United Kingdom Internal Market Bill

Baroness Noakes Excerpts

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

A great deal needs explaining, without which the powers provided later in this part are disproportionate and unjustified. Although this is early in our debate on this part of the Bill, I am prepared to return to this matter on Report.

[Baroness Noakes (Con)]

My Lords, I have added my name to my noble friend Lady Neville-Rolfe’s amendment. Like her, I am concerned that the CMA has been chosen as the home for the office for the internal market with very little substantive discussion and certainly no proper consultation. The White Paper the Government consulted on in the summer did not even mention the CMA, and the best the Government could report in their September policy response was that

“a few respondents suggested that the UK Internal Market functions would be a natural fit with the CMA”.

When I say that I do not believe the CMA is the right home for the internal market functions, I hope that will not be taken as a criticism of the CMA. It has done good work over the years, building on that of its predecessor bodies, and its work is respected here and abroad. However, it is not a body that has won universal acclaim. The time it takes on some of its market studies and the lack of impact of some of its findings are often cited against it.

I have three main grounds for seeking a different solution, of which my noble friend’s amendment is one constructive suggestion. First, the CMA’s existing functions are adjacent to the issues that will arise in the UK’s internal market, but they are by no means coterminous. The CMA is fundamentally about competition impacts, whether through mergers and acquisitions or market behaviour. It is also about the protection of consumers. The UK’s internal market is about trade and the avoidance of unnecessary barriers to trade. These are quite different things. The danger is that the CMA could move from being a focused competition and consumer organisation to one that is more diffuse and less targeted. Many organisations have lost their way when they have sought to expand their footprint and have ended up as a jack of all trades but master of none. We cannot afford to take that risk.

While it is planned for there to be a separate panel for the office for the internal market within the CMA, it is inevitable that the functions of the office, and the resources to deliver them, will be intermingled with the CMA’s other functions. It is also clear from the Bill that it is the CMA, and not the office for the internal market itself, which will carry responsibility for the various functions set out in the Bill. We run a very serious risk of the office for the internal market disappearing into the CMA’s back room.

My second reason is that the CMA really has too much on its plate at the moment to contemplate adding such an important new area of responsibility as oversight of the UK’s internal market. There are aspects of its current workings that are not beyond criticism, as I have already mentioned. Importantly, it is about to take on a number of additional activities as we finally exit the EU at the end of the year. If anyone doubts the extent of these additional responsibilities, there are 50 pages of draft guidance on these new activities which the CMA is currently consulting on. These competition functions have already led to a very significant increase in the CMA’s resources and I believe that it was expected that overall staff numbers would increase by 40% as a result. Against that background, it would be crazy to add on significant additional responsibilities. There is only so much change that any organisation can safely accommodate in a given period.

A final reason for wanting to see the office for the internal market set up outside the CMA is to ensure that it has a real presence in our internal market as a respected source of impartial data, analysis and advice. These seem to be the things that the Government want, as set out in this Bill, but setting it up as a mere panel of a much larger, differently focused quango cannot be the right way to achieve that.

[Lord Palmer of Childs Hill (LD) [V]]

My Lords, my purpose in speaking today is to support Amendment 111, which I have signed, and the detailed comments made by my noble friend Lady Bowles. Amendment 111 aims to clarify that the role of the CMA and the office for the internal market is not the resolution of disputes. We already have common frameworks; we do not need a topdown resolver of disputes.

Last week, the Minister said clearly that the office for the internal market is to provide “monitoring, advice and reports”. He said that it will

“have no direct role in dispute resolution”—[Official Report, 26/0/20; col. 70.]

which will be discussed by the Joint Ministerial Committee. There is no reference to a dispute resolution in the Bill. I hope that, for clarity, the Government will accept Amendment 111, which states clearly that the CMA and, thus the new office for the internal market,

“must not engage in dispute resolution”.

The important role of dispute resolution can realistically be achieved only by discussions and compromises between the nation states of the UK. The amendment seeks to make clear what the OIM can and cannot do. In responding to this debate, will the Minister clarify these powers, or lack of them? Clarification, along with dealing with complaints and inconsistencies, is what is needed. That is what your Lordships’ House is set up for and does so well. The various explanatory documents only confuse even further and imply some resolution powers for the CMA and OIM.

Amendment 111, which puts the CMA and its plethora of civil servants back in the box, is necessary if the Bill is to be approved. The Bill is a mistake; the noble and learned Lord, Lord Falconer, summed it up when he said that it was “unthought-out”. I support the amendment.

--- Later in debate ---

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

My Lords, it is a great pleasure to follow the noble Baroness, Lady Finlay, and the noble Lords, Lord Wigley and Lord Hain. I agree with much of what they have said. The noble Baroness was particularly clear in setting out the issues that arise with this group. I have attached my name to, and will speak to, Amendments 119 and 126, in the name of the noble Baroness, Lady Hayter of Kentish Town, who I thank for originating them.

They share the purpose of many amendments in this group: to ensure that the devolved nations have a voice in the operation of the internal market—the market that will govern much of what they can regulate and what protections they can provide to their peoples, as the Committee discussed last week in the group starting with Amendment 15.

As the noble Baroness, Lady Hayter, has not yet spoken, I will briefly address the detail. I interpret Amendment 119 as something of a back-up to Amendment 118, which would ensure that the Government have to obtain the consent of devolved Administrations before appointing the chair and members of the CMA’s office for the internal market panel. Amendment 119 says “seek consent”. I prefer Amendment 118, but it is important that at this stage we offer a range of amendments to the Government.

Amendment 126 refers to the membership of the OIM panel, saying that it should include representatives from each of the four nations of the United Kingdom. The purpose of these two amendments, as in so many of the amendments in this group, is—to adapt the well-known phrase— to ensure that there is no regulation, or deregulation, without representation or democracy.

In briefly making the case for these amendments, I go back to the first group debated today, which, as your Lordships will recall, related to professional qualifications. I quote the words of the noble Lord, Lord Callanan, in that debate:

“There is the whole world of artificial intelligence or gene editing—there is a massive range of new and potential professional areas, bodies and qualifications that may come forward … in the case of new professions, it is entirely possible that the individual nations of the UK might seek to regulate them differently, and we want no new barriers to trade to emerge”.


In that one short statement, the Minister managed to sum up the disturbing intention of the Government to centralise in Westminster decision-making on extremely important areas of public policy that are currently devolved; the reasons for the objections to this Bill held by many, particularly those concerned with defending the devolution settlements; and the case for these amendments. Even if the protections that the still relatively new institutions of the nations have been able to create for their peoples stay in place, they will not be able to react to social, economic or technological changes, or strengthen existing protections.

To go back to the single-use plastics example that was discussed extensively under Amendment 15, if the Welsh Government want to provide extra protections for their people and environment from these deeply damaging products, they can rush to get measures under the wire now, before the internal market replaces the single one. For what happens after that, I cannot think of better examples than those provided by the noble Lord, Lord Callanan—gene editing and artificial intelligence, where different regulations might be applied by the devolved Administrations in their areas of competence. That would include areas ranging from agriculture to education, from food safety to transport. We need to ensure that the devolved Administrations can keep control.

[Baroness Noakes (Con)]

My Lords, I listened carefully to noble Lords who spoke before me. The devolved Administrations are failing to recognise that both the CMA and the office for the internal market are fundamentally UK-wide bodies working on UK-wide issues. They are not bodies where territorial interests will be played out. The devolved nations are part of the United Kingdom, which exists and is not just a federation of four independent nations. There are clear United Kingdom functions, which is why we have UK Ministers looking out for the interests of the whole United Kingdom. We should not regard the UK as somehow morphing into an equivalence with England, which the noble Lord, Lord Hain, came close to saying, even if he did not actually say it, when he spoke earlier.

Furthermore, these significant independent public bodies should not be seen as having nominees or representatives on them: it is important that you get the best people to contribute to the functions given to these bodies by statute. Those people will require qualifications and experience. It does not matter where they come from: the most important thing is to get the right quality of individual on those bodies to carry out their functions. Any sense that those individuals become the possessions of devolved Administrations could take them into political alignment, which would have a very negative influence on the effective operation of the independent bodies.

Schedule 3 already requires consultation with the devolved Administrations over the appointment of the chair and panel of the office for the internal market. That is the normal formulation. I do not think that there is a precedent for what is proposed, for example, in Amendment 117: direct appointments by devolved Administrations to independent UK-wide bodies. That would take us in a direction that could undermine the independence and coherence of those bodies. I hope that noble Lords will not pursue their amendments.