United Kingdom Internal Market Bill

Baroness McIntosh of Pickering Excerpts

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

[Lord Judd (Lab) [V]]

Thank you. My Lords, I will be brief. I just want to say how much I commend the amendments from my noble friend Lord Stevenson. He is setting out principles which are very important, rather than just the general purpose, and for that we should be grateful. I would also like to put on record that I am glad that he has taken, on previous amendments, the point that what we must be aiming for in all this is a situation in which there is a sense of shared ownership and the shared involvement of all the parts of the United Kingdom.

[Baroness McIntosh of Pickering (Con) [V]]

My Lords, I am grateful to the noble Lord, Lord Stevenson, for introducing these two amendments and giving us the opportunity to probe the very heart of the functioning of the OIM in terms of its independence. Can my noble friend the Minister say how the Government will ensure that this body will be independent? My noble friend will be aware of my concerns and those of others that the Government have got into the habit recently of creating such public corporate bodies and then trying to direct how they operate. Recent examples are, as the noble Baroness Jones of Moulsecoomb, just alluded to, the Trade and Agriculture Commission, which falls within the Department for International Trade, which basically does not provide any resources to those who serve on the commission and, even more recently, the Office for Environmental Protection which, apparently, is to be appointed by and subsumed within Defra. So that is my main concern here, and there is much to commend in Amendment 115 as to how the body corporate is to be set up.

Furthermore, the noble Lord, Lord Stevenson, asks in subsection 2(2) of Amendment 131 for consultation with the devolved Administrations. I would prefer it if went further, as the noble Baroness, Lady Hayter, requested: consent for such appointments should be sought from the devolved Administrations. Presumably, if the Government were to adopt the terms of this amendment, it would be the OIM that would ensure the level playing field, which I imagine is the Government’s intention. However, if it was not the OIM, can the Minister explain which body would, as in subsection 3(2),

“rule that any distortive or harmful subsidies are illegal and should be repaid”,

and, as in subsection 3(4),

“recommend to the Secretary of State changes to the test for a harmful subsidy, the scope of exemptions, and time limits on approvals”?

There should be a body to ensure levelling-up, not just of the regions but between the four nations. I hope that the Government are taking a consistent approach here, in their position on the European Union and their position on state aid between the four nations of the United Kingdom internal market. It would not behove the Government to be seen to be parti pris on their position on competition and state aid in this regard.

I share the concerns expressed by the noble Lord, Lord Purvis, and others, in the previous debate, regarding responses not always being published. I am having great difficulty, and perhaps the Minister can point me in the right direction, but rather than a summary of the responses, it would be enormously helpful if the Government published the responses to the consultation regarding this amendment in full, and preferably before the next stage of the Bill. That would enable us to form our own view of who said what in response to the consultation.

With those few remarks, I would like to put the key questions to the Minister: how do the Government intend to ensure the independence of the OIM, and how do they intend to carry the devolved Administrations with them in this regard?

[Lord Fox (LD)]

My Lords, so far there have been four groups of amendments dealing with the CMA and the OIM, and three different Ministers fielding. That perhaps summarises the fragmented nature of this Bill and the unjoined-up nature of what we are seeking to achieve. In those four groups, and this group, amendments have sought, in a sense, to correct and improve this Bill, but there is no point, because this Bill is beyond that stage. Other speakers have sought to probe and get information from the Government, and there has been no point to that either, because the Government have not answered questions. Despite extremely well directed, forensic analysis and questioning, the Government have ducked, dived and shrugged.

In addition to supporting the request made by the noble Baroness, Lady McIntosh of Pickering, for the consultation to be published, I would like this Minister, who is before us for the first time in this debate, to answer the questions on this group, and to undertake, on behalf of the other Ministers, to answer all the questions that the last four groups have presented, because they are all extremely important to understanding what on earth the Government intend to do.

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There are so many unanswered questions in this part of the Bill that I am drawn to the conclusion that what we have before us is based on political rather than economic reasons. This part of the Bill wants us to take on trust the way the Government will behave towards the other Governments in the UK. It has failed to answer the big questions that need to be answered before we can agree to enshrining so many important matters for the four countries that make up our union and, most importantly, how Wales is going to get its £2.2 billion, promised in this very Chamber.

[Baroness McIntosh of Pickering (Con) [V]]

My Lords, it is a pleasure to follow the noble Lord, Lord German. I would like to build on some of his questions, particularly the question of who administers the funds, especially in relation to regions and local authorities in England.

I am grateful to the noble Lord, Lord Stevenson, for his Amendment 132 and for the chance to debate Clause 48 stand part. The noble Lords, Lord German and Lord Stevenson, and a number of others, asked about the situation going forward in respect of the Barnett formula. Is it the Government’s intention that that will remain in place, or is it the implication of this part of the Bill that the formula will be replaced by a new shared prosperity fund on the criteria that we are currently debating here?

My main concern as someone living in England, albeit of Scottish descent, is about the shared prosperity fund. Who will administer it and to whom will applications be made? How will a balance be reached between rural and urban areas? I declare an interest as a former MP in North Yorkshire for 18 years. I was delighted by the announcement in February this year that £6 million of funding has been allocated for a rural connectivity project in North Yorkshire with the specific task of helping to unlock the rural economy’s potential. It will be to the benefit of farmers and rural communities to support superfast mobile connectivity and rural broadband generally.

Looking at Clause 48(2) as it currently stands, however, rural broadband or broadband and mobile connectivity simply do not appear. Does that mean that, whichever nation or local authority or region you live in, once this shared prosperity fund comes into effect, these funds will disappear? Funds that have only just been allocated this year, presumably, under the existing European Regional Development Fund, will run their course. Is my understanding correct that the omission in the Bill of connectivity—either rural or urban, in whichever nation or region we happen to live in—means that it has been dropped from the shared prosperity fund? I will be interested to know and understand why, in particular, infrastructure has been limited in Clause 48(2) to,

“water, electricity, gas, telecommunications, sewerage or other services (for example, the provision of heat) … railway facilities (including rolling stock), roads or other transport facilities”.

It goes on over the page. I am severely disappointed—I am sure that others living in rural areas will feel the same way—that rural connectivity is being overlooked. It is not acceptable in this day and age that special provision is not being made for rural areas. The 5% who are the hardest to reach are being overlooked. I understand that the Scottish Government have given very generously to rural businesses in this regard, to their benefit and that of English customers who are buying from them.

I want to repeat a question posed by a number of other noble Lords: what is happening with regard to match funding? Will it continue to be required as it was under the ERDF and the European structural funds? How will economic development be administered? Is it going to be the case that local authorities such as North Yorkshire, Ryedale District Council, Hambleton District Council, Harrogate District Council or York City Council will have to go cap in hand to the Government? At this stage, it will be interesting to have more flesh on the bones of Clause 48. Who will determine what the balance is to be in applications from rural and from urban areas?

On the much-vaunted policy of the levelling-up agenda set out so effectively in the Government’s manifesto and to which they promised to commit themselves during the life of this Parliament, and which I entirely support, what role will the shared prosperity fund have in levelling up the regions and local authorities?

I want to end on this note. The noble Lord, Lord Stevenson, referred to the ERDF and structural funds having regard to levels of deprivation. It is not generally understood that rural areas have pockets of deprivation that are every bit as bad as those which are generally better known and recognised in urban areas. With these few remarks, I look forward to the answers from my noble friend.

[Baroness Randerson (LD) [V]]

My Lords, this is a very important group of amendments because they deal with another recentralising measure in this Bill; that is, powers for the UK Government to spend money on wholly devolved areas of competence. Let us remember that power without spending power is hollow. At the least, this is a petty pot-shot at the devolved Administrations, while at the worst, it will lead to a direct conflict of policies and a huge waste of taxpayers’ money.

Let me give a hypothetical example on environmental spending. You could have the Welsh Government subsidising wind farms and the UK Government paying to close them down. Before anyone scoffs at that idea, in relatively recent years the Conservatives in Wales have campaigned against wind farms. In the best case scenario, it will lead to disjointed rather than joined-up policymaking.

The list of specified policy areas goes well beyond the usual devolved areas, so this is clearly a naked power grab. However, all of this is unnecessary because the UK Government can and do spend money on the devolved areas, but they do so in partnership with the devolved Administrations. City deals are a prime example of this successful approach. In these deals, the UK Government will set out pretty stiff conditions for additional funding. They do not simply hand over the cash. If we take the example of higher education, universities in Wales and Scotland receive funding from UK research funds, and here I declare an interest as chancellor of the University of Cardiff.

If the Government feel that they are not getting full recognition for their funding, they should take a leaf out of the EU’s book and put a badge on it. As the noble Lord, Lord Dunlop, said in his truly excellent speech, they should not just fund and forget. In 2012 in the Wales Office, we recognised that the Welsh Government did not have enough capital funding for the significant infrastructure improvements that were needed if Wales was to compete economically. We gave the devolved Administration additional borrowing powers and we worked with the Welsh Government to agree a shared programme of funding for, for instance, the South Wales Metro. We worked with the grain of their views, but we still set the framework. Now I hear that the UK Government are threatening to build the M4 relief road, which the Welsh Government and local people have rejected.

Looking back to the days prior to devolution in Wales, there used to be huge rows about the smallest details of how social and economic support from the EU should be spent. Often, rather foolish decisions would be made by central Government, which were basically too remote from the areas concerned. The proposals in this Bill threaten a return to that centralised, counterproductive approach.

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Moved by

[Baroness McIntosh of Pickering]

134: Clause 31, page 23, line 18, leave out “from time to time”
Member’s explanatory statement
This amendment deletes the phrase “from time to time” from Clause 31(1).

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[Baroness McIntosh of Pickering (Con) [V]]

My Lords, it gives me great pleasure to move this amendment and speak to the others in my name. I thank the noble Baroness, Lady Bowles, for her support; I think she is going to speak at some stage on the clause stand part debate. I take this opportunity to thank once again the Law Society of Scotland for its briefing and its assistance in drafting these amendments.

Amendment 134 would delete the phrase “from time to time” from Clause 31(1). The reason for this is simply to state that reviews should take place on a more structured and regular basis than simply from time to time. I would like to press the Minister on what the intended timeframe for a review is within the terms of Clause 31.

Amendment 135 is on a similar theme. It looks to set out the significance of a matter that the CMA would review under the terms of Clause 31, and to press the Minister to say that surely it must be intended that the CMA conducts reviews into important and significant matters only. Is that the Government’s intention? Currently Clause 31(1) provides the CMA with an extensive power to conduct reviews. In my view that should be used only in accordance with clear rules that will ensure that only important issues are reviewed. The purpose of the amendment is to press my noble friend and the Government on what would instigate such a review and be deemed a sufficiently important and significant matter for this purpose.

Amendment 137 looks at the purpose of a proposal that should be made only, as I state here, by the Secretary of State or others that I have set out. The purpose is to ensure that only the Government and the devolved Administrations can make a proposal to the CMA to conduct a review. The reason for that is that the Bill currently provides that the CMA can receive and consider any proposals for undertaking a review, so in fact anyone can refer a matter to the CMA. Surely it must be intended that there is some qualification relating to this to exclude vexatious or frivolous referrals that might be deemed to be wasting the time of the CMA or others involved. The purpose of this probing amendment is to restrict the capacity to make referrals to the Government and the devolved Administrations, and to ask my noble friend if that is indeed the Government’s intention.

Amendment 144 looks at Clause 32, taking out “part” and replacing it with “or the entirety of”, thereby ensuring that the Secretary of State can request advice on a report for the whole UK, not simply a part of the UK. That is simply to note that the Secretary of State may request the CMA to provide a report for any part of the UK under Clause 32(11)(d), but not apparently for the whole of the UK. It is my intention to resolve that anomaly and clarify whether my understanding is correct.

Amendment 146 would delete Clause 35(4), which states:

“A duty of the Secretary of State to make a statement to Parliament is to be discharged by laying a copy of the statement before each House of Parliament.”


Is it not the case that such duties should be discharged in person directly to Parliament by making an Oral Statement rather than by laying a copy of the Statement before each House? Or do the Government intend to use that procedure and this is just the phrase that they have used? My amendment seeks to probe this.

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In the light of the various reasons and reassurances that I have given, along with my explanations in some detail of the purpose and reasoning behind the clauses, I hope that my noble friend will feel able to withdraw her amendment.

[Baroness McIntosh of Pickering (Con) [V]]

My Lords, I am grateful to all those noble Lords who have contributed to the debate. I did rather enjoy my noble friend’s description of not wishing to overburden the CMA with expectations; I do not think that that is quite the case as yet. As the noble Baronesses, Lady Hayter, Lady Randerson and Lady Finlay, and the noble and learned Lord, Lord, Lord Thomas of Cwmgiedd, have said, we are seeking to ensure that the devolved Administrations are consulted, that consent is sought and that they are respected. That was the main thrust of the argument.

I am disappointed that my noble friend does not find common cause with my amendments. I am very grateful in particular to my noble friend the Duke of Montrose for highlighting the fact that, as he recognised, which is most pertinent, most of the reports will in fact emerge from the devolved Administrations. That is why it is bizarre that the Secretary of State can be excused from speaking to these reports from them so that Parliament itself, along with the devolved Administrations, would be made aware of his arguments and reasons for either accepting or rejecting the reports.

My noble friend’s response begs a question which it will be interesting to explore at subsequent stages. If the Government are not prepared to accept a de minimis rule on what the status of referrals and the reports to be made by the CMA would be, that begs a question about how we define the distortion of the market. I spent six happy months in the European Commission looking at how competition was being distorted in the context of the single market, which we have just left, and what defined a distortion of the market. I shall seek to develop that argument at a later opportunity. For the moment, I beg leave to withdraw the amendment.

Amendment 134 withdrawn.