United Kingdom Internal Market Bill

Lord Naseby Excerpts

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

[Lord Empey (UUP)]

My Lords, the starting point for this group of amendments is, I suppose, that not one of the devolved Administrations has given its consent to this legislation. That is an unfortunate place to be.

However, I welcome the changes that my noble friend the Minister has introduced so far. Listening to the debate, it seems that the gap between the different amendments and the Government’s position is not huge; to be honest, I would have thought it perfectly capable of being bridged. I certainly urge that efforts to ensure it is bridged be pursued, because there is no point in having unnecessary divisions if they can be avoided.

I must say to my noble friend that consultation is in the eye of the beholder. Having been a devolved Minister for just under seven years, I have a little experience of what consultation actually amounts to from time to time. Occasionally, it can be extensive, planned and productive. On other occasions, you read about it in the Daily Mail before you have even got into the office. There is a coherent argument for having a codified process to ensure that consultation happens, and within a framework. We all know that Ministers and departments are sometimes very good at it, but occasionally and, sadly, all too frequently, that is not the case.

I totally accept that no devolved Administration can be permitted to have a veto over what happens in the whole of the United Kingdom, because, as my noble friend Lord Cormack just stated, the buck ultimately stops with the Westminster Parliament; that is totally correct. But one is brought to a position by one’s experience in these matters. What is being asked for in some of these amendments is not unreasonable and would be beneficial. We know that, as has already been referred to, vociferous nationalism is attacking at every opportunity the legitimacy of the United Kingdom. It has been used and abused. So, even though some sections in government may find it a bit tedious, having a structured consultation mechanism is a protection against those who would use it as an anti-unionist argument.

To give an example, due to the action of some of its parties, the Northern Ireland Assembly was unfortunately out of business for three years during the critical Brexit negotiations. We repeatedly asked Ministers what mechanisms they were going to use to consult the people of Northern Ireland about the huge issues arising from those negotiations; indeed, barely a day goes by now without another obstacle and tank trap appearing in the process. We were given assurances that the consultation would be very significant, but I can tell noble Lords that that did not come to pass. It was sporadic and haphazard—it certainly was not structured—and we have ended up today in the most awful mess, which, sadly, we will no doubt return to frequently in the months ahead.

We should not really have to have an argument over these issues because there is a broad level of agreement. I urge my noble friend to harness the different threads of the argument and ensure that we take a united position as we move forward with this legislation, whatever we happen to think of it. Setting out clearly that there must be consultation and that it must be done in a formal, structured way without any devolved Administration being able to frustrate the operation of the UK single market—as it will be referred to—is entirely reasonable. I hope that my noble friend will reflect on that when he sums up.

[Lord Naseby (Con)]

My Lords, one of the pleasant features of this Bill is the extent to which probing amendments have been put down by all sides. It is clear to me from the consultations we have had between debates and the periodic guidance we have received that, for once—this is not true too often—we have on the Front Bench two Ministers who have tried very hard to find a way forward in a controversial and difficult area. I pay tribute to that; it is particularly reflected in the amendment before us today.

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[Baroness Noakes (Con)]

My Lords, I am glad that my noble friend Lady Neville-Rolfe’s Amendment 30 is only a probing amendment. I very strongly believe that the UK’s internal market will be more robust as a result of this Bill and that it needs to cover all aspects of trade and professional activity occurring between the four parts of the United Kingdom.

However, like my noble friend, I have been struggling to work out just how important Part 2 is to businesses throughout the UK at the moment, and I also understand that there is relatively little current data on trade in services across the four nations. Given the exemptions that will apply to Part 2, the Government presumably do not think that the Bill will have very much real-world impact, at least in the short to medium term. I can see that it may be necessary to protect service providers in the future, if one or more of the devolved nations chooses to make it difficult for out-of-nation services providers, and, to that extent, I can see why we may well need Part 2 of this Bill. It would be good to hear from the Minister what he sees as the biggest problems that this Bill is trying to tackle.

[Lord Naseby (Con)]

My Lords, I think the House should be very grateful to my noble friend for putting this probing amendment down. All of us who have worked in the services industry, as I did before going to the other place, understand it very well. However, despite this, it is very difficult to comply with this part of the Bill.

The underlying problems I have are that, first, the services industry is a real growth market for the UK and shows every sign of continuing to be so. We must be very careful not to undermine it. I note my noble friend’s mention of consultation, which I am a great believer in; I have probably spoken about it on more amendments than anybody else. At any rate, consultation of only one month is not acceptable in any industry, particularly not at this crucial point.

I have two technical questions, having read and thought about this. First, what happens to those service industries that have no regulator, which would be a fair number of them? Sometimes they are in a licensed area, and sometimes they are not in any particular area, so it is not clear to me what happens to them. Secondly, will the register, when it appears, automatically approve every existing business in the services industry and transfer them across? If not, is there to be an appeal mechanism? Again, I ask these questions on a probing basis and look forward to my noble friend giving us some guidance.

[Lord Purvis of Tweed (LD)]

My Lords, it is very telling that three of the Minister’s noble friends were seeking clarification as to the purpose of this part of the Bill. The fact that answers are still being sought on Report in the House of Lords should be quite worrying for the Government. The noble Baroness, Lady Neville-Rolfe, is clearly an optimistic person. She believes that there are good reasons and it is just that, at this late stage of the legislation, the Government have not said what they are. We will give the Minister another chance to explain, in clear terms, what these good reasons are, and I wish the noble Baroness luck in trying to find out.

I also agree with the comments made about the grey area of businesses and people who are service providers and sellers of goods in the 21st-century economy. As the noble Baroness said, the previous reports of her committee show that a colossal part of the UK economy now sells goods and associated services. As my noble friend said, it is now commonplace for a huge enterprise such as Rolls-Royce to provide engine services but to retain the good and sell the service of providing that engine to many other markets; or, in effect, to provide generators on leasehold for UK engineering. That is just one example; there are many others, such as the sale of cars to many different households.

If a good is sold but the service is provided by the business enterprise, which part of this legislation will take precedence? If there is a dispute regarding a person who is selling a good that can be sold only if it is part of a service provision, what takes priority in this legislation? Is it the service component or the good component? Regarding those operating in other areas, be it creative services or other key areas, what legislative requirement would be considered first if there is going to be a restriction? We already know that there have been problems within the part of the legislation dealing with services. The next group of amendments, on teaching, illustrates that—the Government have had to clarify the position on education services. I am glad they have, to an extent; that is welcome.

The provision of water services brought into sharp focus the distinction between goods and services. When we raised in Committee the fact that Wales and Scotland operate under a different legislative model for the provision of water services, the Minister kindly wrote to me saying that the distinction in the legislation is between water services that are connected with an infrastructure and those that are not. How does that distinction come about in reality under Part 2? If Scottish Water, a service company that has one shareholder—the Minister—and the infrastructure of which is owned by the Minister, seeks to deliver different services in the future, that will come under the scope of this legislation. It is exactly the same enterprise and the same entity, but if he wanted to sell the infrastructure, that is excluded. I simply do not understand that. The Minister said in his correspondence to me that the question of whether the process needs to be extended is being looked at actively. The question is: when the Government have finished the process of looking at the areas to exempt, what will be left? That was the point made by the noble Baroness, Lady Noakes. What are the problem areas the Government are seeking to identify?

I turn to an issue that has not been addressed sufficiently in Committee. I asked the Minister why the legislation excluded the Isle of Man from consideration as part of the UK for goods but not services. Under the Bill, any services provided from the Isle of Man are considered to be within the United Kingdom; goods sold from the Isle of Man are not. We all know that service provision from the Isle of Man is huge—financial services, et cetera. That is no surprise, because if you are a service provider who wants to operate in a part of these islands that has no corporation tax and a wholly different set of beneficial conditions for your business, why would you not want to be based in the Isle of Man? If the Isle of Man is considered to be covered by this legislation, why have the Government brought forward amendments for consultation that do not include the Government of the Isle of Man? If services being provided from the Isle of Man fall within the scope of this legislation, there is a clear gap. Why would you not consult the Manx Government regarding any regulations that are going to be put in place?

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It worries me that, on all these matters, we are some way off bottoming out the detail of this section of the Bill. It is now quite clear that it raises issues around other parts of the education services and the professional services in the care sector. I would be grateful for any observations the Minister can make to clarify this, if, looking forward—as this Bill must do, because it must be in place for forward legislation—we will come across more difficulties in what we might now regard as essential areas of our life.

[Lord Naseby (Con)]

My Lords, I have a couple of probing questions. I find the word “school” difficult to work out in terms of what happens on the ground. There are universities, many of which have teachers—some have professors, et cetera—and I do not quite see how you can exclude them, particularly the Open University, where some noble Lords may have taken courses. I have friends who have taken courses at it and, from the evidence of two people I spoke to at the weekend, there are teachers there. As someone who takes an interest in flying, having flown in the RAF, I thought also of flying schools. There are also driving schools. I am not sure whether the Government are anticipating that whole area. I look forward to my noble friend’s response; if she cannot respond this evening, perhaps I could have a note in writing.

[Lord Flight (Con)]

My Lords, I am not clear what being “excluded” means. I do not know whether other territories are excluded or how far they go up and down the range of teachers. More particularly, what is the reason for having excluded groups? Why should lawyers be excluded? Are any other groups excluded? This area wants a bit of tidying up and further explanation.

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[Baroness Randerson (LD) [V]]

My Lords, I am pleased to see some amendments from the Government in this group. It may be the start of a little bit of emotional intelligence on the Government’s part, to see the damage that has been done to trust and confidence between the UK Government and the devolved Administrations on this issue.

However, on its own, government Amendment 55, for example, is too weak, in saying that in order to be appointed to the OIM panel, all you need is knowledge of the internal market in the different countries of the UK. That implies to me that anyone who worked, for example, for Tesco—I am not picking on Tesco; other supermarkets are available—in its London head office would, of course, know that there are different markets in different parts of the UK. However, they would not have the depth of knowledge to understand, for example, the importance of signage in the Welsh language in different parts of Wales or the difference in marketing approach required in different parts of Northern Ireland, bearing in mind the history of those parts. It is a subtle business, and it needs strength and understanding in depth.

The truth is that the OIM is being shoehorned into the CMA simply because the Government have made a promise that they are not going to create any more such bodies. They can go ahead saying, hand on heart, that the CMA is the body and the OIM is simply an arm of it—no new body has been created. But, to be honest, it is not a neat and natural fit.

Amendment 56 goes a little way towards seeking the consent of the devolved Administrations to an appointment, but it still leaves all the cards in the Government’s hand. Taken alongside Amendment 57, it makes it clear that if the devolved Administrations withhold agreement, after one month the Government can go ahead anyway—yet they might be withholding agreement for a very good and clear reason. I urge the Minister to look again at the stronger amendments, Amendments 54 and 59, tabled in the name of the noble and learned Lord, Lord Thomas of Cwmgiedd. If the Government mean what they say about genuinely wanting to respect the devolved Administrations and treat them with respect, what harm do the Government think it would do to allow them to appoint one board member each? The Government’s response is that it would make the CMA political. That in itself portrays the fact that the Government have a political approach of their own to this problem.

In conclusion, as the noble and learned Lord, Lord Thomas, pointed out, UK government Ministers are in fact—[Inaudible]—and then they change hats to become Ministers of the UK. This is a problem, and if anyone does not understand that that is a problem, it underlines a lack of understanding and experience of devolution. Anyone who had that experience and understanding would realise that the Government must give a little bit more to satisfy trust among the different Governments of the UK.

[Lord Naseby (Con)]

My Lords, I congratulate my noble friend on the Front Bench. Once again we see the benefit of a good Committee stage, with someone listening and coming back with a series of amendments which all strengthen the Bill. I particularly like the clarification in Amendment 56, and I was delighted to read Amendment 61. However, regarding Amendment 54, I have had the privilege of chairing four different companies and sitting on other boards, some of which had certain dimensions to them as a business that any wise chairman would wish to make sure were covered.

I am also a political animal. Anybody who has sat for a marginal seat and kept it understands the sensitivity of varying wards, varying interests et cetera, and I ask my noble friend to reflect a little on Amendment 54. Certainly I do not believe that there is anything in Amendment 59 worth having, but Amendment 54 is crucial. Whether the wording is right or not, nevertheless, the devolved powers are a very important dimension of the whole of this internal market. Somehow, as other noble Lords have said, they must have ownership of it. The CMA board is in essence one of the absolutely key elements of that. I do not expect an answer tonight, but I suggest that the Minister and his colleagues should sit back and argue this through. I understand what my noble friend Lady Noakes said. In one sense she is right but, with my political hat on, I am not so sure. So I ask the Minister to reflect a little on Amendment 54, although I do not expect him to accept it tonight.