Amendment 143

United Kingdom Internal Market Bill - Committee (3rd Day) – in the House of Lords at 10:30 pm on 2nd November 2020.

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Baroness Finlay of Llandaff:

Moved by Baroness Finlay of Llandaff

143: After Clause 31, insert the following new Clause—“Advice on proposal to make regulations applying Part 1, 2 or 3(1) Where the CMA is given notice of proposed regulations in accordance with section (Legislation to which market access principles apply)(5), (Services: application of sections 18 to 20)(9) or (Application of Part 3)(3), the CMA must give advice, or make a report, to the Secretary of State with respect to the proposed regulations.(2) The advice or report must (among other things) consider the potential effects on the matters specified in subsection (3)—(a) of any regulatory provision that any relevant national authority has proposed or might reasonably be expected to propose and that would be affected by the making of the proposed regulations, and(b) of the application of Part 1, 2 or 3 of this Act by virtue of the proposed regulations.(3) The matters mentioned in subsection (2) are—(a) the effective operation of the internal market in the United Kingdom, including—(i) indirect or cumulative effects,(ii) distortion of competition or trade, and(iii) impacts on prices, the quality of goods and services or choice for consumers,(b) the following in each part of the United Kingdom—(i) the health and safety of humans, animals and plants,(ii) standards of environmental protection, and(iii) any other aim that any regulatory provision mentioned in subsection (2)(a) would seek to promote. (4) Where the CMA gives advice, or makes a report, to the Secretary of State under this section—(a) it must at the same time send a copy of the advice or report to the Scottish Ministers, the Welsh Ministers and the Department for the Economy in Northern Ireland;(b) it must publish the advice or report in such manner as it considers appropriate.”Member’s explanatory statementThis amendment requires the CMA to provide advice or a report to the Secretary of State when notified of proposed regulations applying Part 1, 2 or 3 of the Bill and it specifies matters that the advice or report must consider.

Photo of Baroness Finlay of Llandaff Baroness Finlay of Llandaff Deputy Chairman of Committees, Deputy Speaker (Lords)

My Lords, Amendment 143 is to some extent a coda to our recent discussions on the role of the office for the internal market and to the amendments I moved last week, which were intended to underscore the primacy of the common frameworks process. They would ensure that the market access principles are triggered only when it proved impossible by consensus for the four Governments to agree a common framework. The triggering would be by bringing forward regulations using the affirmative procedure.

That would give this House and the other place a lock to ensure that the common frameworks process, including the provisions for dispute avoidance and resolution, had indeed run its course, before resorting to the blunt instrument of the market access principles. The Government cannot be allowed just to declare that the process has failed. Sadly, the disinclination of some Ministers to compromise suggests that it would be all too easy to use these powers as they are currently written. In our debate last week, I explained that the amendments would ensure that if such regulations were brought forward, both Houses of Parliament would be able to consider the reasoned arguments not only of Ministers here but of the devolved Governments as to whether they were necessary.

Amendment 143 would add further objectivity. It would require the office for the internal market, which the Government propose should be a genuinely independent source of advice, to give its opinion to Parliament on whether the specific proposed regulations to apply the market access principles were necessary. The office for the internal market would be required to report on the impact of making the regulations on the operation of the market and on the health and safety and environmental standards, among other things, in each part of the United Kingdom.

If we are to have an office for the internal market, it is essential that it gives value. One way in which it can do that is as an independent source of advice on whether the claims of the Government that such-and-such a measure poses a significant threat to the coherence of the internal market are credible or not. I beg to move.

Photo of Baroness Garden of Frognal Baroness Garden of Frognal Deputy Chairman of Committees, Deputy Speaker (Lords) 10:45 pm, 2nd November 2020

My Lords, the noble and learned Lord, Lord Morris of Aberavon, has withdrawn, so I call Lord Fox.

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

My Lords, my name is on this amendment, and I am pleased to support it and to follow the very clear explanation that we have just heard.

I speak briefly to subsections (3) and (4) of the proposed new clause. The former calls for the report to deal with

“indirect or cumulative effects … distortion of competition or trade” and, as I am sure that the noble Baroness, Lady Hayter, would be pleased to hear were she still here

“impacts on prices, the quality of goods and services or choice for consumers” then moves on to consider

“the health and safety of humans, animals and plants … standards of environmental protection” and other issues that have come forward.

This is another way of trying to do many of the same things that have come through the variety of amendments that your Lordships have heard over the course of the last three days in Committee. All the Ministers have all talked about level playing fields, and the purpose of this legislation is to create a level playing field. We all subscribe to that. The purpose of subsection (4) is to create an informational level playing field, to ensure that all the Governments are receiving the same information and create some transparency so that the outside world—indeed, the companies involved and the people involved—also receives that information.

I am sure that the Minister will stand up in a few minutes and give us very good reasons why this amendment should be withdrawn, but before he does, can he undertake to ensure that the level playing field applies not only to the commercial and trading issues, but also to the information that all the players receive when these decisions are being taken?

Photo of Lord Stevenson of Balmacara Lord Stevenson of Balmacara Opposition Whip (Lords), Shadow Spokesperson (Digital, Culture, Media and Sport), Shadow Spokesperson (Business, Energy and Industrial Strategy and International Trade)

My Lords, it will be interesting to hear how the Minister responds to this request, which has been well described as a bit of a coda. On the other hand, it also contains teeth, which would be there to be used, if someone wished to. It is important to get this right and understand, if it is rejected, why it is. I look forward to that.

Ministers know that we on the Labour side think that the common frameworks are at the centre of the managed divergence that we want to see and allow to happen across the devolved Administrations. It is important that the process continues and that is at the centre of the Bill, because it is not at the moment; it is hardly mentioned, except in passing. If that is the case, we look for some additional reassurance from the Minister that the powers that might be available to the Government, when they feel the common frameworks are not working, are not used too early or vicariously just to show the devolved Administrations who is in charge. As we were reminded by the noble Lord, Lord Dunlop, on day one, the Government already have powers to deal with any default they feel is present in the common frameworks. The questions raised by this amendment are important, and I look forward to hearing the Minister’s response.

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

I thank those hardy souls who have stayed for this brief debate. Amendment 143, tabled by the noble Baroness, Lady Finlay, is concerned with a proposed role for the CMA in the laying of regulations on the application of the market access principles. It builds on the earlier Amendments 6, 78 and 104, which concerned the scope within which the UK market access principles proposed in the Bill will apply. I understand that the noble Baroness has tabled this amendment on behalf of the Welsh Government, and I thank the Welsh Government for their positive engagement on the Bill so far. The UK Government look forward to continued and constructive future engagement with them on more aspects of these proposals.

Before I turn to the detail of this amendment, I note the previous discussion on similar amendments also tabled by the noble Baroness, Lady Finlay, which would have narrowed the scope of the market access principles. As I set out then, those amendments would, in combination, prevent the market access principles from applying in time, at the end of the transition period. Earlier, I set out that the lengthy process the amendments put in place before the principles can apply, including the need to exhaust the framework discussions first, would mean a considerable delay in securing business certainty that trade can continue unhindered within the UK’s internal market. Amendment 143 would add an additional layer of bureaucracy to that process.

In our view, it would also problematically risk bringing the CMA into potentially contentious decision-making and mean its role was weighted towards supporting the Secretary of State over the devolved Administration counterparts. This contrasts sharply with our vision for this, which is to ensure that the OIM’s expert reporting is available to all four administrations equally. Above all, however, the advice provided by the OIM will be economic in nature. Its panel will have expertise across intra-UK trade, regulatory impacts on business and competition effects, which is one reason why the Government chose to establish it within the CMA. We had that debate earlier.

The office for the internal market will not be equipped, therefore, to opine on matters related to animal welfare or environmental protection. To lay this obligation on the OIM would bring a significant risk of duplication of the remit of other public bodies, which would cause considerable confusion for the many stakeholders in this field. For these reasons, and the uncertainty and confusion that this and other related amendments would generate for businesses and citizens, the Government regretfully cannot support them, and I hope the noble Baroness is able to withdraw.

Photo of Baroness Finlay of Llandaff Baroness Finlay of Llandaff Deputy Chairman of Committees, Deputy Speaker (Lords)

My Lords, I am grateful to the Minister for recognising the staying power of some noble Lords, because we have had three days of this debate. I am most grateful to the noble Lord, Lord Fox, for going through some of the aspects of this amendment in more detail and clearly pointing out that its aim is to establish a level playing field, at every level. There has to be a level playing field, because it is the only way in which the four nations will eventually be able to work together properly.

I echo the words of the noble Lord, Lord Stevenson, and I am grateful to him for stating that there is a need to have common frameworks at the centre of the Bill. This is something to which we will return on Report, because the Bill, as it is written, does not make this clear at all. In the way it is written at the moment, it looks as if the common frameworks are almost disposable. We need to come back to that.

I am glad that the Government recognise the involvement and commitment of the Welsh Government to have positive discussions, and I know that from the Wales end that that is true. They want to engage and come to a good solution. They want business certainty just as much as anyone else; they want less bureaucracy just as much as anybody else, but they need to know there will be a level playing field and fairness at the end of the day. That is why the common frameworks were so attractive, and why people have worked so hard towards them and are committed to carrying on working towards them.

Having said that and knowing that we need to have further discussions on this and that we will return to this on Report, I beg leave to withdraw the amendment.

Amendment 143 withdrawn.

Clause 32: Advising etc on proposed regulatory provisions on request

Amendment 144 not moved.

Clause 32 agreed.

Clause 33: Provision of report on request after regulatory provision is passed or made

Amendment 145 not moved.

Clause 33 agreed.

Clause 34 agreed.

Clause 35: Statements on reports under section 34

Amendment 146 not moved.

Clause 35 agreed.

Clause 36 agreed.

Clause 37: General advice and information with regard to exercise of functions

Amendments 147 and 148 not moved.

Clause 37 agreed.

House resumed.

House adjourned at 10.58 pm.