United Kingdom Internal Market Bill

Baroness Garden of Frognal Excerpts

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

[The Deputy Chairman of Committees (Baroness Garden of Frognal) (LD)]

My Lords, I apologise; I should have reminded noble Lords that anyone wishing to speak after the Minister should email the clerk during the debate and anyone wishing to press this or anything else in this group to a Division should make that clear in debate.

[Lord Thomas of Cwmgiedd (CB) [V]]

I am very grateful to the noble Lord, Lord Stevenson of Balmacara, for explaining the place of this in the Bill and for his proposal to try and make something of the provision. As it stands, it seems wholly separate from the other provisions of this Bill. It should not be there, and it is profoundly undemocratic. Its only connection with the rest of the Bill is that it seems part of an attack on the scheme of devolution. I therefore seek to argue that Clause 48 should not, in its current form, stand part of the Bill.

The Bill is concerned with the internal market; it is not concerned with the allocation of government powers to spend money between the devolved Governments and the United Kingdom or English Government. It authorises the UK Government, as it stands, to spend funds in devolved areas—education, roads—and, giving Clause 48 (1)(a) and (b) their ordinary meaning, almost any aspect of government spending, including hospitals.

Therefore, I have a question for the Minister: why is this in the Bill? How is it going to work? Let me put forward some ideas as to why it may be there. First, the Government might, as the noble Lord, Lord Stevenson of Balmacara, has suggested, have the noble aim of investing additional resources into the devolved nations and the other regions of England. If that were the case, they might be doing the work alongside the Governments of the devolved nations and doing it as the English Government in their capacity as the UK Government. If so, why do they need these powers? They have done city deals and dealt with expenditure of this kind without specific statutory versions. If that is the noble aim of this Bill, it seems unnecessary.

There may be a different aim, which again has been foreshadowed by the noble Lord, Lord Stevenson: that the UK Government see themselves as taking over the role of the EU Commission, steering the use of such funding. If the Commission did it, so the argument goes, why should not the UK Government? In other words, it is an example of this Government doing something the EU has done rather well, but which they will never give it credit for. If that is the Government’s aim, it is fair to point out that the European legislation provided for the European Commission to set overall very high-level objectives for funding, and then to negotiate with the devolved Governments of Wales and Scotland as to how these objectives should be reflected in the programmes the devolved Governments designed. The European Commission, at the end of the day, had the veto, but it negotiated with the elected authorities in Wales, Scotland and Northern Ireland, rather than bypassing them in the way the Bill would enable it to.

There may be a third aim, which is that the United Kingdom Government, the Government of England, know far better how to direct spending and cannot trust the Scottish, Welsh and Northern Ireland Governments to spend wisely. Nor, if that is their reason, can they trust the people of Wales, Scotland or Northern Ireland to choose the Government they want, as that entails the choice between different manifestos regarding the way in which money is to be spent on areas of devolved competence.

As it stands, the clause strikes at that democratic choice and the devolution schemes. It will enable the UK Government to spend funds in ways that the UK/English Government think best, but which the people of Wales, for example, may have rejected. That is not democracy. In effect, it would give legislative underpinning to the now discredited principle that the Government in Westminster know best and the people of Wales, Scotland and Northern Ireland, which have Governments with devolved competences, are not to be trusted to spend money wisely in areas of devolved competence.

In short, I can see no justification for these powers which is compatible with the commitment to the integrity of the devolution schemes. Last week, Ministers were asked repeatedly to confirm whether they supported the devolved institutions’ powers to tailor their policies and spending needs to the wishes of the people of the devolved nations. I understand that no such assurances were given. If Ministers wish to overturn the devolution settlements, let them say so. Let them show that the devolution schemes do not work and, in the light of recent experience, that we would all be better off in the devolved nations if only the UK Government could take spending decisions on matters that have been devolved, in place of the Governments in Cardiff, Edinburgh and Belfast.

As it stands, therefore, the clause should not be in the Bill. If there are constraints on how this is to operate, they should be set out in the Bill, or a proposal of the kind made by the noble Lord, Lord Stevenson of Balmacara, should be put in its place.

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

My Lords, I am pleased to speak in this group on my own amendments. I recognise that the noble Baroness, Lady McIntosh, has picked out some relevant points, including probing what I call the business aspect in Clause 31.

I have already rehearsed many of the arguments relating to my stand part notices, so I shall only speak briefly. The question of whether the OIM is set up to provide independent technical advice regarding business disputes with one another or with national authorities, becoming a first-round settlement process—or not, as it chooses—is all left too vague. Some not entirely technical criteria are intimately involved. I cite again my concern as to whether the OIM is the right body or structure and whether the powers exercisable over people and businesses in Clauses 38 to 40 are justified and proportionate to the reporting requirements in Clauses 31 to 34, which largely relate to the activities of Administrations.

My Amendment 145 would delete Clause 33(2), which states:

“A relevant national authority may not request a report from the CMA ... unless the authority has considered whether any other person or body is qualified to provide an independent report on the matter.”


What is meant by “qualified”? I could not find a definition in the Bill other than that in respect of professional qualifications in Part 3, which I do not think applies here. I understand and accept the subsection if the reference is to another statutory body, but the present wording seems to relate, for example, to advisory firms. I might have all kinds of views about that and how the Government seem to use advisory firms too much already, but I am concerned that such private reports would be less transparent.

However, perhaps there is a case for saying that it is more appropriate for an Administration to pay for that research and advice than foist the cost on to businesses, which is what this provision does. Can the Minister advise me of the intention of Clause 33(2)? Does it mean statutory bodies or private bodies?

Finally, Clause 37 requires the CMA to prepare and publish general advice and information about how it expects to approach the exercise of its functions. At present, how the CMA will use its powers is left solely to its own discretion, without guidance or safeguards in the Bill, but I think it is necessary to have guidance about when enforcement and fines are appropriate. For example, they are not appropriate when there is no reasonable suspicion of wrongdoing or contravention of market principles by the person or body from whom information is sought.

[The Deputy Chairman of Committees (Baroness Garden of Frognal) (LD)]

The noble Baroness, Lady Neville-Rolfe, has withdrawn, so I now call the noble and learned Lord, Lord Thomas of Cwmgiedd.

[Lord Thomas of Cwmgiedd (CB) [V]]

I can be very brief in speaking to Amendments 151 and 152, which stand in my name. They relate to matters that were discussed earlier. The first deals with the need to insert into the Bill provisions to ensure that the Competition and Markets Authority—if indeed it is to be the body that plays a central role in the Bill—consults the devolved Administrations in relation to its policy for enforcement.

The second amendment deals with penalties. The Minister has a regulating power and the amendment proposes that the penalties are made with the consent of the devolved Governments. That is obviously in line with what I hope will be the approach of the Government —that is, to work with the devolved Administrations. The reasons were set out earlier and I need not repeat them.

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[The Duke of Montrose (Con) [V]]

My Lords, I am pleased to be able to contribute to this stage of the debate, and to offer my support to my noble friend Lady McIntosh of Pickering, and particularly to her Amendment 134. Just recently we have heard much discussion, even by the noble Baroness, Lady Bowles, about the suitability of the CMA for this role. But there is no doubt that we need a body, and what we are discussing are the functions it would need to perform. I have sight of the briefing provided by the Law Society of Scotland, which supported some of these amendments, and it has been pretty forensic in striving to ensure, in particular, that this Bill contains enough representation and consultation.

I also support Amendment 135; it seems to me very appropriate that the CMA should have powers to decide what is a matter of importance, because the general idea that anybody could ask it to produce a report is a recipe for overenthusiastic demand from all sorts of people.

Moving on to Amendment 146, Clause 35 deals with who gets to receive the reports that the CMA produces, before, during or after measures that are being introduced, and who will present that report. Subsection (4) excuses the Secretary of State from being the one who gives the report in person. Surely most of the reports will actually be initiated by the devolved Administrations, and reports on the initiative of Secretary of State will be far fewer, so why should the Secretary of State be excused from speaking to the report that he has asked for?

[The Deputy Chairman of Committees (Baroness Garden of Frognal) (LD)]

The noble Lord, Lord Naseby, has withdrawn, so I now call the noble Lord, Lord Razzall.

[Lord Razzall (LD)]

My Lords, I will be brief, unlike many earlier speakers in this Committee, who clearly were revelling in being freed from the tyranny of two, three and four-minute speeches. As the evening goes on, I think we come back to the discipline of being brief.

As to whether Clauses 31 to 37 should not stand part of the Bill, the arguments have been well rehearsed earlier and at Second Reading, but I shall reiterate why they seem appropriate here. Why are we rushing to legislate at this stage in this area? Why are we not working with all four Governments to arrive at agreements and to legislate when necessary? As noble Lords who followed this will be aware, the process of managing the United Kingdom internal market through common frameworks has not yet been exhausted. I do not accept the argument of the noble Lord, Lord True, at Second Reading, that the list that has been dealt with by the common frameworks is not exhaustive. Those discussions can continue to take place.

Why are we not continuing to work with the four Governments and to legislate when needed? Why do we not establish a properly independent body representing all four nations in due course, and then legislate? I support the deletion of all those clauses; they should not stand part of the Bill.

[The Deputy Chairman of Committees (Baroness Garden of Frognal) (LD)]

The noble Lord, Lord Judd, has withdrawn, so I now call the noble Baroness, Lady Hayter of Kentish Town.

[Baroness Hayter of Kentish Town (Lab)]

My Lords, we have said it before, so I will repeat only briefly: these amendments would never have been needed had the legislation been drafted in consultation and agreement with the devolved authorities. Instead, the legislation, as we have heard, reads like a complete desire to run everything from the centre, as if devolution never happened, and that the UK Government would simply decide and tell the others what they are to do. For example, as we have heard, it gives the CMA a cross-UK role with regard to the internal market but leaves the CMA, which currently has no devolved accountability, with the power to set penalties above the IM without any devolved authority consent.

I keep asking the same question: do the Government just forget about the other three Governments? As I have already said to the Minister tonight, we need the Government to respond to the thrust of these amendments positively and make it clear that they respect and want a proper role for the devolved authorities. The noble Baroness, Lady Randerson, said that little things matter. These are quite little requests, but they certainly matter.

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Amendment 135 not moved.

[The Deputy Chairman of Committees (Baroness Garden of Frognal) (LD)]

We come now to the group beginning with Amendment 136. I remind noble Lords that anyone wishing to speak after the Minister should email the clerk during the debate. Anyone wishing to press this or anything else in the group to a Division should make that clear in the debate.

Amendment 136

Moved by

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

My Lords, I do not need to say a lot in this group because I have already made it clear that I consider transparency an important part of consumer protection and the way to find out whether consumer interests have been looked after. My Amendment 138 to Clause 31 relates to the provision where any person may request a report, which the CMA can then choose to undertake. My amendment would take away the optionality of publishing the report and says that it must be published.

The Minister said in connection with Administrations that such transparency may prevent forthright exchanges. In this location, it is not advice about regulation that comes under other clauses. This is a general case and if it is reporting—for example, opining on what is or is not a subsidy, discrimination or any of the other matters on which it could be consulted—then the opinions form a body of information that should be publicly available. I would concede safeguards, but they are there anyway in Clause 36 about reports under Part 4. However, I think that the wording should reflect the presumption of publication.

The noble Baroness, Lady Hayter, has also tabled amendments about consumer protection. While I have been a bit picky at times or uncertain whether it is the right thing to qualify the internal market with reference to any sector, what she said about consumer protection having to be in the mix is right. Certainly, Amendments 139, 140 and 142 are in the right places to establish that point.

[The Deputy Chairman of Committees (Baroness Garden of Frognal) (LD)]

My Lords, the noble Baronesses, Lady Noakes, Lady Jones and Lady Neville-Rolfe, and the noble Lord, Lord Palmer, have all withdrawn so I now call the Minister, the noble Baroness, Lady Bloomfield of Hinton Waldrist.

[Baroness Bloomfield of Hinton Waldrist (Con)]

I start by trying to reassure the noble Baroness, Lady Hayter, that we do not wish to see monopolies increasing and choice and quality declining either.

Amendments 136, 139, 140 and 142 aim to give the monitoring and reporting obligations of the office for the internal market a specific focus on the interests of consumers. Clause 31 enables the office for the internal market within the Competition and Markets Authority to operate general and periodic reporting and monitoring to assess the effective operation of the UK internal market and Parts 1 and 3 of the Bill, including how it operates for consumers. These amendments would limit this function to assessing the operation of the market as it affects consumers.

The role of the office for the internal market is to monitor the health of the UK internal market, including specific regulations, sectors and nations. Moving to a narrower definition of the assessment criteria of Clause 31, from the outset, would hinder its effectiveness in fully delivering this function.

To appreciate this, it is worth setting out the breadth of the areas of monitoring that are in scope. They include emerging trends and developments in the UK internal market, cross-border competition, the nature and level of trade between different parts of the UK and access to goods, services and trade. Monitoring may be undertaken independently by the CMA or upon request by other parties such as the UK Government and the devolved Administrations. Proposals can be submitted to review specific sectors relating to the UK internal market.

In doing its work, the office for the internal market will naturally be able to gather information from consumers, businesses and public bodies. Clause 32(4) also specifies that its advice and reporting can involve consideration of the impact of new regulatory proposals on the pricing, quality and choice of goods and on services for consumers. The interests of consumers are therefore an important concern which is already laid out for the office for the internal market when undertaking its monitoring and reporting functions. So, I can assure your Lordships that it will take into account consumer interests in undertaking its wide monitoring and reporting functions and there is no need for a specific reference to this in Clause 31.

Amendment 138 aims to impose an additional requirement in Clause 31 that reporting on reviews which the CMA undertakes of its own initiative or following a request under subsection (1) on matters relevant to the effective working of the UK internal market must be published. Clause 31(4) already requires that all reports the Competition and Markets Authority produces on matters in subsection (1) be published. Clause 32(10), Clause 33(6)(b) and Clause 34(10) also require publication of the reports on the operation of the UK internal market referred to in those clauses as soon as reasonably practicable. In light of this reasoning, I trust that the noble Baroness, Lady Hayter, will be assured that the amendments are unnecessary and that the amendment moved should be withdrawn. We are already doing a lot of background thinking on consumer protections; it is not a closed issue.

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Clause 31 agreed.

[The Deputy Chairman of Committees (Baroness Garden of Frognal) (LD)]

We now come to the group consisting of Amendment 143. I remind noble Lords that anyone wishing to speak after the Minister should email the clerk during the debate and anyone wishing to press this amendment to a Division should make that clear in debate.

Amendment 143

Moved by

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If we are to have an office for the internal market, it is essential that it gives value. One way in which it can do that is as an independent source of advice on whether the claims of the Government that such-and-such a measure poses a significant threat to the coherence of the internal market are credible or not. I beg to move.

[The Deputy Chairman of Committees (Baroness Garden of Frognal) (LD)]

My Lords, the noble and learned Lord, Lord Morris of Aberavon, has withdrawn, so I call Lord Fox.