My Lords, it is a pleasure to follow the noble and learned Lord, and to agree with the thrust of his comments. This is the last, relatively small, group on the general concept of the consultation, before we move specifically on to what we would expect to see of the OIM’s relationship with the devolved Administrations. It is important, I think, because of Amendment 171 in the name of the noble and learned Lord. The Government’s ability to make considerable changes, through regulation, to any part of this legislation—which could have far-reaching implications for the devolved Administrations—without any requirement for consulting is worrying.
We can look at what is currently under way with regard to consultation. I reflected on the Minister’s previous response to the noble and learned Lord, Lord Falconer of Thoroton, and my noble friend on the regulation of professional services and consultation. I ask the question because the consultation on The Recognition of Professional Qualifications and Regulation of Professions: Call for Evidence, which closed on 23 October—so a very recent closure—was a call for evidence to ask for views on whether there should be a UK-wide system of regulation for professional services. On page 15, under “Future considerations” in the section on the internal market, it says:
“determine whether or not there would be merit in having a UK-wide, cross-sectoral strategy for the regulation of professions (potentially underpinned by regulatory principles).”
But in this Bill we are debating it, because the Government did not wait until the closure of that consultation process before bringing legislation forward and say that this is now absolutely necessary, whereas the consultation by the business department, which closed on 23 October, simply requested people’s views.
I would be grateful if the Government would publish the responses to that consultation and update the House on the consultations on the White Paper which had been requested. I understand that the Government indicated that they would publish those consultations by 9 October, so an update on the status of that would be helpful. The Government’s ability to make regulations without consulting the devolved Administrations, under the last schedule of the Bill, does require consultation. I very much support the thrust of the noble and learned Lord’s amendments.
Turning to Amendments 114 and 141, I note that the Government’s proposal, relating to the CMA and the OIM, in this Bill is that before an appointment to the CMA board, as a chair of an OIM panel, or as a member of a panel, there must be a consultation with the devolved Administrations—so far, so good. But there is no requirement for the CMA then to consult on the establishment of a task group or a panel, so I wonder what the Government’s thinking is on that. The Government will consult the devolved Administrations on an appointment to a panel, but then there is no requirement for that panel to consult before it starts its work.
On the point that the noble Baroness, Lady Neville-Rolfe, recognised in the previous group, some of the work of the OIM in these areas will touch on very sensitive issues, with regard to the devolved powers or the decisions. Given that under this legislation there
will be the ability to disapply devolved legislation—legislation in the competence of any of the home nations—there being no requirement to consult before that work commences is highly problematic. The legislation goes further to say that the CMA, after a request, “may” provide a report on proposals by one of the Governments for legislation within the UK; but, of course, if it may, it may not. If it does not consult after a request has been made by one of the nations—one of the Governments—in the UK, there is no ability to know the reasons for the CMA’s decision. The necessity now for the CMA to consult is important, given that a request can be made to report on a specific proposed regulatory provision, without the requirement to consult the body proposing to make that regulatory provision, which is quite extraordinary in my view.
We do not even know, at the very least, what process the CMA would follow in the establishment of a task group to investigate a proposed regulatory provision; nor will that devolved Administration necessarily know the basis on which the task group will investigate. These are basic principles that the noble Lord is correct to highlight.
4 pm
The area where I would question not necessarily the Minister but the Government is the status of the JMC, specifically its EU Negotiations sub-committee. Last week, in response to requests for clarity on the Government’s view about the correct place for intergovernmental relations, the Minister gave a slightly contradictory summation of how those relations are working in the JMC. In the first part of his speech, on the operations of the discussions on the frameworks, he said:
“It is regrettable that the Scottish Government walked away from discussions on the internal market”.
That is a very sharp view from the Minister, but he concluded his remarks in the very same speech by saying that,
“for all powers, UK Government officials will engage with the devolved Administrations in the spirit of the devolution memorandum of understanding. This system has worked well for 20 years and continues to do so.”—[Official Report, 28/10/20; cols. 306-07.]
Either it is working well or it is not—if some parts of it have walked away. What is the Government’s intention as to where the internal market will fit in as far as the JMC’s operations are concerned?
The JMC has its plenary, its Europe sub-committee and its EU Negotiations sub-committee. I am not sure when the JMC (EN) is meant to conclude, and it would be helpful if the Minister could state that. Then there is the Minister Forum and the domestic JMC, as well as the Finance Ministers, quadrilaterals, joint executive committees and three other areas. There is also a mechanism for dispute avoidance and resolution. What is the Government’s intention on the element of the JMC under which the internal market will be reviewed and overseen?
In a joint letter to me, my noble friend Lord Fox and the noble Lord, Lord Stevenson of Balmacara, the Government indicated that the existing JMC operations will be the mechanism for the operation of the internal market. There is no sub-committee of the JMC to consider that. If there is no sub-committee, only the JMC Plenary can do so and, surely, the JMC
Plenary, chaired by the Prime Minister, cannot be the mechanism through which these elements of discussion about the internal market will be governed.
I wish to note something in passing, given the fact that the Minister said that it was the Scottish Government who walked away from considerations. With regard to the JMC Plenary, according to the Institute for Government:
“It met most recently on 19 December 2018. In July 2019, Prime Minister Boris Johnson committed to holding a JMC Plenary meeting but this had not yet happened as of the beginning of June 2020.”
An update on the status of the Prime Minister’s chairing of the JMC would be helpful. Under this legislation, where will the internal market fit in within the JMC mechanism if not under JMC (EN), which deals specifically with European negotiations?
The noble and learned Lord, Lord Mackay, referred to dispute resolution mechanisms. I want to address a couple of comments there. The Minister indicated that it is not the Government’s intention to bring about a new dispute resolution mechanism for the operation of the internal market. However, the protocol on disputes, which dates back to devolution, and the mechanism that has been in place since 2010 cannot be a mechanism for the operation of the internal market.
First, it is up to the UK Government whether they recognise the triggering of a dispute under that mechanism. We saw an attempt by the Welsh and Scottish Governments to trigger a dispute when the previous Government made an agreement with the DUP to fund Northern Ireland specifically, without consequential funding for Wales and Scotland. The Government simply did not recognise that dispute—so it is at their discretion whether they consider something a dispute, which would trigger the mechanism. There is also no mechanism in any of the dispute resolution processes that could bring about the automatic annulment of a piece of devolved legislation, which is what the powers under this legislation would bring about. Currently, if there is a dispute, legislation must specifically repeal a measure; this Bill goes considerably beyond that. There is no mechanism in the JMC that I can identify through which we can resolve disputes, if there any.
On the operation of this legislation, if it is decided, as a result of either a request from a CMA investigation or the position taken by the UK Government, that a piece of devolved legislation is contrary to market access principles—and that would be extraordinary but is nevertheless theoretically possible under this Bill —or if the UK Government are asked by the CMA to annul a piece of legislation that they passed on behalf of England and which is against the market access principles, through what mechanism will that resolution be made? At the moment, the Government are proposing no mechanism for that; it is simply something for another piece of legislation. We come full circle to the Constitution Committee’s report, which said that this “needs to be clarified”.
I am grateful to the noble and learned Lord for proposing these amendments. We need much greater clarity on how intergovernmental relationships will work under a JMC mechanism, if that is indeed the
Government’s position, and how disputes will be avoided in the first instance or there will be resolution at the end of them.