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.
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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.