Strikes (Minimum Service Levels) Bill

Debate between Lord Callanan and Lord Thomas of Cwmgiedd

Consideration of Commons amendments
Thursday 8th June 2023 Lords Chamber

[The Parliamentary Under-Secretary of State, Department for Energy Security and Net Zero (Lord Callanan) (Con)]

My Lords, with the leave of the House I will also speak to Motion B. I will speak to both the Motions to not insist on these amendments and to resist Motions A1 and B1, which are amendments in lieu tabled by the noble and learned Lord, Lord Thomas, and the noble Lord, Lord Fox.

I am delighted to be in the Chamber again following the consideration of this House’s amendments to the Bill in the other place. Although there was a thorough debate of these amendments and those we will look at next, they have been thoroughly rejected by the other place, which has resolved against amendments that would either delay implementation of the Bill or prevent it from achieving any of its policy objectives.

I recognise that this is a topic that Members of both Houses are passionate about and I agree with my colleague, the Minister for Enterprise, Markets and Small Business, that we have had a robust debate on it. However, I point out to the House that the other place resolved against these amendments by significant majorities of 61 and 55 respectively, which are significantly larger than the majorities of 24 and 31 that amended the Bill in the first place. That is also the case for the amendments that we will discuss in the next group. The elected Chamber has therefore given the Bill and the amendments made here its due consideration and Members there have made the position of their House very clear.

The House will be delighted to know that I do not intend to repeat the debate and the arguments that we have heard on the detail of the Bill here; the Government have already clearly set out their intentions and perspective here, which are reflected in the reasons for disagreement that have come back to us. The Government’s position, and that of the elected Chamber, is clear and I can confirm that the Government have no plans to concede on these issues given the ongoing industrial disputes that show the need for this Bill now more than ever. I therefore ask that noble Lords respect the clear wishes of the other place and, while of course I am always grateful for noble Lords’ insight, passion and expertise on this matter, I hope that this House does not insist on these amendments.

I will now address the amendments in lieu that have been tabled. I thank the noble and learned Lord, Lord Thomas, for his Motion A1, which seeks to limit the application of this Bill to England only, unless the Scottish Parliament and Senedd Cymru agree by resolution for it to apply in those nations. The noble and learned Lord submitted a similar amendment on Report and the Government continue to resist this change for the reasons that I set out then.

First, it is a statutory discretion for the employer as to whether to issue a work notice, taking into account any other legal requirements that the employer may have. However, more fundamentally, the purpose and substance of the Bill is to regulate employment rights and duties and industrial relations. This is a reserved matter, so the consent of devolved Parliaments for this legislation is rightly not required. To add in a requirement for this, as the amendment seeks to do, would create significant inconsistency with wider employment law and I suggest that it would also disturb the careful balance of the UK’s devolution settlement. We will of course, as we have throughout the passage of the Bill, continue to seek to engage with the devolved Governments as part of the development of minimum service levels in those areas.

Finally, Motion B1, tabled by the noble Lord, Lord Fox, relates to additional consultation requirements, assessment of impacts of the legislation and parliamentary scrutiny. As has been made clear to this House many times, sufficient checks and balances are already built into the legislation before regulations can be made. Motion B1 would delay implementation of minimum service levels for an indefinite period and thus extend the disproportionate impact that strikes can have on the public. I am afraid that the Government simply cannot accept that.

This Government recognise the significant role that the UK Parliament has played in scrutinising instruments. New Section 234F already ensures that the regulations will receive the appropriate level of scrutiny by both Houses and are subject to usual processes for consultation. I therefore urge this House not to amend the Bill in such a way that would cause significant delay to implementing minimum service levels, use up precious parliamentary time to duplicate parliamentary procedures and set some unhelpful precedents for future legislation. For all those reasons, the Government resist Motions A1 and B1 and I hope that noble Lords will agree not to press them. I beg to move.

Motion A1 (as an amendment to Motion A)

[Lord Thomas of Cwmgiedd]

Moved by

At end insert “and do propose Amendment 1B in lieu—

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[Lord Callanan (Con)]

My Lords, I thank all those who have contributed. The House will be pleased to know that I do not intend to detain noble Lords for very long. We have debated these matters extensively on a number of occasions in a very rigorous manner, so I do not intend to repeat all the arguments. But, let me just say very briefly, particularly in response to the noble and learned Lord, Lord Thomas, that we are certain that the minimum service levels are a reserved matter. They are reserved because they obviously apply only when there are strikes, which fall within employment rights and industrial relations. This is clearly a reserved matter under each of the devolution settlements for Scotland and Wales. Put another way, the Bill amends the Trade Union and Labour Relations (Consolidation) Act 1992, the subject of which is specifically reserved under each of these settlements. I always hesitate to disagree with distinguished lawyers on matters of law but I am afraid that we just have a different opinion on this.

I addressed the points from the noble Lord, Lord Fox, in my opening remarks and will not repeat that. I acknowledge all those who have spoken. I understand the strength of opinion in the House on this but once again I point the House towards the other place—the elected place—and the clear will it has expressed on these matters. I urge the House not to prolong this matter unnecessarily and, while it looks as though we are going to vote on the Motion from the noble Lord, Lord Fox, I am grateful that the noble and learned Lord, Lord Thomas, indicated that he would not be dividing the House.

[Lord Thomas of Cwmgiedd (CB)]

I beg the House’s leave to withdraw my Motion.

Strikes (Minimum Service Levels) Bill

Debate between Lord Callanan and Lord Thomas of Cwmgiedd

Report stage
Wednesday 26th April 2023 Lords Chamber

[Lord Callanan (Con)]

My Lords, I thank the noble and learned Lord, Lord Thomas, for his constructive engagement on this matter. He wrote to us about it and has had a reply, so he knows the Government’s position. We believe that the current drafting of the legislation strikes the right balance so that, while employers have the statutory discretion to issue a work notice, they also have to consider any other existing legal duties that they may have—for instance, contractual, tort or public law duties. My concern is that the amendment would enable employers to act without due consideration to such duties, as it effectively seeks to remove any legal consequences for not issuing a work notice.

The decision to issue a work notice should be objective but, despite what the noble Lord, Lord Allan, and the noble and learned Lord, Lord Thomas, have said, the amendment would then enable subjective, and potentially political, factors to influence that decision.

It would be likely—and I suspect this is the intention of the movers—to lead to many fewer work notices being given where they were needed, leading to minimum service levels not being met in more cases, but the reason for this legislation is that the Government do not believe that is in the best interests of service users or the public. I therefore maintain the position that I took in Committee and resist the amendment on that basis. I hope the noble and learned Lord will withdraw it.

[Lord Thomas of Cwmgiedd (CB)]

It is disappointing that the Government will not put in the Bill what the position is. The word “may” is too ambiguous. I am afraid we may be back to the kind of thing that happened 50 years ago, as we are seeing a large number of disputes go to a successor—the ordinary courts, this time—to the National Industrial Relations Court, and that was not a happy outcome for anyone. But the Government have taken their stand. I do not wish to press this to a Division and I therefore beg leave to withdraw the amendment.

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[Lord Callanan (Con)]

My Lords, Amendments 6 and 7 relate, as has been said, to the devolved Governments. Amendment 6 seeks to remove the power for the Secretary of State to make consequential amendments to primary legislation made by the Scottish Parliament or the Senedd Cymru. This amendment was previously tabled in Committee, and no one will be surprised to know that the Government’s position remains unchanged.

As I have previously stated, the powers in Clause 3 can be exercised only to make amendments that are necessary to give effect to the Bill; they are therefore truly consequential. Employment rights and duties and industrial relations are reserved in respect of Scotland and Wales. It is therefore right that the Secretary of State has the power to make consequential amendments to primary legislation made by the Scottish Parliament or Senedd Cymru, if required, to ensure that the new legal framework operates in a coherent way across the whole of Great Britain. As always, the Government will engage with the devolved Governments as appropriate should consequential amendments be required to Acts of the Scottish Parliament or the Senedd Cymru.

Amendment 7, meanwhile, seeks to limit the territorial application of this Act to England. The noble Baroness, Lady Randerson, tabled a similar amendment in Committee, and the Government continue to resist this change for the same reasons that I set out then.

As has been said numerous times in this debate, once regulations for minimum service levels are in force for a specified service, if a trade union gives notice of strike action, it is then the employer’s decision whether to issue a work notice ahead of the strike, specifying the workforce required to achieve the minimum service level for that strike period. If the employer is the Scottish Government or the Welsh Senedd, it is their decision whether or not they use this legislation. Of course, we hope that all employers will want to do so where needed —as was said in relation to the amendments of the noble and learned Lord, Lord Thomas, employers must consider any contractual, public law or other legal duties that they have—but the Bill does not contain a statutory requirement to do so. No one is forcing them to use this legislation.

We will, as we have done throughout this legislation, continue to engage with the devolved Governments as part of the development of minimum service levels in those areas and the consultations that would be required that are informing these decisions. The Government have a duty to protect the lives and livelihoods of citizens across Great Britain. The disproportionate impacts that strikes can have on the public are no less severe in Scotland or Wales, and the people there have every right to expect the Government to act to ensure that they can continue to access vital public services, which they pay for, during strike action.

I hope—again, perhaps without too much optimism—that noble Lords will therefore feel able not to press their amendments.

[Lord Thomas of Cwmgiedd (CB)]

My Lords, I considered whether to press both amendments to a Division, but it seems to me that the critical one is Amendment 7. If the Act is not applicable to England, Amendment 6 is, in effect, consequential and falls away. I therefore intend to withdraw Amendment 6 but will ask to test the opinion of the House on Amendment 7.

There are two fundamental reasons for that. First, it is essential that we do not undermine devolution. The devolution Acts give the responsibility for services to the devolved Governments. If the devolved Governments fail to deliver those services, they can be booted out at the next election. That is democracy, which I had hoped this Government believed in.

Secondly, the argument that the Minister has put forward—that the Governments in Wales and Scotland are the employers and can themselves determine whether the notices should or should not be given—is misconceived. As I sought to say, they are not the employers. The employers are the trusts and the local authorities. Probably wrongly, I did not press Amendment 5, but the Government now have to bear the consequence.

If they had agreed to my amendment, the point the Minister made might be a good one—but they did not. The consequence is that it is not up to the Governments of Scotland and Wales. They will have interests and points to make, just as no doubt the UK Government will have to the English authorities. But, ultimately, it will be for the employers. Therefore, this is an outright interference in the running of services in Wales and Scotland. They are at the heart of devolution. This, if anything, proves that what this Government want to do is undermine devolution and thus weaken the union. I will therefore press Amendment 7 in due course, and in the meantime I beg leave to withdraw Amendment 6.

Retained EU Law (Revocation and Reform) Bill

Debate between Lord Callanan and Lord Thomas of Cwmgiedd

Committee stage
Thursday 2nd March 2023 Lords Chamber

[Lord Callanan (Con)]

If the noble Baroness has some patience, I will come on to those amendments shortly.

Turning to Amendments 51, 54, 57 and 58, the power exercisable under Clause 2 will allow Ministers of the Crown to extend the sunset for specified legislation, both in reserved and devolved areas, up to 23 June 2026. This includes areas of devolved competence, and we could act on behalf of devolved Ministers if they wish to request that. Clause 2 allows for the extension of a “description of legislation”, and conferring the power on devolved Governments would, in our view, introduce additional legal complexity. Descriptions of retained EU law may cover a mix of both reserved and devolved policy areas, and this could result in retained EU law in similar areas expiring at different times in different jurisdictions in the UK, across both reserved and devolved areas. We feel that this could create additional legal uncertainty.

Devolved Ministers will of course still be able to legislate to preserve, restate or reform their retained EU law using all the other powers in the Bill. As I said, the UK Government are of course committed to working closely with the devolved Governments on all aspects of the retained EU law revoke and reform programme, including the exercising of this extension power where appropriate.

Regarding the question on the devolved Administrations, which a number of Members raised in considering earlier clauses, I met with the devolved Ministers on behalf of my previous BEIS department a few weeks ago and we discussed a number of legislative areas of concern to them, including—the noble Baroness, Lady O’Grady, will be pleased to know—the MSL Bill, and they did not raise the REUL Bill. I am not saying that means they do not have any concerns—clearly, both the Senedd and the Scottish Parliament are concerned —but when they had the opportunity to raise it with me in a formal meeting designed to discuss legislation, they declined to do so.

Amendment 53 tabled by my noble friend would, I assume, be intended to operate in tandem with amendments to Clause 1 that propose a change in the sunset date. This will be debated in other amendment groupings and, as I have already said, proposing to change the sunset date through the extension power alone would not be appropriate.

Amendment 56A in the name of the noble Lord, Lord Whitty, would require the Government to publish a dashboard of all EU law which remains in force and which has not been superseded by domestic legislation within three months of the Bill being passed. I am sure the noble Lord knows what I am going to say to this: I draw his attention to the public dashboard of retained EU law that the Government published in June last year, and about which we have already had extensive discussions.

Without wishing to annoy the noble Baroness, Lady Ludford, again, that dashboard is an authoritative assessment of the various types—I am worried she will reach for her thesaurus yet again and start quoting definitions at me—of retained EU law across all government departments. It is split over 400 policy areas and 21 sectors of the economy and is categorised accordingly. The dashboard was updated in January, as we have said, and we are committed to updating it regularly through 2023; the next update is planned for spring of this year. Departments are continuing their work on retained EU law, aided—again, I risk provoking the noble Baroness, Lady Chapman—by the National Archives, and we anticipate an increase in the volume of retained EU law in the next publication.

[Lord Thomas of Cwmgiedd (CB)]

The Minister is very keen on timetables and dates. As we know, spring is movable. Can we have a firm date? If the Minister wants to hold people to timetables, he ought to have a timetable to produce a firm list. Could he please go back and ask the lawyers, in whom he has such great trust, when they can produce a list and a comprehensive explanation? I am sorry to press the Minister on this but he cannot expect everyone else to have a timetable and not adopt one himself.

[Lord Callanan (Con)]

I am not sure I want to go on the public record saying that I have great faith in lawyers, given some of the debates we have had in this House. I explained the position on the dashboard in the previous grouping. I know that many Members want to categorise this as a device by which huge swathes of essential legislation will be allowed to sunset. I have explained on three different groupings now—I will not go back there again—that we will update the dashboard as often as we can. Where possible, this will also reflect the ownership of retained EU law across the new departments created by the Prime Minister in the machinery of government changes earlier last month.

Finally, on Amendment 136, this power is subject to the negative procedure, which is the appropriate level of parliamentary scrutiny for a power that only maintains the status quo and cannot enact any policy changes. The power is intended as a failsafe in case the reform of retained EU law is delayed by the parliamentary process or extenuating circumstances. I therefore do not believe that the listed amendments are necessary or appropriate for the Bill and hope that the noble Baroness will be able to withdraw her amendment.

Subsidy Control Bill

Debate between Lord Callanan and Lord Thomas of Cwmgiedd

Lords Hansard - Part 2 & Report stage
Tuesday 22nd March 2022 Lords Chamber

[Lord Callanan (Con)]

There is a difference in principle here. Subsidy control is a reserved matter. Under the memorandum of understanding, we have said that we will set up a mechanism that the Scottish Government can use to challenge schemes. Of course, any streamlined scheme would be approved by this Parliament anyway. In any practical political environment, there is no way that the UK Government will want to set up a parallel scheme to subsidise agriculture and fisheries, which are devolved competences, when the Scottish Government already have similar schemes in the same area.

As I have said, the devolved Administrations will of course continue, as they have always done, to make subsidies and subsidy schemes using the resources that they have. It is important to note that this Bill does not provide any resources for any schemes, and the court would need to look at the facts of the case on legality grounds in the light of the requirements of Schedule 3 to the Bill. This is, in my view, comparable to other circumstances in which devolved primary legislation is reviewed on legality grounds, such as the Human Rights Act or the United Kingdom Internal Market Act. Importantly, and in contrast to the review of the Competition Appeal Tribunal for other subsidies, the court could not consider common-law public law grounds alongside the requirements of the subsidy control grounds.

For all the reasons I have set out, I hope that the noble and Lord will not press his amendments.

[Lord Thomas of Cwmgiedd (CB)]

I am grateful to all noble Lords who have spoken in this debate and for the various points that have been made; I hope it is not discourteous if I try to summarise them without individual attribution.

Fundamentally, this union is not going to hold together unless there is an acceptance of equality of treatment, and this Bill drives a coach and horses through that. One illustration suffices: if this Parliament, for England, makes a subsidy scheme that infringes the subsidy control principles, then those overseas cannot challenge it, but they can challenge what is done in Wales, Scotland and Northern Ireland. That is not equality. A second, more vivid example of equality is the ability to make streamlined subsidy schemes. Part of the difficulty we face is that all of this is for future legislation, but we are now trespassing into the constitution.

What has emerged from the questions that the Minister has tried to answer is this: where are we going in areas of devolved competence? He says that no Government would want to do it, but we are a country governed by the rule of law, and the law ought to be clear as to the constitutional responsibilities of the Government of the United Kingdom and of England and the constitutional responsibilities and powers of the devolved nations. This has not been thought through, as is evident from the Minister’s reply. I do not criticise him, because we do not have the detail of the streamlined subsidy schemes so that we could see how this would work.

Thirdly, we are trespassing into dangerous constitutional areas. I am sure that many lawyers will not accept that, if the Government tried to make a streamlined subsidy scheme that infringed on devolved competence, it would be challenged, because that would be made under subordinate legislation and would not have the equivalent status of an Act of this Parliament. It is a great misfortune that we have not thought all of this through.

Subsidy Control Bill

Debate between Lord Callanan and Lord Thomas of Cwmgiedd

Committee stage
Wednesday 9th February 2022 Grand Committee

[Lord Thomas of Cwmgiedd (CB)]

I have one question for the Minister on the hard economics of recovery of damages. Will there be recovery of damages against authorities that give subsidies wrongly? Secondly, has any estimate been made about the likely recoveries?

[Lord Callanan (Con)]

Yes, of course, they would be able to recover damages if a party had suffered a loss. I do not think that we have any estimates of likely figures at this stage but, if we have them, I shall certainly share them with the noble and learned Lord.

[Lord Thomas of Cwmgiedd (CB)]

My Lords, I thank all noble Lords who has taken part in this debate. If we are embarking on a new regime, we must make certain that it is effective—not because of whatever the EU says but for the good of our own nation and economy. Without an effective regime, this will not work.

We have taken different approaches—and I am extremely grateful to all who supported this amendment. The noble Lord, Lord Lamont, took the point of principle: who is going to look after those who make the decisions, particularly the Government? Who is going to refer them? Litigating against a Government, who have a bottomless pit, is very difficult—and, of course, there are political considerations against doing so.

The noble Lord, Lord Fox, asked what sort of regime this was, and whether there was a regulator. Whatever the Minister might say, the CMA is a kind of regulator in the market—unless the Minister is to say that there is no regulation at all. But this is law, so someone must have to enforce it.

Then there is the problem that I have referred to, of hard economic reality. Is it realistic to accept private enforcements? The benefits have been shown by the noble and learned Lord, Lord Hope: that we really need a body of case law to strengthen the regime, and the importance of that will become apparent later.

For all those reasons, I am afraid that I am one of those whom the Minister has not managed to persuade, but I do not think that he thought he had. But I beg leave to withdraw the amendment.

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[Lord Callanan (Con)]

The legislation is UK-wide so it will apply in Northern Ireland but, clearly, the absence of the Assembly will make it extremely challenging to get the Executive’s consent. However, we certainly will continue to engage with officials.

I want to give some context on all the engagement we have done. Since July 2020, BEIS Ministers and officials have had 75 meetings in total with their counterparts in the devolved Administrations. These are not just talking shops, as has been implied, but sessions of meaningful engagement. For example, our engagement has included sharing draft objectives and building-blocks for the new subsidy control regime; sharing both the Government’s consultation and the consultation response ahead of publication; and sharing our illustrative guidance and regulations in advance of publication, as well as continued engagement as this Bill passes through Parliament. This engagement will need to continue as the regime is implemented. In fact, at this very moment, officials are working with their counterparts on a memorandum of understanding that formally sets out a mutually agreed process for engagement on the crucial next phase of policy development and implementation.

Moving back to the detail of the amendments before us, I will start with Amendment 69. Again, I thank the noble and learned Lord, Lord Thomas of Cwmgiedd, for moving the amendment, which is supported by a number of noble Lords. It would give the devolved Administrations the ability to challenge any subsidy in the Competition Appeal Tribunal, whether their interests have been affected or not. As was confirmed at the Dispatch Box in the other place, the devolved Administrations—or, indeed, any other public authority —will generally be able to apply to the CAT to review a subsidy decision where the interests of people in the areas in which they exercise their responsibilities may be affected by that subsidy. This would be a good opportunity to correct what I said on Monday: this is not exactly the same position as the Secretary of State.

The fact that the devolved Administrations are not named in this clause is by no means intended to exclude them or any other party whose interests may genuinely be affected by the granting of a subsidy. Clearly there will be limits, and the interests of the devolved Administration or local authority in a particular subsidy cannot be totally tenuous. However, the broad definition in the Bill gives the CAT maximum discretion so that, whatever the facts of the case might be, it can deem the right people as interested parties.

The reason why the Secretary of State has universal standing to challenge a subsidy, in contrast to the devolved Administrations and local authorities, is that he or she—whoever occupies that office—is responsible for the overall operation of the subsidy control regime and, as I keep saying, for the UK’s compliance with our international agreements in this reserved policy area. Neither of those reasons apply to the devolved Administrations or local authorities. It is wrong to suggest, as some noble Lords have suggested previously, that simply because the devolved Administrations exist, the Secretary of State’s horizons and duty of care are limited only to England.

It is also worth mentioning that the Government expect that the Secretary of State would use this ability only in exceptional circumstances where, in his or her view, a subsidy threatens the whole integrity of the subsidy control framework or our compliance with international agreements. It would be inappropriate to legislate that the devolved Administrations are an interested party in all cases, implying that the Secretary of State does not carry out his or her role as the responsible Minister for the subsidy control regime for everyone in all parts of the United Kingdom.

I turn now to Amendment 79, tabled by the noble Lords, Lord German and Lord Wigley. I am glad that the noble Lords referred to the recommendations of the Review of Intergovernmental Relations through the amendment. The UK Government take these co-operation mechanisms with the devolved Administrations, as set out under this review, very seriously, and we are always open to ways of strengthening these relationships. We are open to using the intergovernmental relations structures to resolve any disputes, in accordance with the IGR principles. That said, this amendment would in effect bypass a number of earlier stages in the dispute resolution process, which has already been agreed between the UK Government and all devolved Administrations. Escalation to the Council is the last resort. As I mentioned on Monday, we are also working closely with the DAs to establish a formal process for raising case-specific concerns with the department once the regime is up and running.

Let me also stress that there is no need to incorporate this provision into the Bill for disputes to be able to come under the IGR structures. Moreover, I do not anticipate that there will be any great need to refer matters of interpretation to those structures. It is important to bear in mind that there is of course a distinction between case-specific dispute, which is a matter of legality, and a public authority’s compliance with its legal obligations, for which the proper place to resolve such disputes is ultimately the CAT and a dispute or discussion between Governments on their roles and responsibilities.

There is little scope for that type of confusion over the roles and responsibilities of the UK Government on one hand and the devolved Administrations on the other in this regime. The Secretary of State for Business has responsibility for the overall operation of the regime and the UK’s compliance with its international agreements. The UK Government may also create streamlined routes to encourage subsidies that further their strategic priorities. In all other respects, UK government departments and the Secretary of State himself are in the same position as the devolved Administrations. They are public authorities within the scope of the Bill. UK government departments are treated in exactly the same way as any other public authority. All public authorities are similarly subject to the Bill and empowered by it.

As I said earlier, my officials continue to have a regular set of meetings with their DA counterparts on all subsidy control matters; these will continue, along with regular ministerial engagement. Where there is a need for dispute resolution, that dispute will come into the ambit of the agreed intergovernmental relations process.

I recognise the strength of feeling in relation to Amendment 69 in the name of the noble and learned, Lord Thomas, but I simply do not agree that either that amendment or the other would be a necessary or useful addition to the Bill. Therefore, with respect, I urge the noble and learned Lord to withdraw his amendment.

[Lord Thomas of Cwmgiedd (CB)]

I thank all noble Lords who have spoken in this short debate; I do not want to lengthen it with a long reply. I will say only one thing. The Minister has not really answered my noble and learned friend Lord Hope’s question as to the meaning of “aggrieved”. It seems to me that one area in which the devolved Administration may wish to get involved is where a decision is made that does not directly affect their interests but they feel that the decision is wrong in principle and may set a bad precedent. It is that reason—their interest as Governments in upholding the rule of law and the operation of this—that I do not believe was answered by the Minister’s statement, but I will read it carefully. In the meantime, I beg leave to withdraw my amendment.

Subsidy Control Bill

Debate between Lord Callanan and Lord Thomas of Cwmgiedd

Committee stage
Wednesday 2nd February 2022 Grand Committee

[Lord Thomas of Cwmgiedd (CB)]

My Lords, I have a few short points. First, I support the noble Lord, Lord Ravensdale, regarding Clause 18 not standing part of the Bill. It is always very unfortunate when we have in legislation something that says that a subsidy is prohibited by the sanction if it is given to an enterprise subject to a condition that the enterprise relocates. The Explanatory Notes make it very clear that, by “condition”, something explicit is meant. Does it mean therefore that something implicit is permissible? As the Bill aims to achieve transparency, should we not be open and clear, particularly regarding the enforcement by the CMA, about what precisely we will allow in respect of relocation? The noble Lord may be right about the principles governing it, but a provision that makes it dependent on whether it is explicit or implicit is of benefit only to the lawyers, and we do not need to go down that route.

The second issue goes to the question of how this is to work and be enforced, which is the interrelationship of subsidies, procurement and the levelling-up fund. It seems quite clear that procurement obviously can operate as a subsidy, although there is an exemption—the Minister explained it in answer to Amendment 3, tabled by the noble Lord, Lord Wigley—which might exempt certain schemes from it. How does the value-for-money concept in the procurement Bill relate to subsidies?

My last question goes to the levelling-up funds. I assume that something will be done to ensure that they will not be part of financial assistance but, even if they are not for the purposes of the Bill, no doubt the Competition and Markets Authority and the court will have to take into account, in looking at distortion, the cumulative effects of funds from the levelling-up fund and funds from the local authority, because they are both, in essence, forms of state aid. It may be difficult to do it today, but can we have a paper which explains interrelationship of subsidy by way of procurement and how the levelling-up funds relate to the Bill? They are all potentially forms of state aid.

[Lord Callanan (Con)]

My Lords, I thank the noble Lord, Lord McNicol, for tabling the lead amendment in this group, and the noble Baroness, Lady Blake, who ably introduced it. It was great to be reminded by the noble Lord, Lord Purvis, of my previous existence in the campaign against the northern regional assembly—I dread to think how many years ago that was. I seem to remember that Mr Cummings was also involved in the campaign; the noble Lord missed his opportunity to have a go at poor Dominic for that. This is an interesting group of amendments which promotes some good questions. I will try to address the points from the noble Lord, Lord McNicol, and the noble Baroness, Lady Blake, and from the noble Lord, Lord Berkeley, on Amendment 25A, as well as the points from the noble Lords, Lord Ravensdale and Lord Wigley, and the noble and learned Lord, Lord Thomas.

As the noble Baroness, Lady Blake, helpfully reminded us, the context for this is the publication of the levelling-up White Paper. In that, we have announced a comprehensive programme of policies that will put the UK on a path towards greater economic prosperity in every region and place—including, I hope, the north-east of Scotland. We will do this through significant targeted investment, such as the £4.8 billion levelling-up fund that has been referred to, which will invest in infrastructure that improves everyday life across the UK, including by regenerating town centres and high streets, upgrading local transport and investing in cultural and heritage assets.

It is not in question that any government subsidy scheme set up in the context of this levelling-up fund or otherwise should be in compliance with the provisions under this Bill, once it is in force. However, as we discussed on Monday and as raised by the noble Lord, Lord Purvis, again today, subsidies can of course be an important tool to achieve levelling up, but for reasons of time and efficiency I will focus today on the Bill itself and the amendments tabled. I am sure there will be plenty of opportunities to debate the levelling-up fund and its excellent proposals in this House in future.

United Kingdom Internal Market Bill

Debate between Lord Callanan and Lord Thomas of Cwmgiedd

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

[Lord Callanan (Con)]

I am not sure whether that was a question or a speech in the wrong place—but I take the noble Lord’s point. I think he is getting issues conflated. The common frameworks programme of course is a programme of work with diffuse levels of power and ultimately it is not clear where regulation lies. To resolve those matters on a cross-UK basis, there is no doubt in our mind where the proper operation of these powers is—state aid, or rather subsidy control, is a reserved matter for the UK Government. However, we have said that we want to work collaboratively. We want to work with the devolved Administrations and of course, as we have said, we will consult closely with them on any new policy that we develop and indeed on whether legislation is necessary. But, given my general support for the framework and the Government’s support for the framework programme, I do not believe that it is appropriate for this matter to be included in the framework programme.

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

I will be brief, as obviously it would be very unfair if the Welsh were totally to outnumber everyone else in the number of speeches delivered this evening. I thank all noble Lords for their contributions to an interesting, though short, debate.

First, it is very encouraging that there is complete consensus on the need for a single subsidy regime for the internal market. There is no doubt about that. Secondly, there must be a consensus that at the moment this is not something that the UK Government have power over—otherwise this clause would be unnecessary. It is not a reserved matter and therefore under the devolution schemes it is a matter for all the devolved Governments. Thirdly, it is clear that there is no uncertainty. The Government are taking us out of the EU regime, assuming the instrument is passed, and we will go into the WTO regime—so that is the regime for the foreseeable future.

The real question is: are we going to go forward by diktat from Whitehall and Westminster or are we going to go forward by consensus? An obvious way of going forward is a common framework. I regret to say that I cannot agree with the Minister that a common framework is inappropriate. It is absolutely appropriate, because it will cater for the kind of divergence that will be allowed in the subsidy regimes. This is a matter of acute importance to people such as fishermen and those involved in agriculture. We need to know what level of divergence is permissible and negotiate that.

Finally, a decision has to be made on the role of the CMA. I moved amendments earlier this week in relation to the CMA simply because I imagine it will have to be the policeman of this regime. But what is it to be? Is it to be an adviser? Is it to have a central role? Or are things to be laid out in a common framework?

I therefore say that this clause ought to be removed. Get the policy right first. Try it by common framework and let us go forward on that basis. Therefore, I want to take the opinion of the House on the appropriate means of going forward—and the appropriate means is taking this clause out of this Bill.

United Kingdom Internal Market Bill

Debate between Lord Callanan and Lord Thomas of Cwmgiedd

Report stage & Report: 2nd sitting (Hansard) & Report: 2nd sitting (Hansard): House of Lords
Monday 23rd November 2020 Lords Chamber

[Lord Callanan (Con)]

My Lords, noble Lords will have noticed that we have listened carefully to the many constructive points put forward in Committee as well as from the devolved Administrations on the provisions in the Bill to establish the office for the internal market, tasked with overseeing the smooth operation of the internal market. As set out in my recent letter to colleagues on government amendments for Report, we have made a number of important changes throughout Part 4 to make it clear in statute that the OIM will work in the interests of all parts of the United Kingdom and for all Administrations on an equal basis. I believe that these changes take into careful consideration the points raised in Committee and put beyond any doubt concerns around the consumer focus of the OIM—I hope that the noble Baroness, Lady Hayter, will welcome this—and the devolved Administrations’ involvement in the OIM’s governance arrangements.

Amendments 56 and 57 ensure that there is an enhanced role for the devolved Administrations in OIM appointments, requiring Ministers to seek consent with all Administrations within a one-month timeframe. This builds on the model proposal developed by the Welsh Government and tabled by the noble Baroness, Lady Finlay, previously. We believe that this strikes a delicate balance by ensuring that the OIM can operate independently and that all Administrations can have a meaningful input in the appointments process. At the same time, we have been clear that it is essential that the OIM operates independently and at arm’s length from Ministers from all Administrations. Therefore, we do not believe that reserving the right for each Administration to make appointments to the CMA board as set out in Amendment 54 is the correct way forward. Likewise, it is important that appointments are made through fair and open competition, which is what our amendments ensure.

We believe that Amendment 57 and our changes made to Schedule 3 ensure a fair, independent and equitable process for all Administrations. It will ensure that consensus is always a first preference, but recognises that, if it is not reached, appointments can still proceed after an appropriate time has elapsed. This represents a pragmatic way forward and avoids the risk of prolonged deadlock over appointments that would prevent the OIM fulfilling its duties under the Bill.

We agree with previous arguments in Committee that all OIM appointees should reflect a range of expertise from all parts of the United Kingdom. That is why we have tabled Amendment 55, which clarifies this in the Bill, making clear the desirability that panel members have a variety of skills, knowledge and expertise. It is important to remember that the OIM will be a neutral custodian of the UK internal market through its non-binding reporting, advisory and monitoring functions. If there are potential concerns in future about how the OIM conducts its duties, Amendment 61 ensures that the CMA’s annual plans, proposals and performance reports are laid before the devolved legislatures as well as Parliament, ensuring equal scrutiny and oversight of these developments, which can be discussed between Ministers from all Administrations where that is appropriate.

Finally, I am aware that there has been considerable interest in this House in ensuring that the OIM operates in the interests of consumers. We have listened carefully to these discussions and are confident that our amendments throughout Part 4 resolve the concerns expressed and put it beyond all doubt that the OIM will operate in the interests of UK consumers.

For all the reasons I have set out, I hope that noble Lords can accept the Government’s amendments and consequently will not press their own. I beg to move.

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

I shall speak to Amendment 54 but, before doing so, I thank the Minister for the substantial progress that has been made in relation to the office for the internal market, and for the recognition that it is necessary for the strength of the union and for equality and fairness between the people of the four nations of the United Kingdom that that office has representations from all four nations. However, the purpose of Amendment 54 is that that principle should be applied to the Competition and Markets Authority. This is a non-ministerial department with very substantial powers, which it has exercised since its creation in 2013, but Part 4 of the Bill gives it further and more substantial powers and a role in the operation of the internal market. What precise form those powers will take may ultimately depend on further changes to the Bill, but there can be no doubt that the powers are substantial.

Amendment 54 is therefore a modest amendment, seeking to build upon what the Government have agreed to in relation to the office for the internal market. At present, the Competition and Markets Authority has its chair and members appointed by the Secretary of State and the panels under the Act. But it seems that there is no reason at all why the principles that have been brought to bear for the office for the internal market should not be applied to the CMA itself. As I shall try to explain in a moment, it is essential that the CMA should have representatives of each of the four nations.

It was said at a previous sitting that this would be politicising the body. That is not so. First, the CMA is an independent, non-ministerial department, and people appointed by the Secretary of State, including its chair, are independent. The persons under this provision would be independent in exactly the same way. They are not going to be representatives of the devolved Governments in exactly the same way that the persons appointed by the Secretary of State are not representatives of Her Majesty’s Government but independent people.

Secondly, it is very important to ensure that now that the CMA will have an important role in the internal market, it will have at least one member from each of the nations who understands the issues in the internal market as it affects that nation. Thirdly, the amendment will not politicise the position in any way because the appointment will be by an independent public appointment process, in the same way that the chair and members appointed by the Secretary of State are appointed by an independent appointments process. That is the purpose of the first amendment.

Amendment 58, which is also in this group, is now covered by government Amendment 57 if Amendment 54 is agreed to. Amendment 59 is agreed to be consequential on Amendment 54. Before explaining briefly my reasons for tabling Amendment 54, I wish to make it clear that at the appropriate time this evening, unless the Minister is prepared to come forward with some alternative proposals, I propose to take this amendment to a Division.