself outside the European Food Safety Authority and therefore outside the Panel on Animal Health and Welfare. Farm animal welfare standards post Brexit may well be threatened as UK farmers struggle to compete against cheap imported food from countries that produce to lower standards. UK farmers could become uncompetitive, and welfare standards could then come under pressure.

When I was in the other place working on the Agriculture Bill, I read your Lordships’ committee report Brexit: Agriculture and I am still hugely concerned about one of its conclusions. It said:

“It may be hard to reconcile the Government’s wish for the UK to become a global leader in free trade with its desire to maintain high quality standards for agri-food products within the UK”.


The legislation that is being passed in the run-up to the end of the Brexit transition period, including this Bill, will have huge impacts on the UK’s standards of animal health and welfare, food safety and environmental protection. Those ramifications could be felt for years, so we have to get it right. Farmers have told me that they are particularly concerned about transparency of provenance and traceability.

The United States is often mentioned in the debate about food standards, with chlorinated washed chicken and the use of injected growth hormones in cattle demonstrating the difference in standards between our countries. Both give rise to significant welfare concerns for the animals involved; both are banned by the EU and, until this point, have been banned by the UK. But we also know that a priority for the UK Government is securing a free trade agreement with the USA. This is also about food safety: the United States has 10 times more food poisonings than Europe, so food safety could be compromised. We could also end up with higher pesticide residues in food, if protections are negotiated away in trade deals.

Compassion in World Farming has pointed out that we should be concerned not just about the USA. It has looked at a potential deal with Australia, where hormone-treated beef and battery eggs are still common, and believes that, if concessions are made there, they could form a precedent for other talks and trade deals.

So we need to redefine unsafe food in the Bill, which is where Amendment 58 comes into play. That is why I am supporting it, recognising the impact that lower food standards can have on our safety and health. I ask the Minister to listen carefully to these arguments.

[Baroness Altmann (Con) [V]]

My Lords, I add my support in particular to Amendment 52, in the names of the noble Baronesses, Lady Boycott and Lady Jones, and the noble Lord, Lord Teverson. It deals specifically with environmental standards and climate protections, and has already been well explained. As so many other noble Lords have said, this amendment introduces a wider set of derogations to allow any one of our four nations to refuse mutual recognition if it believes it is justified by the legitimate public policy objective to protect the environment and tackle climate change. This is really important, to ensure that innovation is not stifled and that there is no race to the bottom, as has already been well explained.

I also support many other amendments in this group, particularly Amendments 39A, 47A and 52A, in the name of my noble friend Lord Young of Cookham, proposing similar protections for public health, safety and security. I also support my noble friend Lady McIntosh of Pickering and other noble Lords who have spoken on the protections required in the agriculture sector.

I recognise the concerns raised by my noble friend Lady Noakes that lack of uniformity could increase costs to consumers and reduce GDP. However, I do not believe that cheap goods are the be-all and end-all. Ethical production standards, safety, health concerns and environmental protections may all add costs in the short term. However, better quality and higher standards can benefit consumers and the long-term sustainability of the economy. Encouraging innovation in environmental and climate protections can and perhaps should be led by individual countries where they have specific expertise, rather than having a centralised uniform approach imposed that could reduce standards in the long term and leave us with a cheaper but less safe future.

I hope that my noble friend can confirm that the Government are in favour of building consensus and agreements across the UK, with common frameworks, while also respecting the rights of individual countries to have different policies in areas of particular importance.

United Kingdom Internal Market Bill

Baroness Altmann Excerpts

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

[Baroness Altmann (Con) [V]]

My Lords, it is a pleasure to follow the noble Lord, Lord Judd, and so many other noble Lords. I support the thrust of this group of amendments, particularly those in the name of the noble Baroness, Lady Bowles, who explained her reasoning with such clarity. I also support the aims of the wholly reasonable amendments in the names of the noble Baroness, Lady Hayter, and the noble and learned Lord, Lord Thomas of Cwmgiedd. I particularly support Amendments 116, 117, 121, 128 and 129, echoing the calls for specific representation of all the devolved Administrations in the operations of the office for the internal market. I also support the aims of amendments like Amendment 118, which call for the devolved Administrations to be properly involved in both the OIM and the CMA.

I hope that, when responding to this group, my noble friend the Minister can accept the intention of these amendments and return on Report with proposals to help dispel the impression that the establishment, as currently proposed, of this office for the internal market represents a power grab by the English Parliament, which shows wholly insufficient respect for, and inclusivity of, the Parliaments of each devolved nation in the United Kingdom. As the noble Lords, Lord Empey and Lord Hain, my noble friend Lord Cormack, the noble and learned Lord, Lord Hope, and the noble Baroness, Lady Randerson, rightly say, surely, representation of each devolved Administration is the minimum that is required to reassure each nation that its own particular interests will be taken into account by a representative with local understanding.

I also agree with other noble Lords that the CMA seems an inappropriate home for this new office for the internal market. Of course, I understand and support the aim expressed by my noble friend the Minister in earlier groups to avoid establishing more arm’s-length bodies if there is a viable alternative to use. However, the CMA does not seem to be a viable alternative for this purpose: it is an organisation sponsored by two government departments, BEIS and the Treasury, and it aims to promote competition for the benefit of consumers, which is primarily concerned with large businesses, competition issues, mergers and oligopolistic power. It does not have experience in monitoring an internal market across all four of our nations, particularly with the interests of so many small firms in each sector being at stake. Therefore, I believe that the office for the internal market does not really belong in the CMA, and, whether or not it is there, it absolutely must have representation from all four nations of our United Kingdom.

[Baroness Ritchie of Downpatrick (Non-Afl) [V]]

My Lords, it is a pleasure to follow the noble Baroness, Lady Altmann, and other noble Lords in this very robust but genuine and philosophical debate about the role of the CMA and the office for the internal market. The general thrust of the debate has been that there needs to be a degree of independence in this body but also that it should embrace the devolved legislatures as well as that within Westminster and Whitehall. As the noble Lord, Lord Judd, said, to protect identities and recognise and acknowledge democracies that Westminster and Whitehall put in place with the devolved settlements, it is important that they are recognised. The best way to do that is through membership on an equal basis on the CMA and office for the internal market panels.

Like the noble Lord, Lord Hain, I was intending to address Amendment 131, which is now in the next group, because I agree totally with its sentiments, as well as Amendments 117, 118 and 119 in this group. It is interesting that, in its recent report, the Lords Constitution Committee states:

“The Government should explain why the Competition and Markets Authority is the right body to have oversight of the monitoring of the UK internal market”.


Perhaps the noble Lord will provide reasoning for that —I hope he does—because none of the noble Lords who have spoken this evening, apart from the noble Baroness, Lady Noakes, have seen any merit in this organisation doing the job that will be required if this legislation is implemented.

The Lords Constitution Committee also states:

“The Government should seek to make the Office of the Internal Market more clearly accountable to the different legislatures in the UK.”


If you want their buy-in—and, as the noble Lord, Lord Empey, has said, there is no buy-in in Scotland, Wales or Northern Ireland—it is going to be an uphill struggle for the Government to achieve that.

In looking at various aspects of this over the last few days, there is no doubt that members should be appointed by all four Executives on an equal rather than proportionate basis, with substantial stakeholder input from the business sector. It should have a dispute resolution capability and sufficient powers of enforcement. Its remit should include measuring additional costs of GB goods to Northern Ireland and the source of the extra cost. Coincidentally, this issue has already been referred to in this debate by the noble Lord, Lord Empey, and an information session was given by the Government to Northern Ireland businesses today, which said that there will be 30 million customs declarations on an annual basis between GB and Northern Ireland. That is the extent of the issue and the extent, for some of us, of the problem and the work required.

There is no doubt that the resources and information necessary to monitor the impact of the UK internal market as it relates to the implementation of the protocol could be covered in Amendment 131, in the name of the noble Lord, Lord Stevenson of Balmacara. I also highlight the capacity to be informed by relevant stakeholders and business and consumer groups. There is a view in the wider business and academic worlds that the Competition and Markets Authority is not a natural fit, as it deals with private, not government, business. The proximity of the CMA to BEIS would always leave it open to accusations of political influence, even though it is a non-ministerial department with strategic influence given by BEIS.

In summary, it is important that that overarching authority should be—here I go further than other noble Lords, perhaps—independent of all political and governmental influence. However, there is no doubt that the work, influence and devolution settlements need to be recognised and, as such, representatives from the devolved structures need to be on the overarching body for it to work and bring some sense to this organisation. I am happy to support Amendments 117, 118 and 119.

United Kingdom Internal Market Bill

Baroness Altmann Excerpts

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

[Baroness McIntosh of Pickering (Con)]

My Lords, I am delighted to follow my noble friend Lord Cormack. I pay tribute to his excellent work over many years in the other place, not least in his model chairmanship of the Northern Ireland Affairs Committee, which I commend today. I shall speak to Amendments 179 and 180, but I will not press them to a vote. Before I speak to them, I endorse what my noble friends Lord Cormack and Lord Howard of Lympne said. It was a privilege to serve as a humble shadow Minister in the Conservative Party under the leadership of my noble friend Lord Howard of Lympne. I also pay tribute to the noble and learned Lord, Lord Judge. He has set out in his amendments why I shall certainly be voting against this part of the Bill.

On Clauses 42 and 43, the noble Lord, Lord Empey, stated the importance of agri-food and the food industry to Northern Ireland. We should pause for a moment on that point. I pray in aid the evidence that we have heard on the EU Environment Sub-Committee, that all those involved in the production of food in Northern Ireland, and industries such as road haulage and freight, which serve that industry, are distraught at the moment because they all thought that this was done and dusted in the Northern Ireland protocol and under the provisions of the EU withdrawal Act. I regret that we are now discussing those issues again in this context. I have no doubt that this was largely because of a misunderstanding of what the Prime Minister had agreed to in what formed the basis of EU withdrawal agreement.

I cannot support this because I am a non-practising member of the Faculty of Advocates and would be drummed out if I broke my oath. Article 26 of the Vienna Convention on the Law of Treaties clearly states that all agreements should be kept and that every treaty

“in force is binding upon the parties to it and must be performed by them in good faith.”

In the words of the noble and learned Lord, Lord Judge, the provisions in Clauses 42 to 47 are offensive and obnoxious, and I wish to have no part in them. I shall follow the lead of my noble friend Lord Cormack in voting against them this evening and on every occasion when I am asked.

I am grateful to the Law Society for briefing me on this and for preparing me to table Amendments 179 and 180, but if the provisions before us in this part were not bad enough, they were compounded as the Bill made its passage through the other place. The provisions in Clause 56(4) provide additional parliamentary scrutiny of the decision to commence in the sections, which, if enacted, would, if anything, compound the breach of international law. Clause 56(4) is defective for those reasons, not least because it is trying to elevate to a matter of process what is offensive and obnoxious in this part of the Bill. It also downgrades the role that we would play in your Lordships’ House by simply taking note of the commencement order for Clauses 44, 45 and 47.

I do not wish to move my amendments, but I am grateful to the Law Society for pointing out the further deficiencies in this part of the Bill. It is largely academic, because I shall be voting against all five clauses in Part 5 of the Bill.

[Baroness Altmann (Con) [V]]

My Lords, I am humbled to follow so many powerful, erudite, emotional and persuasive speeches. The noble and learned Lord, Lord Judge, presented the case brilliantly. The noble and right reverend Lord, Lord Eames, the noble Lords, Lord Newby and Lord Hain, my noble friends Lord Howard and Lord Cormack, the noble Baroness, Lady Ritchie, and so many others across the Committee, have outlined why it is essential that your Lordships’ House removes each and every clause of Part 5 of the Bill. We cannot allow the Government to rewrite an international agreement to suit ourselves, and to undermine the very foundation of our democracy, which is based on the rule of law and parliamentary sovereignty.

I am proud to sit in your Lordships’ House, and to have grown up in this country, which I have always considered a beacon of respect for the rule of law, for upholding international law, and for honesty and moral standards of behaviour, but I too join my noble friend Lord Howard in opposing the Bill, and agree with him that this is not about whether one was for Brexit or remain. It is much more important even than that.

United Kingdom Internal Market Bill

Baroness Altmann Excerpts

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

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

My Lords, I thank the Minister for some of the considerations on which he elaborated around some of the penalties, but I find it hard to accept this in principle. The information-gathering procedures in the Bill seem without any limit on them in the Bill—an unreasonable measure. To try to find a way to tackle that, I tabled three amendments. I thank the noble Baroness, Lady Altmann, and the noble Lord, Lord Vaux, for signing Amendment 62A on the small business exemption. From among the amendments, we hoped the Minister might consider adopting that one or come forward with a version for Third Reading.

Understanding why the penalty provision is unreasonable requires analysis of the background. Section 5 of the Enterprise Act 2002 gives the CMA an information-gathering function for obtaining, compiling and keeping under review information about matters relating to the carrying out of its functions; it does not give a fining power in order to compel businesses to respond. Such compulsion can come later, at a stage when a market study is undertaken, but the circumstances then are that some suspicion exists that businesses themselves have contributed to failures in the market. In contrast, Clause 38 of this Bill gives the CMA, in connection with reports under Clauses 31 to 34, or under Section 5 of the Enterprise Act when it concerns those clauses, the power to collect information and impose penalties on individuals and businesses in order to make them respond.

This power exceeds what the CMA can do for ordinary information gathering, and the provisions are a copy and paste of the powers that accompany the stronger measure of a CMA market study. But there has not been any corresponding copying of the other conditions that surround a market study; nor is it a comparable situation to a market study, because there is no suggestion that the things being investigated might be happening because of what businesses themselves are doing.

The powers in this Bill are about investigating regulations, which is entirely beyond the control of business, and there is no wrongdoing by business. These investigations are about circumstances created by legislatures and which legislatures wish to investigate. It is more comparable to a departmental consultation than to a market study, so what is the justification for coercing and burdening businesses, even if the Minister says there will be rules making that perhaps a bit less onerous? In Committee, the noble Lord, Lord Tyrie, said of these powers:

“The argument that they were derived from legislation the purpose of which was very different is well taken and might point to further amendment.”—[Official Report, 4/11/20; col. 726.]


That is the view of the recent, former chair of the CMA.

One of my amendments would delete the penalties clause, which is really what I think should be done, although I see little hope of persuading the Minister. My second attempt, Amendment 63B, tried to recreate some of the circumstances of a market study, but as the Minister recently confirmed that only regulations can be investigated, not business cases, it does not fit and it does not work. So my third attempt—Amendment 62A—concentrating where it really matters, exempts small businesses from the penalties. It uses the small business definition from the Companies Act, expanded to cover non-company structures. The Companies Act recognises that small businesses should have a lesser public interest burden by exemption from some filings and it recognises that in primary legislation—it does not rely upon regulations or codes of conduct. Why not apply similar logic here?

Small businesses do not all have the wherewithal to respond to onerous consultations, although many will help when they can, but the information requirements in this Bill can require work to be done or attendance at a given place, both causing financial loss. There is no compensation save travel expenses. Yes, there is a “without good reason” defence, but the smallest businesses cannot afford a legal challenge even if they knew of the defence.

Perhaps the CMA will be reasonable itself in setting its code of practice. The Minister hopes so, but there is no certainty, and a notice detailing applicable penalties is a frightening thing. Of course, it belongs to another culture, in which the CMA’s core functions require confrontation with business and suspicion that businesses and companies are doing wrong.

In Committee I asked the Minister what would constitute a reasonable excuse, giving a wide range of examples relative to small businesses. I got no reply, nor have I had a written reply despite having asked for one—although I know the Minister is very busy, not least writing to colleagues.

This is a huge encroachment on civil liberties and the freedom to conduct business. I hope that, at this 11th hour, the Minister will listen and come back with something at Third Reading to put in the Bill that reinforces the statements he has made. But, if there is not that prospect, this is a matter of deep principle—and I speak as somebody who ran a small business for 30 years—and I must give notice of my intention to call a vote on Amendment 62A if negotiations cannot proceed at Third Reading.

[Baroness Altmann (Con) [V]]

My Lords, I am delighted that my noble friend has listened to many of the concerns raised in Committee. I also welcome his saying that the Government will consult carefully on penalties, and the penalties will be limited. I thank him for saying that the needs of small businesses will be taken into account as well.

However, I cannot help but continue to support the amendment in the name of the noble Baroness, Lady Bowles, which I have added my name to, alongside the noble Lord, Lord Vaux, because the points she made seem most persuasive. She has clearly explained that the proposed penalty regime is not comparable with that of the current CMA, despite my noble friend indicating that it is.

The penalties under the CMA would apply in cases where firms are suspected of wrongdoing or unfair competition or practices. But it has already been acknowledged by my noble friends Lord True and Lord Tyrie that the Bill is concerned here merely with data gathering itself, such as would occur in consultations or calls for evidence, rather than information requests that follow from suspected failures. Therefore, I urge my noble friend the Minister to reconsider the position that many small businesses could find themselves in if information is demanded of them under these powers. It would take scarce corporate resources away from operating the business and is likely to pose significant difficulties for firms that do not have lots of employees available to comply with such an information request.

I point out to my noble friend the Minister from these Benches—as a member of a party that has always been the friend of small business and has promoted the value and virtue of people starting up businesses and running small firms themselves—that there is a significant risk here of imposing unreasonable burdens. I echo the call from the noble Baroness, Lady Bowles, for a meeting with him before Third Reading to see if we can find a form of words that the Government could accept, to avoid the need for a vote on Report.

I hope my noble friend understands that this is about a fear that the Bill imposes unreasonable and abnormal demands. For example, on pensions, the Pensions Regulator has not previously had the power to demand information from schemes unless it suspected wrongdoing. I hope we can find a way in this Bill to exempt small businesses from this burden and the potential threat of penalties.