House of Lords
Wednesday 25 November 2020
The House met in a hybrid proceeding.
Prayers—read by the Lord Bishop of St Albans.
Arrangement of Business
My Lords, the Hybrid Sitting of the House will now begin. Some Members are here in the Chamber, respecting social distancing, others are participating remotely, but all Members will be treated equally. Oral Questions will now commence. Please can those asking supplementary questions keep them sensibly short and confined to just two points. I ask that Ministers’ answers also be brief.
Covid-19: Vaccines and Medical Equipment
My Lords, the UK is at the forefront of efforts to drive global collaboration on the development of new vaccines and has committed to procuring a Covid-19 vaccine for the UK, the Crown dependencies and the overseas territories. We are collaborating with international partners on vaccine development, manufacturing scale-up and future distribution. The NHS has allocated and assigned more than 28,000 items of critical care equipment across the UK and Crown dependencies and the remainder is available for allocation across England according to NHS regions, based on future need.
My Lords, equitable access to vaccines has a number of dimensions and all must be secured across the world and in the UK. The Covid-19 pandemic respects no lines: if we neglect the developing world, we neglect ourselves. A lack of global access will hamper global health and development. Inequitable access would impede the unity of the United Kingdom.
The UK has pledged more than £1 billion in aid to counter health, humanitarian and economic risks, including £829 million on the development and delivery of vaccines. I thank all those involved in the COVAX Facility, a multinational mechanism administered by Gavi which pools funding. The COVAX scheme is an emphatically impactful scheme. Britain has taken a leadership role in it, and I thank all those involved in its development.
My Lords, it is essential that those at economic and social disadvantage be given proper access to a functioning distribution strategy. Can the Minister reassure the 200,000 people with blood cancer in the “extremely vulnerable” classification that they can rely on proper evaluation of the suitability of vaccines, treatments and equipment for their distinctive condition, and provide some insight into how construction of the prioritisation list will be undertaken to address the acute problem those in such circumstances face? In this regard, would the Minister be prepared to meet with representatives of Blood Cancer UK to take these matters forward?
The noble Lord raises an important point about those with blood cancer. In fact, many who are in the “extremely vulnerable” group have conditions that may or may not be affected by the vaccine. We are working extremely hard to accommodate their particular needs. The JCVI has an extremely thoughtful prioritisation process. I would be happy to meet the group the noble Lord describes.
I warmly welcome the agreement that was reached yesterday between Her Majesty’s Government and the three devolved Governments on Christmas household arrangements. That is a good example of working together across the United Kingdom. I press the Government to continue that approach with the rollout of vaccines across the United Kingdom. Nothing would be worse than to have one area or region ahead of another when it comes to vaccinating clinical staff, care workers and vulnerable people.
I entirely endorse the sentiment the noble Lord expresses. I offer my profound thanks to the devolved authorities for the immense spirit of collaboration which has characterised the response to the pandemic. Often, it would seem from the headlines that the nations are at odds with each other; that is not my experience. The Christmas negotiations he cites are a very good example of that, and I hope the vaccination arrangements will be the finest moment.
My Lords, on 25 September the JCVI reported the serious risk of disease and mortality from Covid according to deprivation and ethnicity. These issues have to be taken into consideration in the vaccination programme, so why does the present list of priorities for the vaccine ignore those factors completely?
My Lords, the noble Lord is entirely right that deprivation and ethnicity are key considerations in the morbidity of Covid; we are all acutely aware of them. The JCVI has looked extremely closely at a variety of different models for prioritising vaccination. Prioritisation based largely on age gives the most accurate and thoughtful prioritisation of the vaccine and is also simple to understand and deliver. That is why it has gone down that route.
My Lords, I congratulate AstraZeneca and Oxford University on their triumph in developing this vaccine. I hope that my noble friend agrees that without the exceptional input from the private sector, this game-changing treatment simply could not have been developed. What plans do the Government have to cope with the anti-vaxxers? Some of them will simply be individuals exercising their right to say no, but others will be deliberately spreading lies and misinformation that can only undermine trust in the vaccine. Do the Government have any specific plans to deal with this challenge?
My Lords, we have extremely detailed and energetic plans to deal with misinformation, which is based on confusion, and disinformation, which is based on malice. It would not be right for me to go through those plans in detail at the Dispatch Box, but I reassure my noble friend that they are in place and are being characterised by a degree of consideration for those who have concerns about the vaccine. It is a grave undertaking to have an injection such as that. People naturally have searching questions they would like to ask, and we are trying to meet those questions with a degree of thoughtfulness and to answer them in the spirit in which they are asked.
My Lords, my question follows on well from the previous one. The development of highly effective vaccines against Covid-19 is a remarkable scientific advance. It is crucial that the public have absolute confidence and trust in their use, which they should. This will be reinforced when the scientifically-led process of market approval by the regulator and scrutiny by the wider science community is completed, following publication of the peer-reviewed data. Can the Minister assure the House that there will be no political interference in any way to speed up that process before the vaccines are made available to the wider public?
I thank the noble Lord for the opportunity to make this crystal clear: the MHRA is an independent regulator, its work on vaccine approval has no political interference whatever and there is no pressure on either time or outcome. I pay tribute to those at the MHRA, who are extremely dedicated to the cause. We are going to approach the entire process with a spirit of transparency for exactly the reasons the noble Lord identified. Public trust is essential, and the only way we can gain the public’s trust is by being open and honest about how we go about these approvals. That is the way we will pursue the process.
My Lords, on COVAX, which the noble Lord mentioned, has there been any contact with the new US Administration to encourage its participation? Will the UK use its position within Gavi to ensure that the facility pays no more than cost price for future doses of Covid vaccines? What assessment has the noble Lord made of the impact of the further and substantial cut to ODA, after the £2.9 billion reduction earlier this year, on our global response to the pandemic?
My Lords, our forthcoming chairmanship of the G7, at the beginning of next year, is giving us a good opportunity to engage with our partners, including the United States, on issues such as the vaccine. We are grateful to Gavi, which is doing a terrific job at buying the vaccine; it is being characterised by what I would term commercial savviness. The spending review implications for ODA have yet to be published fully, but I reassure the noble Lord that funding the global response to the pandemic and the equitable distribution of vaccines, in particular, remains a massive commitment for the Government.
My Lords, notwithstanding the good use of UK aid via the WHO’s COVAX initiative, evidence shows that treatment providers and Governments have had to grapple with intellectual property barriers to essential products such as therapeutics, respirators and reagents for test kits. Do the Government maintain the position they held at the WTO TRIPS council meeting of 16 October that IP barriers to the Covid-19 response are hypothetical and will not stand in the way of scaling up vaccine manufacture?
My Lords, the question of vaccine intellectual property is a delicate one because, as was mentioned earlier, we rely on the private sector for a lot of funding and research, and for supplying the research. So, we are respectful of intellectual property as a principle. None the less, we are also grateful to vaccine manufacturers that have taken an open-source approach to vaccine intellectual property and have made local manufacturing available, so that there can be an extremely wide distribution of vaccines, including to those in the developing world who would otherwise struggle.
Wales: Customs Sites
My Lords, for January 2021, HMRC decided that Warrington and Birmingham inland border facilities will provide interim transit facilities for goods requiring inspection through Holyhead. Holyhead will also have a limited facility for ATA Carnets. Neither Birmingham nor Warrington is near capacity; they are on the strategic road network for traffic using the mainland as a land bridge. For July 2021, an enduring site has been identified, and we are moving towards completion as quickly as possible.
Given that we now know that the border in the Irish Sea will be moved temporarily from Holyhead to Warrington and Birmingham, in a move described by an industry expert as a recipe for smuggling, and, given that Holyhead has been described as a “soft spot” for people trafficking, how will the movement of goods and people be monitored on the 100-mile journey to Warrington, or on the 175-mile journey to Birmingham, for their customs checks?
My Lords, does my noble friend share my disappointment that it has not been possible to find a site local to Holyhead for customs checks, which clearly will be needed when shipments come in from the Republic of Ireland and could create jobs and boost the economy on Anglesey and the surrounding areas?
I am pleased to tell my noble friend that yesterday we agreed verbal heads of terms for a site on the island of Anglesey. It is not a done deal by any means, but I am confident that we will do that deal, and that it will give the answers that my noble friend is asking for.
My Lords, uncertainty about how Holyhead as a major gateway out of the European Union will operate raises concerns about jobs and livelihoods for local people. Can the Minister say if the levelling-up agenda applies to Wales, too, or is it just for Northern Ireland? Does he agree that this is an opportunity to help the local economy and Wales as a whole by ensuring that customs checks are carried out on the island, as well as alleviating security concerns inherent in checks done as far away as Warrington and Birmingham?
I agree with the noble Lord, which is why we have made the decision to move at pace to acquire the site on the island of Anglesey. That will bring jobs to the island and will ensure that security checks are as close to the port as possible.
My Lords, at all stages of the Brexit process we have urged the Government to formalise their engagement with the devolved Administrations, for example by putting the Joint Ministerial Committee on a statutory footing. Ministers said that this was unnecessary, yet the Welsh Government say that Whitehall made a formal approach regarding an inland site to serve Holyhead only in August. Why do the Government find it so hard to work constructively and proactively with others? Does it stem from the Prime Minister’s recent and very damaging comments on devolution?
My Lords, I want to reassure the noble Lord that we have had extremely collaborative and constructive discussions with the Welsh Administration; indeed, it was only yesterday that I agreed with the Welsh Minister to go for the site for which we agreed the verbal heads of terms yesterday. I gave that choice to the Welsh Minister and I was delighted when he agreed with the proposal that we put forward to him. So we are working very closely with the devolved authorities, and, as I say, with Wales in particular I have had a very constructive relationship.
Yesterday the French border control started trialling new controls, and immediately a five-mile lorry queue built up on the M20. If lorries to Holyhead have to travel via Warrington or Birmingham, how much longer do the Government believe the additional journey is likely to take, and what estimate have they made of the percentage increase in food costs as a result?
My Lords, if 100% of the Holyhead traffic had to go to Birmingham, it would take up 40% of Birmingham’s capacity. If it had to go 100% to Warrington, it would take up 20% of its capacity. So we are very unlikely to see any congestion at those two interim inland ports. In terms of distance delay, the Warrington site is located for those trucks going to the eastern ports and the Birmingham site is located for those going to the short-straits ports, so we do not anticipate delay or cost in relation to that.
My Lords, I am sure the Minister accepts that Warrington is totally inappropriate, and I am glad that a location has been found on Anglesey and hope that it moves forward very quickly. But perhaps I may press the Minister on another question. As I understand it, the digital infrastructure for border checks at Holyhead from 1 January still has not been fully tested, and, if things go wrong, it will have massive implications for the flow of trade and for local congestion. What urgent measures are being taken to deal with that scenario?
My Lords, I can reassure the noble Lord that we are on track to have the digital infrastructure up and running by 1 January. I completely accept that we are running on a very tight timetable, but if we take, for example, the GVMS system—which I think is the one that he is referring to—that has been available for testing by hauliers and carriers since September and will be released to all hauliers on 8 December.
Putting aside the issue of having to drive 100 miles or 175 miles in order to have your load checked, meaning that you have to go to one of two places, I am interested to know the Minister’s answer to the question that was put to him earlier about working at pace. Am I right to understand that the first communication on the siting of a potential site on the Isle of Anglesey was yesterday; and, if so, is that what the Government call working at pace?
I can reassure the noble Lord that we have been working on this solution for some time. There was an alternative proposal several months ago that most people were in favour of, which was RAF Mona, but unfortunately that was not acceptable to the local community. But, no, we have not just started work on this this week. In terms of the inland sites, to reassure the noble Lord, not every lorry has to go to them. About 2% of loads will be diverted for formal checks. So, although I accept that in the interim, before the enduring site is created on the island, there will be some inconvenience, it will be only for a very small number of loads.
My Lords, following on from the question asked by the noble Lord, Lord Wigley, concerns were raised this month about the readiness of IT systems, including the Customs Declaration Service, in oral evidence to the EU Select Committee’s EU Goods Sub-Committee. Is it the case that key personnel for developing the CDS are still being recruited? Does the Minister agree that, the rest of the UK aside, the particular problems facing Wales will be compounded if IT systems are not ready on time?
My Lords, the CDS is the system that is being rolled out specifically for Northern Ireland from 1 January, because that is the one that enables a dual-tariff mechanism. The development is well under way. We have one or two more upgrades to make to it, with the last one on 21 December. I am not going to pretend that that is not tight, but the development is moving at pace, and the most recent upgrade enabled the dual-tariff operating model to work. The CSPs—the community service providers that provide the link into the CDS for traders and hauliers—are working at pace. The main one, the Trader Support Service, is working at particular pace, and I am confident that the system will be connected by the due date.
My Lords, further to the questions from the noble Lord, Lord Wigley, and the noble Earl, Lord Clancarty, the head of Stena Line’s head of UK Port Authorities told the BBC yesterday that it was preparing for no deal and was confident that it was in the right place for that. As far as I am aware, the Government are still looking for a deal. That means that big companies such as Stena, and also small companies, will have to deal with the uncertainty, with 36 days to go. What help is being provided to enable small independent businesses, in particular, to interact with that extremely late-arriving IT system?
My Lords, the difference for the vast majority of traders between a deal and no deal is simply the level of tariffs that will have to be put into the HMRC and DIT systems. So their readiness needs to be at the same level, whether it is a deal or no deal.
My Lords, Her Majesty’s Government keep their nuclear deterrents policy and posture under continual review, taking into consideration their commitments to maintaining the United Kingdom’s nuclear deterrent for as long as the global security situation demands, and to the long-term goal of a world without nuclear weapons.
My Lords, I thank the Minister for her reply. There is common ground with the Treaty on the Prohibition of Nuclear Weapons because that is the shorter term goal, too. However, with the collapse of so many non-proliferation treaties and the failure of the 2015 round of the nuclear non-proliferation treaty to reach a consensus, is the Minister confident that the next round of the non-proliferation treaty, which must take place before April, will reach some consensus as a way forward? The 122 countries that signed the Treaty on the Prohibition of Nuclear Weapons are desperate that nuclear weapons states are not making sufficient efforts to fulfil their obligations under pillar 3. What dialogues have the Government had to date on achieving a consensus and success at the next round of the NPT?
The Government remain constantly engaged. There is probably a fundamental difference of philosophy between an attitude towards a non-proliferation treaty and an attitude towards a prohibition treaty. Certainly, the Government believe that the non-proliferation treaty has been successful because it is built on foundations of consensus and delivers tangible benefits for all its signatories. It continues to make a significant contribution to international security and stability, and that is what this Government want to promote and support.
My Lords, recently I and a number of other Bishops issued a public letter welcoming the important ratification of the UN Treaty on the Prohibition of Nuclear Weapons. Can the Minister comment on the moral inconsistency, whereby we have rightly taken a stand on outlawing cluster bombs and landmines but not outlawing nuclear weapons, which, as we know, are far more destructive when they are used?
At the heart of the question asked by the right reverend Prelate is the relevance of the term “deterrent”. Very often people measure the deterrent a failure because it has not been used. I would argue the exact opposite—that the measure of a deterrent’s success is that it has not been used, because it is doing its job of deterring.
My Lords, bearing in mind how much the cost of the nuclear deterrent has destabilised the defence budget, have HMG considered relieving it of this cost as part of the welcome recent addition to the resources allocated to defence and security?
I would respond to the noble Lord by observing that the Government recognise that the cost of maintaining and renewing the deterrent is substantial. Equally, the Government are clear that the safety and security of the United Kingdom is a long-term issue and immediate economic pressures are not sufficient rationale for taking risks with the security of the nation and British public far into the future. The costs have been and will continue to be subjected to cross-government scrutiny, but the underlying rationale for the deterrent is the safety of the country and its citizens.
I refer noble Lords to my interests as reported in the register, as chair of the Nuclear Education Trust. As the noble Baroness, Lady Miller, said, the TPNW comes into effect on 22 January 2021. The list of prohibitions includes use, stockpiling, testing, production, manufacture, stationing and installation of nuclear weapons. In that context, can the Minister tell us what current government thinking is about the possibility of defence diversification to provide alternative good-quality jobs for those currently engaged in the process of replacing the existing nuclear arsenal? We know that science and industry can respond very quickly when necessary, as we have seen during the Covid pandemic.
I simply observe that the commitment to the deterrent is very significant in terms of defence capability, planning and cost, and is a long-term commitment. We deploy our best scientific and technical skills to that programme, and there is no proposal to distract from that activity.
My Lords, the Minister suggested that there is probably a different philosophy between those who believe in a non-proliferation regime and those who believe in a prohibition regime. Can she tell the House what work the Government are doing to take us down the nuclear ladder and reduce the amount of nuclear capabilities, because surely the aim we all have is a multilateral solution to ending nuclear weapons?
Let me offer some cheer to the noble Baroness by agreeing with her last point. The difficulty lies not so much in the objective, which is shared by many people, but in the journey to reach it. That is why the United Kingdom believes that the non-proliferation treaty not only offers focus but is a treaty entered into by all the nuclear states. I am not aware of any nuclear state joining the prohibition treaty. It is entered into because those nuclear states believe that the non-proliferation treaty provides focus and verification, and that it has a record of delivering.
On 24 January 2021, it will be 75 years since the General Assembly of the United Nations first pledged to rid the world of nuclear weapons, while meeting at Central Hall, Westminster. Is my noble friend aware that many of us who have argued vigorously against unilateral nuclear disarmament feel passionately about the need for greater progress in multilateral disarmament? I welcome the UK’s leadership in reducing our nuclear stockpile. Will the Government use the upcoming 75th anniversary to urge other nuclear states to follow suit?
As always, my noble friend makes an interesting and informed contribution. He underlines my earlier point about why we have the deterrent and what the test of a successful deterrent is. I assure him that the United Kingdom Government support multilateral nuclear disarmament, but we believe that the non-proliferation treaty is the most effective means of progressing that objective.
We welcome the long overdue commitment on defence spending announced last week but, according to the National Audit Office, poor management of Britain’s nuclear weapons programme has led to infrastructure projects being delayed by six years and costs increasing by £1.3 billion. Can the Minister say how much of the £16 billion increase in spending will be used to complete the nuclear programme upgrades?
I cannot attach specific sums of money to the particular components to which the noble Lord refers. He will understand the Government’s commitment to the Dreadnought programme, an extensive, ambitious and challenging programme. We remain on track to deliver the first of class into service in the early 2030s, which we will do within the costs envelope announced in the National Security Strategy and Strategic Defence and Security Review 2015. That estimated the cost to be £31 billion and set aside a £10 billion contingency fund.
Which makes for better policy, and why, when there are force expansions by adversaries in capability, capacity, doctrine and battle-readiness: on the one hand, reinforcing our seat on the Security Council, NATO leverage and special relationship status, or, on the other, recognising our new status as a lesser-tier country but with a strategy of balancing the extent of the threat with nuclear disarmament and adopting more of a practical focus on IT capabilities and retaining 0.7% as our foreign aid contribution?
Responding from the perspective of defence, I do not accept the premise of the noble Viscount’s question. When we are dealing with threats to security and the safety of our country and our citizens, we go down all routes—security routes, MoD roots and diplomatic routes—and they are all vital. The recent settlement offered by the Government to the MoD reflects the importance that we attach to that.
Covid-19: Vaccination Prioritisation
My Lords, the Joint Committee on Vaccination and Immunisation has found that mortality increases exponentially with age and has published interim advice accordingly. An age-based programme captures many with underlying conditions. None the less, the sub-committee is reviewing evidence on clinical risk factors, including the clinically extremely vulnerable, and the committee will update its advice if necessary after review.
I thank the Minister for his Answer. As someone who has been shielding since early March, I celebrate those involved in producing the vaccines in such a short time. However, I am concerned to learn that those under 65 in the clinically high-risk categories have been given a lower priority for the vaccine, knowing that 59% of people who have died from the coronavirus have been high-risk disabled people. Can the Minister please provide the JCVI’s evidence that informed the Government’s decision that those in high-risk categories under 65 are less vulnerable to the virus? Disabled people tell me that they have not felt shielded or protected throughout this pandemic, and this priority decision seems to confirm that belief. I urge the Government to think again.
I reassure the noble Baroness that no final decisions have been made; this is only interim advice. I point out in particular that the behaviours of individual vaccines might be quite different for different groups of people. It is only when we have the final phase 3 data on the vaccines that we will be able to make the decisions that she alludes to. We are considering the extremely vulnerable carefully. As I mentioned, a review is under way to see whether clinical factors should play a greater role in prioritisation.
My Lords, I could not agree more with the noble Baroness, Lady Campbell. Motor neurone disease is an example of a fatal illness with a very short life expectancy after diagnosis. The Minister might well have seen recent publicity about the case of a six year-old child being unable to attend school in case he brings the Covid-19 virus home to his dad, who is living with motor neurone disease. I hope the Minister will agree that no family should be in the position of having to choose between their child attending school and the risk of shortening the already short lifespan of his father. Will he further agree that people living with motor neurone disease, as well as those with many other life-limiting illnesses, must be on the priority list for very early vaccination?
I ask noble Lords to keep their questions short.
What provision is being made for another group who feel totally forgotten by this Government—namely, extremely vulnerable children, whether they have medical conditions or physical or learning disabilities, many of whom have been unable to access carers or schools since March? When is the review that the Minister just spoke about likely to publish its results?
It will not be possible to publish any results until we have the clear data on the vaccines. Individual vaccines may behave quite differently with different groups of people. There may be some vaccines that work well with the elderly, some that work well with those with clinical conditions and some that work well with children. It is only when we know that data that the final prioritisation can be published.
My Lords, on 12 November I asked my noble friend’s ministerial colleague, my noble friend Lord Greenhalgh, if he would recommend to the JCVI that rough sleepers and those who work with them should be a priority for vaccination. He said he would. Does that remain the case, and will they indeed get priority?
My noble friend has made the case for rough sleepers extremely well. It is one that we are deeply concerned about. When it comes to the prioritisation list, what has been published so far is an interim and indicative list. It will be reviewed, and a more detailed list will be published in time.
As the Government keep the priority list under review, will they also look at the results of the New York vaccine rollout prioritisation? Younger adults who have been shielding are often already on a list, are at high risk and have children at school or college who are also their carers. These children are already stressed, if they attend education, knowing that they risk being asymptomatic virus carriers into the home and that Covid could kill their parent or sibling.
I am extremely grateful to the noble Baroness for suggesting the New York precedent. It is not one that I was aware of and I will look into it. I reassure her that we are liaising with all our international partners over the vaccine rollout to ensure that we put in the best possible practice that we can.
My Lords, I have read the JCVI priority list. As the Minister has indicated, some granularity is going to be vital. There is so far no mention of vulnerable BAME communities, who have borne the disproportionate burden of the pandemic. How will the Government approach those vulnerabilities in setting the priorities and their implementation?
My Lords, the underlying principles of the advice of the JCVI are to reduce mortality, to improve population health by reducing serious disease and to protect the NHS and the social care system. The basic insight is that the risk of serious disease and death from Covid increases exponentially with age and increases in those with a number of underlying health conditions. Those are the basic principles of the interim advice and they will evolve over time.
The noble Baroness makes the case extremely well for care providers. The prioritised list starts currently with older adult residents in care homes and care home workers, but she makes the case for the 250,000 who may not be on that principal list. That is something that I will take away with me.
My Lords, I add my voice to the plea that those sleeping rough on our streets are not forgotten when vaccination occurs. I ask the Minister to rule out any government-assisted moves to stop people who decide, just as they do not want vaccination for flu, that they do not want to be vaccinated for Covid from travelling, certainly within the UK.
I hear loud and clear the case for rough sleepers made by both the noble Baroness and my noble friend. The case was made to my colleague, my noble friend Lord Greenhalgh, as well. That is a really important part of the vaccination programme and we will look into the most effective way of doing it. On the noble Baroness’s second point, I am not aware of any moves to try to limit or create mandatory situations for vaccines within the four nations.
Might my noble friend consider setting up a network to catch and bring back into circulation those young people technically in care between the ages of 14 and 21 who have none the less been trafficked out of their unmonitored council care homes, given that the vaccination publicity is so enormous that they might well be able to be tempted back into life again?
My Lords, the vaccination holds the prospect of returning to some form of normality very quickly. It is exactly the kind of situation that my noble friend points out that will be most welcome. There are a large number of people in various types of care who have not been able to be looked after in the way that they might have been previously. It is extremely valuable that the vaccine will be able to return people to that kinds of support, which they both deserve and need.
My Lords, the Question of the noble Baroness, Lady Campbell, shows very clearly that flexibility will be needed, and I think the Government are hearing that. Now that we have three vaccines, including the Oxford-AstraZeneca vaccine, how soon does the Minister think we will be able to roll out vaccinations at a target of 1 million a day? Will he confirm that target? Will that be from January onwards? In the meantime, the need for rapid mass antigen lateral flow testing is all the greater.
My Lords, the noble Lord tempts me to commit to schedules that I am simply not in a position to commit to, I am afraid to say. The performance of the various vaccines is extremely complex: each one of them needs a different delivery plan. In collaboration with the NHS, we are putting in place an extremely energetic and thoughtful deployment programme. Those in charge have been instructed to have that ready to start from 1 December, but I will not hide it from the House that it may well be after the new year that the very large numbers begin. I reassure the House that we are super-focused on this deployment plan, and, as soon as the vaccines become available, we will be trying to get them to the public as soon as we can.
International Development (Official Development Assistance Target) Act 2015
Private Notice Question
My Lords, I cannot speculate ahead of the Chancellor’s Statement, which I believe he is currently giving in another place. The Government remain firmly committed to helping the world’s poorest people. We are always looking at how the aid budget is spent to ensure that it serves the UK’s priorities and represents value for money.
My Lords, whatever the outcome of the Chancellor’s statement, the target of 0.7% of GNI to help the world’s poorest is a proud Lib Dem achievement in coalition, spearheaded in your Lordships’ House very ably, if I may say so, by my noble friend Lord Purvis of Tweed. It serves moral, economic and political imperatives. Polling shows that it is not the British people pushing for cuts to the aid budget; it is ideologues within the governing party and a weak Prime Minister who seems unable to deny them anything.
I have two questions. First, does the Minister agree that, if there is a willingness to break international law, as set out in Part 5 of the United Kingdom Internal Market Bill, coupled with a willingness to break a manifesto pledge on international aid, this is not a good look for global Britain as a “force for good”? Secondly, how does he think that the £4 billion cut to the aid budget, scrutinised to within an inch of its life, compares to the £12 billion haemorrhaged over the last five months by the Government’s test and trace programme, which is tainted by failure and mired in fraud and corruption?
The noble Baroness is right to pay tribute to her noble friend Lord Purvis of Tweed, who took this Bill through your Lordships’ House. She is right to say that it is a proud achievement of the coalition Government, composed of both the Liberal Democrats and the Conservatives. This is an issue on which all parties have worked over many years. I believe the target was first adopted by a British Government in the year in which the noble Lord, Lord Purvis of Tweed, was born—it took us a long time to reach it.
I am afraid the noble Baroness’s two questions are both hypothetical, and I cannot pre-empt what my right honourable friend the Chancellor is saying at the moment.
My Lords, in 2020, we have been informed by a virus that did not start in this country and will not end in this country of just how interdependent our world is in the 21st century. What possible justification could there be, in such a world and at such a time, to reduce by two-sevenths, or £2 in every £7, the budget that we spend—that we invest—around the world in tackling climate change, extreme poverty and preventing conflict and ill health?
The noble Lord is right to point to the current circumstances of the pandemic as a forcible reminder of the importance of assisting people around the world: these are global problems. That is why the United Kingdom is one of the largest donors to the international Covid-19 response. We have already committed up to £1.3 billion to combat the pandemic and to reinforce the global effort to find and equitably distribute a vaccine.
My Lords, the Act in which I had a role—the Minister kindly referred to it—was as a result of consensus. Now, as the Chancellor has finished his Statement and it has been released, the Minister no longer needs to speculate; he can read from his brief what the reality is to the House. That reality could well be the biggest reduction in UK overseas assistance in a generation. Can the Minister look me—the sponsor of the International Development (Official Development Assistance Target) Act in this House—in the eye? There is no provision in this Act for a Secretary of State to proactively and deliberately miss the 0.7% target; it is the law and a duty. Will the Government uphold the law, and can the Minister confirm to me, personally and directly, that Secretaries of State will continue to uphold their legal duty under that Act?
The noble Lord has an advantage over me in knowing what the Chancellor has said; he had not risen to his feet when I came into the Chamber. His Statement, like all Statements on fiscal events, will be released when he has sat down. There is a Topical Question in your Lordships’ House tomorrow, when all of us will be able to debate these matters, having acquainted ourselves with what my right honourable friend has said or is saying.
My Lords, does the Minister accept that a cut in aid spending would risk undermining the leadership the UK has shown in supporting the H2H Network, which allows dozens of small independent groups to provide vital technical help, such as logistics, security and language services, in refugee camps, disaster zones and conflict areas? Will the Minister agree to persuade the Government to protect the budget for these organisations through the H2H network?
My Lords, the Government rely heavily on the capacity, expertise, resilience and flexibility of a number of organisations, such as the ones that the noble Baroness cites. We certainly pay tribute to them for their work and will, I am sure, be engaging with them as they see what my right honourable friend the Chancellor is saying today.
My Lords, if the newspapers are right, it is a sad day. I believe that, having supported and worked with the Liberal coalition to put the 0.7% commitment on the statute book, there is now a proposal from the Conservative Government that this might be changed. As noble Lords will know, I go back a very long way in this area. When I think of what could be done with that amount of money—particularly now, with the spreading of Covid, the continued spread of malaria and the spread of so many other diseases in Africa, which might well end up coming to Europe even if they are contained in Africa, the far east and South America at the present time—it seems to me madness; that is the only word I can use for it. I hope the noble Lord, who is quite newly facing the Front-Bench duties, will explain in words of one syllable just how bad this is, not only for the Government but for the country, which will have been seen to have let down the developing world.
My Lords, I hope my noble friend understands that I cannot comment on speculation in newspapers. Tomorrow, we will have an opportunity for an informed discussion after noble Lords have heard what my right honourable friend the Chancellor has said. I certainly pay tribute to my noble friend’s work as a Minister and the work she has done since in forcefully making the case for the increase in spending. I believe that when she left her role as Minister, we were spending 0.2% of GNI or thereabouts. It is to the great credit of successive Governments and all parties that that amount has since been increased.
My Lords, the 2019 Conservative general election manifesto said:
“We will proudly maintain our commitment to spend 0.7% of GNI on development”.
That was before Covid, of course. On 16 June, the Prime Minister said in the other place that spending 0.7% remained the Government’s commitment. On 18 June, the Leader of the House reassured the right reverend Prelate the Bishop of Peterborough of the Government’s continued commitment to the 0.7% target. In this House on 2 September, the noble Baroness, Lady Sugg, reassured the right reverend Prelate the Bishop of Bristol, with these words:
“I assure her that we will continue to be guided by our responsibilities under the International Development Act”.—[Official Report, 2/9/20; col. 354.]
In a letter to the Prime Minister last week, I drew attention to Archbishop Desmond Tutu’s words:
“A promise to the poor is particularly sacred.”
Does the Minister agree with him?
My Lords, the right reverend Prelate mentioned a large number of things said in Parliament in recent months. As I speak, my right honourable friend is saying something further; we will all have the opportunity to acquaint ourselves with it. The right reverend Prelate is also right to point to the fact that this pandemic has hit us since the last manifesto was written.
My Lords, this year, we have seen £2.9 billion cut from the ODA budget, so whatever the Chancellor announces this afternoon will be on top of that—and could be as much as £4.8 billion. In September, only a short while ago, Dominic Raab told an FCDO staff meeting that
“the prime minister has been clear he wants aid to be at the beating heart of our foreign policy”
and that his “good pal” the Chancellor would not be cutting it. Can the Minister tell the House what the Foreign Secretary may be saying to his good pal this afternoon?
The noble Lord will understand that I cannot speculate on what my right honourable friends may be saying to one another. My right honourable friend the Foreign Secretary led a thorough process to identify a package of necessary savings for this financial year, as the noble Lord said. That package prioritised the UK’s global response to the Covid-19 pandemic, including on poverty reduction for the bottom billion, climate change and reversing biodiversity loss, championing girls’ education and protecting our operational capacity. That work speaks for itself.
My Lords, the noble Baroness, Lady Sugg, said yesterday that she was proud of the United Kingdom, with its commitment to 0.7%, as a “development superpower”. Last night, the most reverend Primate the Archbishop of Canterbury said that reaching 0.7% was one of the
“great moral achievements in this country of the past 20 years.”
I am proud to have been the Minister who took my noble friend Lord Purvis’s Bill through the House of Lords with cross-party support. I can tell the Minister that it has been announced that aid has been cut from 0.7% to 0.5%. Is he proud of that?
I share the noble Baroness’s pride. I was an adviser in the coalition Government and worked with my noble friend Lady Sugg; in that capacity, I shared the words that she said in your Lordships’ House yesterday. Unlike the noble Baroness, I have not had the opportunity to hear what my right honourable friend the Chancellor has said. His speech, like all fiscal events, will be released later; I will listen to what he says. Your Lordships’ House will have an opportunity to debate the Topical Question tomorrow.
My Lords, I appreciate that my noble friend can say little or nothing today, but I put on record my support for the current spending level. Can my noble friend confirm that, whatever the result of the review, the department will continue to prioritise gender equality, especially girls’ education and family planning, which is the most effective way of raising women, families, communities and countries out of poverty?
I am very happy to give that reassurance to my noble friend. Since 2015, the UK has supported more than 15.5 million children in gaining a decent education; over 8 million of them were girls, to whom that is so important. On sexual and reproductive health and family planning, between 2015 and 2020, DfID reached a yearly average of 25.3 million women and girls with modern methods of family planning.
Does the House accept that the influence that the United Kingdom can exert in the post-Brexit world will come largely through the integration of our hard power—our defence capabilities—with our soft power, which is the combination of our diplomatic skills and the focused use of our international development budget? Does the Minister therefore accept that the potential reduction in our international development budget that has apparently just been announced will significantly reduce our soft power and thereby reduce the impact of so-called global Britain? Will the Minister ask the Chancellor of the Exchequer to think again before flouting the 0.7% figure, which is part of the law?
The noble Lord raises important issues about the interconnectedness of these things, which is part of the integrated review that the Government are considering. He will have seen the announcements on defence spending, and I will certainly read with interest what my right honourable friend has said in another place.
What the Chancellor has said has now been made public, so will the Minister confirm for the House whether new legislation will be introduced to repeal the Act that we have been discussing, which commits us to 0.7%? If not, who will be prosecuted: the Chancellor of the Exchequer or the Secretary of State for International Development?
My Lords, my brief does not contain a copy of my right honourable friend’s speech. As is normal with fiscal events, that will be made available to Members in another place and your Lordships after he has sat down, which he may or may not have done. That will be the right opportunity for noble Lords to acquaint themselves with it.
I hope that my noble friend the Minister will be able to answer my question today. A 2019 National Audit Office report highlighted that the FCO had failed to match DfID’s transparency when it came to reporting on its ODA spending, and that it had spent a disproportionate portion of its aid transfers on administrative costs. With the formation of the FCDO, how do Her Majesty’s Government plan to improve transparency on the allocation of development spending and work bilaterally with developing nations to build capacity and complement domestic development programmes?
I hope that I can answer my noble friend’s question. The Government are certainly committed to ensuring the robust scrutiny of our aid. In August, my right honourable friend the Foreign Secretary announced the continuation of the Independent Commission for Aid Impact and plans to conduct a review, to be concluded by the end of this year. That will ensure that the ICAI’s remit, focus and methods are most effectively scrutinising the impact of UK aid and the good that it can do for the world’s poorest people.
DHSC Answers to Written Questions
Commons Urgent Question
The following Statement was made on Thursday 19 November in the House of Commons.
“Parliamentary questions are a key element of Parliament’s ability to scrutinise Government on behalf of the people of the United Kingdom. As the House would expect, we take them very seriously, and as you, Mr Speaker, and hon. Members will know, I take seriously all aspects of my and the Government’s accountability to this House. Prior to the pandemic, my Department had an exemplary record of providing accurate and timely answers. In the last full parliamentary Session, despite receiving more PQs than any other Department, we had the highest response rate in Whitehall. However, as hon. Members will be aware, DHSC, its Ministers and officials have been at the forefront of responding to this pandemic, with the attendant additional workload that has brought.
As such, it is a matter of regret that we have been unable to sustain previous PQ performance, for which I rightly apologise to you and the House. However, it is explicable in the face of a trio of concurrent challenges. The first is volume: between March and October this year, we received over 8,000 written parliamentary questions across both Houses. This compares with 4,000 for the equivalent period last year. The second challenge is timeliness: we have met a rapidly, almost daily, changing situation, and answers drafted by officials are sometimes out of date shortly after they are drafted. We have been prioritising accuracy of response to Members over speed, but this can mean that responses have to be redrafted, with attendant delays.
The third challenge is policy input: despite increasing the administrative resources to respond to parliamentary questions, it remains the same policy officials who are responding to the pandemic operationally and drafting regulations and are the only people with the requisite policy expertise to input into parliamentary questions and responses.
That said, Mr Speaker, although we continue to field exceptional volumes of parliamentary questions, I want to reassure you and the House that we are not making excuses in providing these explanations, and are taking every possible step to recover our performance. We have instituted a parliamentary questions performance recovery plan and are delivering against it by increasing resource where we can and clearing the backlog, focusing on the oldest parliamentary questions first.
More broadly, throughout this challenging time the Secretary of State and Ministers have sought to make themselves regularly available in the House to be questioned and held to account. Between March and October, the Secretary of State made 18 statements and answered seven urgent questions. We have also seen seven general debates on Covid since March, and that is not including junior Ministers’ appearances in the Chamber. This is not an alternative to written parliamentary questions, but it is an important reflection of our accountability to this House.
To conclude, written parliamentary questions will continue to be a top priority on which I am briefed weekly. I thank you, Mr Speaker, and hon. Members for your and their patience and recognition of the exceptional circumstances of recent months. In the weeks and months ahead, we will work hard to restore our leading performance, which hon. Members have a right to expect.”
My Lords, earlier this week, there were 149 outstanding Written Questions addressed to the Department of Health and Social Care on the Lords business paper. My first question, therefore, has to be: when will they be answered?
One has to wonder about the quality of the Answers. On 21 July, my noble friend Lord Bassam asked a perfectly reasonable Question about
“how many COVID-19 tests have been sent by post and subsequently returned to laboratories, for each day since the scheme began; and how many of the tests sent by post have been discounted because swabbed material was not collected correctly.”
The Answer arrived today—25 November. It says:
“The information is not collected in the format requested”.
You have to wonder why a non-answer took so long to arrive. Does the answer possibly lie partly in the existence of the Cabinet Office clearing house? Are Written Questions subject to a clearing house process—something that many regard as part of a wider obstructive approach to disclosing information? Can the Minister tell the House whether he and his department are involved in referring things to the clearing house at the Cabinet Office?
My Lords, the very large number of questions which have been put to the Department of Health is completely unprecedented. We had 577 in the whole of 2019. So far in 2020 we have had 1,783, of which 799 have been answered on time and the rest are late. I apologise for that; it is a matter of huge regret. I ask for the forbearance of the House, as the pandemic has put enormous pressure on the department.
The noble Baroness, Lady Thornton, quite correctly alluded to one aspect of the answering of questions: the questions themselves often address novel challenges. Traditionally, we get questions about things that the department has been doing for years and years, where it is easy to pluck out an answer from the database or from the encyclopaedia of answers. The noble Baroness gave a good example of a question where it is difficult to elicit an answer. I know the exact question she referred to, because I have sought really hard to provide an answer to the noble Lord, Lord Bassam. The question of how many swabs have not been returned by post is much more complicated than it might look. There are different types of swabs; different schemes—ONS, REACT, clinical trials—send in the swabs. Inconveniently, they do not pool all the answers. Also, some swabs may sit on a bench or in a cupboard at a house for a long time and it is not possible to know when they are, or are not, sent back.
I cite that as an example of the kind of challenge that we have faced in answering questions from noble Lords. I am not trying to detract from the inconvenience of questions not being answered on time, but I assure the House that we have put in considerably more resources. We have upgraded the quality of the people who are answering the questions and have an absolute commitment to trying to answer them on time.
My Lords, I do not underestimate the pressure under which the Department of Health has been put and pay tribute to my noble friend for the number of times that he comes here to answer Questions. However, the data behind this virus is hugely important. I put down a Question asking about the number of NHS workers—doctors and nurses—who have been killed by the virus. The answer that came back was: “We don’t know”. Surely, we must know this. I have also asked a question in this Chamber, not a written one, about what the strategy is without vaccinations. A vaccine has now come, but we must know what the strategy is. Are we going to go into another lockdown if the infection rate rises again? Perhaps the Minister can answer that now?
My Lords, matching the data on deaths with the HR records of the NHS is actually very difficult. It cannot be done easily, or even accurately. Our strategy is crystal clear: to protect the NHS, keep the schools open and encourage the economy while we wait for the vaccine to be deployed.
My Lords, I am grateful for the answer from the health department on 24 November to my letter of 8 June about the disparity of health outcomes from Covid-19 for Gypsies, Travellers and Roma, although it did not answer our specific questions and was sent only to my cosignatory, Kate Green MP, not me. Will the Minister please answer my question of 21 October, due to be answered on 4 November, asking whether the Government would recognise International Stammering Awareness Day, now long past, with better technological provision for speech and language therapists, which is sorely needed?
My Lords, I have every sympathy with the unique pressures being placed on the Minister and his department this year. It was inevitable that mistakes would be made, but the crucial thing is to learn from them, not least because, however encouraging recent news has been, there are still considerable challenges to be overcome before the country can return to normal. When Ministers refuse even to address questions asked of them, it hardly encourages belief that they are prepared to learn lessons from recent months. I have asked many questions about the failure to utilise efficiently the much-needed capacity provided by the partnership between the private sector and the NHS. The responses were a masterclass in a wilful refusal to answer questions. Does the Minister not recognise the damage done by such public denial of the facts?
My Lords, I regret enormously that the noble Lord feels that we have, in any way, avoided the facts. We are absolutely committed to learning the lessons of Covid, which will be profound. I note that my right honourable friend the Secretary of State was in front of the House of Commons Select Committee on health for two and a half hours yesterday, answering exactly those questions. It was an illuminating and important discussion and I very much hope that this House will have an opportunity to do the same.
My noble friend is, I am sure, aware of the frustrations that the House has just heard. Here is a question to which I do not expect an answer, perhaps, at the moment. How many officials are actually involved in having to provide these answers? Does my noble friend agree that accuracy of responses is more important than speed?
My Lords, before the pandemic the parliamentary affairs team was made up of nine people; it has grown to 15. The ministerial correspondence and public inquiries team has grown from 51 people to 111. I think the noble Lord would agree that, at a time when we are trying to deal with test and trace along with programmes on therapeutics, restart, seasonal flu, PPE and vaccines, having 111 people working on correspondence seems the outer limit of what would be proportionate.
Leaseholders and Cladding
Commons Urgent Question
The following Answer to an Urgent Question was given in the House of Commons on Tuesday 24 November.
“I congratulate the honourable Member for Sheffield South East, Mr Betts, the Chair of the Select Committee on Housing, Communities and Local Government, on securing the urgent question, which is of huge interest and concern to many of our constituents up and down the country.
The question of who pays for remediation works is key for the Government and many of our constituents. We have been clear that leaseholders should not have to worry about the cost of fixing historical safety defects in their buildings that they did not cause. Test have shown clearly that aluminium composite material—the kind of cladding found on Grenfell Tower—is the most dangerous form of cladding material. We continue to engage with building owners, regulators and the wider industry to ensure that it is removed from high-rise residential buildings as quickly as possible.
ACM remediation costs are being funded through several sources, including warranties, building owners and developers. We have provided £600 million to fund the removal of ACM where funding has been a key barrier to remediation and the Chancellor of the Exchequer has allocated a further £1 billion to be spent on removing other types of unsafe cladding over the current financial year.
It is important to remember that this is a multi-year problem. Remediation work cannot be done overnight and it must be done properly so that it makes buildings and residents safe. That forms part of the ongoing discussion that my right hon. Friend the Secretary of State has with other Departments.
However, I am clear, and I hope that the House is clear, that public funding does not absolve the industry from taking responsibility. We expect developers, investors and building owners who have the means to pay to cover remediation costs themselves without passing on costs to leaseholders, but we recognise that there are cases where that might not be possible, and cases where there may be wider costs relating to historical defects. The Government are determined to identify suitable financial solutions and remove barriers to remediation.
The Government have asked Michael Wade to accelerate his work with leaseholders and the financial sector to develop proposals to protect leaseholders from the costs of remediating historical defects wherever possible. However, we must also ensure that the bill does not fall wholly on taxpayers. We will update leaseholders on that work before the Building Safety Bill, which has just completed its prelegislative scrutiny, is introduced in Parliament.”
My Lords, I refer the House to my relevant interests, as set out in the register. We are clearly making some progress with this Statement, but we need absolute clarity that no leaseholder or tenant will face any cost as a result of this scandal. Does the Minister accept that tenants and leaseholders are the innocent victims here? Does he also accept that redress for this scandal has to be by the builders who built the unsafe buildings, the people who signed them off as safe, and those organisations which provided insurances, warranties, guarantees and protections? It is regrettable that some of these companies are now trying to wriggle out of obligations that they gave.
My Lords, the Government do accept that leaseholders are victims in this situation. We recognise that the £1.6 billion of public funding that has been put up so far to pay for the costs of cladding remediation go some way to protecting leaseholders from the costs they face. We also recognise that this public funding does not absolve the industry from taking responsibility.
My Lords, I draw the attention of the House to my relevant interests in the register. I echo what the noble Lord, Lord Kennedy, just said about the growing public concern over this issue. The Health and Safety Executive gave evidence to the House of Commons scrutiny committee on the building safety Bill, which includes some clauses on cladding and fire safety of buildings. It said in the committee’s report that leaseholders should not
“have to worry about the cost of fixing historic safety defects in their buildings that they did not cause.”
Does the Minister agree with the Government’s own Health and Safety Executive?
My Lords, with the greatest respect, the bill for remediation of historic cladding defects cannot simply be passed to the taxpayer. We expect developers, investors and building owners who have the means to cover remediation costs themselves to do so without passing on costs to leaseholders.
How many freeholders have been asked to pay for this remedial work on the buildings they commissioned on their land, and how many of those who built these dangerous dwellings, who all gain profit from the sale of leasehold properties? What legislation do the Government plan to bring forward to move from leasehold to co-ownership for multioccupancy buildings?
My Lords, in addition to other ministerial responsibilities, I am now responsible for looking at leasehold reform. This is not the place to opine on that, but just over 50% of private sector developers and freeholders with aluminium composite material in high-rises funded it and did not pass on the costs to leaseholders—a significant proportion stepped up to the plate and did the right thing.
My Lords, I declare a possible interest as someone who might be affected. One million leaseholders will still be ripped off by landlords, freeholders and agents who will carry out all possible so-called remediation works and gold-plate them to increase the value of their holdings and make leaseholders pay through the nose for them. Will my noble friend confirm that the Government will bring forward an amendment to the Fire Safety Bill stating that leaseholders will not pay a penny for remedial works but will deal with the genuine anomaly of wear and tear and service charges, for which they should pay? Will he also bring forward urgent legislation on leasehold reform and the full abolition of this iniquitous, prehistoric law which should have no place in a levelled-up society?
My Lords, I thank my noble friend—that will be about five minutes’ work. I agree that leaseholders must be protected from unaffordable costs, particularly if these are driven by unnecessary gold-plating. I agree that leasehold reform needs to be an absolute priority, and it is a priority for this Government.
My Lords, I am pleased to be able to follow my noble friend Lord Blencathra. The HCLG report published yesterday argued, correctly, that leaseholders should not be expected to foot the bill for failures not of their own making. Some property owners have taken the necessary steps, supported by the Government—and therefore the taxpayer—through funding, but sadly so many others have not. Can my noble friend tell me what I can say to Charlie, Rebecca and their baby, who bought their new build leasehold flat five years ago? The block failed the ESW1 process and the review found flammable cladding, combustible insulation, timber balconies and more. They are trapped in a flat that could go up in flames and have repair bills that could break them financially.
My Lords, my noble friend must point out to them that this Government have an iron resolve to make sure that developers step up to the plate. They have made significant profits on those developments and will want to make profits in the future. We need to make them pay; we need to reason with them and say that it is no good laying this at the door of the taxpayer. They will have to step up to the plate. I will ensure that this Government make every endeavour to make them do so.
My Lords, 36 years ago, when I had my noble friend’s job at the then Department of the Environment, I put on the statute book the Housing Defects Act 1984. In a nutshell, it compensated homeowners who found that their homes were unsaleable, through no fault of their own, and had no other form of compensation coming from the Government. Does my noble friend think that that legislation has relevance to today’s leaseholders? Would he welcome my advice on how to persuade the Treasury to pay for it?
My Lords, there is no problem in public life that has not been seen before. My noble friend makes a valuable point and I will indeed ask my officials to look into the ways in which the Housing Defects Act of 1984, when I was doing my A-levels, and the Housing Act of 1988, when I left university, were used to address the issues we face today.
Arrangement of Business
My Lords, the Hybrid Sitting of the House will now begin. Some Members are here in the Chamber, respecting social distancing, others are participating remotely, but all Members will be treated equally. If the capacity of the Chamber is exceeded, I will immediately adjourn the House.
I will call Members to speak in the order listed in the annexe to today’s list. Interventions during speeches or “before the noble Lord sits down” are not permitted and uncalled speakers will not be heard. Other than the mover of an amendment or the Minister, Members may speak only once on each group. Short questions of elucidation after the Minister’s response are permitted but discouraged; a Member wishing to ask such a question, including Members in the Chamber, must email the clerk.
The groupings are binding and it will not be possible to degroup an amendment for separate debate. A Member intending to press an amendment already debated to a Division should have given notice in the debate.
Leave should be given to withdraw amendments. When putting the question, I will collect voices in the Chamber only. If a Member taking part remotely intends to trigger a Division, they should make this clear when speaking on the group. We will now begin.
United Kingdom Internal Market Bill
Report (3rd Day)
Relevant documents: 24th, 36th and 29th Reports from the Delegated Powers Committee, 17th Report from the Constitution Committee, 8th Report from the Joint Committee on Human Rights
My Lords, I should inform the House that, on Monday, Amendment 34 was agreed in error. It was pre-empted by Amendment 31.
Clause 39: Enforcement
62: Clause 39, page 31, line 30, leave out “such” and insert “—
(a) each relevant national authority, and(b) such other”Member’s explanatory statement
This amendment would provide that the domestic administrations must be among the bodies consulted by the CMA in relation to its policy on enforcing information-gathering notices.
My Lords, during the Bill’s progress through Parliament, we have engaged extensively to ensure that it, and the Office for the Internal Market in particular, work for all parts of this country. We have always been clear that the Competition and Markets Authority will ensure the devolved Administrations are consulted on all important matters relating to the OIM. Following significant discussions with our devolved counterparts and noble Lords, we are pleased to introduce these two amendments, which will underscore the importance of the devolved Administrations in the operation of the OIM. The Government have emphasised throughout the introduction of the Bill that the UK internal market needs to work for all parts of this country, and these amendments are a testimony to this aim.
Amendment 62 ensures the CMA must consult the devolved Administrations when preparing or revising its policy on enforcing information-gathering notices. Alongside this, Amendment 63 will require the Secretary of State to consult the devolved Administrations over the level of fines that can be placed on bodies that do not comply with a CMA request for information. Both amendments give the devolved Administrations a significant say in the key operations of the OIM. These amendments will put beyond doubt this Government’s commitment to ensuring that the interests of the devolved Administrations are reflected in the governance of the OIM and that the OIM will continue to meet the interests of all parts of the United Kingdom.
I turn now to Amendments 62A, 63A and 63B, which seek to alter the CMA’s ability to effectively gather information. I reassure the House that, as highlighted in previous debates on the Bill, these penalty powers in Part 4 will not be commenced unless there is a clear and credible need for them—for example, to ensure that the OIM can gather credible and accurate information for its reporting and monitoring purposes. I believe this goes some way to addressing many of the concerns of the noble Baroness, Lady Bowles, regarding the design of the information-gathering and enforcement regime. This will ensure that such a regime will be well considered, based on clear evidence of need and proportionate to fulfil the OIM’s duties. I emphasise that the need for accurate, and up-to-date information is essential to ensure that the OIM’s reports and advice are credible, evidence-based and meaningfully capture the UK internal market landscape.
I recognise the concerns of the noble Baroness that small businesses should not suffer disproportionate burdens in complying with the law, and a definition of the penalty criteria of Clause 40 should apply only when investigating adverse effects in the UK internal market. To reiterate: the CMA will prioritise carrying out information-gathering on a voluntary basis. However, there may be circumstances in which a formal information notice is required. It is therefore vital the CMA is given the necessary legal powers to help ensure that this assistance is provided. These are all based on the existing powers of the CMA. Therefore, excluding one type of company from receiving penalties under the regime and narrowing the definition of the penalty criteria in Clause 40 would not be appropriate and hinder the effectiveness of the OIM in fully delivering monitoring across the whole of the UK internal market.
I remind noble Lords that the penalty regime is proportionate. Under the proposed penalty arrangements, any penalties imposed will reference a daily rate or a fixed amount, with limits on both charges. As I have said, the Secretary of State will want to consult all relevant persons before finalising the levels of penalties. This will help ensure fair management of penalties and I would expect the OIM to apply a sensible approach to implementing those penalties in line with its published policy statement. Removing the ability to impose a penalty against those qualifying as a small company under the Companies Act 2006 or when investigating regulatory provisions will set a precedent that compliance with an information notice is not always mandatory. I have made clear, and these new government amendments also make clear, that we will consult carefully on penalties and take concerns, including those of small businesses, into account to strike the right balance.
Clause 40 provides for a holistic, thorough approach to penalties, when evidence and consultation with other relevant persons necessitates it, by the CMA as OIM, whenever it needs a person to provide documentation to carry out its functions and it is clear that a voluntary approach will not work. For these reasons, I hope I have reassured noble Lords and hope the noble Baroness, Lady Bowles, will not move her amendments. I beg to move.
My Lords, I thank the Minister for some of the considerations on which he elaborated around some of the penalties, but I find it hard to accept this in principle. The information-gathering procedures in the Bill seem without any limit on them in the Bill—an unreasonable measure. To try to find a way to tackle that, I tabled three amendments. I thank the noble Baroness, Lady Altmann, and the noble Lord, Lord Vaux, for signing Amendment 62A on the small business exemption. From among the amendments, we hoped the Minister might consider adopting that one or come forward with a version for Third Reading.
Understanding why the penalty provision is unreasonable requires analysis of the background. Section 5 of the Enterprise Act 2002 gives the CMA an information-gathering function for obtaining, compiling and keeping under review information about matters relating to the carrying out of its functions; it does not give a fining power in order to compel businesses to respond. Such compulsion can come later, at a stage when a market study is undertaken, but the circumstances then are that some suspicion exists that businesses themselves have contributed to failures in the market. In contrast, Clause 38 of this Bill gives the CMA, in connection with reports under Clauses 31 to 34, or under Section 5 of the Enterprise Act when it concerns those clauses, the power to collect information and impose penalties on individuals and businesses in order to make them respond.
This power exceeds what the CMA can do for ordinary information gathering, and the provisions are a copy and paste of the powers that accompany the stronger measure of a CMA market study. But there has not been any corresponding copying of the other conditions that surround a market study; nor is it a comparable situation to a market study, because there is no suggestion that the things being investigated might be happening because of what businesses themselves are doing.
The powers in this Bill are about investigating regulations, which is entirely beyond the control of business, and there is no wrongdoing by business. These investigations are about circumstances created by legislatures and which legislatures wish to investigate. It is more comparable to a departmental consultation than to a market study, so what is the justification for coercing and burdening businesses, even if the Minister says there will be rules making that perhaps a bit less onerous? In Committee, the noble Lord, Lord Tyrie, said of these powers:
“The argument that they were derived from legislation the purpose of which was very different is well taken and might point to further amendment.”—[Official Report, 4/11/20; col. 726.]
That is the view of the recent, former chair of the CMA.
One of my amendments would delete the penalties clause, which is really what I think should be done, although I see little hope of persuading the Minister. My second attempt, Amendment 63B, tried to recreate some of the circumstances of a market study, but as the Minister recently confirmed that only regulations can be investigated, not business cases, it does not fit and it does not work. So my third attempt—Amendment 62A—concentrating where it really matters, exempts small businesses from the penalties. It uses the small business definition from the Companies Act, expanded to cover non-company structures. The Companies Act recognises that small businesses should have a lesser public interest burden by exemption from some filings and it recognises that in primary legislation—it does not rely upon regulations or codes of conduct. Why not apply similar logic here?
Small businesses do not all have the wherewithal to respond to onerous consultations, although many will help when they can, but the information requirements in this Bill can require work to be done or attendance at a given place, both causing financial loss. There is no compensation save travel expenses. Yes, there is a “without good reason” defence, but the smallest businesses cannot afford a legal challenge even if they knew of the defence.
Perhaps the CMA will be reasonable itself in setting its code of practice. The Minister hopes so, but there is no certainty, and a notice detailing applicable penalties is a frightening thing. Of course, it belongs to another culture, in which the CMA’s core functions require confrontation with business and suspicion that businesses and companies are doing wrong.
In Committee I asked the Minister what would constitute a reasonable excuse, giving a wide range of examples relative to small businesses. I got no reply, nor have I had a written reply despite having asked for one—although I know the Minister is very busy, not least writing to colleagues.
This is a huge encroachment on civil liberties and the freedom to conduct business. I hope that, at this 11th hour, the Minister will listen and come back with something at Third Reading to put in the Bill that reinforces the statements he has made. But, if there is not that prospect, this is a matter of deep principle—and I speak as somebody who ran a small business for 30 years—and I must give notice of my intention to call a vote on Amendment 62A if negotiations cannot proceed at Third Reading.
My Lords, I am delighted that my noble friend has listened to many of the concerns raised in Committee. I also welcome his saying that the Government will consult carefully on penalties, and the penalties will be limited. I thank him for saying that the needs of small businesses will be taken into account as well.
However, I cannot help but continue to support the amendment in the name of the noble Baroness, Lady Bowles, which I have added my name to, alongside the noble Lord, Lord Vaux, because the points she made seem most persuasive. She has clearly explained that the proposed penalty regime is not comparable with that of the current CMA, despite my noble friend indicating that it is.
The penalties under the CMA would apply in cases where firms are suspected of wrongdoing or unfair competition or practices. But it has already been acknowledged by my noble friends Lord True and Lord Tyrie that the Bill is concerned here merely with data gathering itself, such as would occur in consultations or calls for evidence, rather than information requests that follow from suspected failures. Therefore, I urge my noble friend the Minister to reconsider the position that many small businesses could find themselves in if information is demanded of them under these powers. It would take scarce corporate resources away from operating the business and is likely to pose significant difficulties for firms that do not have lots of employees available to comply with such an information request.
I point out to my noble friend the Minister from these Benches—as a member of a party that has always been the friend of small business and has promoted the value and virtue of people starting up businesses and running small firms themselves—that there is a significant risk here of imposing unreasonable burdens. I echo the call from the noble Baroness, Lady Bowles, for a meeting with him before Third Reading to see if we can find a form of words that the Government could accept, to avoid the need for a vote on Report.
I hope my noble friend understands that this is about a fear that the Bill imposes unreasonable and abnormal demands. For example, on pensions, the Pensions Regulator has not previously had the power to demand information from schemes unless it suspected wrongdoing. I hope we can find a way in this Bill to exempt small businesses from this burden and the potential threat of penalties.
My Lords, I have added my name to Amendment 62A, proposed by the noble Baroness, Lady Bowles. We owe her our thanks for bringing this important wrinkle in the Bill to our attention. She and the noble Baroness, Lady Altmann, have already eloquently set out the reasons why this amendment is needed, so I will not detain the House for too long.
The Bill creates draconian powers of investigation for the CMA, with associated penalties which, as we have heard, are much more suited to its duties of investigating market abuse. Indeed, as the noble Baroness, Lady Bowles, pointed out, the wording has actually been lifted from those duties. However, the purposes of the investigation set out in this Bill are very different from market abuse investigations. In this Bill they are investigations into the impacts of regulations or provisions made by the various national authorities. Businesses are not in this case being suspected of, or investigated for, market abuse, yet the Bill will mean that they will have to respond to notices subject to penalty as if they were.
Even if we reluctantly accept that these powers and penalties are appropriate—and I do not—we must surely ensure that the powers, and in particular the penalties, do not become an undue or unfair burden on business. I listened carefully to what the noble Lord the Minister had to say in this opening speech, and I am afraid that I do not think that the protections and the consultations that he mentioned go far enough in this case.
While larger businesses may be able to cope with such an investigation, small companies do not have compliance departments or in-house legal teams. They do not have the excess capacity to be able to deal with such investigations. Even in normal times, these investigations would be burdensome for small companies, and it is even more the case when they are trying to recover from the Covid crisis and at the same face up to the challenges that leaving the EU single market will create. This is no time to load additional burdens on to small businesses. Therefore, I urge the Minister to accept this simple—and, I had hoped, uncontroversial—amendment, or at least to come forward with some protections for smaller companies, as has been suggested.
My Lords, I very much welcome the opening statement from the noble Lord, Lord Callanan. I think he has proposed an improvement in the Bill, by adding further requirements for consultation with the devolved Administrations. That is for the good. I also have a great deal of sympathy with the amendment moved by the noble Baroness, Lady Bowles. I can see the argument that, if there are impediments to the internal market in a particular sector, the new body will require an information-gathering power, and if you have that power you have to have an enforcement power. It is welcome that the Minister says that these powers will be exercised in a voluntary and proportionate way. Yes, maybe—but I do think that there is a special concern about small businesses, to which I hope the Minister can find a way of responding positively in his reply.
I have to say—and I cannot resist the temptation to poke fun at the noble Lord, Lord Callanan, on this—that if such clauses had been proposed by the European Commission, we would have heard his screams of protest from the committee rooms of Brussels to the banks of the Tyne, which he represented, and he would have raised the roof on the wonderful auditorium of the plenary in Strasbourg. I can hear him now in excellent Brexiteer mode. Of course, now that Brexit has happened, these concerns are of no consequence. The truth is—and I think this is going to become clear—that for business Brexit means more and more bureaucracy, and this is what we are seeing in terms of the new customs arrangements and in terms of this Bill. There—I cannot resist making that point.
Having said that, there are many serious issues with this Bill. I regard it as a treaty-breaking, devolution-wrecking, United Kingdom-unravelling Bill. These are serious points for debate and many of the amendments we are considering this afternoon, I am afraid, contribute to those consequences. So I hope that a compromise can be reached on this matter before Third Reading and, on that basis, I will abstain in the Division.
My Lords, I am delighted to follow the noble Lord. Like him, I was surprised at the level of the penalties for these infringements. I join noble Lords who congratulated and thanked my noble friend the Minister for listening to concerns expressed at an earlier stage of proceedings and bringing forward Amendment 62. I will just ask: what form will the consultation by the CMA with the devolved Administrations take? How long will be allocated to it generally, along with the other bodies that are to be consulted?
Has the CMA taken a policy decision not to have on its board currently, as I read it, any representatives of the devolved Administrations? I notice that Jo Armstrong, for whom I have the highest regard, is represented. She is currently a commissioner with the Water Industry Commission for Scotland with whom I have had the pleasure to work for four or five years. But I do not see that any specific representatives of the devolved Administrations are there. Given the thrust and context of this Bill, it will be interesting to know if there is any policy principle as to why there are not. I know that my noble friend will say that that is a matter for the CMA, but it works under the guidance of the Secretary of State and the department, so I ask him to comment in that regard.
I echo the concerns raised by other noble Lords and I thank the noble Baroness, Lady Bowles, for her Amendments 62A, 63A and 63B. I ask my noble friend to consider to what extent the ask under Article 39 goes much wider than is currently envisaged in, I think, the Enterprise Act that forms the basis for these provisions. Against the background that these are quite substantive penalties, will the Minister be mindful of the debate that we have had, noting, in particular, the comments made by the noble Baroness, Lady Bowles, my noble friend Lady Altmann and the noble Lords, Lord Vaux and Lord Liddle? Will my noble friend have regard and perhaps pause at this stage and come forward with a further government amendment at Third Reading?
My Lords, I support the government amendments in this group, but I put my name down to speak in order to address the other amendments tabled by the noble Baroness, Lady Bowles of Berkhamsted. Like her, I am concerned about the heavy-handed penalties that could apply in respect of the CMA’s information powers under the Bill.
The CMA has extensive information powers under the Enterprise Act 2002, as the noble Baroness, Lady Bowles, explained, which are needed so that it can carry out its competition functions effectively, in particular in the face of companies or sectors that are resistant to one of the CMA studies. However, there has to be a serious question about the information powers put into the Bill in respect of the office for the internal market. It should be remembered there was no clear consultation on this during the summer, so the proposals have not had a lot of serious attention.
The OIM will of course be focused on the effectiveness of the internal market rather than the behaviour of companies or sectors. I understand that the OIM needs to build up a picture of intra-UK trade flows in order to understand the scope of what it is looking at, and it should have the ability to request that information. However, to back up that kind of information gathering with extensive penalties is not right. It stands in stark contrast with the Trade Bill, which sets up the possibility of requesting information from businesses in respect of international trade—but it is very clearly a request, with no compulsion. My noble friend Lord Grimstone of Boscobel confirmed that in Committee on the Trade Bill.
The office for the internal market may well want to gather information from the devolved Administrations or regulatory bodies within the devolved territories. For example, it could be looking at whether particular provisions have a detrimental effect. That sort of information gathering is largely within the public sector, and the enforcement provisions in Clauses 39 and 40 do not make sense in that context.
Can the Minister say who the “persons” in Clause 39, whom the Government expect to be served with a penalty notice, are? Could one of them be, for example, the First Minister in Scotland, or one of her Ministers? If not, why not? I suspect that the serious information that may need to be extracted at some stage will come from the devolved Administrations. Why should businesses, which will be the victims of any abuses of the internal market, be treated in the way envisaged in the Bill?
So I support the noble Baroness, Lady Bowles, in particular in her Amendment 62A to try to shield small companies from these powers. I listened carefully to what the Minister said in his introductory remarks, which were very helpful, but I remain concerned that the CMA will use inappropriately the powers given to it by the Bill. There are no safeguards against that, so I hope that my noble friend will take this away for further discussions between Report and Third Reading.
My Lords, I should declare an interest in that I have a partnership with my wife to look after 40 acres of woodland in Bedfordshire. I thank my noble friend on the Front Bench. I have worked on a great number of Bills in this and the other place, and it is good that when we discuss things in depth, right across the Chamber, problems are raised and the Minister listens. I welcome enormously Amendments 62 and 63.
However, I share the concerns of some other noble Lords about the implications of Amendment 62A. It raises questions that ought to be considered—although I am not in a position to repeat what my noble friend Lady Noakes said. I hope that the Minister has listened to the concerns expressed from both sides of the Chamber and will find a means of ensuring that what might be very unusual cannot happen. I am sure that my noble friend on the Front Bench is listening. Some consideration should be given to including Amendment 62A, or something comparable, in the Bill.
My Lords, I have to declare an interest, in the sense that, due to my IT incompetence, my name appeared in error on this list of speakers. Nevertheless, I have listened to the debate. It is not an area that I know anything at all about, but I am much taken with the amendment from the noble Baroness, Lady Bowles. My views were summed up by my noble friend Lord Liddle. I agree with him. The Minister has obviously tried to meet the requests of the House with his own amendments and, to that extent, we should be grateful. However, as I say, I really was not part of this debate but the noble Baroness, Lady Bowles, has my support.
My Lords, many noble Lords have railed against the virtual process, but the serendipitous arrival of the noble Lord, Lord Rooker, is perhaps justification for having a virtual Parliament after all.
I thank the Minister and other speakers in this short debate. I should like to put this issue into context. Back in the day, when I worked in the real world, in many cases the sort of inquiry that we are talking about would have come across my desk. I worked for large international corporate companies and, even for us, it was difficult to find the resources to respond to some of these requests. So this is a real problem and Amendment 62A seeks to address a real issue that will genuinely cross the desks of small businesses in this country.
The Minister tried to corral these requests, saying that they would occur only when the office for the internal market needed credible and accurate information. Well, I trust that it always needs credible and accurate information, so that is no restriction on the office. He also talked about the word “proportionate”. I should correct the noble Lord, Lord Liddle: the Minister did not use the word “voluntary”. He said “proportionate”. This is not a voluntary process but a compulsory one, as it stands in the Bill. That is the problem. And proportionate to whom? Is it proportionate to the desire of the office for the internal market to get credible and accurate information, or proportionate to the fact that five, six or seven people occupy an important part of the market but do not necessarily have the resources to respond to these requests?
The Minister also said that only in a small number of cases did he expect that a formal information notice would be required. Well, that is where some of the clarification can come. What are the circumstances around which a formal information notice would be required? How do we ring-fence it and make sure that we understand what “proportionate” means in the context of this discussion? The Minister also said that leaving out, or giving this exemption to, small businesses would set a terrible precedent. However, my sense is that precedents have already been set in other Acts. I cannot remember exactly, but I think that the Corporate Insolvency and Governance Act has carve-outs for small businesses, and there are many other Acts in which small businesses already have carve-outs. So the precedent already exists; it is just a question of which precedent one chooses to select.
The nub of the problem is that the Minister said that the powers were carved out of the existing powers of the CMA. However, just as the noble Baroness, Lady Noakes, said, the powers are used for an entirely different purpose—to investigate and identify potential irregularities and law-breaking. That is not the nature of what we are saying.
When I entered this debate, I expected, for once, to be on the same side of the argument as the noble Baroness, Lady Noakes, and the noble Lord, Lord Naseby, and that proved the case. The noble Baroness, Lady Noakes, gave a very powerful and detailed explanation about why the Minister should be serious about this issue. It is absolutely true that the Trade Bill has taken a different route; it acknowledges that this information is essential but has gone down the route of gathering it voluntarily. If the Minister is in the business of precedence, perhaps that would be a better precedent for him to take.
It seems bizarre that a Conservative Government would push this level of red tape on the small, enterprising and innovative businesses of this country. It seems strange that we should be the flag carriers of this case, rather than the Minister, and it was important to hear the noble Baroness, Lady Noakes, pick this up.
My noble friend Lady Bowles talked about the possibility of something being agreed for Third Reading. I am no expert in body language, but I saw a faint shaking of the head cross the Minister’s personage when my noble friend mentioned the idea of some sort of negotiation or compromise being reached in time for Third Reading. In light of what the Minister has heard, not just from this side of the House but from his staunchest supporters throughout the Bill, making serious and important comments about this issue, I ask that, whatever decision he comes to, he makes it very clear verbally. We are in a hybrid House, and not all of us can benefit from the subtle nuances of the Minister’s demeanour in working out whether he will or will not be negotiating at Third Reading. Can the Minister be clear about his intentions between now and Third Reading, then we can be clear about whether to vote in support of this amendment?
My Lords, partly for the reasons that the noble Lord, Lord Fox, has given, this has been an interesting debate, with some flying in without any original intent but also from across the House. It highlights many of the issues facing what was meant to be an “oh so easy” departure from nearly half a century of EU membership. Practices and rules within the EU developed over years, with input and experience from business and consumers and the experience of how things worked, and from Governments, regulators, courts and lawyers. As my noble friend Lord Liddle said, there were umpteen harrumphs, grumphs and complaints from the Minister and others who are not supporters of the EU, but the rules were created in that way. They were created by discussion, experience and by knowing what was needed when. They were not written hurriedly over the summer, as we know the Bill was.
The creation of an internal market, covering four parts of the UK with their own Governments and competences, needs as much careful thought, planning and, especially, consultation and joint decision-making as has worked so well across the EU as its single market developed. It is sad that some of these amendments need to be written into legislation—we hoped they would have been taken for granted. But we need to set down that the devolved authorities should, of course, be consulted at any stage of decision-making, and we therefore welcome Amendments 62 and 63 in the Minister’s name, and welcome this formalising of the devolved Administrations’ rights and roles.
The other issues raised by the noble Baronesses, Lady Bowles, Lady Altmann and Lady Noakes, are clearly accurate in their specific content. Our only problem with them, especially given the vital three issues in the Bill—Part 5, the Henry VIII powers and devolution—is that they are probably not the right subjects on which to ask the Commons to think again, but we would like to ask the Government to think again. There are some really big questions that we need the Commons to consider. Our fear is that sending Amendments 62A and 63B back to the Commons simply would not serve a purpose. It normally takes a nanosecond for them to be overturned there when, actually, we want to get the attention of the Minister and Government.
I have a slight problem with the idea of releasing small businesses from all penalties. We do not do that in other areas, in particular with health and safety. Offering a complete safe haven in all circumstances could be detrimental to consumers and employees—but that is a small point. More serious is the wider issue touched on by the noble Baroness, Lady Noakes, of whether these information-gathering powers are right. As the noble Lord, Lord Fox, said, the OIM is being shoehorned into the CMA, and the fit simply does not work. As a regulator, the office for the internal market would be better tailored to be independent, so it could develop rules, a code of practice or any penalties needed suited to the task in front of it, rather than brought over from elsewhere. We are going to discuss that later: the big issue of whether the OIM should indeed be part of the CMA.
My plea to the movers is not to put this to a vote today. My guess is that the Minister would prefer that, because he would be able to wait for the other place to overturn it, which is not what we want at all. I worry that it would detract from the big issues, but it would also not deal with the broader issue of how the OIM will work. For that reason, we do not support it. I do not think it is the right way of dealing with an important issue.
I make one further point on how devolution is to be strengthened, which is part of the noble Lord’s amendments. It is about recognising the devolved authorities, as we implement the plan in the Bill to make an internal market work. The Minister has protested throughout that the Government are committed to the common frameworks process and that they have not retreated from the principles under which they were set up in 2017. Ministers have said that they respect the hard work that has gone into making these frameworks over the last three years, and the way in which they are pioneering new ways of working between the four countries and the harmony, as well as harmonisation, that has emerged. They have reiterated praise of the common frameworks, at the same time as saying that they are inadequate, partial and need to be overtaken by the Bill, rejecting all evidence to the contrary and despite public concern that the Bill will lower standards and provide less certainty than the frameworks will.
We have heard that Ministers in Wales and Scotland have warned that the Bill
“To all intents and purposes … removes any incentives for the UK Government to continue engaging with the common frameworks.”
That is a serious concern, and it sounds as if the evidence is showing that that concern is right. According to the work of our Common Frameworks Scrutiny Committee, there are indications that the Bill is already having a chilling effect on the progress of achieving common frameworks.
In July, the Cabinet Office Minister Chloe Smith wrote to the noble Lord, Lord McFall, and to the Liaison Committee, saying that seven frameworks would be developed and agreed by the end of this year. In September, she reduced that to five. As of today, only two have been published, on nutrition and on hazardous substances. I am afraid that the others, even if published, will not have time to complete their parliamentary scrutiny by the end of the year.
Moreover, the Common Frameworks Scrutiny Committee is aware that, in the process of completing the task of making the frameworks, some—such as nutrition––are already coming up against the requirements in this Bill. No doubt there will be future examples of that emerging in the next few weeks. Will the Minister say, before the Bill progresses further, whether he will seek the advice of the Common Frameworks Scrutiny Committee on this emerging evidence of difficulties, so that we really do make sure that this Bill is not going to undermine but will support the work of the common frameworks?
I thank all noble Lords for their interventions on this subject; I understand the sincerity with which Peers have addressed it. However, as I said in my opening remarks, the amendments on which we have been able to get agreement put beyond doubt that the OIM will closely consult and work with the devolved Administrations on an equal basis, in the interests of all parts of the United Kingdom. These important changes ensure that the OIM’s policy on information-gathering and enforcement, including the level of penalties, will be carefully considered in consultation with the devolved Administrations. This will ensure greater transparency in decision-making and will help ensure that the OIM will be able to gather the accurate information it needs to independently assess and monitor the UK internal market. Of course, the Government have made it clear that reports carried out by the OIM each year will be made available both to this Parliament and to the devolved legislatures.
I reiterate a point I made in previous debates: to be clear, the penalty powers in Part 4 will not come into effect unless there is clear evidence that there is a need to do so in order for the CMA to fulfil its internal market functions. I believe that this provides the necessary assurances that any penalties regime will be proportionate and transparent.
In addressing some of the points made in the debate, I turn first to those made by the noble Baroness, Lady Bowles, and the noble Lord, Lord Fox, on precedent. I can certainly reassure noble Lords that the Bill sets out clearly the maximum limits to the level of financial penalties in Clause 40(6). They do not exceed those which the CMA can currently impose. Penalties and the enforcement regime are based on precedent, as set out in the Enterprise and Regulatory Reform Act 2013. As I mentioned in my opening speech, the justification for these powers is that, without such a deterrent in place, there is an incentive not to comply with information-gathering requests, and that runs the risk of not having completely accurate information supplied to the OIM.
My noble friend Lady Altmann gave the example of the Pensions Regulator. I can say that excluding an entire class of business from information-gathering requirements such as these does not have as firm a standing in precedent as the she suggests. The CMA acting as a reasonable public body will, of course, in all cases, take into account all relevant factors, whether on the face of the Bill or not, in considering how to act and whether to pursue penalties, if they have been commenced at all.
My noble friend Lady McIntosh asked about reasonable excuses. I am not sure whether it was she who asked me a similar question on Report on Monday, but as I said then, the CMA would set out in its statement of policy the clear steps and procedures regarding the enforcement of its information-gathering regime. The penalties will not be commenced until there is evidence that they are called for, and even then they will not be used except as a last resort, whatever the size of the business. The CMA will consult all relevant persons regarding its statement of policy. I am happy to confirm to my noble friend Lady Noakes that, as I said in Committee, the CMA will not be able to issue a financial penalty against—I am pleased to say—either this Government or any UK Government, or indeed the devolved Administrations.
My noble friend Lady McIntosh mentioned consultations. The Bill requires that Ministers should consult as a matter of fact before they exercise their delegated powers. As is normal for such legislation, it does not spell out in great detail how this must be achieved, but we will engage with the devolved Administrations as part of the process of normal policy development, by, for example, sharing draft SIs and publications, and co-operating on public-facing events wherever that is possible, and, in any case, more formally before a decision is made.
For all of the reasons that I have set out, I hope that noble Lords will accept the amendments that I have tabled and that the noble Baroness will not press hers. However, for the benefit of the noble Lord, Lord Fox, and to be absolutely clear and to put the matter beyond doubt, I am afraid that I have gone as far as I can go on these matters and I will not be reflecting further before Third Reading. Therefore, if the noble Baroness wants to test the opinion of the House, she should do so now.
Amendment 62 agreed.
Clause 40: Penalties
62A: Clause 40, page 32, line 7, at end insert—
“( ) Penalties under section 39(1) or (2) may not be imposed on small companies, as defined in section 382 of the Companies Act 2006 (companies qualifying as small: general), or on partnerships or other businesses with similar criteria.”
In moving this amendment, I am sorry that the Minister is not prepared to negotiate further about small businesses. I am also sorry that the noble Baroness, Lady Hayter, and Labour do not seem to think that small businesses—which are the backbone of jobs and the economy in this country—are a sufficiently serious matter. I consider that allowing businesses to have the freedom to conduct their business without obstruction when they have done no wrong is quite a serious constitutional matter. Therefore, I wish to test the opinion of the House and to record my vote and those of my colleagues.
63: Clause 40, page 32, line 19, after “CMA,” insert—
“(aa) each other relevant national authority,”Member’s explanatory statement
This amendment would provide that the other domestic administrations must be among the bodies consulted by the Secretary of State about regulations setting the level of penalties for contraventions of information-gathering notices issued by the CMA.
Amendment 63 agreed.
Amendments 63A and 63B not moved.
We now come to the group beginning with Amendment 64. I remind noble Lords that Members other than the mover and the Minister may speak only once and that short questions of elucidation are discouraged. Anyone wishing to press this amendment or anything else in this group to a Division should make that clear in debate.
Clause 42: Power to provide financial assistance for economic development etc
64: Clause 42, leave out Clause 42
Member’s explanatory statement
This amendment is intended to remove the provision for a Minister of the Crown to provide financial assistance for economic development etc. anywhere in the United Kingdom.
My Lords, I rise to move this amendment to remove Clause 42 of the Bill. This amendment and Amendment 69, to which we shall come later and which stands in my name, deals with two clauses that are in some ways closely related. This clause authorises the UK Government to spend funds on the huge area of government expenditure—indeed, almost any aspect of government expenditure. Clause 44 deals with the quite separate question of state aid, and it is very important to keep them distinct. I make it clear in moving this amendment that I intend to press this to a Division.
First, I shall say a little bit about the clause. What is it for? The Conservative manifesto spoke of a shared prosperity fund which was intended to be a successor to the European Union regional structural funds. I looked on it as something that would strengthen the union by sharing the prosperity of our four nations. However, because it wore the word “shared”, it carried with it the connotation that the Governments of the four parts of the United Kingdom would share in the way in which it was distributed in accordance with the constitutional arrangements in place.
That such a fund would be greatly welcomed does not need to be stated. There are parts of the UK—and being here in Wales it is evident—that are far poorer than other parts of the United Kingdom, and investment is needed. Of course, we need to look carefully and in a structured way at how they are to be dealt with. I think we have—and I shall come to this later—some guidance published this afternoon in the Red Book, at box 3.1 on page 37. It is convenient for me to deal with that when I come to deal with the role of the devolved Governments.
There is one thing I ought to say—and I hate that this is something that will not come to pass. In Committee, the noble Baroness, Lady Bennett of Manor Castle, drew our attention to another term. She pointed out that in the European Union there were rules about funds allocated for the remediation of poverty and for equalling people up which had been made available to parts of the United Kingdom, including Wales. She pointed out that there would be detailed rules, and that Europe operated detailed rules. However, this shared prosperity fund still has no detailed rules, despite what is said in box 3.1, to which I have referred. She pointed out that the Americans have a term, pork barrelling, for this kind of fund. I would like to continue to call it a shared prosperity fund, because I believe in the union and in sharing the way our country is governed, and I hope that we will never have this aspect of American politics brought into our way of doing things but, plainly, there are dangers along those lines.
This clause is best analysed by asking eight questions. The first is why it is included in the Bill? As it stands, it is wholly separate from the other provisions we have been debating, which are to do with the internal market. The Bill is not concerned with the allocation of government powers to spend money between the devolved Governments and the Government of the United Kingdom with England. Secondly, what is its aim? I have addressed that: as was stated in the Government’s manifesto and now in box 3.1, it is intended to level up the divisions of society within the union and to help.
One immediately has to ask why this clause is needed. The Government have done city deals and have provided money, perfectly property, under our existing constitutional arrangements. Why do they need this power? If they were to provide the funds through the existing constitutional arrangements, this power would not be needed. The devolved Governments of Scotland, Wales and Northern Ireland would be involved and the spending programmes would go along the way they have always gone along, this fund being an additional fund provided from moneys no longer remitted to the European Union. Indeed, if it were to follow the lines of the city deals or its predecessors in the European Union, the Government would negotiate the other Governments, in the case of the devolved nations, or, in the case of England, the various regions and cities, what they felt the money should be spent on, consider it and make a decision. That is all perfectly feasible. So, yes, it is a very good idea to have a shared prosperity fund, and it needs no legislation.
The third question that one needs to briefly touch on is: what is the position at the moment? As my noble and learned friend Lord Hope of Craighead pointed out in Committee, paragraph 4(1) of Part III of Schedule 5 to the Scotland Act 1998 made it clear that the powers of
“giving financial assistance to commercial activities for the purpose of promoting or sustaining economic development or employment”
were not reserved but were within the devolved competence. The same is true in Scotland and Northern Ireland. It is therefore plain that the purpose of Clause 42 is to cut across the powers of the devolved Governments to provide financial assistance in areas such as economic development and commercial activities, though there are wider purposes.
Now we come to the critical question four: how does this relate to the devolution schemes? In Committee the Minister sought to reassure the House that the Government had an intention to work with the devolved Administrations. She said:
“This power, in addition to existing powers, will allow the UK Government to complement and strengthen the support given to citizens in Scotland, Northern Ireland and Wales, without taking away devolved Administrations’ responsibilities”.—[Official Report, 2/11/20; col. 596.]
She added, although I do not think that I need quote her at length, that this was all to be done by working with the devolved Governments. It appears from what was said that it was intended that this power would be exercised in co-operation with and dealt with through the devolved Administrations, but of course there is nothing in the clause in the Bill to say so. It is also plain that the power is being taken because the Government want additional powers to cut across the expenditure. So it plainly affects the devolution schemes.
This is now very much clearer from box 3.1. I am sure noble Lords will not mind me referring to a document that has only just been published and which they may not have in front of them. There is not one word in box 3.1, which purports to explain how this works, about the involvement of the devolved Governments. The box says that the fund
“will operate UK-wide, using the new financial assistance powers in the UK Internal Market Bill”.
It has one common theme with the European funding because it says:
“Investments and programmes will display common branding.”
Being in Wales, one is quite used to seeing what was done by the European Union; now, one assumes, that will be substituted by seeing what is being done by the UK Government. From going through what is in box 3.1, it is quite clear that this is to be a UK Government-run scheme dealing directly, with not a word about the devolved Administrations. One can say quite safely, now that box 3.1 has been published, that this cuts right across the current schemes of devolution. The fifth question is: will it do so? The answer to that, again, is plainly yes; as I read it in box 3.1, that is now clear.
Before having the benefit of that, I was able to read what the Prime Minister had said, as reported in the Financial Times, about the intention vis-à-vis Scotland. However, never being entirely comfortable about relying on a report in a newspaper that could be said to have taken remarks out of context, I had a look and found something else. I looked for, and was provided with, an article written by the Secretary of State for Wales last week in the Telegraph. By the Telegraph, I do not mean the Western Telegraph, the long-established and excellent paper that circulates in Pembrokeshire and west Carmarthenshire, but the Daily Telegraph, a paper that is much read here in the valleys of south Wales. In it the Secretary of State said:
“In the past week I’ve been meeting local authorities across Wales. They’re all hungry to play a greater role in smarter investment of this funding—distributing it to those best able to target the money to projects that will benefit their communities most.”
It is clear that this funding is designed to bypass the devolved Governments. The sixth question is: is this a return to “Westminster knows best”? Undoubtedly it is. I had hoped that that thought had died, but it is plainly very much alive.
The seventh question is: is this democratic? As it stands, it plainly is not; it strikes at the very heart of the devolution settlements and the choices that the people in Wales are entitled to make in their coming election. It will therefore enable the UK Government to spend funds in the way that they think best but which the people of Wales may have rejected. That is not democracy as I have known it. It is, in effect, giving legislative underpinning to the now discredited principle of “Westminster knows best”.
My eighth question is: is it efficient and effective to proceed in this way? The answer must be no. This is where I return to the fear expressed by the noble Baroness, Lady Bennett of Manor Castle. The current position, where the Government of Wales discuss and agree how funds are to be used—either in respect of city deals with the Government in London or, as regards the European funding, with the Commission—is that you have one overall policy, which is then administered and developed as a joint policy. One can see now that this clause is intended to provide divergence, to show that with cash there is a different way of doing things, and maybe to provide that cash, as one sees happening so much in the US, where it is thought to be to the electoral advantage of those providing the money.
It therefore seems to me that this clause, which is now much clearer as a result of box 3.1 in the Red Book, should not be in the Bill. If the clause had provided in terms that all this was to be done in conjunction with the devolved Governments then that would be quite a different matter, but it does not. I will seek to press this amendment to a Division to remove this clause, which is so destructive of our current scheme of devolution and hence to our union. I beg to move.
My Lords, it is a genuine pleasure to follow the noble and learned Lord. I admire how thoroughly he outlined his amendment, to which I have added my name. I inform the House that I believe Amendment 68 in my name is consequential to Amendment 64, so if Amendment 64 is agreed to by the House then I will move Amendment 68.
As the noble and learned Lord concluded his remarks, he hit on a fundamentally important point, about which we raised concerns in Committee and earlier, which have been reinforced by the Chancellor’s Statement today. Both before and during Committee, the concern was that the Government sought these financial powers to override one of the core elements of devolution: that expenditure on devolved areas in our devolved nations should be taken by the bodies accountable to them for those policy areas. As a member of five years’ standing of the Finance Committee in the Scottish Parliament, I know that that spending would come with agreed policy platforms, financial strategies and a degree of accountability.
The Government, I think, believe that the people owe loyalty to those who spend the money, and therefore the main priority is to identify the source of the money—not how it is delivered and not the accountability for it. However, as the noble and learned Lord raised, can the Minister clarify whether that is the case as she responds to the debate on these amendments?
If the Government have indeed announced their intention to override the devolution settlement and to use this Bill to deliver spending on devolved areas without the agreement of the devolved Administrations, that will indeed confirm the fears that we outlined, both at Second Reading and in Committee. I hope that the Minister will be able to say clearly that that is not the case, but I fear from the announcement that has been made today that it is.
The concern started because we had seen very little consultation with the devolved Administrations—or indeed English local authorities—on the spending powers that were to be in this Bill, and we had not been given any indication that these powers had been the result of consultation. There had been consultation on the replacement of EU structural funds, and that consideration was fairly extensive. But there was a mismatch between the consultation on how to repatriate the structural funds and the powers under this Bill, which are catch-all. Not only that, there surely could not have been consultation based on the manifesto commitment of the Government, which was to replace those funds with a skills fund—that was in the Conservative Party manifesto. So the powers that seem to be indicated go far beyond what the manifesto itself said, and indeed the results of the consultation on what the structural funds should be.
There is no reference in the Bill to what the delivery mechanism would be. The noble and learned Lord indicated quite clearly that, under the previous scheme—where, I remind the House, 76% of all European investment had been allocated to the member states—it was to be managed through the devolution settlement, and that management was through our existing frameworks. The current multiannual financial framework, from 2014 to 2020, which is coming to an end, was a UK partnership agreement. It gave granular detail—373 pages of it—of the fund: where it was going, the administration of it, how it was administered and how complementarity would be secured between the legitimate devolved policy areas. The Government have indicated that that approach is no longer fit for purpose because that was the European structural funds. Before we see announcements at a political level about the political intention, surely it is right that the Government publish the respective replacement process.
My party on these Benches and I, as a former Member of the Scottish Parliament, have never been opposed, since devolution, to the UK Government supporting schemes within Scotland. But that was under a recognition that it was linked to the correct competences of the UK Government. For example, in 2018, the UK Government supported the Edinburgh Fringe Festival in supporting artists to promote the United Kingdom around the world in one of the world’s premier cultural events. Local to home in my area, the wonderful Common Ridings used to be very familiar with receiving support from the local authority, the Scottish Government and the UK Government.
The point is not that the UK Government should be restricted from supporting reserved areas in the devolved countries, but that the policies for delivery of the replacement of the structural funds should be done under an agreed process. That agreed process seems to be set on its head now, with the Government believing that they will deliver the programmes, regardless of consultation, regardless of agreement and, more worryingly, regardless of an agreed framework for how these funds can be delivered.
I jotted down in my notes before this debate that I hoped that the Government would bring forward proposals that could be introduced in the Commons, so that if this amendment is passed and we take out Clauses 42 and 43, we would be able to see at least some clarity as to how the Government intend to deliver on the replacements for the funding mechanisms as a result of consultation. The announcement today is alarming. I hope that the Minister can reassure me that that is not the case and that, if these clauses are taken out, the Government will recognise that they should bring back proposals.
If there is a case for powers necessary to deliver the expenditure, and which do not already exist—although I have indicated that, in many respects, they do and have worked perfectly well—let the Government bring it forward. But this clause is not the case, as the noble and learned Lord indicated. I hope that the Minister has listened and will be clear in her winding up. If that is not the case, the House will be justified in removing these clauses at this stage, effectively forcing the Government to come back and bring forward their proposals for us to consider them further.
My Lords, it is a great pleasure to follow the noble Lord, Lord Purvis of Tweed, who has repeatedly shone a light into dark corners of this Bill, and to follow my noble and learned friend Lord Thomas of Cwmgiedd.
I strongly support Amendment 64 and Amendment 65, to which I have put my name. It has become increasingly apparent that Clause 42 would enable the Government to work around, rather than work with, the devolved Governments, in particular replacing the regional development funding, which has been so significant here in my own country, Wales, in addressing endemic problems such as economic inactivity and lack of skills. After all, the Government can already provide funds to support devolved matters, providing they do so in partnership with the elected Governments.
In that surprising article last week in the Daily Telegraph, already referred to, the Secretary of State claimed:
“For the first time, this money will be able to be spent by people who have been directly voted for by the people of Wales. People who know the local communities best, and who can develop coherent proposals that are aligned with broader UK-wide priorities.”
It is astonishing that this Government seem to have ignored the group of stakeholders endorsed by the Welsh Local Government Association and the majority of its members, convened—but not commanded—by those directly elected to the Welsh Senedd to develop a framework for regional investment to determine the spending priorities for this funding.
But of course we now have the Chancellor’s statement and can see in box 3.1, as referred to by my noble and learned friend Lord Thomas, the heads of terms of the UK shared prosperity fund. It states, with reference to additional funding in 2021, that the Government will provide such funding to communities using the new financial assistance powers in this Bill. This seems to bypass the elected Welsh Government by inviting local authorities to directly bid to central government. Perhaps the Minister will confirm whether I have understood correctly or not.
I am afraid this Government’s record is to spend on things that have always been the Government’s responsibility. Think of the rail infrastructure: the electrification of the Great Western main route was cut short at Cardiff, despite all the arguments in favour of extending west. Then there are major energy projects, such as the tidal lagoon or broadband, where the Welsh Government had to invest huge funds, including from the EU—which the Minister seems to loathe—to make good the underinvestment by Whitehall. Some suggest that this looks deliberately timed to be before the elections to the Senedd and the Scottish Parliament, and to drive a wedge through the devolved nations’ ability to consider their whole-population needs.
The history of the £3.6 billion towns fund, which relied on Ministers selecting which towns would receive funding, does not inspire confidence. The National Audit Office and the Public Accounts Committee were not convinced by the rationale behind these choices. The committee said:
“The justification offered by ministers for selecting individual towns are vague and based on sweeping assumptions. In some cases, towns were chosen by ministers despite being identified by officials as the very lowest priority (for example, one town selected ranked 535th out of 541 towns).”
The Minister may try to provide reassurance that this Government would not use the powers in Clause 42 to undermine the political priorities of the elected Government in Wales. But once on the statute book, this clause would open the way for future Governments of any colour to ride roughshod over an elected devolved Government. Clause 42 undermines the devolution settlement, which has functioned well for the last two decades. The clause should be removed.
Amendment 65 is an intelligent and thoughtful proposal from the noble Lord, Lord Stevenson of Balmacara, to depoliticise the allocation of funding to replace the EU structural funds to reflect economic and social need, not political expediency. It gives an appropriate role to the devolved Governments, while recognising that this is UK funding designed to level up regions with weaker economies in line with the Government’s own declared aspirations. If the Minister is unable to accept Amendment 64 and remove the offending clause in its entirety, I call on the Minister to settle for this compromise amendment, which will allay suspicions that the Government want to manipulate regional funding for their own ends rather than address objective, clear economic priorities.
My Lords, I am pleased to support Amendment 64, moved by the noble and learned Lord, Lord Thomas of Cwmgiedd, to leave out Clause 42. I agree with him and with the noble Baroness, Lady Finlay, in her pertinent comments in support of that amendment. If, however, we do not succeed in removing this provision from the Bill or succeed with Amendment 65, the Bill most certainly needs to be amended to meet the widespread criticism, expressed in the devolved legislatures and, only last Friday, in the Western Mail—if I may quote it rather than the Telegraph—which stated in its editorial’s headline:
“This plan is a direct threat to devolution.”
And it is just that.
I wish to speak to Amendment 67 in my name, which addresses the issue at the heart of the Welsh Government’s misgivings and those of my party, Plaid Cymru. It revolves around the linked questions of what replaces the European regional funding, of which Wales has been a major beneficiary over the past few decades, and who controls the expenditure priorities for any replacement funding coming from the UK Treasury.
The need for this amendment can be properly appreciated only if it is considered in the context of the immense benefit Wales has secured from the European Regional Development Fund and the European Social Fund over the past two decades. Wales is not the only part of the UK that has benefited; Scotland, Northern Ireland, Cornwall, Merseyside and South Yorkshire have also received significant investment. However, it has been Wales—in particular, the area known as West Wales and the Valleys—that has received the most significant level of investment. There is a good reason for this or, I should say, an understandable reason, for it is bad news, not good news: West Wales and the Valleys, the area which includes most of the old coal mining, slate quarrying and marginal land farming in Wales, is, sadly, one of the poorest regions in the entire European Union. The GDP per head of population in this area has been below 75% of the EU average. We were entitled to European funding due to persistent, long-term economic poverty, which the UK Government had, for most of the 20th century, failed to address—and certainly failed to eradicate.
The system utilised by the European Union established the criteria, framework and ground rules of the funding programme, each round of which lasted seven years. The Welsh Government put forward their proposed investment programme, which had to be agreed with the EU authorities in Brussels. The Welsh Government provided matched funding, which had to be additional to the normal spending budgets. That principle of additionality caused some controversy in the early days, with the UK Treasury reluctant to make additional funds available until it was instructed to do so by the EU regional commissioner—one Michel Barnier, God bless him.
The detailed rollout of the programme was, and still is, overseen by WEFO—the Welsh European Funding Office. The funding has been used for a range of projects, two of which I was involved in: the creation of the Galeri performing arts centre in Caernarfon and the management centre of the business school of Bangor University, both assisted by some £6 million of European funding. They could not have gone ahead without it. Both projects have been tremendously successful, as I know both the noble Baroness, Lady Humphreys, and the noble Lord, Lord Hain, can testify.
The third round of this European programme is still running. For the period 2014-2020, the operational programme is worth some £3 billion to Wales. At the time of the Brexit referendum, leave campaigners stressed repeatedly that the funding coming from Brussels would be replaced in full—I repeat, replaced in full—by money from the Treasury in London. I well remember, as I am sure many noble Lords do, being told that the funding emblazoned on that Brexit battle bus—the claimed Brexit bonus of £350 million per week—would, in just a fortnight, fund the annual replacement cost of the European Regional Development Fund and the European Social Fund money coming to Wales. Of course, we were told that the Welsh Government would be fully in control of its use. Those were the promises made, on which basis Wales—regrettably, to my mind—voted to leave the European Union. The time has come to redeem those promises, and Amendment 67 facilitates that commitment.
Amendment 67 seeks to establish the principles that will safeguard the funding coming to Wales and, likewise, to Scotland and Northern Ireland from funds denoted in Part 5 of the Bill. Specifically, the amendment provides that funding should reflect need, not some ad hoc arbitrary criteria, nor a Barnett-type formula, which has been repeatedly condemned by committees of this House yet was used again today in another place by the Chancellor of the Exchequer in the Autumn Statement. Funding on a needs-based distribution, related to the GDP per head of population, would be the basis. In that way, it respects the pattern of distribution of European regional funding—a pledge made during the referendum. Amendment 67 requires the Minister to bring forward a needs-based formula to be approved by order, subject to the affirmative resolution procedure, and provides for the Minister to secure the agreement of the devolved Governments to the content of that order. The amendment also proposes that each annual figure be presented as part of a three-year rolling programme, to ensure that coherent, long-term investment programmes can be secured and the money is not frittered away on short-term fixes.
We have heard a lot during the passage of the Bill about the fears in Cardiff, Edinburgh and Belfast of a power grab by the UK Government, taking away from the devolved Governments powers they currently enjoy. The Government respond, of course, that there is no such power grab and the devolved Governments will retain the powers they currently exercise. This amendment puts those assertions to the test. Either the devolved Governments retain the power to determine capital expenditure projects in their territories, or they do not. If they do not, it will be a flagrant violation of the commitments made during the Brexit referendum and the last general election. If the Government insist on retaining the rights to impose capital expenditure projects on and in Wales, it will set alarm bells ringing. There have been press reports of projects such as the construction of reservoirs in Wales, which is an incendiary topic, given our experience over the past century.
Of course, there may be joint projects of mutual interest, but those must be negotiated by the respective Governments, not imposed by Westminster and Whitehall. The days of imperial diktat have long since gone; if there was one dimension which could trigger an avalanche of support for the independence movements, it would be such an approach by Westminster. It is my fear that this Bill, without amendment along the lines that I propose, heralds such a retrograde step—a rolling-back of the freedom we have enjoyed within a European context and its replacement by Westminster central direction of the sort that Wales suffered in the bad old days before devolution. Amendment 67 is in the interest of establishing a stable harmony between the nations of the UK and I urge the Government to accept it.
My Lords, I preface my remarks by saying that what will replace the European structural funds is a matter of interest not only to the devolved Administrations but to the regions, such as Yorkshire, as well. I was fairly agnostic about this group of amendments before the debate commenced but now I think that the noble and learned Lord, Lord Thomas of Cwmgiedd, and the other noble Lords who tabled these amendments have done the House a great service.
In the briefing on the spending review, the emphasis now appears to be much more on UK-wide spending. It states:
“The Spending Review takes advantages of our departure from the EU to benefit the union. We will ramp up funding, so that total domestic UK-wide funding will at least match EU receipts … for the introduction of the UK Shared Prosperity Fund, we will provide additional UK funding to support our communities to pilot programmes and new approaches. We will also deliver £1.1 billion to support farmers in Scotland, Wales and Northern Ireland, £20 million to support fisheries—and we will build one freeport in each part of the UK.”
It goes on to say that the spending review is UK-wide and refers to the UK shared prosperity fund and the shared rural network. Although I welcome the funding that has been announced, it is incumbent on us today to find out whether, in the words of the noble Baroness, Lady Finlay, the Government are now working around the devolved Administrations rather than with them.
I am particularly concerned with one aspect relating to economic development, which I hope is relevant to this group of amendments. England and Defra have clearly stated that they are committed to phasing out direct payments to farmers from 2021, but the new system involving an environmental land management scheme will not be in place until 2024. As I understand it, however, the Scottish Minister has announced that direct payments to farmers will be retained for the foreseeable future. That begs the question of what the impact on economic development will be for English farmers as opposed to Scottish farmers and whether that will potentially distort the market between England and Scotland. That would seem to flout the principles of mutual recognition and non-discrimination, which we have heard so much about during the Bill’s passage.
I welcome this debate. I am particularly supportive of Amendments 64 and 67, both of which have been spoken to so eloquently by their authors. I urge my noble friend the Minister to say how the payments under the shared prosperity fund will be distributed. Obviously, I would add a rider that Yorkshire would like to have its fair share of that fund, but it is incumbent on my noble friend to state whether we are departing from what we have become accustomed to under devolution or whether this is simply a red herring.
My Lords, I support Amendment 64, which seeks to remove Clause 42 from the Bill. I thank the noble and learned Lord, Lord Thomas of Cwmgiedd, for tabling such an important amendment and for his excellent explanation and analysis of its intent.
Clause 42 empowers the UK Government to provide financial assistance for economic development in any area of the UK. At the outset, I want to make it clear that I have absolutely no objection to the UK Government making investments for economic development in Wales—nor, I believe, would anyone else in Wales. It is the intrusion into devolved powers that is so offensive. Those of us who live in the Objective 1 area of West Wales and the Valleys understand that our economy is weaker than those in other areas of the UK and that we live in one of the poorer regions of Europe. We have appreciated the EU’s investment in the past 20 years; for example, the investment in the A55, which provides such a vital transport link across north Wales, and the projects that we have seen come to fruition under the rural development fund.
In my contributions on Second Reading and in Committee, I said that investment in our region is desperately needed—it was before we received Objective 1 funding and it will be when it ends—but this clause gives the Government extraordinary powers to act in areas of devolved competence and in areas where the EU structural funds have never operated. It is extremely disappointing that, throughout this clause, there is no mention of consultation, joint planning of schemes, joint programmes of work or joint management of projects—all examples of the collaborative approach to investment programmes initiated by the EU that we have become used to. There appears to be no clear setting of objectives, other than, I suspect, that the Government’s prime objective is to see projects in the UK—in the Prime Minister’s words—emblazoned with the union flag. I have no problem with that either. In West Wales and the Valleys we are used to seeing EU blue flags or plaques on projects. They are an indication that the needs of our area have been recognised, and so it would be with the union flag.
There is, however, still no clarity on how needs will be determined and recognised in the UK under the shared prosperity fund, whether projects will be imposed or applications sought and, crucially for us in Wales, what impact there would be on our financial settlement. We still do not know whether a UK Government investment in a road-building programme, for example, would lead to a reduction in the Barnett allocation, or whether projects imposed on us would be financed by loans that require repayment by the Welsh Government. All this curtails the Senedd’s ability to deliver on its objectives and will have an impact on its ability to deliver on its manifesto commitments.
Of all the attacks on the devolution settlements in this Bill, this is probably the most blatant—so much so that the powers and responsibilities of our Parliaments do not even merit a mention. It is another example of the introduction of a new constitutional settlement by stealth, as I referred to in my speech on Monday. It is another item to add to the list of examples fuelling the interest in independence, which, under this UK Government, is reaching a level never seen before in Wales. People are witnessing the performance of an almost colonial Government emanating from Whitehall and comparing it with the more progressive Government and Senedd we see in Wales—a progressive Senedd that voted last week to allow councils to change the electoral system for local elections by introducing the STV system and open up the franchise for local elections to 16 and 17 year-olds in addition to their existing rights to vote in Senedd elections; importantly, it supported voter participation by paving the way for automatic voter registration.
I must admit, I am surprised that, after listening to concerns expressed by the noble and learned Lord in Committee and hearing the support for his stance from other noble Lords, the Government have not come back on Report with an amendment of their own that recognises and ameliorates the impact of this clause on the devolved Parliaments.
In a Bill about the regulation of the UK internal market, this clause and its assault on the devolution settlements has no place, and I support Amendment 64 to remove it. I hope that the noble and learned Lord will be minded to call a Division on the amendment. If he does, he will have the support of these Liberal Democrat Benches.
My Lords, I will speak first to government Amendment 66, on how the power in Section 42 will be used. There is a very welcome statement that there is to be an annual report, which can be fully debated in Parliament. We had some discussions about this in Committee, and this amendment is very welcome.
Turning to Amendment 64, I hope that the noble and learned Lord, Lord Thomas, will not find it offensive if I allude to the fact that I used to own ferrets. Ferrets are beautiful animals, very ingenious and very inquisitive—but of course they have one failing. Sometimes they succeed in catching or flushing out rabbits, but quite often they turn around, get distracted and think of something far less important. Listening to the noble and learned Lord’s introduction to his amendment, it was based, according to him, on finding in paragraph 3.1 of the Red Book something that he thought was relevant to this debate on Clause 42.
I am sufficiently brave to suggest that he has perhaps forgotten what the basic elements of this Bill are. On the front page, it says:
“To make provision in connection with the internal market for goods and services in the United Kingdom … to authorise the provision of financial assistance by Ministers of the Crown in connection with economic development, infrastructure, culture, sport and educational or training activities and exchanges”.
This is what the whole Bill is about. So here we have before us an amendment which is a pretty wide-sweeping reversal of that primary purpose of the Bill. A whole new concept is being proposed in this new clause, at a time when the whole country faces massive challenges arising from Brexit.
After five days looking exhaustively at the Bill in Committee, lo and behold, here we are on Report, and this pretty revolutionary amendment is put forward. For me it is basically pre-empting the role of the Chancellor of the Exchequer and the Government of the day. It does not matter what the colour of the Government is: in structural terms it pre-empts the Westminster Government, setting up a whole new semi-department, with little oversight and, frankly, huge costs. There does not seem to be any constraint on it at all. In my judgment it is way outside the scope of the Bill and should be rejected.
My Lords, in his very clear and crisp outline of the reasons for his Amendment 64, the noble and learned Lord, Lord Thomas of Cwmgiedd, referred to my speech in Committee about pork barrelling. The noble and learned Lord helpfully informed us about box 3.1 in the Red Book, which I have not yet had a chance to read but which seems deeply revealing about the Government’s clear political intentions. The smell of roast meat is certainly in the air.
Government Amendment 66, offering retrospective annual transparency, is a slight improvement on the Bill, but so slight that I find the words “slightly better than nothing” rather hard to get out. Considerably better improvement is offered by Amendment 65, in the name of the noble Lord, Lord Wigley, which provides stronger democratic control and devolved Administration involvement. However, that is clearly the opposite of the Government’s apparent intention, as the noble Baroness, Lady Finlay of Llandaff, demonstrated, using their own words. I agree with the noble Baroness, Lady McIntosh of Pickering, that this is also of great interest to the English regions, whether Yorkshire, which I hope will soon have a democratic parliament of its own, or Cornwall, which has similar ambitions.
Many of the issues have already been well canvassed, so I will not repeat them, but I will finish by remarking on the words of the noble and learned Lord, Lord Thomas, who reflected that he and I have different views on the union. As a Green, I believe in local decision-making, with power and resources going upwards only when absolutely necessary. The best decisions are made democratically and, of course, the devolved Administrations have far more democratic structures than Westminster. Those decisions should be made by the people affected by them.
I believe in self-determination, and of course support the Scottish Greens’ position on independence. I note that last month the Wales Green Party voted that, in the event of a referendum on Welsh independence, the Wales Green Party
“commit to campaigning in favour of seceding from the United Kingdom.”
I remember that very soon after I came into the House —I can date it back to about a year ago—the noble Lord, Lord Wigley, coined, I believe, the neat phrase about Wales becoming “indy-curious”. Everything I hear says that that position has moved on significantly.
I know that your Lordships’ House, and the Government, are firmly pinned to unionism. Despite my different position, I will offer some advice to those holding that view. Seizing more control and trying to take back power and resources from devolved Administrations might seem like a way of taking control and getting a tighter grip on the nations of the so-called United Kingdom, but the effect is likely to be the opposite. Squeezing harder will push nations further away.
So why am I offering this advice if my view is the opposite? Because, when the independence move or moves come, I hope that they can be done in a friendly, co-operative manner, with the kind of political, consensual approach more typical of the representatives of the devolved Administrations than of Westminster—as we hoped the move out the European Union could have been managed once the decision was made. Now, 36 days from the end of the transition period, with the nation in a state of great uncertainty, let us learn from that experience—and I can promise the Green group’s support for all the moves to try to ensure that power and resources stay with the devolved Administrations.
My Lords, I support Clause 42 and Amendment 66, but I do not support the various other amendments in this group, and in particular I wish to speak against Amendment 64, which seeks to remove the financial assistance power from the Bill.
I have been very concerned, throughout this Bill and again today, at the way in which grievances about devolution have been elevated into some kind of holy crusade which sees only evil in the UK Government. Noble Lords supporting various amendments on this theme have often alleged that the Government are playing a dangerous game with the devolution settlement and that this Bill represents a major power grab which must be resisted. I believe that the only people threatening the constitutional settlement on devolution are those who have set their face against—or at least ignored—the existence and value of our United Kingdom and our precious union.
I have also heard a lot of wishful thinking about the UK as a federation of equal states, which it is not. Many noble Lords have been pretending that “the UK Government” is synonymous with “an English Government”—which is also far from the truth. If there is a gap or weakness, it is that the UK Government and UK Ministers act mainly in the interests of the whole of the United Kingdom, and England gets left a bit to one side.
The Government have been consistent and clear that they intend to act in the interests of levelling up the whole of the United Kingdom. The actions of my right honourable friend the Chancellor of the Exchequer in today’s expenditure review are testament to that, and I say to the noble and learned Lord, Lord Thomas, that it is a very fine blue book—a Red Book, I believe, is normally reserved for a Budget Statement.
The UK Government will always act in the interests of the whole of the United Kingdom, and it is disingenuous of noble Lords to paint a picture of a domineering Government trying to strip powers away from the devolved nations. No powers at all are going to be taken from the devolved nations. Devolved Administrations still have the same powers to spend their money as at present.
Clause 42 creates the power to grant financial assistance across the UK so that it is put beyond doubt that the UK can replicate the sorts of financial flows that existed when the EU took money from the UK and graciously gave a bit of it back to us to use in the way it decided. In future the UK Government will make those decisions about how UK money is directed, rather than Brussels. The guiding light will be the needs of the UK as a whole, although I am sure my noble friend the Minister will confirm that there will be extensive discussions with and the involvement of the devolved Administrations.
Clause 42 talks about financial assistance but let us be clear: this is simply public expenditure. Public expenditure is sourced within the overall fiscal policies of the United Kingdom as set by the Chancellor of the Exchequer. It will be financed by UK taxation or UK borrowing, both of which are carried out by Her Majesty’s Treasury as part of its UK-wide economic policies. These are not matters for the devolved Administrations, however much they might wish otherwise.
Noble Lords really should be careful what they wish for. If Clause 42 is removed from the Bill, noble Lords will remove the mechanism the Government have chosen to funnel public money into their agenda to level up the whole of the UK. How do noble Lords think that the devolved Administrations will get the kinds of money that used to flow via the EU without Clause 42?
Of course, the Government have powers, in general terms, under the appropriation Act to decide upon and distribute public expenditure, but it is a well-known rule and general practice to take a specific legal authority for major expenditure that will be made on a recurrent basis. So the result of taking Clause 42 out of the Bill may well be that the large sums that the devolved nations expected to receive will disappear. Is that really what the noble Lords promoting Amendment 64 want to achieve?
My Lords, I again partly apologise to noble Lords because I intended to speak on later amendments and to support the noble and learned Lord, Lord Thomas, on Amendment 69. I will settle for Amendment 64.
I take exception to the definition of the Long Title from the noble Lord, Lord Naseby. Whichever way we read it, it is about devolved matters in the United Kingdom. We have only to look at the definition of infrastructure in Clause 42 to see that it absolutely covers devolved matters. His was a bit of a cheap shot at the noble and learned Lord, Lord Thomas, to try to imply that this was inconsistent with the Long Title.
My other beef is one I have had in the past regarding Wales and the Barnett formula. I have never understood why the people of Wales, including the politicians, have never risen up. Some years ago I was a member of the Select Committee that looked at the Barnett formula. It was abundantly clear that Wales had been cheated for years. If the Barnett formula was based on need, rather than population, Wales would be on about a third more than it is now. We told leading MPs about this, but I have never noticed any great kickback. Wales has been short-changed under Barnett for years. There is no easy answer to that.
The noble and learned Lord, Lord Thomas, was absolutely bang on in delivering the information from box 3.1 out of the Red Book at the beginning of the debate. I thought his eight questions were incredibly telling. I would use the term “pork barrel”, because that is what it is about. The Chancellor of the Exchequer, whose Statement I heard earlier, made it quite clear that the spending of this money relied on the consent of the constituency Member of Parliament, although I understand that the Treasury might have disowned this since. I tweeted, saying that it is incredibly dangerous for constituency Members of Parliament to be involved in executive functions. Local councils are always involved in executive functions; Members of the House of Commons are not. It is incredibly dangerous territory for them to get involved in, particularly in view of incidents that arose in the past.
I understand that the Treasury might have backpedalled a little on that, but it shows the thought process of those who constructed the Statement today, which is intricately involved with the Bill: destroy devolution, open up the pork barrel and give money to your friends based on the constituency MP. That cannot be a good form of governance. It cuts across devolution massively, whichever way anyone defines it. I have said before that my experiences have been at Defra and MAFF before devolution, then at the Food Standards Agency, which was a four-nation, non-ministerial department at the time. Whitehall has never really done devolution and never really understood what was happening. It has taken a while even for the House of Commons to become clear about the quite distinct advantages of devolution. It all went wrong, of course, when the proportional electoral system gave a majority Government. That is not supposed to happen, but neither, on the other hand, is first past the post designed to give coalitions, which is what we had in 2010. You cannot base the future construct of the constitution on such whims.
Governments come and go and will not be there for ever, but I very much agree with what the noble Baroness, Lady Bennett of Manor Castle, said: with devolution now under acute and very massive threat, there is no question but that this will push the independence movements of Wales and Scotland wider and further, particularly in Scotland, where it is stronger. I cannot see a solution to it. I think that we are heading headlong towards the break-up of the union. I will fight like hell to stop that and a lot of people will. The problem is, keeping the fight in words and debate. We are heading for the destruction of our country, without any policy announcement, a clear vote or a manifesto commitment. It is being done by subterfuge and backhanders.
In my view this is the direct effect of the Bill, particularly these attacks on devolution. Amendment 69 covers the same for Clause 44; they are two sides of the same coin. I was going to speak about Amendment 65, but I will leave that to my noble friend. This fundamental attack on devolution, with the push to break up the United Kingdom, is a much more serious affair than has been recognised by your Lordships’ House, where it has been recognised more than in the House of Commons. We need to send a signal to the elected House that our country, our constitution and the make-up of the union are under direct threat as a result of the Bill.
My Lords, I am very pleased to follow the noble Lord, Lord Rooker, but I could not disagree with what he said more. The threat to our United Kingdom results from the power grab being attempted by devolved authorities, led by nationalist parties, of powers that were never theirs in the first place.
Amendments 64 and 68, in the names of the noble and learned Lord, Lord Thomas, and the noble Lord, Lord Purvis, strike at the very heart of the Bill by removing the Government’s powers to make provisional assistance for infrastructure projects. Many such projects need to be provided across the whole United Kingdom in a coherent and consistent manner. I greatly respect the opinions of both noble Lords, but the devolution settlement that the noble and learned Lord, Lord Thomas, talked about is different from one that properly preserves the UK internal market.
I welcome Amendment 66, in the name of my noble friend Lord Callanan, which seeks to allay the concerns of noble Lords about these clauses. I would have expected your Lordships to be pleased that my noble friend has proposed that the Government “must” make an annual report to Parliament. Amendment 65, in the name of the noble Lord, Lord Stevenson, pre-empts the Government’s announcement about how they intend to set up and run the shared prosperity fund, which is to take over the functions of the EU structural funds. As my noble friend Lord Greenhalgh said in a Written Answer on 10 August:
“The fund will bind together the whole of the United Kingdom, tackling inequality and deprivation in each of our four nations.”
In this regard, I think the fund should not be restricted by powers that may be exercised by the devolved authorities to any greater extent than the EU structural funds have been restricted until now.
This amendment is far too prescriptive, and it is, of course, inconceivable that the Secretary of State would not discuss disbursements from the fund in the same way that European officials have hitherto discussed disbursements with both the UK Government and the devolved authorities. Nevertheless, I share the concern of the movers of these amendments that there is now little time before the EU structural funds are consigned to history as far as the UK is concerned, so I hope that the Minister will tell us when she expects that the Government will announce exactly how they intend to operate and distribute the new fund?
My noble friend Lady McIntosh of Pickering told the House that a Scottish Minister had stated that Scotland intends to continue direct payments to farmers rather than introducing something similar to the ELM scheme. Of course, this is a slightly different—though related—matter, but it clearly shows why it is so important to maintain a coherent internal market in the United Kingdom.
The noble Lord, Lord Wigley, talked about “the bad old days before devolution”. Does he remember that less than 25% of the electorate of Wales supported even the limited degree of devolution at that time? The noble Lord’s Amendment 67 seems to me to be aggressively nationalistic. The noble Baroness, Lady Bennett of Manor Castle, spoke in favour of what Baroness Thatcher called “subsidiarity”—but I have not heard her, or the noble Lord, Lord Wigley, or other noble Lords opposite criticise the EU as it moves to centralise and harmonise fiscal and other powers at the expense of the nation states.
My Lords, once again, this has been a very widespread and high-quality debate. To the Minister, who has not had the benefit of the soap opera that you tend to have on Report, I say that we have reached the point that—here I agree with the noble Viscount, Lord Trenchard—is the meat of this Bill. At Second Reading, in Committee and on Report, many of your Lordships asked why this Bill was necessary. Of course, there was the political and negotiating posturing that came with Part 5, but I put it to your Lordships that one of the central, driving reasons for this Bill is exactly what we are discussing here today: it is so that central government can get its hands on this money and administer it through whatever means it sees fit, because there is no detail on that administration —here, again, I echo the point made by the noble Viscount, Lord Trenchard.
Some people called it pork-barrel; I would perhaps call it a hobby horse. We saw the benefit of the Prime Minister’s attempts at hobby horses when he was the Mayor of London: we saw the amount of public money that was spent on “Boris Island”, the green bridge and the Emirates wire crossing of the Thames. These are just small potatoes compared to what we could look forward to.
In her speech, the noble Baroness, Lady Noakes, characterised those of us on these Benches and in Her Majesty’s Opposition as, somehow, thinking that the Government are evil in this. I make it absolutely clear to the noble Baroness and the Minister that I do not think that she is evil, and we do not have a policy of thinking that the Government are evil. However, we do think that the Government are wrong, and we are allowed to do so. Many of the speeches on the Benches opposite have also been factually wrong on the subject of devolution, and I will correct some of those facts.
However, I will err on the side of giving the benefit of the doubt, because I do not believe that the people who drafted this Bill misunderstood devolution in the way that many of the speeches we have heard today have. I believe that there is a very deliberate attempt in this Bill to bypass the processes that have become normal in devolved government and, unless we see actual details as to how this will go forward, this suspicion will only get greater.
Very recently, the Government introduced the notion of the role of local councils. This has come along only in the last 24 to 48 hours in relation to their possibly getting involved in the process of disbursing. I can only assume that it is the antidote to the Prime Minister’s loose lips around devolution, but perhaps the Minister can explain what role the Government see in any future disbursement process for local councils—and, if there is not one, perhaps they can disabuse us of that as well.
My noble friend Lord Purvis set out how the multiannual financial framework works. In answer to the noble Baroness, Lady Noakes, who said that the devolved authorities are not having financial powers taken away from them, I say that they most definitely are, because they had functions under EU structural funds and state aid within the fiscal framework which are being withdrawn.
I am afraid that the noble Baroness was similarly wrong on the subject of public finance and tax. If you happen to live in Scotland, as my noble friend Lord Purvis will tell you on many occasions that he does, you pay Scottish income tax, which is set by the Scottish Government: it is a different tax. Perhaps the noble Baroness, Lady Noakes, would acknowledge that there are differences across this country in the fiscal arrangements for the people who live in the nations of the United Kingdom. Those differences arise through the devolved process, which, somehow, is now being withdrawn and pulled back by this Government under the misapprehension that, by being seen to spend this money, they will somehow become popular. That is not the way to be popular, and it will fail. The noble Lord, Lord Naseby, spoke about ferrets. My experience of ferrets is that they usually bite the people who are handling them—so perhaps he should be warned.
I have one final point, which is a question that I really do want an answer to—it is not a rhetorical question. The noble Baroness, Lady McIntosh, raised the interesting point about how the markets could get distorted. I would like the Minister to explain the role of the office for the internal market in this. As we have discussed in previous amendments, considerable powers are being vested in the OIM, not least Clause 31 powers, so can the Minister confirm that the OIM will be able to investigate the UK Government’s use of the powers that they seek in Clauses 42 and 43 to investigate whether this distorts the market? Can the Minister also confirm that devolved authorities will be able to request such an investigation from the CMA?
My Lords, I am going to say much the same things as the noble Lord, Lord Fox, but I will focus a little on my Amendment 65, which has been supported by the noble Baroness, Lady Finlay, as well as offering support from the Opposition Benches for Amendment 64 in the name of the noble and learned Lord, Lord Thomas, and—if it is treated as consequential—Amendment 68.
The last time she joined us, the noble Baroness, Lady Penn, responded to my amendment on the shared prosperity fund with a very full and useful speech, part of which the noble and learned Lord, Lord Thomas, has already quoted. It was helpful to hear, because it was so clear what the purpose behind the new approach to the shared prosperity fund was to be. Although she may have to slightly change the way she expresses it when she responds in a few minutes, she confirmed, stressing the collaborative nature of the future, that this would
“allow the UK Government to complement and strengthen the support given to citizens in Scotland, Northern Ireland and Wales, without taking away devolved Administrations’ responsibilities.”
That is all good stuff, but she went on to say—this was not quoted by the noble and learned Lord earlier—that
“the response to Covid has shown how the UK Government … can save jobs and support communities. This could only have been delivered strategically and at that scale by the UK Government.”
That interesting formulation has been much explored during this debate. I do not think the Minister will find much support across the House for that statement.
The Minister went on to say:
“The UK Government are uniquely positioned to level up across every part of the UK”. —[Official Report, 2/11/20; col. 596.]
That also needs to be challenged. It is the sort of thinking from which comes the “Westminster knows best” process, which has been criticised, and spending decisions being taken against the advice of those in the best position to know about them. As the noble Lord, Lord Fox, said, this may lead to follies of the type of the garden bridge and, perhaps, the much-mooted bridge between Scotland and Northern Ireland, which seems to be the answer to the Northern Ireland protocol problem.
I will talk a little about Amendment 65. I was grateful to my noble friend Lord Rooker for talking about the work done in your Lordships’ House on a critique of the Barnett formula. He is absolutely right: if that formula had been replaced by something of a different nature, the funding levels in Wales and Scotland would have changed, because of inward immigration to Wales and external emigration from Scotland. There has been a change in the population levels which has not been reflected in settlements. The system does not command much love and affection, let alone support.
The proposal in Amendment 65 challenges the Government to think again about how they might wish to do the shared prosperity fund. If it is not clear, because the drafting is somewhat complicated, it is based on a model to which the closest analogue would be the Low Pay Commission. Despite allegations to the contrary, it weighs heavily on subsidiarity and proportionality as the principles under which it might be set up. Under the proposal in Amendment 65, it is the Secretary of State who sets the level of the fund, it is clearly the Government’s funding and their authority to set a level every year for that is not, in any sense, taken away. What the amendment does is to mandate consultation and provide an alternative, needs-based basis for judging the bids. As set out in proposed new subsection (11), this approach looks at an area’s proportion of children below the poverty line, low income, economic weakness, the age structure of the population, the impact of the pandemic and the impact of climate change—something we might want to consider more fully, though it has also been picked up today.
I thank the noble Baroness, Lady Finlay, for her kind words. For anyone in the Official Opposition to be ruled as “intelligent and thoughtful” is almost too much to take, but it probably rules out any further consideration of my amendment. It would not do to be seen to be endorsing that, would it?
As the noble Lord, Lord Purvis, said, if Amendments 64 and 68 are passed, there will be a bit of a hole in the Government’s thinking on this area. They might want to think again about how do to that by looking at this amendment, certainly in the context of the responses to the now notorious box 3.1. I congratulate the noble and learned Lord, Lord Thomas, on being able to adapt his speech to take account of the fact that he could have had only a few minutes to look at that box. His critique of it was spot on. As the noble Baroness, Lady Finlay, said, box 3.1 is based on the assumption that the Government will receive the new financial assistance powers in this Bill—it says so straight out, at the beginning. It is also interesting that this is clearly a top-down approach:
“The government will develop a UK-wide framework for investment in places receiving funding and prioritising: investment in people … investment in communities … investment for local businesses”.
There is nothing exceptional or egregious about the list of things to do, but the idea that there is a top-down approach jars with everything we have been doing in the last 20 years to develop a much more responsive, local environment.
“Places receiving funding will be asked to agree specific outcomes to target within the UK-wide framework. They will then develop investment proposals to be approved by the government among a representative stakeholder group.”
What on earth does this all mean? However, it does say something that we might celebrate:
“Investment should be aligned with the government’s clean growth and net zero objectives.”
Is this the first time that the Government are prepared to accept publicly that there is a case for maintaining existing high environmental standards and net-zero objectives? If so, why is that not also being applied in the Bill to market access principles and the derogations from legitimate aims which the Government were dead against only a few days ago.
The whole approach being taken in this is redolent of what the noble Lord, Lord Fox, suggested was an attack on the devolution settlement and it must be opposed. This is not the way we do things. Amendment 65 is an attempt to think outside the box for the shared prosperity fund, but it is based on an assumption that there will be a continuation of the way in which devolution has worked. I hope that, when she comes to respond, the Minister will say that we are wrong about this, and that the Government’s proposals reaffirm their commitment to the devolution settlement. Their current proposals have exposed a centre that seems unable to listen and outlying areas that do not feel they are being consulted.
This power grab, and the rather ignoble assertions made by the Minister the first time round, exposes a key divide between us. Why do all the important things that she identified have to be done from the centre, when existing mechanisms allow these bodies, which have far greater knowledge of what is happening locally, to spend the resources more effectively? As I said in response to an earlier amendment about the common frameworks, it is now patently obvious that the Bill is actually about gathering powers, which should be devolved, to a relatively insensitive centre which is trying to imprison a multinational country composed of vibrant, diverse regions, with diverse histories and needs, into a straitjacket of a unitary state. We can, and need to, do better than that.
My Lords, I begin by reminding noble Lords of the purpose of this part of the Bill. The power to provide financial assistance supports the Government’s determination to deliver on the commitments on which they were elected: levelling up and delivering prosperity across the whole United Kingdom, and strengthening the ties that bind our union together. It provides for a unified power that operates consistently UK-wide—one which will allow for strategic investment throughout the UK, underpinning the Government’s determination to see all parts of the UK flourish. It makes sure that we meet our manifesto commitment to deliver a UK shared prosperity fund which allows the Government to invest in communities across England, Scotland, Wales and Northern Ireland. Previously, in many of these areas, the EU mandated how our money had to be spent, with little say from elected politicians in the United Kingdom. The UK Government intend to take a much more collaborative approach in delivering any funding that replaces EU programmes.
In this context, I will speak to Amendments 64 and 68, which seek to remove Clauses 42 and 43. The noble and learned Lord, Lord Thomas, asked why such a power should be included in this Bill. The ability of the UK Government to invest in and support businesses and communities in all parts of our union, as these clauses provide for, helps to achieve a stronger and fairer internal market. Indeed, this is the argument the EU makes on the role of European structural and investment funds in strengthening the European single market. It is right that, as we leave at the end of the transition period, the UK Government have the right tools to make sure the whole country can benefit from investment which strengthens communities, economies and connectivity within and between all parts of the UK.
Another point of focus from noble Lords, including the noble Lords, Lord Purvis and Lord Fox, the noble and learned Lord, Lord Thomas, and the noble Baroness, Lady Finlay, among others, was the role of the devolved Administrations and other local partners, including local authorities. Let me be clear: this power is in addition to the devolved Administrations’ existing powers. It will allow the UK Government to complement and strengthen the support given to citizens, businesses and communities in Scotland, Northern Ireland and Wales. It does not take away responsibilities from the devolved Administrations. Rather, the power will enable the UK Government to deliver investment more flexibly and dynamically and in collaboration with the devolved Administrations and other partners.
We have taken a collaborative approach to investment with devolved Administrations already, for example through our successful city deals programme, as noble Lords have talked about. The UK Government intend to continue to work in this spirit of partnership with stakeholders. We will make sure that this new power can facilitate UK government support for projects, making it far more responsive and responsible for addressing the needs of communities and businesses throughout the country.
We have seen how important this can be. Colleagues on these Benches and in the other place have already noted that our experiences of Covid-19 have demonstrated the value of a responsive UK Government. The noble Lord, Lord Stevenson, questioned the support in this House for that statement; I tend to disagree, unless the party opposite does not support the furlough scheme and the Bounce Back Loan Scheme that have protected thousands of jobs and businesses across the UK during this pandemic. To make sure that the UK Government can deliver on this ambition for all parts of the UK, I hope these amendments will be withdrawn or not pressed.
Turning to government Amendment 66, we listened carefully to the debate by noble Lords on this part of the Bill in Committee, where questions were asked on how the clause would operate. Through Amendment 66, the Government seek to introduce a requirement in Clause 43 to report annually to Parliament on the use of this power to provide financial assistance. This would put a requirement in legislation to provide a summary on the use of the power for scrutiny by parliamentarians, other key partners and the wider public. This is in addition to the scrutiny role that Parliament already performs for public spending through voting on the spending allocations, as part of the estimates process and in line with the principle of the PAC concordat.
This requirement makes sure that key partners, including devolved Administrations, have transparency on where funding under the power has been directed. Any future funding decisions are subject to fiscal events. Accordingly, the requirement added by Amendment 66 requires a summary of the use of the power in the previous financial year. I hope your Lordships’ House will agree that this government amendment improves the opportunity for Parliament to see and scrutinise financial assistance provided under the power in Clause 42.
I will now discuss Amendments 65 and 67. Amendment 65 would mean that this new clause would seek to establish a UK shared prosperity fund commissioner, whose primary task would be to make recommendations for the disbursement of the UK shared prosperity fund. Amendment 67 would mean that financial assistance for economic development would be managed and administered through the devolved Administrations. As I have said, this power to provide financial assistance is wider than any single fund or organisation. It will ensure that the UK Government are well positioned to deliver financial assistance, following the end of the transition period, and to replace EU structural funds. It is crucial that the UK Government can use successor funds to invest strategically and have the additional flexibility needed to invest across the whole UK that this power provides. These amendments, including the establishment of a commissioner, would curtail that flexibility. In addition, decisions on governance for the fund should not be made through legislation.
Noble Lords are, however, right to seek progress on the UK shared prosperity fund. The Covid-19 pandemic presented exceptional circumstances, and it is right that our focus and priorities shift accordingly. The Government have conducted a one-year spending review to prioritise the response to Covid-19 and focus on supporting jobs. However, in these challenging times it is important we do not lose sight of our long-term objectives. I reassure my noble friend Lord Trenchard that investment under EU structural funds peaks next year and will tail off until 2023, with spending in each of England, Scotland, Wales and Northern Ireland remaining higher than the annual average.
To ensure a seamless transition from EU structural funds into the UK shared prosperity fund, we announced additional spending today in the spending review to help local areas prepare over 2021-22 for the introduction of the UK shared prosperity fund, supporting our communities to pilot programmes and new approaches. As noble Lords have also referenced, we have published the heads of terms setting out our plans for the shared prosperity fund.
The noble and learned Lord, Lord Thomas, asked whether the spending would be efficient and effective. The bureaucratic burden of EU programmes meant that places have had to wait a long time before they received any funding. Places typically see no investment in their communities until at least a year after the programmes have started. The provision of additional funding next year will be quick and responsive; it will be phased in as EU investment declines.
The heads of terms also set out that there will be two portions of the fund: one targeting places most in need to support people and communities to open up new opportunities; and a second targeted differently at people most in need through bespoke employment and skills programmes, again tailored to local need. As the noble Lord, Lord Stevenson, noted—I hope the noble Baroness, Lady Bennett, who had not seen the spending review document, will take some reassurance from this—the terms also state that investment should be aligned with the Government’s clean growth and net-zero objectives.
We have not taken back control over investment to hoard it in Whitehall or to roll over EU prescriptions on how we invest in our local economies. Local places across the UK will be able to shape investment to reflect their needs. This means a strong role for local partners across the UK. The UK Government intend to work with devolved Administrations and local communities to ensure this power is used to best effect and that the UK shared prosperity fund supports citizens across the UK. This includes engaging with local authorities and devolved Administrations, as well as wider public and private sector organisations. I reassure noble Lords that the Government have held 26 engagement events across the UK on plans for the shared prosperity fund, including 16 events in devolved Administrations, and that UK government officials regularly speak with their counterparts in the devolved Administrations to discuss the design and operation of the fund to ensure it supports every part of the UK.
Further details on additional funding for next year will be published in a prospectus in the new year. We will set out further details on the UK shared prosperity fund in the UK-wide investment framework, to be published in the spring. A multiyear profile will be set out at the next spending review.
The short answer to the noble Lord, Lord Fox, on his final question on the role of the office for the internal market is no. It looks only at Parts 1 to 3 of the Bill and relevant effects, so it would not look at decisions under this power.
Given the further details I have set out today, I encourage noble Lords not to press their amendments.
My Lords, I have received requests to ask a short question from the noble Lord, Lord Liddle, the noble Baroness, Lady Finlay of Llandaff, and the noble Lords, Lord Fox and Lord Purvis of Tweed. I call the noble Lord, Lord Liddle, to ask a short question for elucidation.
My Lords, I strongly support the Government’s levelling-up agenda but, having listened to the noble Baroness, they seem to have a fundamentally different approach to how this should be achieved from what has been a shared consensus for the last 20 years or so. We all thought the way to achieve levelling up, economic development and all the other things mentioned in Clause 42 was through devolution, bringing economic powers closer to the people. That was the logic of Scottish and Welsh devolution and the logic of the Chancellor of the Exchequer in the Cameron Government, George Osborne, who promoted the northern powerhouse, the Midlands engine and all the rest. The Government now seem to be saying, “We want to run the show centrally”. Is that so?
Do the Government not recognise that all this talk about the EU directing how the funds were spent is nonsense? I was very involved with the North West Development Agency; we directed how the funds were spent from that agency. Are the Government not proposing to weaken the powers that the devolved bodies have over structural funds? Finally, is it not the case, as I have been told—someone made a cursory reading of the Red Book—that next year the Government are allocating £220 million to the shared prosperity fund, which is a far lower sum than was available under the EU structural funds?
I am not sure that the noble Lord’s first questions cover points that we have not covered in this debate already but, for clarity, this does not change the devolution settlements. We are talking about a UK-wide investment programme that will work in collaboration with the devolved Administrations, local partners and local authorities.
I am very happy to clear up the noble Lord’s point about £220 million. That is in addition to money that is still coming through the EU structural funds, which will continue to flow until 2023. As I believe I said in my speech, each of the nations will continue to receive the same level of funding, if not a bit more. That first year of funding is for pilot projects and to aid the transition to the shared prosperity fund, which will then ramp up and there will be a multi-year settlement for that fund in the next spending review.
The noble Baroness, Lady Noakes, said to be careful what you wish for. She intimated that, in the event of Clause 44 being deleted from the Bill, the shared prosperity funding being discussed might be withheld completely. Can the Minister state clearly, with a simple yes or no, whether it is indeed the Government’s policy that, without Clause 44, the funding will be withheld or diminished?