 Fforydd ddiddordeb. Fforydd ddiddordeb yn ystafell 23 diwrnod y Baeth Cymru. Mae Cymru ymwyfyr ar y Cyntafol Llyfridog yn 2023. Yn ystafell yma yw ein bod yn cyflaen o ddet�ol, gan weld o grwp hyn arweithio gyda gweithiwr, aregwyd yn ystafell i ben Macpherson, Alistair Allan i Moir Sgylgedd yn gyfliadau'r cysylltu i fynd iawn a chweithiwr yn ystafell i ddweud i'r newid oed. A fforydd fwyaf yma, Iam Kate Forbes, Keith Brown i I want to invite you to eat to make a relevant declaration of interest. Kate, can you start with you? I don't believe that I have any relevant interest to declare. Alexander? I have none other, but I'm delighted to return to this committee. I sat one of those for years in the past session, so I look forward to it. Thank you very much. I'm not aware of any direct interest, although I should, in the interests of transparency, say that my partner is the Minister for Culture, Europe and International Development. Thank you very much. Our second agenda item is the decision on taking business in private. Can we take agenda item 4 in private? Thank you very much. Our next agenda item, I can just point out that we're joined in a hybrid meeting. Our deputy convener, Donald Cameron, is joining us remotely, so, hopefully, we'll be able to manage questions and interactions on that basis. Thank you once again to the Office of the Internal Market. We have Murdo MacLennan, chair of the Office of the Internal Market, and Rachel Merrily, senior director of the Office of the Internal Market, and a warm welcome to committee. I wonder if I could open questions with just... What? My apologies. Can we have an opening statement from you? Good morning, deputy convener and committee members. For those who don't know me, I'm the panel chair, Murdo MacLennan, panel chair of the OIM. Rachel Merrily is the senior director of the Office of the Internal Market. Rachel, I really welcomed the opportunity to meet with you this morning and to update the committee on the recent work of the OIM and with the committee's permission. I just want to briefly set out some key points. It's only a couple of minutes, but it's a helpful background. As the committee is aware, the OIM launched in September 2021. Our role is to assist Governments, legislatures and other key stakeholders across the UK in understanding how effectively business can trade their products and services across the four nations and the impact of the regulatory provisions on this. Our advice and reports are non-binding. The OIM is not the regulator of the internal market and, unlike other parts of the CMA, we have no enforcement role here at all. The OIM also works even handedly in relation to all four Governments. It's also about mentioning that the Northern Ireland protocol matters are really outside our scope of the functions under the UKM Act. Since our last evidence session before this committee, which was in January 2022, the OIM has achieved several milestones. We published our first monitoring reports on the operation of the UK internal market and the effectiveness of the UK internal market regime. The reports are the first of their kind on the UK internal market. We've also published our intra-UK trade data strategy roadmap, which looks to promote the collection and publication of intra-UK trade data. I'll come back to this again and again in the meeting that I made because we're trying to build up as strong a database as we possibly can to make not our job easier but to make it more relevant to the Governments. We continue to have excellent engagement with businesses and other stakeholders in Scotland, including Scottish Government officials, and just to register, convener, if I may, our sincere gratitude to the amount of work that they put into that, too. They've been very, very helpful. The OIM has developed open, equal working relationships across the four nations, and we welcome our on-going engagement with and invitation from this committee to appear today. I hope that's helpful as a sort of intro. We're very happy to answer any questions, and then I'll be coming back and asking for some help and support, if I may. Thank you very much. That was indeed helpful, and I'm sure that it's a scene for our deliberations today. I wonder if I could open with a question that has been an area of concern raised by this committee, as a scrutiny committee of the Scottish Parliament in terms of the transparency around the common frameworks as they tend to be done at officer to officer level. It's difficult to scrutinise the development of common frameworks and to understand exactly what negotiations have taken place. We'd be interested to know if you're aware of those concerns that I know were shared across some of the other legislatures. To understand, I believe that you issue a questionnaire asking about whether exclusions from the market access principles have been requested or granted, and I was wondering if there was an intention to publish that data to make it available to the parliaments. Shall I pick that one up? Thank you very much, and I also welcome the opportunity to be in front of the committee today. I mean, common frameworks, first of all, to take a step back, I suppose. We recognise that they're a really important way in which regulatory divergence or, indeed, regulatory alignment between the four nations can be managed. But we're very open to supporting the process so far as our statutory duties allow. I think in our periodic report, we flagged up the question of transparency, as you rightly say. We found when we were gathering evidence at our roundtables that a lot of people were not aware, particularly on the business and trade association side, people were not necessarily aware of the common frameworks that they were. They didn't really have a lot of information about what those common frameworks, what the discussions were about and what the key issues were that were under consideration. So we'd certainly support your suggestion that there should be greater transparency. Obviously, it's not for us. It's not our process. That's something for the governments to think about. But we certainly support the idea that there should be greater transparency. There's something that's really important in our work in general. There's always a trade-off between transparency and confidentiality that needs to be taken seriously. As the CMA, we're very used to carrying out that balancing act. But our default is to be transparent. It's something that we feel strongly about because we think that that way we get the best inputs and we get the best evidence, which, as Murdoch said, is something that's really important to us. In terms of the publication of some of that data, is it an indication that you might actually publish the request or some data around the number of requests? You're talking about exclusion requests. Yes. Those are not really for us to do. The exclusion requests are things that come through the common frameworks process and are managed by the governments. Obviously, when we do our periodic, our statutory reporting, we're interested to understand how well common frameworks are working and, as you've seen in our last report, we have published the information that we've gathered across the four Governments and, as I say, from a range of different stakeholders about how that's happening. Thank you very much. I'll move to questions from the committee. Any kind of advice for Mr Bibby? Thank you, convener. Good morning to the panel. The report repeatedly mentions issues with businesses not understanding or appreciating that regulatory divergence could occur across the UK. Is there or could there be more work done to educate businesses and those likely to be affected on that possibility? That's a very good point. Certainly more can be done. I think that if you're in business, you don't really worry about anything. If you're trading effectively across the four nations, then why does no problem? So don't get concerned. For the future, yes, it's important that they understand. I think that the trade associations and the contact that we've had with them has been very effective. They get it and some of the larger companies get it. Basically at the moment, that's very early days for the OIM. But as they don't have any problems really trading across the four nations, they don't show a great deal of interest in that particular point. As time moves on, it's a certainty. That's one of the things we'd appreciate your maybe helping guidance about how to get in contact with the business world on a broader base. We have plenty of engagement at the moment, but it's never enough. That's probably one of the most important aspects of that at the moment. We're working on it. Thanks for the work that you are doing on it. I know what you've said about the engagement that you are carrying out with Scottish Business. Are you concerned, after three years of the UK Internal Market Act, that there is still a lack of understanding? If you're in business, you're too busy trying to trade effectively, part of our job is to make sure that companies across the four nations can trade effectively unencumbered for the benefit, not just of their businesses, but the benefit of consumers and to keep competition going. It's just early days. It's not a problem at the moment. Do you think that the primary reason is that companies have been operating on the basis of a single market across the EU and they're assuming that the UK Internal Market is operating with the same standards across the UK? Do you think that that's the primary reason why there's a lack of understanding about it? It's just that assumption. It's not so much the assumption, it's just the basic trading. If you don't have any barriers to trade, then you're not bothered. That's it. Maybe I can just interject for a moment because of course we gathered quite a lot of evidence from businesses as part of our statutory reporting. As Murdoch says, the vast majority have no issues trading across the UK. I think we said something like 15% trade across the nations and then of those only less than 10% flagged up issues with differing regulations. Murdoch's absolutely right that the vast majority can trade seamlessly. A lot of businesses I don't think even think about the fact that they're trading cross-border. They have no particular reason to do so. I think it's something that will become more evident as time goes on and obviously there hasn't been a huge amount of regulatory divergence either since post-transition but as that builds, if it does, then that is something that they will need to be more aware of. Thank you. Can I bring in Alexander? Can I just have a supplementary on Mr Bibby? You've talked about data and I think that data is vitally important here. Trade associations and federations may collect that for their own sectors. How well do you manage with that because, as I say, some sectors are very proactive in ensuring that they have the data for their own sector but others do not seem to have that robustness and it's trying to manage that so that there's a much better understanding because even as you identify in different parts of the country some federations and organisations are much more robust at putting that together. We use the data and volumes of entry UK trade as a priority indicator basically you're right assessing the effectiveness of the market but again, it's early days we put this as a major priority for us because that will improve our effectiveness. There is a resource for you for businesses for other stakeholders and that's the way we see ourselves operating very much on an even handed basis across the four nations. Can I bring in Mr Cameron? Thank you Thank you, convener Also a question on data and I'm very sorry not to be there in person I should add a preface my question with that I was very interested in your experience of finding data on intra-UK trade and in your report you said that the available data on intra-UK trade was limited with long lags and no data at all for England and you also mentioned inconsistencies in the way data is collected so I'd wondered what Governments can do to improve that or how anyone really including businesses can do to improve that and a more specific question about the data strategy roadmap and the Scottish Government's commitment to publishing single export statistics and whether we need more regular statistics on exports for Scotland than that which is currently promised I'm happy to pick that one up as Murdoch says this is a very important area for us and we believe that we can add value by bringing together the data and evidence that already exists and helping to improve that and as you refer to we published our data strategy roadmap alongside our statutory reporting in March we've been working very closely with the Office for National Statistics and the equivalent bodies across the nations so we've been bringing together the national pictures that do exist as was referred to though we do recognise that the data that we collect that has been collected so far isn't collected on an entirely consistent basis and the Office for National Statistics is trying to bring together the experts to first of all put forward a sort of experimental methodology for having more consistent data between the nations and then to populate that methodology so by the end of next year we hope we'll have better data across the nations it won't solve all the issues partly because we're relying to a large extent on survey data rather than customs data that is mandated so it's more of a voluntary process but we are trying to build in a number of different sources to get a more robust picture of trade across the nations because we do think that's very important Did you want to come in? I completely agree with Rachel at present there are significant limitations on the entry UK data that you pointed out between the nations the development of the entry UK trade data is absolutely vital for us so the strategy roadmap that we've produced sets out the initiative by partners including the Scottish Government the ONS that can improve the collective understanding here so the purpose of that is to act as a catalyst for the improvement on this evidence base and it's really building that up it's going to be very helpful for you and all of us Thank you Mr Cameron Did you want to come in again? The only, I mean the question on export statistics Scottish export statistics I wonder if we need to try and achieve more regular publishing of that if that's feasible I don't know if that's feasible but you may have an observation on that or not I'm not sure I mean anything that can be done to improve the data is certainly to be welcomed Thank you Thank you I'm wondering to what extent you still have an eye on the European Union because arguably European Union is the world's most successful single market which manages a degree of regulatory divergence between member states within that market do you still look across to Europe to see how good practice is developed, how businesses are managing regulatory divergence within sectors and what can we learn from that? Yes, I'm happy to pick that up I think there are things that we can possibly learn from a number of different single markets the European Union clearly being an important one we also I think had a brief look at Australia, Canada, Spain and a number of different federal organisations nations I think the internal market within the UK does have some specific characteristics and we started from a position where we were pretty unified and that does play into the way in which the internal market operates so certainly it's very it's of relevance and anything that anybody would like to flag up that we can learn about how that is relevant to the operation of the internal market we're very open to so I think it's a good question and something that we are we do keep an eye on but probably no more than an eye because I think the relevance we have to be we have to think carefully about the relevance of lessons there for the UK When you're working with businesses I mean other particular scales or types of businesses that are more integrated within that European market who perhaps have got more experience of working within different territory set-ups I was just thinking about it because you mentioned in your report about deposit return schemes and we've got different DRS schemes operating across member states in Europe I guess some companies will be supplying to any one scheme some will be working across the continents that are engaging in different models so I'm interested in what business sectors are particularly adept at working within that larger kind of internal market which are perhaps got concerns around divergence if they're working to one particular market but not others It's a really interesting question and we I suppose that what we've prioritised so far are the sectors in which we've seen the most potential for divergence within the UK but I think quite often they will also be sectors that have experience of trading across the EU there's no doubt so I think we flagged up in our report that the environment food and drink agriculture a couple of others are really important areas to us and certainly talking about something like the deposit return scheme we would want to learn to the extent that we get involved in any work on the deposit return scheme we'd certainly want to learn lessons about how that operates in other countries I was thinking about how we would have been used on that basis but the deposit return scheme or in fact any other a new item of business that comes up before you consider putting something into legislation it's worthwhile asking the OIM this is a sales pitch really for the technical advice the paid report that we produced that's the only report so far that we produced gives a very good indication of the quality of work from economists from on the legal side as well so the technical support that's offered there is considerable so I would implore people to think about that as a as a resource an important resource to look for information to the committee and to the government the great thing is at the end of the day you don't have to take the advice but the technical advice is there to be used that's the best way of looking at the OIM does that advice then get fed into the common frameworks process are there particular issues around single-use plastics or anything else would you offer that advice or have you been asked so the people who would come to us asking for advice would be one of the governments and it's of course for them to work out how to use the advice that we offer but it certainly could be fed through into the common frameworks discussions it certainly would make sense for that to be the case that's the important part just back to the question of transparency that would be helpful in that sense I suppose the last question is just about the value of having divergence in different markets is that something that comes through at all in the evidence that you get from businesses is it just seen as a barrier or is it about saying well actually there's maybe a different market for this product in this particular area is there value in that kind of diversity within markets or is it just seen as a well it's all a bit of a pain having different markets operating in different places I think it's really important to recognise that divergence can be both a benefit and have some downsides clearly businesses want to be able to trade seamlessly across the UK and that's some of the issues that we look at innovation for example and I think we pulled out a couple of examples of that in our report the trialling of the charge on carrier bags in Wales the smoking ban in Scotland so there are things that I think can usefully be trialled in individual nations as part of a sort of innovative process and then taken on board more widely okay thank you very much miss Forbes Mr McLean mentioned in response to Neil Bibby the fact that most businesses don't think of trade barriers when they are trading quite freely I suppose reflecting on the last few years there has been a huge amount of upheaval which may have more commonly than in other times pushed businesses into new markets so for example whether that's rising costs Covid or indeed trade barriers associated with Brexit might have encouraged Scottish-based businesses to trade more within the UK having been trading within the EU and vice versa I can think of one business in my constituency that used to trade primarily in the UK that now trades in Europe and I can think of one that has done the opposite so in that sense you've obviously taken a lot of qualitative evidence from businesses and come across that a lot where businesses are having to adjust to operating within the UK that might have been trading more frequently in Europe and having to deal with some of the challenges that that brings across the UK it's a really interesting question actually and I don't think we have had a lot of evidence to that effect but would be really interested to hear from businesses who were adjusting to trading within the UK but I do take your point one thing that we did hear from businesses or certainly through the independent research that we commissioned as part of our statutory reporting we heard that businesses were more accustomed now to dealing with regulatory change obviously with the position with the EU they had increased their agility I think it would probably be the way they would have looked at it and therefore if they encountered issues within the internal market they felt that they were better equipped I think that was certainly true of larger businesses I think smaller businesses perhaps have more challenges in that respect okay and my second point was around again this notion of raising awareness you mentioned that the issues on which you received the most submissions are probably the issues that have been most widely in the press and whether the fear perhaps that's created by some of the press creates more concern amongst businesses that may actually be reflected by the genuine trade barriers that exist thinking of anything in particular? I suppose that your reports obviously considered five areas glue traps, food and drink, genetic technology single use plastics to positive return scheme, all of which are perhaps more in the press than other issues you are one of the major stakeholders so you would bring that to our attention and ask us for advice on that we don't react to the press so it's the unit on the OIM is technical support but at very high quality support in that sense and if you raised it with us and asked us to investigate it then we would look at that and take it very seriously My question was more about the quality of evidence that you've taken from businesses in terms of what they've expressed to you you know do concerns largely get raised on issues that are a focal point in the media or are they largely because of direct experience that businesses have had? Well my experience of business it's more the effect on the company I would be running than the media certainly from my experience I wouldn't pay too much attention to that It does I suppose raise awareness in a way that you are saying needs to be done in your earlier comment Yes it does in the sense that when I was saying we were looking for further assistance on the data collection side that's true I wonder if I could just ask a supplementary on Ms Forbes question with around the issue of businesses that have been agile and pivoted we're also unfortunately aware of a number of businesses that have ceased trading as a result of this and I wonder on the right data on the number of businesses in particular sectors or the size of the trading in those particular sectors to try to understand if businesses are just ceasing to trade at all as a result of post-Brexit relations? It's a good question going back to the question of what trade data we can collect at the moment at a national level it's been tricky to get data by sector or by region at the moment but we're working to get more granular data and that's part of the kind of road map that we've set out Thank you Mr Brown Thank you very much I'm new to this I have to say but just listening to it and also to your point that started off with a more unified situation I suppose the implication of which is that we're about to become less unified or experience more diversity or divergence and it does seem a little bit absurd if you've started off in a single market and now you're going to what even by its name appears to be a much more insular approach of an internal market if it's been a single market previously surely the benefits were there in the first place and do we need to have bureaucratic superstructures that are regulating or seeking to monitor a situation where we had a single market before it just seems odd that we'd have to do that If everyone was trading effectively and there were no issues across the four nations then yes, there's no need but as I think you'd understand there could be some serious divergence going forward into the future and we are there as a back to the business of being a technical support not making decisions on that rest entirely with Government Just on that I'm trying to be helpful here you've mentioned suggestions about meaningful data and so on one way that you could perhaps build that whether it's at your own hand or through others is through an examination of the approved lists of public bodies so contractors are successfully placed on the approved list of public bodies information which is probably more easier to gain than elsewhere and the purpose of that would be of course to say that if innovation and efficiency are rewarded then you would see huge numbers of Scottish companies servicing Welsh local authorities or English serving Northern Ireland and that might give you a better indication especially how it develops over time as to whether the internal market is working more efficiently so I wonder if it's possible to either see yourselves maybe O&S to get that kind of data and to monitor it over time whether it's through or otherwise That's really interesting I'm not aware that we've looked at that today but we'll certainly take that away and think about it, thank you Okay, one last point and this is counter to the last point you just made but that's the way that I think of these things there's also a fairly developed movement of, I forget the term of it it's not quite a circular economy but it's seeking it's a north of England area and it's spent by public bodies it's spent in a local area, recycled if you like and I don't know whether that would be termed as divergence or not but is that something that you've either come across or you would take into account in these figures because there is quite a strong movement across having moved from CCT decades ago to best value and now to a more liberal regime more recently in the last 10 years to say that local authorities can place a contract with somebody who's not given them a cheapest price but there are wider benefits from placing it with that company I suppose that kind of works against the idea of an internal market, is it just to see if it's come across your radar yet or not No, not really our focus is very much on regulatory divergence or alignment rather than in terms of the money spent so I suppose it's quite maybe one answer to that but no, it's something that we haven't done so far I think that you're right, it probably wouldn't come under divergence but it certainly would come under the efficient operation of an internal market In the report you talk about the actions of Governments across the nations when it comes to food that may be high in fat sugar and salt content and the future divergence may come from that that may well create some real difficulties going forward because for certain businesses and for certain manufacturing or supply bases they may then have to deal with different processes across different locations How do you see that going forward as a possibility or is it a real issue that is going to become much more apparent as time progresses It's a good question and it is an area that we're interested in looking at more closely I think that we as you say, there is scope for divergence between the nations about the way in which promotions or labelling or other things take place so it is something that we're monitoring quite carefully I don't know, did you want to come in on that? From that I think that the possibilities of having different locations and different things happening may well become a real issue for the market and for the supply and also for the consumer depending on what they wish to take and how they wish to plan that I'll be interesting to see what data you may well create from that from the future Yes, it's certainly something we may well return to in our next report I'm looking out to see any other hands going up I wonder if I could have a final question and we've just been discussing our committee this morning about the EU tracker and the ambition of the Scottish Government the Welsh Government to keep pace with European legislation and the requirement on Northern Ireland to do so anyway and I just wondered if it's something you are considering or something it would be possible to actually look at the trends as to where the internal market act and divergence is happening if you see a pattern in health or environmental issues or indeed in product development or in the food and drinks industry and is that something that you would be hoped to be able to report on in the future? It's certainly the idea that we track or we identify trends that are where there's more divergence that's what we start to pull out in our statutory reporting already and we'll get more information on that as time develops so it's certainly something we're interested in it's not necessarily divergence from the EU but that may well then have an impact on the UK internal market so to that extent we'll certainly be picking up those trends over time Any final questions? Mr Brown Donald Cameron raised about the figures which are there for in that example of Scottish exports I think you'll find there are huge numbers of very key figures in the economy which really rely on pretty will be survey data and that's true across the UK and I think in Scotland's case we often have to rely on DFT or whatever they're called and HMRC for some of the figures but Donald Cameron's point is true the figures are very woolly which seems really surprising for a so-called advanced economy in the 21st century but is it part of your intention to see if you can start to not just in Scotland obviously but across the UK start to nail down those figures? Yes absolutely I mean that's the conversations that we're having with the various expert statistical bodies across the UK to try to get to improve our collection so yes absolutely I think that's exhausted conversations from the committee this morning can I thank you once again for your attendance at the committee it's been really helpful and no doubt we'll be seeing you at some point in the future again and on that note we'll go into private session absolutely yes absolutely Just a small point because we continue to engage and if the committee have any ideas of other stakeholders that we could talk to I mean we've been involved with the Institute of Directors Food and Drink Federation Federation of Small Businesses Law Society the National Farmers Union so that engagement's a key part of our work but you're closer to it The Senate very kindly pointed us in the direction of the royal wealth show to engage with their businesses in that fashion so anything you can think of would be helpful but just to say again we are a resource to be used and it's not saying it you'll be silly not to use it when you're putting things into into law and even after you've done that and at the end of the day the committee doesn't have to take the advice of the OIM but it's there to be used if needed That's extremely helpful we'll put our collective heads together in terms of what this committee might do but also we have a conveners group for all the subject committees all the conveners of the Parliament that our report to them might be helpful to engage with the subject committees who generally will do much more in-depth analysis of their sectors and what might happen than the constitution committee in itself so we'll take that on board and we'll feed back to you