Amendment 114

United Kingdom Internal Market Bill - Committee (3rd Day) – in the House of Lords at 3:45 pm on 2nd November 2020.

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Lord Mackay of Clashfern (Con):

Moved by Lord Mackay of Clashfern (Con)

114: Clause 30, page 23, line 15, at end insert—“(3) Before authorising a task group under subsection (1), the CMA must consult the Joint Ministerial Committee on European Negotiations.”

Photo of Lord Mackay of Clashfern Lord Mackay of Clashfern Conservative

My Lords, the United Kingdom Parliament has a legislative competence to regulate the United Kingdom internal market, but the devolved Administrations have a fundamental interest also. In my view, it is wise to give them a voice in the way it is exercised. This group of amendments is entirely concerned with that. I am assuming that the structures in the Bill are kept as they are, as—as with the last set of amendments—fundamental changes would affect the effect of the amendments I am proposing.

Amendment 114, which I am moving, relates to the task force set up to examine an aspect of the internal market. I am saying that the devolved Administrations should be consulted on that through the Joint Ministerial Committee. Amendment 141 relates to the submission of CMA reports. It is important that this report from the authority looking into it should go to the Joint Ministerial Committee, which has responsibility for the common frameworks. That can include the Ministers from all the devolved Administrations, as well as the UK Minister, and it is extremely important that the report should go to that committee. Admittedly it goes to Parliament, and the members of course are Members of the Parliaments, but the committee as a whole should have the responsibility of having the report given to it.

The third amendment is Amendment 171. The joint committee is a committee which I think—or I understand —functions well; I hope my noble friend the Minister will comment on that when he replies. But, however well it functions, there is the possibility of disagreement. It is absolutely important that when a Minister of the UK Government uses powers to make statutory instruments and applies to Parliament for them, that should be a matter of thorough consultation with the Joint Ministerial Committee. It should come at a time when the formulation is not complete—in other words, at a time when a committee of this sort would be able to discuss the shape of the statutory instrument that would be laid before Parliament. This is a very good way of involving the devolved Administrations in the nitty-gritty, as it were, of the work that will flow from the Bill when it becomes law.

No matter how good a committee is, there is always a possibility of disagreement; I have tried to deal with that. A number of suggestions were made earlier in these debates about how disagreement should be resolved. In my view, the best way of doing it is by putting it to the United Kingdom Parliament, where all the devolved nations are represented constitutionally. If that is to be done, it is essential that it should be by full debate in both Houses of Parliament before a decision is taken. This is preferable to any kind of majority rule, or anything of that sort. It is important that Parliament, including those Members from the devolved Administration countries, has a responsibility in this matter. I think this is the way it should be resolved, and that is my suggestion.

I thoroughly believe that this proposal is fundamental to the smooth working of the internal market Bill in the future. There is always the possibility of misunderstanding unless there is a full discussion of the proposal quite early on. That is part of what I have in mind. I beg to move Amendment 114.

Photo of Lord Purvis of Tweed Lord Purvis of Tweed Liberal Democrat Lords Spokesperson (International Trade)

My Lords, it is a pleasure to follow the noble and learned Lord, and to agree with the thrust of his comments. This is the last, relatively small, group on the general concept of the consultation, before we move specifically on to what we would expect to see of the OIM’s relationship with the devolved Administrations. It is important, I think, because of Amendment 171 in the name of the noble and learned Lord. The Government’s ability to make considerable changes, through regulation, to any part of this legislation—which could have far-reaching implications for the devolved Administrations—without any requirement for consulting is worrying.

We can look at what is currently under way with regard to consultation. I reflected on the Minister’s previous response to the noble and learned Lord, Lord Falconer of Thoroton, and my noble friend on the regulation of professional services and consultation. I ask the question because the consultation on The Recognition of Professional Qualifications and Regulation of Professions: Call for Evidence, which closed on 23 October—so a very recent closure—was a call for evidence to ask for views on whether there should be a UK-wide system of regulation for professional services. On page 15, under “Future considerations” in the section on the internal market, it says:

“determine whether or not there would be merit in having a UK-wide, cross-sectoral strategy for the regulation of professions (potentially underpinned by regulatory principles).”

But in this Bill we are debating it, because the Government did not wait until the closure of that consultation process before bringing legislation forward and say that this is now absolutely necessary, whereas the consultation by the business department, which closed on 23 October, simply requested people’s views.

I would be grateful if the Government would publish the responses to that consultation and update the House on the consultations on the White Paper which had been requested. I understand that the Government indicated that they would publish those consultations by 9 October, so an update on the status of that would be helpful. The Government’s ability to make regulations without consulting the devolved Administrations, under the last schedule of the Bill, does require consultation. I very much support the thrust of the noble and learned Lord’s amendments.

Turning to Amendments 114 and 141, I note that the Government’s proposal, relating to the CMA and the OIM, in this Bill is that before an appointment to the CMA board, as a chair of an OIM panel, or as a member of a panel, there must be a consultation with the devolved Administrations—so far, so good. But there is no requirement for the CMA then to consult on the establishment of a task group or a panel, so I wonder what the Government’s thinking is on that. The Government will consult the devolved Administrations on an appointment to a panel, but then there is no requirement for that panel to consult before it starts its work.

On the point that the noble Baroness, Lady Neville-Rolfe, recognised in the previous group, some of the work of the OIM in these areas will touch on very sensitive issues, with regard to the devolved powers or the decisions. Given that under this legislation there will be the ability to disapply devolved legislation—legislation in the competence of any of the home nations—there being no requirement to consult before that work commences is highly problematic. The legislation goes further to say that the CMA, after a request, “may” provide a report on proposals by one of the Governments for legislation within the UK; but, of course, if it may, it may not. If it does not consult after a request has been made by one of the nations—one of the Governments—in the UK, there is no ability to know the reasons for the CMA’s decision. The necessity now for the CMA to consult is important, given that a request can be made to report on a specific proposed regulatory provision, without the requirement to consult the body proposing to make that regulatory provision, which is quite extraordinary in my view.

We do not even know, at the very least, what process the CMA would follow in the establishment of a task group to investigate a proposed regulatory provision; nor will that devolved Administration necessarily know the basis on which the task group will investigate. These are basic principles that the noble Lord is correct to highlight.

The area where I would question not necessarily the Minister but the Government is the status of the JMC, specifically its EU Negotiations sub-committee. Last week, in response to requests for clarity on the Government’s view about the correct place for intergovernmental relations, the Minister gave a slightly contradictory summation of how those relations are working in the JMC. In the first part of his speech, on the operations of the discussions on the frameworks, he said:

“It is regrettable that the Scottish Government walked away from discussions on the internal market”.

That is a very sharp view from the Minister, but he concluded his remarks in the very same speech by saying that,

“for all powers, UK Government officials will engage with the devolved Administrations in the spirit of the devolution memorandum of understanding. This system has worked well for 20 years and continues to do so.”—[Official Report, 28/10/20; cols. 306-07.]

Either it is working well or it is not—if some parts of it have walked away. What is the Government’s intention as to where the internal market will fit in as far as the JMC’s operations are concerned?

The JMC has its plenary, its Europe sub-committee and its EU Negotiations sub-committee. I am not sure when the JMC (EN) is meant to conclude, and it would be helpful if the Minister could state that. Then there is the Minister Forum and the domestic JMC, as well as the Finance Ministers, quadrilaterals, joint executive committees and three other areas. There is also a mechanism for dispute avoidance and resolution. What is the Government’s intention on the element of the JMC under which the internal market will be reviewed and overseen?

In a joint letter to me, my noble friend Lord Fox and the noble Lord, Lord Stevenson of Balmacara, the Government indicated that the existing JMC operations will be the mechanism for the operation of the internal market. There is no sub-committee of the JMC to consider that. If there is no sub-committee, only the JMC Plenary can do so and, surely, the JMC Plenary, chaired by the Prime Minister, cannot be the mechanism through which these elements of discussion about the internal market will be governed.

I wish to note something in passing, given the fact that the Minister said that it was the Scottish Government who walked away from considerations. With regard to the JMC Plenary, according to the Institute for Government:

“It met most recently on 19 December 2018. In July 2019, Prime Minister Boris Johnson committed to holding a JMC Plenary meeting but this had not yet happened as of the beginning of June 2020.”

An update on the status of the Prime Minister’s chairing of the JMC would be helpful. Under this legislation, where will the internal market fit in within the JMC mechanism if not under JMC (EN), which deals specifically with European negotiations?

The noble and learned Lord, Lord Mackay, referred to dispute resolution mechanisms. I want to address a couple of comments there. The Minister indicated that it is not the Government’s intention to bring about a new dispute resolution mechanism for the operation of the internal market. However, the protocol on disputes, which dates back to devolution, and the mechanism that has been in place since 2010 cannot be a mechanism for the operation of the internal market.

First, it is up to the UK Government whether they recognise the triggering of a dispute under that mechanism. We saw an attempt by the Welsh and Scottish Governments to trigger a dispute when the previous Government made an agreement with the DUP to fund Northern Ireland specifically, without consequential funding for Wales and Scotland. The Government simply did not recognise that dispute—so it is at their discretion whether they consider something a dispute, which would trigger the mechanism. There is also no mechanism in any of the dispute resolution processes that could bring about the automatic annulment of a piece of devolved legislation, which is what the powers under this legislation would bring about. Currently, if there is a dispute, legislation must specifically repeal a measure; this Bill goes considerably beyond that. There is no mechanism in the JMC that I can identify through which we can resolve disputes, if there any.

On the operation of this legislation, if it is decided, as a result of either a request from a CMA investigation or the position taken by the UK Government, that a piece of devolved legislation is contrary to market access principles—and that would be extraordinary but is nevertheless theoretically possible under this Bill —or if the UK Government are asked by the CMA to annul a piece of legislation that they passed on behalf of England and which is against the market access principles, through what mechanism will that resolution be made? At the moment, the Government are proposing no mechanism for that; it is simply something for another piece of legislation. We come full circle to the Constitution Committee’s report, which said that this “needs to be clarified”.

I am grateful to the noble and learned Lord for proposing these amendments. We need much greater clarity on how intergovernmental relationships will work under a JMC mechanism, if that is indeed the Government’s position, and how disputes will be avoided in the first instance or there will be resolution at the end of them.

Photo of Lord Lexden Lord Lexden Deputy Chairman of Committees, Deputy Speaker (Lords) 4:00 pm, 2nd November 2020

The noble Lord, Lord Liddle, has withdrawn so I call the noble Baroness, Lady Humphreys.

Photo of Baroness Humphreys Baroness Humphreys Liberal Democrat Lords Spokesperson (Wales)

My Lords, I thank the noble and learned Lord, Lord Mackey of Clashfern, for tabling the amendments in this group.

In what is becoming an extremely welcome defence of the devolved Administrations and their devolution settlements in debates on this Bill, these amendments point the way to involving a forum that already exists when discussing and agreeing to regulations under the Bill: the Joint Ministerial Committee on EU Negotiations. The amendments would require the Competition and Markets Authority to consult the JMC on EU negotiations; they would also ensure that regulations are brought before the committee and discussed by it before being laid before Parliament.

The amendments are entirely sensible. The JMC on EU Negotiations appears to be the ideal vehicle for such oversight and deliberations. The amendments also open up the opportunity to discuss the way in which the JMC operates, to examine whether it is fit for purpose and to envisage its future role. Of course, the Joint Ministerial Committee on European Negotiations is a sub-committee of the Joint Ministerial Committee—a committee made up of Ministers from all four national Governments. On looking at the memorandum of understanding that underpins the JMC’s operations, it seems an ideal candidate for this oversight role. It is worth examining its wording. According to the memorandum, the JMC should provide

“central co-ordination of the overall relationship” between the UK and the devolved nations and, among other things,

“consider devolved matters if it is beneficial to discuss their respective treatment in the different parts of the United Kingdom” and

“consider disputes between the administrations.”

It seems an ideal candidate indeed, as I am sure we all would agree. This is exactly the sort of forum that we need, not just to have oversight of regulations brought forward by the CMA but to consider all issues arising from the relationship between the four nations. But the reality is slightly different. The JMC has the potential to be a forum to guide devolution issues and resolve them, but the committee itself seems to operate on an almost ad hoc basis.

My noble friend has already pointed out the difficulties with the Joint Ministerial Committee (Plenary), which is supposed to meet at least once every year. Like him, I look forward to hearing when the Prime Minister will be willing to chair another of its meetings. The Joint Ministerial Committee on EU Negotiations, to which these amendments refer, was initially expected to meet monthly. It did so until February 2017 but then ceased to operate for eight months, and its meetings have been held on an irregular basis since then. It met five times in 2019 and, I believe, has met three times so far in 2020. I would be delighted if the Minister could prove me wrong and tell me that it has met more often.

Despite the obvious drawbacks in the way that the JMC and its sub-committees operate, I am extremely grateful to the noble and learned Lord for tabling these amendments, because they point a way forward. The JMC and its sub-committees, actual and potential, could have a vital role to play in resolving issues that arise in and around the operation of the UK internal market, but first we need to resolve the long-standing issues surrounding its constitution. The frequency of meetings and the question of who controls the agenda, for example, all have to be placed on a statutory footing. The JMC and its sub-committees, operating efficiently, regularly and fairly, have the potential to allay the fears of the devolved Administrations and allow for the consensual and co-operative government they seek. I support these amendments.

Photo of Lord Naseby Lord Naseby Conservative

My Lords, when I read the Bill and the amendments to it that have been tabled, I asked myself, “Why?” Of course, my noble and learned friend Lord Mackay is a very experienced attorney and parliamentarian, but the whole purpose of the CMA is to be independent of government. It is not there to be dictated to because one of the devolved Administrations does not like the look of what the task group is going to be doing. That would be absolutely wrong. The whole basis of the CMA and OIM is that they are independent of government. They publish their results, monitor properly and advise, but the amendment would seem to put in another tier of management, like Europe in reverse. That is very wrong, and it would find no favour with me at all.

Photo of Lord Morris of Aberavon Lord Morris of Aberavon Labour

My Lords, I support Amendment 114, moved by the noble and learned Lord, Lord Mackay. It is right that we take the opportunity to look at the role and relationship of the Competition and Markets Authority and its relation to the Joint Ministerial Committee.

The single market is important to all of us. Perhaps I may give a practical example of smooth working, which is so essential. In the words of the noble and learned Lord, Lord Mackay, smooth working will ensure that our products are able to be sold in one part of the country and in any other. Nothing would distort that more than if access to the markets were limited. All my family are sheep farmers. They sell their products, produced in Wales—ram lambs, lambs and ewes—in markets in Carlisle and Exeter on a modest scale. It is important for them to ensure that they have easy access to all markets. That is the kind of practical example that we look at in the functioning of our future relationships.

In addition, there is the devolution settlement for each country. Whitehall has been very slow to wake up to the fact that there are four legislatures in so many fields within the United Kingdom, as we have seen recently in the divergences relating to health. It is important that that is recognised. I keep a constant watch on anything that might be done to undermine the devolution settlement. The very fact that powers are coming from Brussels to Westminster entitles us to concentrate ever more sharply and keep an even more watchful eye on the machinery.

The machinery for the CMA is set out in Clauses 28 to 35, which are all very detailed. We are putting into legislative effect the fruits of detailed negotiations between the four Governments since 1997. Those involved should be congratulated on what they have been achieving, and nothing should be done to undermine those achievements. In all these clauses there are detailed provisions regarding reports, regulations and default provisions. I may have missed something but I see no reference to consultation. Consultation is the essence of the amendment moved by the noble and learned Lord, Lord Mackay. The Joint Ministerial Committee will represent all four nations. They will know where the shoe pinches and what is of concern in their own countries. In fact, they will be the better means by which to ensure the smooth working in the future to which the noble and learned Lord referred.

Photo of The Duke of Montrose The Duke of Montrose Conservative 4:15 pm, 2nd November 2020

My Lords, I support my noble and learned friend Lord Mackay of Clashfern on this group of amendments, particularly Amendment 114. Having the correct dispute resolution mechanism is extremely important. If the Government can find a better one than what has been suggested, I would be interested in the Minister giving us a clue as to what it might be.

The Government have found that the Scottish Administration object to the Bill, particularly the internal market element. My noble and learned friend has drawn on many years of legal and parliamentary experience in trying to find a way for the devolved Administrations to have a forum for formal comment on the arrangements for reinforcing the single market and any SIs.

The Joint Ministerial Council on EU Negotiations has already received wide acceptance in its role of setting up the conditions for negotiating market frameworks. I declare my family interest, which is in a livestock farm in Scotland and in the Scottish agricultural industry. As the noble and learned Lord, Lord Morris, pointed out, the industry as a whole in Wales and Northern Ireland is desperate to see a properly functioning single market across the UK, let alone within the EU. It finds the framework concept so far very reassuring, but it appears that the Scottish Government are looking for more.

I have a reason to declare an interest of another kind in this whole process, in that the dukedom that I represent in your Lordships’ House derives from the role that my six-times-great-grandfather played in promoting the negotiations for the Act of Union. This of course was a desire to get a single UK market at that time, as there were so many areas where Scotland had previously had no way of gaining benefit. The settlement that they agreed left Scotland with much lesser constitutional powers than currently exist; none the less, they were determined that certain characteristics of Scottish life should remain, and they do so to this day. Therefore, I have always watched these developments with care.

Several of your Lordships were here when we debated the Scotland Bill, sometimes quite late into the night. At that time, it seemed incredible that all the items necessary for the administration of the UK could be defined in a schedule, with Scotland having jurisdiction over everything else. We were assured that this was not a worry, because Westminster always retained the final say. Noble Lords—my noble friend the Minister is probably conscious of it too—may remember, during the progress of the Scotland Bill in 1998, a slightly bad-tempered evening in Committee, which was asked to begin sitting at 6 pm and spent some time on the future relationship between Westminster and the new Administration. I was never quite sure if this was a formally prepared answer, but when trying to bring the argument to a head, Lord Sewel uttered the familiar words:

Clause 27 makes it clear that the devolution of legislative competence to the Scottish parliament does not affect the ability of Westminster to legislate for Scotland even in relation to devolved matters … However, as happened in Northern Ireland earlier in the century, we would expect a convention to be established that Westminster would not normally legislate with regard to devolved matters in Scotland without the consent of the Scottish parliament. If problems do arise the solution is for the Scottish executive and the United Kingdom Government to resolve the matter through political dialogue. That is what differences between mature parliaments and Executives will be concerned with.”—[Official Report, 21/7/98; col. 791.]

This is where we find ourselves today. Any formal reiteration of this power always recognises the full content of this text, but the element that receives much more exposure—to the point where people begin to think that it is the only part of the legislation—is the need for legislative consent Motions whenever uncertainty arises. The encouragement to progress to political dialogue is most certainly relevant to where we are at the present time. In the present circumstances, it would not be ideal for the Government simply to implement UK legislation. Perhaps the Minister can tell the House what stage discussions with the Scottish Government have reached? It seems to me that these amendments are suggesting a form in which the Government’s proposals can be formally conveyed, with a chance that the final positions of both sides can be opened for scrutiny.

Photo of Lord Fox Lord Fox Liberal Democrat Lords Spokesperson (Business, Energy and Industrial Strategy)

My Lords, I am grateful for the quality of this relatively short debate on a really important issue. In his speech, the noble and learned Lord, Lord Morris, emphasised the need to avoid a threat to the devolution settlement. When the noble and learned Lord, Lord Mackay of Clashfern, stirs, and tables amendments, it is important for us all to listen. Clearly, he is very concerned about the route that this Bill is taking, as is the noble Duke, the Duke of Montrose, who articulated strong reasons for a consultative and consensus approach to regulating the internal market of the United Kingdom. I am also grateful to him for bringing up again the Act of Union, because this is a live treaty; it still exists and reflects on the issue which we are discussing. We should always remember that.

The noble and learned Lord, Lord Mackay, talked about the need for the devolved authorities, or the Joint Ministerial Committee, to be involved in the nitty-gritty of the market. My noble friend Lord Purvis of Tweed set out the dangers and the discontinuities within the current state of the Bill that make that process impossible. Therefore, it is important for the Minister to explain how this will work, because there are so many missing pieces in a jigsaw puzzle which, frankly, still does not have a picture, and which make it very difficult for us to understand what the Government are seeking to achieve and why.

My noble friend Lord Purvis asked many questions and he raised the issue of triggering disputes. The issue of when a dispute is triggered is central, as is the one which has surfaced in many different debates: the mechanism for resolving disputes. The noble and learned Lord, Lord Mackay of Clashfern, suggested one way; perhaps the Minister can comment on that.

My noble friend Lady Humphreys and other noble Lords have pointed out that the JMC, and its variety of committees, seem to have stalled, not because of any lack of faith from the devolved authorities but because of the Prime Minister not convening a meeting of the Joint Ministerial Committee (Plenary). Can the Minister explain the delay and say when the next meeting will occur? My noble friend Lord Purvis also raised the important question of structure. Where does this all fit in with the JMC’s current operations?

It is the Government who have sought to drag the CMA out of its current area of reserved issues and focus it on devolved issues. I say to the noble Lord, Lord Naseby, that it is not this amendment, but the Government, that have decided to do that. They are pulling the Office for the Internal Market into an as yet undefined dispute role. It is very clear, as the noble and learned Lord, Lord Mackay, set out, that if advice and reports are being submitted, then the JMC must be party to the same information that the UK Government are getting. It is also clear that we have no real idea of the Government’s intention for the operation of this Bill.

Photo of Lord Falconer of Thoroton Lord Falconer of Thoroton Shadow Spokesperson (Justice), Shadow Attorney General

These are important amendments that reveal yet another problem in the Bill. First, they deal with the role of the CMA, which under this Bill is intended to monitor and give advice on the working of the internal market. As I understand the way that Section 30 envisages that the CMA will operate, it will authorise an Office for the Internal Market task group to set up groups to look at particular issues. The amendment tabled by the noble and learned Lord, Lord Mackay of Clashfern, seeks to ensure that, before such a task force is set up, there is confidence that the appointment of the task force, the terms of the task force and what it is doing have broad buy-in from all the relevant parts of the United Kingdom. Can the Minister explain how, without the amendment tabled by the noble and learned Lord, Lord Mackay of Clashfern, this was currently going to be achieved?

For example, the CMA’s parent department is the business department, which is a UK government department. The CMA has a number of board members and panel members; how many of them at the moment have experience of Scottish, Welsh or Northern Irish business issues? As the Bill makes clear, the CMA will be appointing a task force where there is a difference between one part of the United Kingdom and another regarding regulatory or statutory requirements. On what basis do the Government envisage these task groups being appointed and set up? Is there any objection to adopting the noble and learned Lord’s suggestion of how to ensure that you get all the other parts of the country involved, as opposed to only BEIS or the CMA? If not, can the Minister put forward an alternative suggestion?

The last of the three amendments from the noble and learned Lord is equally significant, if not more so. Amendment 171 suggests that, if regulation is to be imposed which is different from one part of the country to another, the Joint Ministerial Committee must be consulted, and if there is disagreement within it then Parliament must be informed of the reason for that disagreement and why the Government are not accepting the dissident view. My understanding—although I could be wrong about this; the noble Lord must correct me if I am—is that the Government envisage that disagreement in relation to this will be dealt with and resolved by the common frameworks process.

We strongly support the common frameworks process. I also support what the noble and learned Lord, Lord Mackay of Clashfern, and all noble Lords, with the possible, though unsurprising, exception of the noble Lord, Lord Naseby, agreed with: we want something which is more than just the common frameworks without some statutory recognition to provide a means whereby, if there is disagreement, it can be dealt with collaboratively.

The noble and learned Lord, Lord Mackay of Clashfern, suggests this method in Amendment 171. At the moment, I have been persuaded that the suggestion that the common frameworks process be recognised in the Bill looks more attractive. Could the Minister indicate the Government’s position on Amendment 171 and on whether the common frameworks process should be recognised in the Bill? That would definitely provide a solution.

Photo of Lord True Lord True Chair, Intergenerational Fairness and Provision Committee, Minister of State (Cabinet Office), Chair, Intergenerational Fairness and Provision Committee 4:30 pm, 2nd November 2020

My Lords, it gives me great pleasure to seek to reply to this extremely interesting debate. I agree with the noble and learned Lord that this is an extremely important area to consider. There were times in the speech of my noble friend the Duke of Montrose when I reflected that I was probably the 14th Mr True in the context of this discussion. I pay tribute to his ancestors for their long service to the Crown and the country of Scotland. It is true that the Act of Union is still of fundamental importance.

I am extremely grateful, as always, to my noble and learned friend Lord Mackay of Clashfern. Everybody who spoke recognised the good, unionist motivation to seek conciliation and collaboration which lay behind his amendments. I think that was shared by even my noble friend Lord Naseby. Often in debate we are asked to measure quantity and quality; although my noble friend was alone until now in saying that these amendments were perhaps not right for the Bill, I welcome his support.

Turning to the speech and proposals from my noble and learned friend, his Amendments 114, 141 and 171 seek to place obligations on the Joint Ministerial Committee on EU Negotiations—my noble and learned friend suggests this should be the core body—to be consulted on a number of considerations relating to the operation of the internal market.

I have been asked about the work of intergovernmental operations. The JMC (EN), which is the subject of these amendments, is a sub-committee chaired by my right honourable friend the Chancellor of the Duchy of Lancaster. It meets at regular intervals to facilitate political engagement between the UK Government and the devolved Administrations on the outcome of the UK’s exit from the EU, of which this Bill is one consequence. In total, since 2016, it has met 25 times, including the meeting that took place on 3 September 2020. The JMC system provides central co-ordination for the IGR machinery. I will come back to that later.

Before I address the amendments individually, I stress that the Government agree that the internal market should be underpinned by an effective system of governance and consultation between the four Administrations of the United Kingdom. However, we argue that the Joint Ministerial Committee on EU Negotiations is not the most appropriate or effective intergovernmental structure to engage on such technical considerations. As I mentioned, it was established in 2016 and has been valuable since then; it involves Ministers from each Administration.

I say with all respect to the noble Lord, Lord Purvis of Tweed, that there is no antithesis in regretting—as I hope he does—the decision of the Scottish Administration to withdraw from internal market discussions last March, as I referred to in a recent speech in your Lordships’ House, while seeking to continue co-operative work in the broad area of intergovernmental relations and through the common frameworks process. I will return shortly to the points on that made by the noble and learned Lord, Lord Falconer. The United Kingdom Government seek co-operation and understanding between the different Administrations. We want effective governance and consultation.

Through the review of intergovernmental relations, which is going on at the moment, as your Lordships are aware, we are working together with the devolved Administrations to revise and update the existing JMC system. Good progress is being made and we look forward to reporting on our finalised governance and parliamentary reporting structures in due course. As such, it would be counterproductive to pre-empt the conclusion of the review of intergovernmental machinery and place these obligations on the existing Joint Ministerial Committee, which would perhaps not be the most appropriate forum.

The noble and learned Lord, Lord Falconer, asked how disputes relating to the internal market should be resolved. Where disagreements relate to the internal market impacts of specific regulations that fall under a common framework policy area, it is anticipated that they will be considered through the dispute resolution mechanisms for individual common frameworks. The Government remain committed to resolving issues, including those relating to the UK internal market, at the lowest possible level. Most conversations on the UK internal market should therefore take place at departmental level to consider the impact on the UK internal market of individual policies at the technical level. This will be done through increased and improved engagement across all UK government departments and their devolved Administration counterparts. The proposal for reforming the formal process for avoiding and resolving intergovernmental disputes was jointly drafted by officials from all Administrations and endorsed by Ministers.

The UK Government are committed to the principle of dispute avoidance, as all Administrations continue to work closely behind the scenes to resolve issues through constructive dialogue, rather than detailed procedure. In the past, differences rarely escalated into disputes—in only four instances, I am informed. We can therefore expect the principle of dispute avoidance to remain central to managing disputes in the future.

My noble and learned friend suggested a specific function for the JMC (EN) on these issues. Amendment 114 requires that the committee be consulted prior to a task group of the Competition and Markets Authority being set up. We have already written into the Bill, in paragraph 2(3) of Schedule 3, that the Secretary of State will consult devolved Administrations prior to the appointment of panel members to the office for the internal market. The noble Lord, Lord Purvis of Tweed, referred to this. He said that it is just appointing the panel members but, in appointing members to a panel, it stands to reason that the devolved Administrations, being consulted, will be aware of the purpose for which that panel is being created.

In addition, we need to think carefully before compromising the independence of the CMA. The CMA is an independent non-ministerial department with a global reputation, as my noble friend Lord Callanan argued on an earlier group. Ministers have no day-to-day involvement in its operations. So that the advice and outcomes of the OIM’s work is trusted, its advice and future panels must be seen as impartial. There can be no suggestion of political interference, at any point. The involvement of a political engagement forum would therefore not be appropriate, in our judgment.

Amendment 141 then requires that all periodic reports by the office for the internal market on the operation of the UK internal market are laid before the JMC (EN). Subject to Clause 31(7) and Clause 34(3)— which the noble and learned Lord, Lord Falconer, pointed out, are governed by Clause 30(1)—the OIM will lay reports to the UK Parliament and each of the devolved legislatures. It will be for the relevant Administrations and legislatures, which receive the reports, to determine the most appropriate course of action, rather than a committee such as the JMC (EN).

Finally, Amendment 171 places an obligation on UK Ministers to bring regulations proposed under powers in the Bill to the JMC (EN). It suggests that, in the absence of agreement, UK Ministers would be obliged to lay reasons for the failure to agree before both Houses of Parliament and to table a Motion for a debate on the proposed regulations and the disagreement. I understand why my noble and learned friend is searching us on this point, but this mechanism is likely to introduce considerable delay in the implementation of policy to protect the internal market. Such a process would not facilitate timely discussions, given the frequency of such JMC (EN) meetings, and could undermine Parliament’s responsibility to legislate for the internal market as a whole.

I do not normally like to go with technical objections to amendments, but this amendment, as well as creating a new procedure for all powers across the Bill, would change the way regulations are made for Northern Ireland. It would require all the devolved Administrations to consent to regulations for Northern Ireland. Even if my noble and learned friend were minded to go forward on this route, and I hope he is not, we would have to respect the particular regulating arrangements for Northern Ireland in the Bill.

In summary, I hope noble Lords agree that, although these matters are important—I do not resile from the importance of the considerations raised and I will reflect on the debate—there are clear limitations to using the JMC (EN) in this capacity, particularly for measures relating to the office for the internal market, where there are already provisions in place to report directly to the Senedd, Holyrood and Stormont. With this in mind, I ask that this amendment be withdrawn.

Photo of Lord Lexden Lord Lexden Deputy Chairman of Committees, Deputy Speaker (Lords) 4:45 pm, 2nd November 2020

I have received requests to speak after the Minister from the noble Lords, Lord Fox and Lord Purvis of Tweed. I call the noble Lord, Lord Fox, first.

Photo of Lord Fox Lord Fox Liberal Democrat Lords Spokesperson (Business, Energy and Industrial Strategy)

I appreciate the Minister’s reply on the important points put forward. Whether the amendments of the noble and learned Lord, Lord Mackay, are adopted or there is some other form of regulating the relationship between the UK Government and the devolved authorities, does the Minister agree that there can be a smooth-running internal market only if there is trust between the UK Government and the devolved authorities? Could the Minister say what the Government’s assessment is of the effect on that trust of publishing the Bill?

Photo of Lord True Lord True Chair, Intergenerational Fairness and Provision Committee, Minister of State (Cabinet Office), Chair, Intergenerational Fairness and Provision Committee

My Lords, I strongly agree on the principle of trust between all parties in a negotiation. It is not always there in every negotiation, but this is more than a negotiation; it is a relationship. It is a life together, which we all wish to carry forward as the four nations and peoples of these islands. Standing at this Dispatch Box, I have sought to assure the House of the Government’s total commitment to proceeding with trust and respect. That has to come from every Government and institution in the United Kingdom. I go no further than that. I do not believe that seeking to set out a common approach to the management of the UK internal market in the UK Parliament, to which all four nations of this kingdom send representatives, should in any way undermine trust.

Photo of Lord Purvis of Tweed Lord Purvis of Tweed Liberal Democrat Lords Spokesperson (International Trade)

My Lords, can the Minister confirm that the discussions of the intergovernmental review, the conclusions of which we are asked to await, will specifically cover the operation of internal market legislation? Until now, as the Minister knows, legislative consent has been denied by both Wales and Scotland. The Minister repeated today that he regretted that the devolved Administration of Scotland has walked away from single market considerations. Will the intergovernmental fora that were referred to specifically cover the internal market?

Secondly, in their joint letter to my noble friend Lord Fox, the noble Lord, Lord Stevenson, and me, the Minister and the noble Lord, Lord Callanan, stated that the office for the internal market will have a role in providing independent advice in the dispute resolution process. With regard to the devolved Administrations in the intergovernmental fora, has it been confirmed that the OIM will have a role in dispute resolution?

Photo of Lord True Lord True Chair, Intergenerational Fairness and Provision Committee, Minister of State (Cabinet Office), Chair, Intergenerational Fairness and Provision Committee

My Lords, I believe I heard my noble friend Lord Callanan addressing this point in the previous group and that there was talk of a letter. I may have misheard but, if such a letter were proposed, I would not want to interpose my rather excessively considerable body between my noble friend’s pen and your Lordships’ House. But I take the point. If it is not covered in the response that my noble friend Lord Callanan has promised, I will address it. I am not pleading for an institutional parsing of the text in my comments, but I repeat that we are jointly exploring a number of options to strengthen the impartiality of the intergovernmental dispute resolution process. We hope it can be carried forward successfully.

Photo of Lord Mackay of Clashfern Lord Mackay of Clashfern Conservative

My Lords, I am grateful for the general support for my proposal to require co-operation between the devolved Administrations and the UK Parliament. I am sorry that my good friend, my noble friend Lord Naseby, does not care for it. I am not sure why that is, because I do not think that what I am proposing would damage in any way the independence of those seeking to set up a task force. All I am concerned about is that the task force should be familiar with the various areas of the United Kingdom that will be affected by the dispute in question. However, I have to be thankful for the support of your Lordships for the general principles that I am trying to further.

I am using the JMC (EN) because I understand that, at the moment, it is the body that is running the common frameworks policy. I want to make it absolutely clear that I am strongly supportive of the common frameworks policy and of bringing together in that connection various important matters. The system seems to work well. I am happy to use any organisation that the Government come out with for continuing that work with a degree of friendship.

I indicated in my speech at Second Reading that although the Scottish Government had stood apart from the situation in a formal way, they were apparently encouraging support for trying to resolve the main problems of the internal market in the common frameworks policy. As far as I can make out, that is the position. Needless to say, I got that information from the Scottish Government. It is a description of our situation which shows a certain degree of separation and co-operation at the same time; I very much welcome that co-operation.

The general point of who will eventually run this is a matter that I cannot anticipate. Therefore, when I use the JMC (EN) in my amendments, I am simply using what I understand is the present situation. The Government may well be able to produce a better system and, if they do so, I will be glad of that. In the meantime, I think that there is general acceptance of the view that the devolved Administrations need to be closely involved. After all, in Scotland at least there is a very strong interest in this, because something like 60% of its exports go to the rest of the United Kingdom. An internal market that functions properly and fairly is very much in Scottish interests, and I certainly would like to do everything I can to promote that.

In the light of the very good response I have had from my noble friend Lord True, I am happy to withdraw my amendment.

Amendment 114 withdrawn.

Photo of Lord Lexden Lord Lexden Deputy Chairman of Committees, Deputy Speaker (Lords)

We now come to the group beginning with the question that Clause 30 stand part of the Bill. I remind noble Lords that anyone wishing to speak after the Minister should email the clerk during the debate. Anyone wishing to press this or anything else in the group to a Division should make that clear in the debate.

Debate on whether Clause 30 should stand part of the Bill.

Photo of Baroness Bowles of Berkhamsted Baroness Bowles of Berkhamsted Liberal Democrat

My Lords, for the general reasons that I elaborated in the earlier group, I do not consider the CMA to be the right body, or the OIM the right structure, so in this group I give notice that Clause 30 and Schedule 3 should not stand part of the Bill. Clause 30 is about the setting up of task groups in the OIM and Schedule 3 contains more OIM detail.

Perhaps I may correct a small misspeak in the previous group. I referenced accidentally Clauses 29 and 30 instead of Clauses 28 and 29. I also pointed out then that this is part of a wider aim that Part 4 and Schedule 3 should not stand part, but as the Minister will know, it is not possible to put all of that in one amendment and debate it—we have to go through it clause by clause. However, I do not need to be reminded that removing one clause would leave the rest of them standing in a slightly awkward way. My solution is that we should get rid of them all.

I have also put forward Amendment 116 to probe how an independent OIM would look. It covers broadly the themes or principles that keep recurring as we move through the Bill and which need to be picked up, even when forced into the CMA straitjacket. I also heard what the Minister said about not creating new bodies. I recognise that there is a money aspect to this, but the point is that we need something that is better than the current proposals.

The first paragraph of Amendment 116 mentions having an MoU between the Administrations about the market access principles, and then the OIM being set up to assist in oversight. The message is simple: these matters should be consensual, and a consensually agreed body should be representing the four nations, rather than an imposed one that could potentially pay only lip service to the devolved authorities, or that does not necessarily have the right range of knowledge and abilities.

Proposed subsection (2)(a) envisages transparency, other than for commercially confidential information; maybe there could be some confidentiality for the Administrations in some instances too, but there should be a presumption of transparency, because how else are consumers or anyone else to know whether their views have been properly taken into consideration? Proposed subsection (2)(b) states that the board must include nominations from all of the devolved authorities and from the regions of England. I accept that the regions suggestion is as yet unstructured, but the principle I seek to convey is that it is no good just having the view from Westminster, it needs to be more “on the ground”, which is the enormous benefit of devolution.

The proposed third subsection says:

“Any task or investigatory group within the OIM must have a minimum of five persons drawn from all four nations of the United Kingdom.”

I have not tied the structure to the CMA-type panels, because I do not see that they are needed. However, whatever investigatory teams are used, there should be national diversity, not just cosmetically and not because it is political, but because there are genuinely different sets of knowledge and perspectives. The “minimum of three” task force of the CMA structure is clearly too few.

The proposed final subsection refers to the original CMA, not the OIM, and states that when in the ordinary course of its business the CMA conducts an investigation that requires consideration of the internal market, it shall also appoint balanced inquiry panels from all four nations. This could be in mergers, for example. I note that this part of my amendment contains thoughts that are somewhat similar to Amendment 153 tabled by the noble Baroness, Lady Hayter, which we will get to on Wednesday.

That is my vision of the starting principles for the OIM and how the Government’s construct could also be improved. I do not understand why the Government have given it copy-and-paste structures that derive from those that the CMA has for its investigations, and I question whether that is appropriate. This also underlies the clause should not stand part notices both in this group and generally.

The CMA deals broadly with large companies, which may be doing things that do not serve the public interest in terms of competition, and where it has powers to enforce mitigating measures. Strong information and enforcement powers are needed to be able to persuade businesses to co-operate and, importantly, the businesses will have done something to bring it on themselves.

The purpose of panels is to have a pool of expert talent available, over a range of sectors—in particular to look at things such as mergers, monopolies, cartels and competitive pricing—without having to have everyone on the payroll except for daily rates when used in an investigation. It is almost a gig way of working, if you like. It is a method of insulating the investigations from the board to reinforce independence, but it also has the effect of making panels less than accountable. It creates, and is intended to be, a closed structure, constructed not to be transparent or accountable. I do not see that as the right philosophy concerning work that relates to the internal market, and I really would like someone—well, the Minister—to explain why it was chosen and what benefits it brings.

I know the Minister does not like EU comparisons—I can say that because the noble Baroness, Lady Neville-Rolfe, started it—but think of the difference between the impenetrable DG Competition and the transparency of DG Internal Market. I had oversight of both; they are worlds apart and so, too, are CMA competition investigations and internal market monitoring. There really is no culture fit.

The OIM may, as indicated on page 29 of the Explanatory Memorandum, be dealing with businesses, possibly in the area of direct or indirect discriminations. These are matters of public interest. When it concerns the goods or services to which we may or may not have access, or if a business or anyone is up to shenanigans, we should know. It would not be shielded in a court hearing.

The remainder of my amendments in this group relate to improving the Government’s structure along similar lines to those I have elaborated regarding my hypothetical independent OIM. Amendment 127 relates to an investigatory panel size of five not three, Amendment 128 says that panels must be drawn from all four nations, and Amendment 130 relates to transparency.

Photo of Baroness Randerson Baroness Randerson Liberal Democrat Lords Spokesperson (Transport) 5:00 pm, 2nd November 2020

My Lords, I will speak to the amendments in this group to which I have added my name: Amendments 117 and 118, and Amendments 120 to 124. The noble and learned Lord, Lord Thomas of Cwmgiedd, and the noble Baroness, Lady Finlay of Llandaff, have also signed these amendments, which have been put forward with the agreement of the Welsh Government.

Clauses 28 to 40 of this Bill establish a new Office for the Internal Market, within the CMA, as other noble Lords have already noted. The OIM will have reporting, monitoring and advisory functions and information-gathering powers; it will monitor the health of the internal market and provide advice on the economic impact of proposals and regulations, including their impact on trade, investment and competition. It will publish reports available to stakeholders and devolved Administrations. The problem is that all this is to be provided within the existing structure of the CMA, which is a body established and designed to work within the UK Government structure.

These amendments relate to the status, role and membership of the CMA, which was established in 2013 as a non-ministerial government department, accountable to Parliament via its sponsor department, which at the moment is BEIS. Although the CMA works at arm’s length from the Government, BEIS gives it a strategic steer that outlines the Government’s strategic priorities. The Secretary of State appoints, or removes, the chair and board of the CMA, and it produces an annual report for the Secretary of State. It is the CMA which represents the UK Government abroad on relevant issues.

The CMA was designed to deal with purely reserved matters, whereas the Office for the Internal Market is designed to have functions in relation to the devolved Administrations as well. The OIM is therefore a mismatched limb, grafted on to the CMA. For instance, Schedule 3 includes measures to establish an OIM panel and task groups. The Secretary of State must simply consult the devolved Administrations before these appointments. That is inadequate, as it provides no guarantees of agreement from the devolved Administrations before appointments are made and no guarantees of balanced representation.

These amendments seek to address these problems and to be fully respectful of devolution, including requiring the Secretary of State to get the consent of the devolved Administrations to appointments, although with the provision that they must respond within one month so they cannot unreasonably hold up the work of the OIM. Importantly, these amendments would also adjust the structure and relationship of the CMA so that it will no longer be a purely UK Government and parliamentary vehicle. The DAs would each be able to appoint and remove a CMA board member, subject to the usual five-year term and the CMA’s annual plan and annual report would be laid before the devolved legislatures as well as Parliament. Thus the parent organisation, the CMA, is structured to ensure that its offshoot, the Office for the Internal Market, works genuinely for all parts of the UK.

I spoke in an earlier debate about the hybrid role of UK Ministers, who are expected by this Bill to operate at one moment as English Ministers, acting in the specific interests of England, then to switch hats into their UK role and act as impartial arbiters between the interests of the four nations. This Bill requires a similar constitutional contortion from the CMA in relation to its baby, the Office for the Internal Market. There is a reason why the referees in Saturday’s rugby internationals did not come from either of the nations represented on the field—and we all know that. You cannot guarantee an even-handed approach unless you have the structures in place to ensure that, and it has to be built into and throughout the appointments of the organisation, into its remit and reporting processes.

Photo of Lord Thomas of Cwmgiedd Lord Thomas of Cwmgiedd Chair, Consolidation, &c., Bills (Joint Committee), Chair, Consolidation, &c., Bills (Joint Committee)

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.

Photo of Lord Palmer of Childs Hill Lord Palmer of Childs Hill Deputy Chairman of Committees, Deputy Speaker (Lords)

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.

Photo of Baroness Finlay of Llandaff Baroness Finlay of Llandaff Deputy Chairman of Committees, Deputy Speaker (Lords) 5:15 pm, 2nd November 2020

My Lords, as other noble Lords have explained, the aim of these amendments is to ensure that not only is the office for the internal market appropriately constituted and organised so that it is accountable to all four democratically elected legislatures of the United Kingdom but also that the Competitions and Markets Authority—if this is to be the home of the new office—should be reconstituted to reflect the fact that its functions no longer relate exclusively to reserved matters.

I say “if” the office for the internal market is to sit within the Competitions and Markets Authority. Other noble Lords have already addressed that issue thoroughly and made clear that it is neither necessary nor desirable. The more radical attempts by the noble Baroness, Lady Bowles, and the noble Lord, Lord Stevenson, to establish the office for the internal market as a truly independent and unattached new body are far more logical and would ensure the proper functioning of the office. The noble Baroness, Lady Bowles of Berkhamsted, explained this very clearly. Their proposal has great merit. We will all be interested to hear the Minister’s arguments as to why a truly independent office is deemed undesirable.

Ministers keep claiming that passing the Bill is extremely urgent. If it is that urgent, perhaps he could explain why it would not be possible to initially brigade the office for the internal market under the CMA as an interim measure until it can be established by statute. After all, that is what seems to be happening with the Trade Remedies Authority. If I am correctly informed, the Government found it easy enough to establish a new body—the Trade and Agriculture Commission—as an independent statutory body.

If there are compelling arguments supporting the current proposal then it is imperative that the CMA can demonstrate that it really can command the trust of the devolved Governments and legislatures. If the Minister cannot give us those arguments during this debate, can he write to us specifying the justification? Nothing in these amendments suggests that it would be impossible for the CMA or for the OIM to function should a future devolved Government simply not want to engage.

The right of appointment of a board member to the Competitions and Markets Authority is important, but the board could function without one or more of these members. In the case of the OIM panel—where the devolved authorities would have to be fully engaged in appointments—if consent is not forthcoming within one month then the Secretary of State could proceed without their consent as long as he made a statement as to why proceeding without consent was desirable. That seems to strike an appropriate balance between ensuring the operability of the new arrangements and ensuring that the devolved institutions have confidence in a body that will have such significance for the future integrity of devolution.

Photo of Lord Wigley Lord Wigley Plaid Cymru

My Lords, I am delighted to follow the noble Baroness, Lady Finlay of Llandaff. As she has made so many of the points that I intended to address, I shall not repeat them and I shall curtail my comments accordingly. I agree with the telling arguments made by the noble Baroness, Lady Randerson, and the noble and learned Lord, Lord Thomas of Cwmgiedd. I shall also limit my remarks because of the diabolical communications between Wales and Westminster this afternoon. Noble Lords may see this as an ironic reflection on the amendments that we have just been addressing.

I oppose Clause 30 standing part of the Bill and support Amendment 117, to which I have added my name and to which the noble and learned Lord, Lord Thomas, has spoken. Like the noble and learned Lord, I shall desist from being drawn into the argument that Wales has so often been treated as part of England; that is for another day.

In the earlier debate on Amendment 110, the noble Baroness, Lady Bowles, said that the CMA should be equally available to all four nations. During the debate on the last group of amendments, the noble and learned Lord, Lord Mackay of Clashfern, argued that the devolved Governments should have a voice. This is why I have added my name to Amendment 117.

The Bill is reinventing the CMA as a hybrid body with the OIM—very different from the widely respected body that has hitherto existed. The CMA has to be restructured accordingly.

The Bill is bringing the CMA into a highly controversial area, as it will be dragged into polarised arguments between the Governments of the four nations. Several noble Lords have already raised doubts about whether it is in any way appropriate that the CMA should be used in this way. If the CMA is going to act as an adviser to the Government, it has surely to be an adviser to all four national Governments within the UK. It has to be equally responsive to all four Governments and not beholden unto one Government more than the other three.

It is in that context that I support the amendment requiring there to be a nominee of each of the devolved Governments on the CMA board. Unless this is delivered, the CMA will be seen as the referee and as a body beholden unto one of the teams between which it potentially has to adjudicate. This will inevitably lead to conflict, and it is to give the devolved Governments greater confidence in the CMA that Amendment 117 proposes having a nominee of the devolved Governments within its structure. Having rejected earlier amendments to amend the statutory functions to avoid these dangers, the very least the Government can do is accept Amendment 117, or alternatively bring forward on Report an amendment to achieve a similar purpose. I urge the Minister for once to take a sympathetic approach to this constructive amendment.

Photo of Lord Hain Lord Hain Labour

My Lords, it is a pleasure to follow the noble Lord, Lord Wigley, and all previous speakers in the debate. I wish to speak especially in support of Amendments 117, 118, 125 and 131. As Amendment 131 is in the next group, I shall not speak in that debate as I am listed to do.

These amendments concern the future governance of the Competition and Markets Authority—the CMA—and the creation within it of an office for the internal market, or OIM, under the Bill. These amendments seek to ensure that appointments to these bodies are representative of the four constituent legislatures of the UK and that, in overseeing the internal market within the UK, the OIM does not effectively act as an arm of the UK Government and therefore of only one nation, England.

These proposals are important because they are part of the emerging architecture of what Robert Shrimsley of the Financial Times has called the “one-legged economic strategy” of No. 10, namely the “levelling-up” of the UK regions and nations, which appears to mean allowing No. 10 to subsidise favoured industries without any willingness to partner with either the devolved Administrations or, for that matter, regional and local government, such as mayors. In July, the Financial Times quoted an individual close to these discussions as saying:

“The current plan is an odd combination of reserving state aid [for control from London] but then agreeing to a free-for-all. They just want to be able to bung money at things and do not want UK internal market legislation cutting across that.”

The Bill therefore seeks to create a UK-wide, or at least a Great Britain-wide, regime for market access overseen by the new office for the internal market within the CMA that undermines the current devolutionary settlements, certainly for Scotland and Wales and potentially for Northern Ireland, depending on the outcome of the UK trade negotiations.

The provisions of the Bill to curtail the scope of EU state aid rules that could potentially apply through Article 10 of the Northern Ireland protocol, which the Prime Minister agreed to last year, reflect objections by No. 10 to possible “reach back” into the UK by these EU rules. The Government now seek to give the Westminster Government legal powers to control UK state aid, which will potentially replace the estimated £2 billion average annual European Union structural funds previously distributed to the UK’s devolved nations and regions. Just as the Government are resistant to demands by the EU for a level playing field between the UK and the EU, neither do they apparently wish to see the UK’s internal market subsidy regime between England, Scotland and Wales, and possibly in the event of no deal even Northern Ireland, overseen by an independent UK regulator.

The reason why Scotland and Wales in particular are so unhappy about the Bill is that the arrangements proposed are seen by them as undermining the very principles of devolution. This is because the Bill not only curtails devolved competence in specific ways, for example, by making state aid a matter reserved to Westminster, but will ironically also cut much more deeply into areas of devolved competences to regulate economic activity in relation to goods and services than did the previous EU rules. This is because areas of permissible exemptions from similar EU internal market rules, including public health, environmental protection and the protection and promotion of local heritage, do not appear to be exempt from the proposed UK internal market rules. The Bill also gives the Westminster Government new spending powers in devolved areas with no obligations to consult the devolved Administrations.

The previous Conservative Government of Theresa May envisaged that post-Brexit there would be a new legally enforceable regime for state aid under the CMA. However, the arrangement now envisaged for the office for the internal market is that all appointments to its board and the panel of task force members will, like those currently at the CMA, which is a non-ministerial department of the UK Government, be made by Ministers at Westminster and that the role of the new office will be purely advisory.

Amendments 117 and 118 would give each of the devolved Administrations the power to appoint a member of the CMA board itself and would also ensure that the consent of the devolved Administrations is obtained for appointments of the chair and members of the office for the internal market panel. The Bill as it stands provides only for consultation with, as opposed to consent from, the devolved Administrations in relation to such appointments. Amendment 125 would require the CMA to lay its annual plan, proposals for its plan and its annual report before each of the devolved legislatures. Amendment 131—I accept that it is in the next group—contains similar provisions related the involvement of the devolved Administrations in appointments to the OIM and would strengthen the independence and enforcement powers of the OIM so that it would not be effectively an agent of the Crown.

In addition to crucial aspects relating to undermining devolution in the UK, there is an additional disturbing element to what the Government are trying to achieve here. As pointed out by the Institute for Government, under the Bill as it stands the office for the internal market will have very limited powers. Its reports may be useful in gathering relevant information about how the internal market functions, but there is no obligation on any of the Governments to act on them.

In the Conservative manifesto of 2017 there was a promise to use the returning £2 billion average annual EU structural fund money to set up a UK shared prosperity fund. The March 2020 Budget said that the fund would be realigned to match domestic priorities. The Government have yet to publish a consultation on this fund, but the Welsh Government have already made clear that they are strongly opposed to the idea of the fund being administered from Westminster.

The devolved Administrations have vocally expressed their opposition to the proposals relating to the Bill’s blueprint for the future UK economy, which they say was drawn up with no consultation or respect for divergence between the nations. Nicola Sturgeon has pronounced it “an assault on devolution” and the Welsh Government called it

“an attack on democracy and an affront to the people of Wales”.

I have previously argued that the rarely convened Joint Ministerial Committee, which was created to allow the UK Government and the devolved regions to discuss issues relevant to devolution and consider any disputes between the Administrations, should adopt a modified form of the EU system of qualified majority voting so that the Westminster Government would need the support of at least one of the other three nations for a measure to go forward. Such a measure is supported by the Welsh Government, but not—unsurprisingly maybe—by the chair of the committee, Michael Gove.

The Covid crisis has emboldened the UK’s devolved Administrations to make decisions that significantly diverge from those in Downing Street, and they are thought by many to have shown greater surety in their handling of the pandemic than has Westminster. Far from rewarding them for their competence, however, the Government are exploiting Brexit as an opportunity to impose an autocracy on Great Britain, and potentially on Northern Ireland as well, in respect of these internal market rules.

Brexit has also exposed the lack of autonomy at local government level within England. Without independent regulation and arbitration between levels of government, there is potential for pork-barrel politics in relation to the shared prosperity fund if such funds are to be controlled from Westminster. Referring to this proposed fund on 23 September, Michael Gove said in the other place:

“We will, of course, spend that money on what the Prime Minister has called the levelling-up agenda”.

He went on to refer to parts of the country that now have Conservative MPs, saying,

“it is vital that their advocacy on behalf of their constituents … is supported”.—[Official Report, Commons, 23/9/20; col. 973.]

As Greater Manchester mayor Andy Burnham recently discovered, under this Government local leaders hold little sway when it comes to differences with Whitehall if they are not Conservatives.

These amendments seek to correct that gross imbalance in the Bill and to make some provision for the independent governance of the internal market and UK state aid in the post-Brexit future. They have my strong support.

Photo of Baroness Bennett of Manor Castle Baroness Bennett of Manor Castle Green 5:30 pm, 2nd November 2020

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.

Photo of Baroness Noakes Baroness Noakes Conservative

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.

Photo of Lord Empey Lord Empey UUP

My Lords, as the noble Lord, Lord Hain, has said, much of the debate on this group has coincided with the next group and Amendment 131, and with what I was going to say on that group, so I will not exercise my right to speak then.

The word “confidence” has been used consistently, and it is the one thing currently missing. We do not have the support of any of the devolved Administrations for these measures, and it worries me that if we follow the same pattern in future, areas of conflict will arise, because there is no consensus on what we are trying to do. I take the point made by my noble friend Lady Noakes that this is a UK-wide body and you cannot expect the United Kingdom Government to be held to ransom by any of the devolved Administrations. I would not wish to see that.

Equally, however, we have, in our haphazard way—I have drawn the attention of the House to this before—provided devolutionary powers to these regions. As I said last week, we have a collision between the powers of the devolved institutions and what we are now trying to create. It makes sense, therefore—whichever way the Minister intends it in practice—to ensure that the devolved regions feel confident that they have someone at the table, in this new body, who understands their local circumstances and will speak up on their behalf, as well as exercising the UK-wide powers.

I must say that as far as my own region is concerned, while the Government will not allow the truth to pass their lips, from both the economic and state-aid points of view Northern Ireland is left in the European Union. We will be operating on EU state-aid rules and operating an EU regulatory regime. While we are all on the same page today, over time there will be differences. I do not believe, nor I do see any evidence, that Whitehall fully understands that. If we want proof of that, we were told a year ago to tear up any pieces of paper we were given and throw them in the bin; on 1 July we were provided with £25 million to ensure that our traders could deal with the paperwork and the administrative burden that they were going to be confronted with; and by 29 August that had risen to £355 million.

It is perfectly clear that there is a border in the Irish Sea, there are differences and the regime that businesses in Northern Ireland will have to operate under could well be very different over time, so having representation on this body is the minimum that we wish to achieve. I do not want to see a veto—I do not want to see a body that is crippled by disagreement—but people have to be realistic: if you give powers to the devolved Administrations then you cannot be surprised if they take offence when Whitehall says, “We know best and we will do things that you don’t agree with”.

I would say that we have created our own problems. I would like to see in response to some of these probing amendments the Minister address the point about how we get buy-in if we do not have broadly-based representation on the body that understands the different social, legal and economic contexts, particularly when one part of our United Kingdom is left under EU regulations and state-aid rules. I look forward to what the Minister has to say in that regard because we want to succeed. We have to move forward coherently and with restored confidence, because I have never seen it at a lower ebb than it is today. It would be so much better if the JMC were functioning as it was originally intended and if it were a forum where we could jointly work together on solving our problems. What we have achieved at the moment is a stand-off with the devolved Administrations, none of which support this legislation.

Photo of Lord Hope of Craighead Lord Hope of Craighead Chair, High Speed Rail (West Midlands - Crewe) Bill Select Committee (Lords), Chair, High Speed Rail (West Midlands - Crewe) Bill Select Committee (Lords)

My Lords, it is a pleasure to follow the noble Lord, Lord Empey. I support Amendments 117 and 125, to which four noble Lords with a special interest in Wales have put their names. I should like to add a Scottish point of view when I say that the amendments that they propose have everything to commend them, and the arguments that they put forward are ones that I entirely endorse and support.

The key point underlying both these amendments was expressed by the noble Baroness, Lady Bowles of Berkhamsted, when she said that these matters should be consensual and the body taking the decision should represent all four nations. Whatever the structure of that body, and indeed whichever body we are talking about—the options are before us in these various amendments—it has to command the confidence of all four nations.

Sub-paragraph (2A), as set out in the Bill as it stands, provides that before making an appointment the Secretary of State must consult the Scottish Ministers, the Welsh Ministers and the Department for the Economy in Northern Ireland. However, consultation, as the noble Baroness, Lady Randerson, put it so well, is not a guarantee of an even-handed approach being carried through all the processes that the body is responsible for conducting, so it does not give the confidence that is needed. The crucial point underlying all these arguments is that, whatever the structure, it must be designed to minimise the risk of suspicion and conflict.

I thought the noble Baroness, Lady Noakes, made an important point when she drew attention to the fact that the CMA is a UK body and that it seeks to operate in the best interests of all four nations. I am sure that is right, and of course one would not want in any way to question its ability to do that. The problem is that the decisions that it takes are seen as decisions taken in Westminster, and that that is true of decisions taken in Whitehall as well. From the distance at which the devolved Administrations are operating, it is easy to fall into the trap that the noble Baroness would wish us not to—I would not wish to do it myself—which is to regard these bodies as English and not truly representing the UK. That is the risk that we run if we do not pay due attention to the desire of the devolved Administrations to be properly represented on these bodies. It is important that that should be recognised, not only for its own sake in supporting the devolution arrangements but also to avoid the risk of the bodies themselves being misunderstood, particularly when they take decisions that are regarded as unpopular in the devolved Administrations.

Amendments 117 and 125 are extremely important. I congratulate the Welsh Government, those who have brought the amendments forward and those who have spoken in support of them, and I offer them my full support.

Photo of Lord Cormack Lord Cormack Conservative 5:45 pm, 2nd November 2020

My Lords, I also offer my support to these two amendments. It is a privilege to be able to follow two such wise speakers as the noble and learned Lord, Lord Hope of Craighead, and my noble friend Lord Empey. Implicit in their speeches was a recognition of the fact that the United Kingdom is on the verge of becoming the broken kingdom. The Government underestimate at their own potential peril just what dangers surround us. I beg my noble friend who will wind up this debate—for whom I have a genuine regard, as I have said many times before—to take seriously the points made by the noble Lord, Lord Empey, the noble and learned Lord, Lord Hope of Craighead, and the noble Lord, Lord, Hain, all of whom, coming from different parts of the United Kingdom, speak with a tone of real concern and sorrow because they passionately believe in the UK, as do I, and they know it is in peril.

We have to be extremely careful. I will speak for a moment or two longer than I would otherwise have done. I too, like the noble Lords, Lord Empey and Lord Hain, will not trouble the House in the next series of amendments because they rather overlap with these, and in many ways I would have liked them to have been grouped together so, like both noble Lords, I will speak as if they are.

My noble friend Lady Noakes was right to talk about our dealing with the United Kingdom. However, we have had 20 years or more of devolution and in the case of Northern Ireland considerably longer, although much more fractured from time to time. Therefore, we cannot behave as though ours were the only elected legislative body—of course, we in your Lordships’ House are in a unique position. We cannot behave as if there were just one Parliament; some of us may wish that there were but there is not. Therefore, to neglect what has been built up over the last 20 years would be sheer folly. We have to have a proper regard for the Scottish Parliament, the Welsh Senedd and the Northern Ireland Assembly, and to make sure that in this new world where the United Kingdom is no longer part of the European Union, we pull together, work together, recognise what each constituent part brings to the United Kingdom and strive to ensure that it remains the United Kingdom.

I deeply regret the fact that we are rushing pell-mell towards 31 December. The crisis that has engulfed the United Kingdom over the last seven or eight months, unique and grave as it is, ought to have made the Prime Minister and his Government realise that there would have been real merit not in trying to undo Brexit—that has happened—but in trying to get the very best possible relationship and, therefore, taking more time. I deeply regret that, but, as they say, we are where we are. It is therefore tremendously important—utterly vital—that we go into the new year as a united kingdom, each nation complementing the other and, as a collective country, moving forward.

We have seen over the last few months, with the way devolution has operated in Scotland, Wales and Northern Ireland, that the constituent parts of the kingdom have behaved differently with regard to Covid. I am not making any value judgment, but I would say that we have made our fair share of mistakes in this part of the United Kingdom. We have made some sweeping judgments, which we will be debating on Wednesday, and, in many things, other constituent parts of the United Kingdom have behaved perhaps a little more wisely than we have.

One point that has cropped up time after time in this very interesting debate is that we must command confidence. The prime duty of the United Kingdom Government here at Westminster is to command that confidence. I urge my noble friend the Minister to ensure that the bodies we are talking about tonight are able to command that confidence—that the office for the internal market does not become an office where dissension rules the day but where all the constituent members, from the constituent parts of our country, can recognise that they are complementary one to another, each with a contribution to make. It is therefore important that all four constituent parts are represented within this office by people in whom we can all trust. The noble and learned Lord, Lord Thomas of Cwmgiedd, said that we really did have to be able to trust each other. He made a number of very valid points which I hope my noble friend the Minister will take on board.

I do not want to sound too much of a Jeremiah, but I have never felt more worried for the future of our country than as we enter 2021—for its continued existence as a united kingdom, for its prosperity, and for our ability to come out of this crisis in a way that gives us a new and bright future.

The Government must practice a degree of humility as they realise that they have not had all the answers right in these last few months. If they are to get them more right in the next few months, they must not behave as though they have a monopoly of wisdom— they have not.

Photo of Lord Judd Lord Judd Labour

My Lords, it is always interesting to hear the reflections of the noble Lord, Lord Cormack, and I have a tremendous amount of sympathy with a great deal of what he said. However, I think he must come to understand—if I may put it this bluntly—that we have moved on and we are perhaps at a stage now where the future strength of our four nations working together will have to be rooted in an understanding of their separate identities and democratic systems, which complement our own.

I happen to believe that the road we should be exploring far more often is that of a federal United Kingdom. I hope that does not hurt the noble Lord; I feel that that is how our people can become strongly united in the way forward. In some ways, the determination to leave the European community has made this more urgent and important than ever. Our success as four nations depends upon our mutual co-operation and our recognition of interdependence.

Our debate this afternoon has been on a theme to which we have returned several times during the passage of this Bill, and it is crucial. We must have a situation in which the peoples of Scotland, Wales, Northern Ireland and England feel a sense of ownership in what is being done, and a genuine sense that it is being done on their behalf rather than being dependent on a dominating lead from England, and finding ways of talking to them to try to meet their needs in the best way possible.

We simply have to make sure that there is common ownership of what is being done. That is why the amendment by my noble and respected friend Lady Hayter is so important and I am so glad to see it—although I am slightly intrigued by the groupings as I think it is closer to the perhaps more detailed Amendment 131 tabled by my noble friend Lord Stevenson. As we go forward, I am sure that we will fail if there is any feeling that there is not common ownership and agreement about the things that are being done. This will take time and effort because, as has already been said, it is not just an administrative matter but a trust-building matter. These amendments are desperately important, and I hope that the Government will take them seriously.

Photo of Baroness Altmann Baroness Altmann Conservative 6:00 pm, 2nd November 2020

My Lords, it is a pleasure to follow the noble Lord, Lord Judd, and so many other noble Lords. I support the thrust of this group of amendments, particularly those in the name of the noble Baroness, Lady Bowles, who explained her reasoning with such clarity. I also support the aims of the wholly reasonable amendments in the names of the noble Baroness, Lady Hayter, and the noble and learned Lord, Lord Thomas of Cwmgiedd. I particularly support Amendments 116, 117, 121, 128 and 129, echoing the calls for specific representation of all the devolved Administrations in the operations of the office for the internal market. I also support the aims of amendments like Amendment 118, which call for the devolved Administrations to be properly involved in both the OIM and the CMA.

I hope that, when responding to this group, my noble friend the Minister can accept the intention of these amendments and return on Report with proposals to help dispel the impression that the establishment, as currently proposed, of this office for the internal market represents a power grab by the English Parliament, which shows wholly insufficient respect for, and inclusivity of, the Parliaments of each devolved nation in the United Kingdom. As the noble Lords, Lord Empey and Lord Hain, my noble friend Lord Cormack, the noble and learned Lord, Lord Hope, and the noble Baroness, Lady Randerson, rightly say, surely, representation of each devolved Administration is the minimum that is required to reassure each nation that its own particular interests will be taken into account by a representative with local understanding.

I also agree with other noble Lords that the CMA seems an inappropriate home for this new office for the internal market. Of course, I understand and support the aim expressed by my noble friend the Minister in earlier groups to avoid establishing more arm’s-length bodies if there is a viable alternative to use. However, the CMA does not seem to be a viable alternative for this purpose: it is an organisation sponsored by two government departments, BEIS and the Treasury, and it aims to promote competition for the benefit of consumers, which is primarily concerned with large businesses, competition issues, mergers and oligopolistic power. It does not have experience in monitoring an internal market across all four of our nations, particularly with the interests of so many small firms in each sector being at stake. Therefore, I believe that the office for the internal market does not really belong in the CMA, and, whether or not it is there, it absolutely must have representation from all four nations of our United Kingdom.

Photo of Baroness Ritchie of Downpatrick Baroness Ritchie of Downpatrick Non-affiliated

My Lords, it is a pleasure to follow the noble Baroness, Lady Altmann, and other noble Lords in this very robust but genuine and philosophical debate about the role of the CMA and the office for the internal market. The general thrust of the debate has been that there needs to be a degree of independence in this body but also that it should embrace the devolved legislatures as well as that within Westminster and Whitehall. As the noble Lord, Lord Judd, said, to protect identities and recognise and acknowledge democracies that Westminster and Whitehall put in place with the devolved settlements, it is important that they are recognised. The best way to do that is through membership on an equal basis on the CMA and office for the internal market panels.

Like the noble Lord, Lord Hain, I was intending to address Amendment 131, which is now in the next group, because I agree totally with its sentiments, as well as Amendments 117, 118 and 119 in this group. It is interesting that, in its recent report, the Lords Constitution Committee states:

“The Government should explain why the Competition and Markets Authority is the right body to have oversight of the monitoring of the UK internal market”.

Perhaps the noble Lord will provide reasoning for that —I hope he does—because none of the noble Lords who have spoken this evening, apart from the noble Baroness, Lady Noakes, have seen any merit in this organisation doing the job that will be required if this legislation is implemented.

The Lords Constitution Committee also states:

“The Government should seek to make the Office of the Internal Market more clearly accountable to the different legislatures in the UK.”

If you want their buy-in—and, as the noble Lord, Lord Empey, has said, there is no buy-in in Scotland, Wales or Northern Ireland—it is going to be an uphill struggle for the Government to achieve that.

In looking at various aspects of this over the last few days, there is no doubt that members should be appointed by all four Executives on an equal rather than proportionate basis, with substantial stakeholder input from the business sector. It should have a dispute resolution capability and sufficient powers of enforcement. Its remit should include measuring additional costs of GB goods to Northern Ireland and the source of the extra cost. Coincidentally, this issue has already been referred to in this debate by the noble Lord, Lord Empey, and an information session was given by the Government to Northern Ireland businesses today, which said that there will be 30 million customs declarations on an annual basis between GB and Northern Ireland. That is the extent of the issue and the extent, for some of us, of the problem and the work required.

There is no doubt that the resources and information necessary to monitor the impact of the UK internal market as it relates to the implementation of the protocol could be covered in Amendment 131, in the name of the noble Lord, Lord Stevenson of Balmacara. I also highlight the capacity to be informed by relevant stakeholders and business and consumer groups. There is a view in the wider business and academic worlds that the Competition and Markets Authority is not a natural fit, as it deals with private, not government, business. The proximity of the CMA to BEIS would always leave it open to accusations of political influence, even though it is a non-ministerial department with strategic influence given by BEIS.

In summary, it is important that that overarching authority should be—here I go further than other noble Lords, perhaps—independent of all political and governmental influence. However, there is no doubt that the work, influence and devolution settlements need to be recognised and, as such, representatives from the devolved structures need to be on the overarching body for it to work and bring some sense to this organisation. I am happy to support Amendments 117, 118 and 119.

Photo of Lord Purvis of Tweed Lord Purvis of Tweed Liberal Democrat Lords Spokesperson (International Trade)

My Lords, this is a characteristically interesting and deep group, and it is a pleasure to follow the noble Baroness. Having listened to and thought through all the contributions, I start by asking the Minister a question. Did the CMA respond to the Government’s consultation on their White Paper? If so, will the Government publish that response? Over the years, the CMA, as an independent body, has responded to many consultations on government proposals. What was its response to this? We know, as the Minister has indicated in answers to previous groups, that the Bill was, to put it most kindly, drafted within a constrained period; others may say that it was rushed. It seems there are concerns that the Government have found the CMA to be the appropriate body for a function to identify problems which the Government themselves have not indicated exist yet. It is all to do with future problems.

I will start by reflecting on the very good point made by the noble Baroness, Lady Noakes, who is frequently wrong in these debates. Her points are excellent, but when she shows the working of her arguments, we often come to a different conclusion. I have struggled to find a recent example of a UK body, operating on UK reserved matters, which has a direct role on devolved Administrations and Parliaments for areas within their competencies. Maybe the Minister can indicate where that has been the case. If that is not common practice, then we are in new territory. The closest that I can think of would be the operation of certain UK regulators that, by virtue of the decisions they can make within the reserved functions, could have an impact on devolved ones. We addressed that in the Scotland Act 2016, under which there are, for example, new requirements, which did not exist previously, for Ofgem and Ofcom to lay their reports to the Scottish Parliament. Interestingly, both Ofgem and Ofcom have a statutory duty under that Act to appear before a Scottish Parliament committee. This is part of an advance recognition that the decisions that they can make in regulating a UK market will have an impact.

In response to the noble Baroness, the role that the Government seek for the CMA is now markedly different, because the CMA is not just a UK body operating under explicitly UK issues of competition and regulatory functions. It will now report on non-UK-wide policy proposals made by the UK Parliament for England only, for Wales only or for Scotland only. That is a very different way for that body to operate; it was not the policy intent when it was formed in 2013. It is worth considering in detail, because it is a deviation from the policy intent in its parent legislation.

The CMA is also, fundamentally, about private enterprises in the market and the protection of consumer interests, but it will now have new responsibilities to report directly on decisions made by one Parliament, within its legislative competencies, which do not have private enterprise relationships or consumer interests at their heart. This goes back to the debate about what legitimate aims are. We are moving from a single market which had a wider scope of legitimate aims—environmental policies for example—to a more restrictive one. However, the decisions that will be made for England, Wales or Scotland alone will be within their existing devolved competencies or, indeed, their new ones. It goes far beyond what we have at the moment.

Neither have the Government explained fully why they do not believe that they have existing powers under Section 139 of the Enterprise Act 2002, which allows Secretaries of State to intervene in the market, or Schedule 3 to the Competition Act 1998, which gives the Secretary of State powers to make an order prohibiting an agreement or concerted practice which has the effect of preventing, restraining or distorting competition. If the thrust of the argument was that the CMA will continue to operate as far as competition or market operation is concerned, then the Government have existing powers. However, the proposal is that the CMA will now have the power to report on proposed legislation within the devolved Administrations. I did not get much from the Government’s Explanatory Memorandum on the proposals, so I studied the impact assessment, which was far more telling about what the Government intend for the OIM. It struck me that, given the current tight financial framework, the £5 million a year cost of the OIM, with 55 staff, seemed rather excessive to be operating on an annual report and, potentially, being asked to report on proposed legislation in three years’ time, but not having the power to report on existing legislation. What will those 55 people be doing at a cost of £5 million a year? It is quite extraordinary.

Page 35 of the impact assessment was interesting. Ministers have said, with full assuredness, that these powers are absolutely necessary for the oversight of the internal market. Page 35 says that

“the inherent uncertainty associated with quantifying benefits that depend on hypothetical regulatory scenarios means that the benefits of delivering UKIM functions are presented qualitatively.”

So even in the impact assessment, they do not know the benefit of the operation of the office for the internal market; it is currently all hypothetical. I wonder why, as my noble friend Lady Bowles of Berkhamsted and other noble Lords have indicated, the Government are rushing to have this established now, when the only function for the 55 people in it, spending £5 million of taxpayers’ money a year, is sitting waiting to work out what the hypothetical benefits could be of regulatory scenarios that are themselves hypothetical.

Worryingly for the devolved Administrations, the impact assessment goes a little further on who will be gathering the information about the functioning of the market overall. The impact assessment says:

“The development of a central repository of information and expertise will ensure the most robust and consistent practice when it comes to the estimation of UKIM impacts.”

Let us not forget that these are hypothetical at the moment. The Governments in Wales and Scotland already look at forming and developing policy for their legitimate aims of legislating on the environment or other areas. However, that “central repository of information” somehow gives the impression that the Government believe that they will not continue to have their own economic development departments to forecast what they consider beneficial, because the central repository of information and expertise will somehow supersede these.

The policy analysis that is put into legitimate policy proposals for legislation and regulations in Wales, England and Scotland are very valuable tools that they themselves will have. However, if that is being denied them, then it is very questionable as to what the Government’s intentions are for this. Do the Government believe that the OIM will be able to be the arbiter for what the market access principles are overall? The OIM will be asked to give an annual report and then a five-monthly report on developments under Clause 31. The report may consider,

“developments in the operation of the internal market, for example as regards … (i) competition”,

but it does not say between whom. Is this competition within businesses or is it about policy competition, as in: will each Administration seek to have an aim to meet a policy objective differently from another Administration with a similar policy objective but seeking to do it in a different way? That was the first one. It goes on:

“(ii) access to goods and services”.

By whom? Does it mean consumers? Is the OIM reporting on consumer access to goods and services? The third is,

“(iii) volumes of trade … between participants in different parts of the United Kingdom”.

How the OIM will be doing that and how it will be defining competition is questionable.

Clause 31(8)(b) is very worrying and goes to the heart of why so many noble Lords are taking part in this debate. Clause 31(8)(b) states that the OIM will be reporting on an annual basis about,

“the practical implications of differences of approach embodied in regulatory provisions, falling within the scope of this Part”.

This goes to the heart of what devolution is. Devolution is allowing decisions to be made within different component parts of the United Kingdom, potentially taking a different approach that might meet the objectives that they have set that have been endorsed by the people in those countries through democratic elections. The OIM, under this legislation, will be asked to report on the practical implications of the “differences of approach”, not necessarily on the regulations themselves or on the changes to regulations. But what does “differences of approach” mean? If I were a Scottish or a Welsh Minister, or a UK Minister acting on behalf of England, I would say, “I think our approach to meeting this legitimate policy aim is the correct one”. So what does that mean as far as the OIM is concerned?

This leads on to the next point about why there is concern. As my noble friend Lord Fox indicated in previous groups, along with the noble and learned Lord, Lord Falconer, and others, one of the consequences of this is the ability of certain private enterprises to seek to challenge decisions that are likely to be made. It is very interesting that page 36 of the impact assessment, to which I again refer, says about the role of the CMA:

“Administrations, businesses, and consumer groups would be able to seek clarity on the operation of this system and raise concerns around specific decisions taken within it, to an independent body with a suitable remit and mandate to review these issues.”

What that means, as far as the Government’s intent is concerned, is that a private enterprise, which would be able to view a policy choice made within a devolved competence, would be able to ask the OIM to seek clarity, as it says, on the operation of this system and raise concerns.

This brings the CMA into a wholly different situation. Since the whole of the impact assessment of the operational view is hypothetical, my final question to the Minister is hypothetical. What on earth is the incentive for a devolved Administration ever to ask the OIM to carry out a report on any of their policies? In the absence of the OIM being a body that can resolve a dispute, ultimately, if there is a difference in approach on a legislative or regulatory proposal under the internal market, where the devolved Administrations know that the final arbiter is this Parliament on regulations brought forward by UK Ministers to disapply devolved Administrations, why on earth would the devolved Administration ask the OIM to report on it? There is absolutely zero incentive for them to do that at all.

If the issue is whether the devolved Administrations will then ask the OIM to report on a UK proposal for England, as our Constitution Committee report indicated, there is not a level playing field as far as the powers over legislation are concerned. Therefore, UK legislation can disapply devolved legislation, but the Bill will prevent any reciprocal action if, indeed, the OIM says, “Yes, I agree with Wales” and an Act for England will be acting against the interest of the market access principles, because ultimately this Parliament will decide whether that is the case. I really cannot see what the incentives are for the operation.

On a whole series of grounds—the cost and efficiency of the OIM, with £5 million and 55 staff working on hypothetical benefits; the lack of clarity as to the OIM’s role when operating in the devolved Administrations; the concern that the OIM will have a view of making a judgment on a devolved Administration’s different approach; and a lack of incentive—I hope that the Government will listen to our arguments about these amendments. If this is to progress, these amendments really need to be in this legislation.

Photo of Baroness Hayter of Kentish Town Baroness Hayter of Kentish Town Shadow Spokesperson (Cabinet Office), Shadow Deputy Leader of the House of Lords, Shadow Minister (Business, Energy and Industrial Strategy) (Labour), Shadow Spokesperson (Digital, Culture, Media and Sport) (Charities), Shadow Spokesperson (Cabinet Office, Constitutional and Devolved issues) , Shadow Spokesperson (Wales) 6:15 pm, 2nd November 2020

My Lords, I rather regret that, early on in this debate, the noble Baroness, Lady Randerson, mentioned rugby. I would have thought that this was not the weekend for her to do it, but I am sure that it cheered up others in the House.

It is hard to add much to the case so clearly set out by earlier speakers, and I thank the noble Baroness, Lady Bennett, for covering the amendments in our names, so I do not need to go through them. I will just say that, yet again, the Bill bears testimony to the haste in which it was cobbled together. Perhaps even more serious was the lack of consultation and joint working with the devolved Administrations. How else was it possible to think it appropriate to give the OIM to a non-ministerial government department, accountable only to the UK Parliament through its sponsor department, BEIS, without a thought to the interests, the responsibility, the competences or the rights of the devolved authorities?

As the noble and learned Lord, Lord Thomas of Cwmgiedd, said, whatever structure we end up with must surely have the confidence of all four nations. Indeed, he said that the appointees should have the experience and the expertise of the four constituent nations. That point was emphasised by the noble Lord, Lord Empey, who said that, particularly in the case of Northern Ireland, which will be working in a different regime from the others, it was absolutely essential to build in the requirement that someone with that expertise and knowledge was involved in the governance of this organisation.

Without these amendments, it would simply be the Secretary of State who had the power to appoint the chair and members of the CMA’s board and of its panel—the latter, of course, as we have heard, is responsible for operational and casework decisions. More than that, BEIS is a UK department, which gives the CMA a non-binding strategic “steer”, as the noble Baroness, Lady Randerson, reminded us. Therefore, one Government of the four gives the CMA a steer with that Government’s strategic priorities, to which it is expected to have regard. Placing the OIM in the CMA to monitor the health of the internal market—apart from all the issues about whether it has any expertise to do so—including its impact on intra-UK trade, investment and competition, but with no voice from the other three parts of the UK, appears, at its kindest, forgetful, but at worst, deliberate.

The office for the internal market is meant to update all the administrations and legislatures on developments in the internal market. But the suggested structure leaves this within a UK body, a body set up to deal only with reserved matters.

My noble friend Lord Stevenson will shortly suggest, as we have heard, that the office should not even be within the CMA. But for the purpose of this group of amendments, we seek to ensure that, if it remains there, it should, as the noble Baroness, Lady Bowles, said, be a consensually agreed body. It has to take on a devolved nature and ensure that appointments are genuinely shared with devolved Governments and that its work is reported to all the legislatures—as the noble Lord, Lord Cormack, says, there are four, not simply one. At the very least, the Secretary of State should obtain the consent of the relevant devolved Governments to any appointments, preferably with each being able to appoint one member of the CMA board.

I have a serious point to make to the Minister. I know he is in listening mode because he always is; we have got used to that. I plead with him to not just bat away these amendments. Clearly, they will return on Report, so it seems better for the Government to work consensually with your Lordships’ House but also with the devolved Administrations. As the noble Lord, Lord Empey, says, the current proposals clearly do not have the confidence of any of the devolved authorities. So, for the Government to be resisting these, even at this stage, sends a very serious message.

The CMA or the OIM may, as the noble Baroness, Lady Noakes, says, as is their remit, cover the whole of the UK, but it is hard to understand how, in a devolved world, that is possible if they are appointed by only one of the four Governments. Devolution matters. The union matters. We do not want, in the words of the noble Lord, Lord Cormack, a broken union. A zero response to these amendments would be serious, as my noble friend Lord Hain suggests, and it does look like a power grab, as the noble Baroness, Lady Altmann, says.

Consultation is inadequate. At the very least, there has to be consent, and I hope the Minister will give the House the absolute confidence not just that he is listening but that he will take back the message to those who, I hope, will enable us to have a consensual approach by Report stage.

Photo of Lord Callanan Lord Callanan Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy) 6:30 pm, 2nd November 2020

I thank all noble Lords who have spoken in the debate so far. At the risk of agreeing with the noble Baroness, Lady Hayter, I can say I have been listening very carefully to what everyone has had to say in this debate. We take these matters extremely seriously.

Let me respond directly to the question from the noble Lord, Lord Purvis. No: the CMA did not respond formally to the consultation when we issued it, but as you would expect, there has been extensive, official-level discussion on the design and development of the OIM proposal with the CMA.

Before addressing the individual amendments, I shall set out why Clause 30 and Schedule 3 should stand part of the Bill. I have set out the purpose of the office in previous groupings, and noble Lords will be delighted to hear I will not repeat that here.

The purpose of Clause 30 is to introduce the office for the internal market panel and task groups and allow those task groups to carry out all the functions set out in Part 4 of the Bill on behalf of the Competition and Markets Authority. This will ensure that the CMA, through the OIM, can carry out a set of independent, advisory, monitoring and reporting functions to support the development and effective operation of the UK internal market on an ongoing basis. Building on existing governance arrangements, it allows the CMA to authorise the task groups to do anything that the CMA can do under Part 4. This would include delivering specific pieces of reporting, such as annual health of the market reviews or requested monitoring on the intra-UK trade impacts of specific regulations.

To fulfil those independent functions, Schedule 3 sets out the constitution of OIM task groups, to which functions of the CMA may be delegated by virtue of Clause 30. Schedule 3 also provides for the establishment of a panel from whose members such groups may be selected. In performing its role, the OIM will have the ability to gather market intelligence from UK businesses, professionals and consumers to develop its evidence base. The effect of removing Schedule 3 would be that no public body undertook those independent advisory, monitoring, and reporting functions to support the smooth running of the UK internal market. The Government believe that this outcome would be detrimental to the future health of the internal market and to the benefit of every region and nation of the UK. Thus, it is crucial both Clause 30 and Schedule 3 stand part of this Bill.

Amendment 116 would insert a new clause seeking to ensure that the creation of the OIM was subject to a memorandum of understanding being agreed between the Secretary of State and Ministers in the devolved Administrations. It also seeks to set out how the OIM should handle and use information that it requires to fulfil its functions. It proposes that the office for the internal market panel and task group members should include nominees from the English regions and devolved Administrations. It also proposes who should be members of any internal market work undertaken by the CMA if it undertakes such work separately from the OIM. I will respond to these latter points later, as they are referenced within other amendments.

The Government have considered a wide range of delivery options for the advisory, monitoring and reporting functions for the UK internal market as set out in the Bill. We have concluded that the CMA is best suited to house the OIM to perform these functions. This option was strongly supported by a wide range of stakeholders during the White Paper consultation earlier this year.

The Government have sought to work closely with the devolved Administrations. For example, I would like to say how much the engagement with the Welsh Government to date on this Bill has been appreciated. I believe these conversations have helped enormously to ensure that the purpose and effect of the OIM is understood. The Government are committed to continuing to engage constructively with the devolved Administrations on the establishment of the OIM and how it operates in future in fulfilling its functions as set out. In recognition of the keen interest of the devolved Administrations in the operation of the UK internal market, these appointments will be made following consultation with Ministers from all three devolved Administrations. This will ensure that the panel comprises members who all represent the interests of stakeholders in all parts of the UK. For the reasons I have set out, I am not able to accept the amendment by the noble Baroness, Lady Bowles.

I turn to Amendments 117, 121, 122, 123 and 124. Amendment 117 would allow each devolved Administration to appoint a CMA board member, with Amendments 121 through to 124 setting the terms and conditions of those appointments. The CMA is an independent non-ministerial department with a global reputation for promoting competition for the benefit of consumers and ensuring that markets work for consumers, businesses and the economy. Ministers have no day-to-day involvement in its operations. It is for these reasons that the CMA is a natural choice to take on the functions of the OIM.

The noble Baroness, Lady Randerson, asked how it is that the CMA deals with reserved matters but the OIM can address devolved issues. The statutory objective of the OIM in Clause 29 is designed precisely to draw a distinction with the current CMA objective and functions. This is wholly compatible with operating effectively and independently in relation to devolved matters, with a difference in focus on devolved and reserved matters respectively.

So that the advice and outcomes of the CMA’s work and the members undertaking such work are trusted and continue to be seen as impartial, it is clearly important that board members and the appointments process are seen to be trusted. As my noble friend Lady Noakes said, board members must be seen as capable of overseeing the promotion of competition throughout the entire United Kingdom, rather than as a representative of any one individual nation. It would therefore be inappropriate to risk politicising the CMA’s board by accepting this amendment.

Having different routes to the appointment, resignation and removal of CMA board members would be at odds with the UK-wide remit of the CMA and would have the effect of creating two categories of member. I recognise the keen interest of the devolved Administrations in the appointment process for the CMA board given that the proposed OIM panel chair will, by extension, become a CMA board member. We have stressed during engagement and written into the Bill that devolved Administration Ministers will be consulted on appointments ahead of the OIM becoming operational.

Amendments 118, 119 and 120 propose devolved Administration consent mechanisms for appointing the chair and panel members of the OIM. The first two of these amendments would require the Secretary of State to seek the consent of the devolved Administrations before appointing the OIM’s chair and panel members. As it stands, the Secretary of State appoints the CMA board chair and will appoint the OIM panel members and chair with full and mandatory consultation of the devolved Administrations. The priority will be ensuring that each appointment is on the basis of the relevant range of expertise and, crucially, is someone who can serve the interests of the whole of the United Kingdom.

During this consultation and the appointment process, the Secretary of State will aim to work closely with the devolved Administrations to ensure that their interests and comments are taken fully into account before decisions are made on who should be appointed. These amendments, on the other hand, would encourage a narrowing of expertise and risk the effective establishment of the panel. Consent would give each Administration a veto, which could delay and politicise appointments, which would undermine the OIM from the outset. For those reasons, I cannot accept these amendments.

Amendment 125 would require CMA’s proposed and finalised annual plan and annual report to be laid before each Parliament of the devolved Administrations. I assure noble Lords that the Government share the concern of the noble and learned Lord, Lord Thomas, that adequate opportunities for debate and scrutiny of the CMA’s annual report and other documents exist for the devolved legislatures. The Enterprise and Regulatory Reform Act 2013 requires arrangements to be made to lay the annual plan and report to Parliament; in practice, they are also laid before each devolved legislature. I assure noble Lords that this will continue in future. Should this reassurance be insufficient, the CMA’s annual plan and report are made public, allowing each legislature to scrutinise and debate them if it sees fit. In the light of those reassurances and reasons, I hope that noble Lords will not move their amendments.

Amendments 126, 128 and 129, and subsections (2)(b) and (4) of the new clause proposed by Amendment 116, would require either the OIM panel or task groups to have representatives from each of the four nations of the United Kingdom. This amendment could lead to members of the relevant task groups placing regional or political interests ahead of the CMA’s UK-wide mandate. This would harm the OIM’s ability to monitor the internal market effectively. All panel members chosen to be on each task group should represent the UK as a whole when undertaking reporting for the OIM. For that reason, I am unable to accept these amendments.

Amendment 127 would increase the mandated size of an OIM panel group from three members to five. Having consulted the CMA carefully on this and other points, the Government are confident that three members are sufficient to provide the range of expertise necessary to undertake the work of a task group. Since the panel may need to be able to form multiple task groups at a given time, increasing above this number would reduce the resilience of the panel as a whole and create additional unnecessary expense. For this reason, I hope the noble Lord will not press his amendment.

Photo of Lord Purvis of Tweed Lord Purvis of Tweed Liberal Democrat Lords Spokesperson (International Trade)

My Lords, I apologise for detaining the Committee; I know I spoke at length on this group. Can the Minister clarify something that he said at the outset? I heard him say that responses to the consultation supported the Government’s proposals for the CMA having this role, but I have the White Paper and the consultation in front of me. No one asked; the Government did not ask. The CMA is not mentioned at all, as I think the noble Baroness, Lady Noakes, indicated. In fact, questions 3 and 4 do not refer to the CMA, and in the entire section the CMA is not mentioned. To resolve this, would the Government publish the consultation responses before Report, or can the Minister clarify in his remarks that he may have inadvertently misled the Committee?

Photo of Lord Callanan Lord Callanan Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy)

I will certainly check that, and of course I will respond to the noble Lord if that proves incorrect. We obviously proposed the creation of the office for the internal market in the White Paper and said that we were interested in views—the noble Lord, Lord Purvis, shakes his head but I think we did. I will clarify that for the noble Lord in writing, in one of the many letters that I will be sending him. I definitely remember having discussions at the time of the White Paper with many noble Lords whom I spoke to during the consultation. We certainly discussed at the time how the creation of a new body would best monitor the function and effectiveness of the UK internal market process in the context of the White Paper, but I will certainly clarify that for the noble Lord in writing.

Photo of Baroness Bowles of Berkhamsted Baroness Bowles of Berkhamsted Liberal Democrat

My Lords, we have had an extensive and thoughtful debate, and I thank all noble Lords who have taken part. I thank my noble friends Lord Palmer and Lord Purvis for supporting my amendments, and indeed others who have mentioned them; one who springs to mind is the noble Baroness, Lady Altmann. As ever, the major constitutional issue has taken pride of place over technical issues. I am sure that noble Lords have realised that I am rather interested in the technical issues too, but we will end up having to come to grips with them, so I will not reiterate now.

To comment on some of what has been said—I cannot do justice to all speakers—my noble friend Lord Palmer said that there needed to be much more clarity to the OIM, and that we needed to resolve the ambiguity of its structure, flesh out how it works and find out what it meant in real terms. I think that is also the basis for a lot of other thoughts, whether they are technical or to do with devolution. What comes out loud and clear is whether all parts of the UK will feel that they have voice or ownership. My noble friend Lady Randerson led with the proposals that others have also spoken on and which have the support of the Welsh Government. It is all about having a structure that is workable for everybody and not part of something working inside the UK Government.

The Minister says that the CMA is independent. I accept that to a large extent that may be true, but there is still the problem that its strategy can be directed or steered by BEIS. That is just not the way to give the devolved Administrations confidence when, as has been outlined, the hybrid role of UK Ministers leaves us in the rather unsatisfactory situation of the same person trying to arbitrate. It is like the referee in the rugby match that my noble friend Lady Randerson referenced. Indeed, the noble Lord, Lord Wigley, said that basically the referee cannot be the manager of one of the teams—which rather seems to be the situation that we have here.

Some very valid points were made by the noble and learned Lord, Lord Thomas of Cwmgiedd, who said that judges had to be drawn from the different parts of the United Kingdom who understood everything vis-à-vis their specialist knowledge. I would not hold myself out at the level of a judge. I am not bad when it comes to negotiating things internationally, but I am English and would never hold myself out as being able to represent the positions of the devolved Administrations. I know that there are known unknowns that I do not know, and that is the situation we have to recognise. Whatever the integrity of the people on the CMA, you just do not know that the background is there unless they are drawn from a diverse field. I am very much one of those people who says that you cannot have sectoral interests, but this is different. I do not consider that devolution is political in that sense—we are all trying to get on together.

The noble Baroness, Lady Finlay, made a very interesting point when she suggested that it could perhaps be an interim measure because it has all been brought together very quickly. The noble Lord, Lord Hain, investigated the governance of the CMA and came up with many of the same conclusions as others. The noble Baroness, Lady Bennett, echoed that it is all about a voice for the legislatures and how to keep devolution alive.

As I said, I share with the noble Baroness, Lady Noakes, the view that the CMA is meant to be a UK-wide body and that nominees are not always the best people, but what is good enough for judges is, I think, good enough for the OIM. Yes, perhaps you always have to compromise, but my compromise comes down on the side of voice and ownership; otherwise, the body will never be trusted, as the noble Lord, Lord Empey, said. You have to have the confidence of knowing that people are properly at the table. I acknowledge that we have had rather haphazard devolution but, just because we have left the EU, that cannot be solved with “Whitehall knows best” and by taking back things that properly have been devolved.

The noble and learned Lord, Lord Hope, supported consensual Motions and said that consultation is not a guarantee. The noble Lord, Lord Cormack, warned us of the danger of a broken United Kingdom, emphasising again that there was a need for more time to be taken and for more confidence. The noble Lord, Lord Judd, had a good point in suggesting that we need a federal UK. That would perhaps make things easier, but we are not able to resolve that now—so, as he said, it comes back to understanding separate identities and to ownership.

The noble Baroness, Lady Altmann, supported some of my amendments and wanted the proper involvement of all parties. She also felt that the CMA was the wrong home, and really was not a viable place or a viable alternative to constructing a new body, because of the strategic involvement of BEIS and HMT, and because of it not being sensitive to matters of small businesses and diversity.

The noble Baroness, Lady Ritchie, was I think the first to bring forward the same points about needing a degree of independence and embracing the devolved legislatures, and also the fact that the Constitution Committee had also asked, “Why the CMA?” This was echoed by the views of my noble friend Lord Purvis. I agree with him; I could not find the flagging up of the CMA. It may be that one respondent said “a body such as the CMA”, but I did not see any consultation on it being the CMA or whether it was appropriate. The noble Baroness, Lady Ritchie, and other noble Lords also pointed out that the CMA is used to dealing with private business and enterprise and has a BEIS strategic influence.

I cannot begin to summarise what was said by my noble friend Lord Purvis, but the fact is that the CMA is left trying to analyse hypothetical benefits. It is true that we do not really know how this is all going to work out. If noble Lords follow the logic of my noble friend’s argument, they will find that he concluded by asking what incentive there was for this body to be used by the devolved Administrations. It is not intended to stir up wars between the devolved parts of the UK and the centre, but my view is that, by its set-up, it is likely to stoke rather than resolve concerns.

As I said before, the noble Lord does not like looking to the EU for examples, but it is a bit like when the Commission comes out with a proposal. It always wants to harmonise everything to make it easier and then the member states, notably the UK, get stuck in. You then get down to the nitty-gritty and you solve it. At the moment, we have this sort of overview coming from the Government that gives the devolved Administrations no room to manoeuvre—yet, when they get down to the nitty-gritty in the common frameworks, what happens? You can reach a conclusion.

Photo of Baroness Bloomfield of Hinton Waldrist Baroness Bloomfield of Hinton Waldrist Baroness in Waiting (HM Household) (Whip)

Perhaps the noble Baroness cannot feel the mood of the Committee, which is that she should now withdraw her opposition.

Photo of Baroness Bowles of Berkhamsted Baroness Bowles of Berkhamsted Liberal Democrat

I am sorry; I had basically come to a close anyway. There is much more that needs to be done. I do not think this is politicising; I think it is respecting devolution.

Photo of The Earl of Kinnoull The Earl of Kinnoull Chair, European Union Committee, Principal Deputy Chairman of Committees, Chair, European Union Committee

We now come to the group beginning with Amendment 115. I remind noble Lords that anyone wishing to speak after the Minister should email the clerk during the debate. Anyone wishing to press this or anything else in this group to a Division should make that clear during the debate.