I thank noble Lords who have taken part. They have asked for a lot of information on the various clauses and whether they should stand part, and I will provide it.
I start with Clauses 31 to 37 and why they should stand part. As we have discussed previously, Part 4 of the Bill creates the office for the internal market within the CMA, charged with carrying out a set of independent advisory, monitoring and reporting functions to support the effective operation of the UK internal market. Clause 31 defines a regulatory provision for the purposes of the CMA’s UK internal market reporting, advisory and monitoring functions, as well as stating which of these provisions are within scope. The purpose is to establish that the CMA may undertake monitoring
reviews on an ad hoc basis, either of its own volition or at the request of other parties, including the UK Government and the devolved Administrations and legislatures. This monitoring will focus on cross-border competition, investment and trade, as well as access to goods and services.
There are two categories of monitoring and reporting that the CMA must undertake. The first is an annual health of the market assessment that will set out trends and developments in the internal market, including levels of integration across different sectors and nations. The second is a review of the impact of the measures in Parts 1 to 3 of the Bill, dealing with the internal market system itself, to be published at least every five years. Both types of report will be published and laid before both Houses and all the devolved legislatures.
Clause 32 sets out the provision for the CMA to advise on a regulatory proposal prior to it being passed or made in law. If an Administration in one part of the UK wishes to do so, it may request non-binding advice from the CMA on an approach to regulation it or any other person proposes to make in the relevant part of the UK. This is on a voluntary basis but will help support effective policy development. The advice, or report, from the CMA will examine the potential economic impact of the proposal on areas such as competition and trade distortions, the impact on prices and the choice and quality of goods and services for consumers. To ensure transparency, all advice will be published and shared with all four Administrations.
Clause 33 details the CMA’s reporting procedure on regulatory provisions already been passed or made in law. The request may be made by one or more Administrations and must concern a regulatory provision applying to its part of the UK and within its legislative competence. Similarly, to ensure transparency, the CMA will publish the report soon after it is provided to the requesting Administration. The noble Baroness, Lady Bowles, asked about this clause. The clause sets out that it is for the national authority seeking the report from the OIM to consider and determine whether another body could provide advice. This is not a technical term and is simply intended to make it clear that the OIM is not intended to displace other bodies that might in theory provide more relevant advice on the same matter and, in doing so, make the best possible use of public funds.
Clause 34 sets out the reporting procedure that the CMA will undertake for regulatory provisions that are already enacted in any part of the United Kingdom and are considered to have actual or anticipated detrimental impacts on the internal market. The CMA may produce reports upon the request of a Minister in the UK Government or a Minister in any devolved Administration. The CMA must provide copies to all other Administrations in other parts of the United Kingdom, laying the report before each House of Parliament and all devolved legislatures, as well as making it public.
Clause 35 sets out the process that the CMA, the UK Government and the devolved Administrations must follow once a report has been produced by the CMA and laid before the legislatures under Clause 32. The process requires the Minister in the Administration
responsible for implementing the regulatory provision that was the subject of the report, and the Minister in the Administration who requested the report, to make a Written Statement in their relevant legislature. This supports effective parliamentary oversight, as well as prompting legislatures to determine the most appropriate subsequent course of action.
Clause 36 allows the CMA the discretion to exclude particular categories of information from its reporting on impacts on the internal market. The discretion to exclude some categories is not novel or contentious, and is used by public and private organisations to protect commercial and private information about an organisation or a person. This discretion is necessary in specific circumstances to provide assurances for business and individuals’ interests.
Clause 37 requires the CMA to publish general advice, information and guidance about how it expects to approach the exercise of its monitoring, advisory and reporting functions under Clauses 31 to 34. This mirrors existing requirements in the Enterprise Act 2002 to publish documents, as the UK’s competition authority, on how it works to promote competition for the benefit of consumers, both within and outside the UK.
I turn to Amendment 134, which seeks to delete the phrase “from time to time” from Clause 31(1), which deals with the CMA’s ability to produce ad hoc reports on matters it considers relevant to the effective operation of the UK’s internal market. The Government agree that it is essential for the CMA to undertake reviews and report on matters it considers relevant to the effective operation of the internal market. However, the Government believe that it is also important that, as an independent body, the CMA should not be under pressure to frequently produce ad hoc reports, which is what removing this phrase “from time to time” would imply. As Clause 31(5) and (6) make clear, the office for the internal market will produce regular reports on the health of the internal market; it will therefore be well placed to make the right judgment on the need for the production of other reports.
Amendments 135 and 137 would require the CMA to conduct reviews only into what are called “important” matters, and that only the UK Government and devolved Administrations may request a review from the CMA. The Government appreciate the intention of these amendments, which is to ensure that the CMA is not overburdened by expectations in relation to reviews. However, the CMA is experienced in the matter of reviews and should not have its work impeded due to debates as to what constitutes a “matter of importance”. Furthermore, it is important that all stakeholders with an interest in the internal market should be able to request that the CMA undertake a review. This in turn will help to maintain stakeholder confidence in the independence of the OIM from the UK Government and the devolved Administrations.
Amendment 144 seeks to amend Clause 32 by inserting the word “entirety” to ensure that the Secretary of State can request advice and a report from the CMA on matters relating to the whole of the UK, not just a part of it. The current wording of Clause 32 aims to capture that reporting made possible by the
clause is limited only to devolved regulatory competence. In the case of the Secretary of State, this would mean England-only legislation by the UK Government would be in scope of Clause 32. The effect of the amendment would be to extend the scope of Clause 32 to capture powers being exercised for the whole of the UK by the UK Government. To support the effective operation of the internal market, the office will need to focus its reporting and monitoring on areas of regulatory divergence across the UK. If regulatory measures apply UK-wide, the same risks to the functioning of the internal market will not feature. It is therefore vital to narrow the focus of the reporting in question to regulation that covers only a proportion of the UK and could pose an issue to the functioning of the market.
I turn to Amendment 145. The purpose of Clause 33 is to enable the CMA to produce reports on the impact of regulatory provisions which have already been passed or made into law. This procedure is voluntary and can be requested by an Administration, solely or jointly, in all parts of the United Kingdom, in relation to a regulatory provision applying to the relevant part of the UK and within its legislative competence. The Government understand the concerns around transparency, but the aim of subsection (2) is to ensure that the requesting Administration consider whether any other person or body is also qualified to provide an independent report on the matter before a request to the CMA is made. It is important to consider whether any work done by another person or organisation would put the CMA in a better position to provide advice to an Administration and for this to be taken into account and considered before a request to the CMA. This is a pragmatic and wholly sensible approach and ensures that the CMA’s resources are best directed at requests for advice, monitoring and reporting where it has the relevant expertise.
Amendment 146 advocates for the removal of subsection (4) within Clause 35. This clause requires the national authority responsible for implementing the regulatory measure that was the subject of the CMA’s report to then make a written statement in the relevant legislature. This amendment would remove the obligation of laying a copy of a written statement before each House of the UK Parliament. This would clearly result in inconsistency between the UK Government and devolved Administrations in accountability to their respective legislatures. We believe that this change would result in a democratic deficit and the loss of accountability towards both Houses of this Parliament.
Amendments 147 and 148 would require the CMA to consult stakeholders before preparing advice and information about how it expects to approach the exercise of its functions and revising or withdrawing any advice or guidance. Clause 37 mirrors existing requirements in the Enterprise Act 2002 to publish documents, as the UK’s competition authority, on how it works to promote competition for the benefit of consumers, both within and outside the UK. As a matter of good practice and maintaining effective working relationships with a range of stakeholders, the CMA already undertakes extensive consultations with stakeholders in respect of its existing statutory duties before publishing advice and information. The CMA
will be maintaining this approach in respect of the advice, information and guidance it publishes under Clause 37. In light of this reassurance, and to safeguard the independence of the CMA, the Government do not think it is necessary to compel the CMA to do this, as proposed by the amendment.
Amendment 151 seeks to amend Clause 39 to explicitly require the CMA to consult the UK Government, the devolved Administrations and other relevant persons in preparing or revising its statement of policy in relation to the enforcement of its information-gathering powers. Clause 39 allows the Competition and Markets Authority to take actions in response to non-compliance with the information requests described in Clause 38. To ensure that its penalties regime is fully considered and proportionate, the CMA will be required, as it already is now under its existing statutory functions in relation to the Enterprise and Regulatory Reform Act 2013, to consult other parties as it sees fit when developing or revising its approach. I can assure noble Lords that, in practice, the UK Government and the devolved Administrations would always be consulted as a duty on the CMA as it stands in the Bill. The noble Baroness, Lady Finlay, asked about compelling devolved Administration Ministers to give information. We can give DAs information notices, but they cannot, of course, receive any penalties for non-compliance.
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I turn to Amendment 152, which seeks to amend Clause 40. It would require the Secretary of State to obtain the agreement of the devolved Administrations before specifying in regulations the maximum level of financial penalty in cases of non-compliance with an information-gathering notice from the CMA. Clause 40 as it stands sets out the penalty regime for non-compliance with the aforementioned information-gathering powers. It is vital that the CMA, acting as the OIM, has access to credible, accurate and comprehensive information sources to fulfil effectively its internal market functions.
Clause 40 directly mirrors Section 174D of the Enterprise Act 2002 ensuring consistency of approach in respect of financial penalties across the CMA’s existing functions. The Secretary of State will therefore make regulations specifying the maximum amounts in practice for these penalties in consultation with the CMA and other interested parties. Again, I can give noble Lords, first, the reassurance that the Government are committed to not taking any steps to bring the financial penalties into effect by commencing the clause until there is clear evidence that there is a need to do so. Secondly, the clause requires the Secretary of State to consult with other relevant persons before making the necessary regulations. I want to confirm that the devolved Administrations would of course be fully consulted as part of that duty.
In the light of the various reasons and reassurances that I have given, along with my explanations in some detail of the purpose and reasoning behind the clauses, I hope that my noble friend will feel able to withdraw her amendment.