United Kingdom Internal Market Bill

Lord Palmer of Childs Hill Excerpts

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

[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 ---

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

As the noble Baroness, Lady Randerson, has very carefully explained the purpose of these amendments, I can be much briefer than I had intended.

The amendments are directed at the CMA and the Office for the Internal Market as set out in the Bill, but the principles behind these amendments would apply to any different structure that emerged, as the noble Baroness, Lady Bowles of Berkhamsted, envisaged. It seems to me that the critical point for this House to consider is that whatever structure is established must command the confidence of all the nations of the United Kingdom. Secondly, it is obvious that there will have to be a body that exercises independent powers and makes judgments that may go against one part of the United Kingdom or another part of it.

Thus, it is important to ensure, as these amendments seek to do, that the appointments both to the Competition and Markets Authority and to the office for the internal market take into account the change in the CMA’s role and cater for the new role of the OIM—assuming that these roles will be given to them when the Bill emerges from Parliament.

It seems to me that there is one useful analogy to make. Because the CMA has certain quasi-judicial and independent functions, it must be set up in such a way that those who are affected by its decisions know that those appointed to it have their confidence. They must also have a proper knowledge of the different constituent parts of the UK. When this House enacted the Constitutional Reform Act in 2005, a statutory provision was included that there had to be judges from Scotland and Northern Ireland; Wales was dealt with as part of England, and I will say nothing about that today. But recent experience of devolution legislation has shown how important it is for a body such as the Supreme Court—and for this body—to have representatives who know and understand the position in each of the constituent nations.

I need not elaborate on the detail of how this provision will work. I stress that the body must comprise those who understand the different nations of the UK and are able to provide it with confidence in its decision-making. It must address the point to which the noble Baroness, Lady Randerson, referred—namely that, more and more, Ministers are seen not simply as UK Ministers but as Ministers of England.

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

My Lords, I speak in support of Amendments 116, 127 and 130, to which I have added my name. I agree with the arguments put forward by my noble friend Lady Bowles, who put it much better than I can.

The aim of the amendments is to seek to bring some clarity to the office for the internal market. Gosh, it needs some clarity. I am unsure that we even require this quango. If it stays in the Bill, then please let us flesh out how it could work. Does the Minister accept that, if the office for the internal market remains, there is still much ambiguity in this Bill? It is not even constructive ambiguity; it is ambiguity pure and simple. Can he explain it?

Amendment 116 seeks to add a clause which should be the bed-rock of the Bill. There has to be an understanding agreed between the Secretary of State, Welsh and Scottish Ministers and the Northern Ireland department in order to make the internal market work, be transparent and involve all the devolved authorities.

Amendments 127 and 130 underline the need for transparency and representation. I hope the Minister can accept that the amendments seek to clarify and flesh out what the Bill means in respect of the office of the internal market and to get rid of any ambiguity. Amendments 116, 127 and 130 seek to do that.