Legislation, Justice and Constitution Committee

If possible, Chair, then perhaps a brief introductory statement, if you're happy with that.

Yes.

Thank you. Diolch, Chair, and thank you to the committee for giving the Office for the Internal Market the opportunity to come and give evidence and talk to you today. I'm Tim Render. I'm one of the panel members of the Office for the Internal Market. It's a pleasure and bit of a sense of déjà vu to be back here today. Previously, I served, obviously, as the director of the environment and rural affairs in the Welsh Government, so I'm familiar with some people around this table, and some of them from previous roles in committee. And James joins me, as you say, as one of the directors, one of the officials, in the Office for the Internal Market. I hope that what we can do today is update the committee on our recent work, which builds, I think, on the evidence that colleagues gave to you, or to this committee—I'm not sure, but, Alun, I think you were a member, but everyone else is new—in June of last year, and I'd like to just add a few of the key things.

I think, as you're aware, our role in the Office for the Internal Market is to assist the four Governments across the UK, legislatures, businesses and other key stakeholders in understanding how the UK internal market is operating and the impact and potential impact of regulatory provisions on that internal market. Our aim is to be an insightful and trusted analytical resource that all four Governments can rely on, when they need it. Our advice and our reports are not binding. We are not a regulator of the internal market and we have no enforcement role. We're technical advisers.

Since we last gave evidence to this committee, the OIM has produced its latest annual report. We're required by statute to do that every year. We provided an update to our data strategy, and, very recently—indeed, last week—brought together officials and stakeholders from across the UK and, indeed, internationally, to discuss how, collectively, we can improve the data collection in this area, which is challenging, I think it's fair to say. We've also launched a project on single-use plastics, which has been one of the areas where we have actually seen regulatory divergence already across the UK—one of the few areas. Hopefully, the OIM has been strengthened by the appointment of its panel in November. There are seven of us, as panel members, with a variety of experience from across the UK. As some of you know, my experience is in policy making and delivery, particularly in economic development, environment and food, and I've worked across the UK Government and the Welsh Government. Across the panel, we've got the experience of professional economists, trade and competition lawyers, academics, regulatory backgrounds, and people like me with experience of working across all four Governments—two members from Scotland, two members for Wales, one from Northern Ireland and three from England, which, I think, provides a very good balance of interests across the whole of the United Kingdom.

We continue to have good engagement with a wide range of stakeholders in Wales and with officials in the Welsh Government. We aim to work even-handedly across all four nations, and it's been important to look to develop open and equal working relationships across both the Governments and more widely, and engaging with you in this committee is an important part of that, and hopefully, as we move forward, we can expand the portfolio of work to give a richer picture of the operation of the UK internal market.

Central to that, in March of this year we published the annual report for 2023-24 on the operation of the UK internal market. That's the second annual report. It has expanded the coverage of the internal market, especially about the scale and nature of the trade, and to include for the first time analysis on services sectors and the regulated professions as well as goods sectors. That's really the first time we've been able to do a detailed analysis of the potential scale and scope of areas where there could be regulatory differences flowing from devolved policy making. That includes finding that, in trade in goods, it is perhaps 95 per cent of the trade in goods for Wales, and perhaps 60 per cent of trade in services, that are potentially subject to regulatory difference. So, it's potentially quite a major impact, and I think that deeper analysis of the operation of the internal market is giving us a richer, clearer picture than we've had to date.

We also found that there had not been a substantial change in the operation of the internal market over the past year. Very few businesses are reporting challenges in doing business across the UK because of regulatory differences to the different parts of the UK. We've looked at four case studies, which I hope we can discuss in more depth a bit later. Those, I think, give a better understanding of how businesses work with the regulatory differences that are arising or are likely to arise in the relatively short term, and I think they give some useful insights for policy makers that should be able to impact on how policy is designed to understand its potential impact on the internal market. That more sophisticated understanding, especially of supply chain impacts, some of which, frankly, are quite unexpected, I hope can help policy makers in all Governments better assess the impact of the regulatory proposals they're making.

We continue to work on the data strategy—it’s challenging, as I said, and it's really important—working closely with all Governments and the Office for National Statistics. The goal is to build a clearer, more detailed picture of how the UK internal market operates, including from the perspective of businesses and consumers. Progress is reflected in the annual report’s analysis—the first time we've really been able to bring that data together—and more detailed data, I hope, will be produced later in the year, but there's still work to do.

And finally, we've recently launched a study into the regulatory restrictions on single-use plastics in the UK. It builds on the case study, but exploring in more detail the themes on businesses’ responses to regulatory changes in this area. We chose it because it's a chance to explore an area where there has been regulatory divergence and where there is more in the pipeline. So, we can see what the real-world responses of businesses have been, as well as looking at potential future impacts. Again, I think the insights that we hopefully derive from that should be able to help policy makers better assess the impacts and so design policies more effectively for the legislation that is made by the four Governments.

I hope that's a helpful introductory overview, Chair. Very happy to answer further questions in detail.

Thank you very much. I'm sure it's knocked out a few questions, actually.

Oh, shame.

Can I start? How do you ensure that you're engaging effectively with the Welsh Government when undertaking your duties and preparing your annual report?

I'll ask James to deal with that, because, obviously, most of the engagement is at the official level. So, James.

Thank you, Chair. So, I'll talk first of all generally about our engagement with the Welsh Government, and then talk more specifically about the work we did with Welsh Government colleagues in connection with the annual report. In terms of that overall general engagement, we have four Government multilateral meetings about every six months, which is an opportunity to bring together officials from all four Governments at a relatively high level to talk through progress on our work programme. Additionally, we have various bilateral meetings with each of the Governments, including the Welsh Government, usually on specific projects. So, in the run-up to the launch of the single-use plastics study that Tim mentioned, we had meetings both with the constitutional officials in the Governments and also the relevant environmental policy officials.

Specifically, in relation to the annual report, again, we built engagement around the annual report into our multilateral meeting and into various ad hoc meetings as well. We issued a set of written questions to each of the Governments asking for their views on particular topics, and that, in turn, informed the content of the annual report. I think, overall, since we launched in September 2021, recognising the quite difficult context in which the United Kingdom Internal Market Act 2020 came into being, I think we've made some real progress with all four of the Governments in building some quite strong, open and trusted relationships. I'm quite pleased with where we've got to over that period.

Thank you very much. How has the OIM engaged with stakeholder organisations in Wales to raise awareness of the office and the UK internal market Act more generally?

Shall I pick that one up as well? So, thinking more broadly about other different types of stakeholders, obviously, we're very happy when asked to give evidence before different committees across the four nations. Earlier this year, the chair of the OIM panel, Murdoch MacLennan, and one of my staff colleagues, James Macbeth, gave evidence to, I guess, if you like, the counterpart constitution committee in the Scottish Parliament about very similar topics. In Wales specifically, earlier this year, I took part in an event at the Welsh Parliament sponsored by the research team, which was a really good opportunity to meet with different business groups, academics in Wales. The now Deputy First Minister of Wales was present at that event—obviously, previously, Chair of this committee.

In terms of the business group and third sector organisations that we engage with in Wales, we look to have meetings with your typical main trade associations and business groups. We've had various ad hoc meetings with academics who've got interest in the UK internal market regime as it affects Wales. So, generally speaking, although we are a relatively small team at staff level, we look to have a fairly balanced programme of engagement across all four nations.

Okay. Thank you very much. And finally at this stage from me, how could awareness amongst businesses of the UK internal market Act and its market access principles be improved? Do you see a role for the Office for the Internal Market in this?

I'd start, Chair, and say that our findings basically have been that awareness of market access principles among businesses is low, or probably very low, actually. And that, I think, remains the same. The largest businesses have some knowledge, smaller ones probably less so. We are not aware of anybody consciously using market access principles or invoking market access principles, and there is certainly no case law around that. So, yes, there is an awareness issue.

Is it the role of the Office for the Internal market to do that awareness raising? We're advisers, not advocates, so I think we are raising awareness probably indirectly through helping people understand how the internal market operates, how it's structured. So, things like the annual report give that overall picture, but are we out there shouting from the rooftops, 'This is what market access principles are, this is how you might use them'? No, and is that our role? No. As I say, it's that advice, creating the understanding of the picture, which, I think, remains fairly low.

Okay. Thank you very much. Natasha.

Thank you very much, Chair. Good afternoon, gentlemen. I just took what you said on board, Tim, with regard to the fact that you are advisers and not advocates, but how have you worked with the OIM panel to ensure that they are aware of devolved legislation and policy?

I think that's where the panel is important. As I said in the introduction, I think the panel members—. To be honest, I've been involved in the appointments of a large number of panels and boards, and I think the balance that we have got on the panel is remarkably good: technical expertise across economics, law, and there are two of us with my sort of background as policy makers in devolved Governments. So, we bring that experience, and I think it's very much that the panel sees its role as ensuring that the office, the officials, are focused on those issues, and, in our challenge to the officials, we keep that sense of—. 'Are you properly reflecting the interests of all four parts of the United Kingdom properly?' is one of the things that we would be constantly asking. And also, 'Are we getting the balance right, are we being impartial?' So, in a sense, upholding those values is very much what the panel sees itself doing. We've got the expertise, we've got the reach into all parts of the United Kingdom, and can bring that into the mix as well. So, I think it is very much that the panel would see its role as making sure those issues are properly addressed, are reflected.

We have been involved in some of the meetings with officials. We are looking to make sure that the panel meets in all parts of the United Kingdom. Last month it met in Edinburgh; we are scheduling meetings in both Cardiff and Belfast for next year. So, we want to maintain that very much front and centre. I have to say, I think the officials are very sensitive to this, they are very much working to build and maintain strong relationships and be sensitive to what is going on in all parts of the UK.

Okay. And how has the work of the OIM responded to the Windsor framework and the recent publication of the 'Safeguarding the Union' command paper? A follow-up question is: does the OIM have any specific role as a result of these publications?

Shall I get James to pick that one up? Yes.

So, I think our starting point is, obviously, that our role is as an independent source of economic and technical expertise and advice to each of the four Governments, either at their request, or perhaps we might launch an own-initiative project, like single-use plastics or, as Tim's already mentioned, about our annual report, and under the—apologies, it gets a little bit technical here, but I think it's important the committee understands one or two of these features—under the internal market Act itself, we can't, at the request of any of the Governments, provide advice or report on a regulation that's necessary to implement what then was the protocol, but which is now typically described as the framework. But, obviously, that said, clearly Northern Ireland is a really important part of the UK internal market, and, certainly at the macro level, we're really keen to ensure that's reflected in our data strategy, in our annual report. So, our annual report has data about trade, not just for Wales, but also for Northern Ireland and other parts of the United Kingdom.

At this moment in time, because the Windsor framework has only recently come into effect, you can't necessarily—(a) the data doesn't exist to cover that relevant time period, and (b) we would expect that, over time, you might begin to see some effects, possibly, about the Windsor framework and its impact on GB to NI trade, but I think it is genuinely too early to say. And I think it's important the committee is aware that we don't have a specific role to either implement the Windsor framework or the commitments under the 'Safeguarding the Union' command paper. Those are commitments made by the UK Government, and we don't have a role in monitoring that implementation either. As the committee will have seen, there was an announcement of a recent monitoring body in Northern Ireland that is specifically tasked with monitoring the implementation of the Windsor framework.

Apologies, I didn't catch your second question. Do you mind repeating that?

Yes, absolutely. So, does the OIM have any specific role as a result of these publications?

Okay. Did my answer—?

You did. That's why I wasn't going to pursue it any more. That's absolutely fine. So, has the OIM provided advice to the UK—? You both mentioned single-use plastics in your introduction and also in the answer that you just gave me. Has OIM provided advice to the UK or devolved Governments in relation to any regulatory provisions over the past 12 months?

Over the past 12 months, no, we haven't. We're very ready and willing to receive requests for specific advice on particular regulatory provisions from any of the Governments, but, over the last 12 months, we haven't done such a piece of work. The one piece of work we have done like that was at the request of the UK Government, specifically the Department for Environment, Food and Rural Affairs, which was around a proposed ban on the sale of horticultural peat.

Okay. How have the market access principles affected the regulation of different sectors in Wales and across the UK?

Let me just—

Take your time. It's fine.

No, I'm just sort of—.

I think the starting point, as we said before, is that the evidence that we have taken in the specific cases that we have seen, on, particularly, single-use plastic and some of the debate around the deposit-return scheme, is that businesses were, I think, unlikely to use market access principles to address those regulatory differences. I think there's an element of thinking—and this is probably particularly from larger businesses—that might consumers and customers see that as taking advantage of a loophole, that they have brand expectations that the brand would do the right thing, and complying with regulation is seen as doing the right thing. So, that use of market access principles, particularly for bigger businesses, has substantial reputational risk, I think. And, in the cases that we have seen, they have been able to adapt in a different way, particularly by using the highest common denominator, and that's an approach that has worked in those circumstances.

I think it's fair to say that the circumstances we've seen have been where the different parts of the UK have been going in broadly the same direction—the differences have been on detail and timing, not really on substance—and they have been going with the grain of consumer feel and consumer acceptance, and therefore, in a sense, it's relatively easy for business to do that. Were you faced with a position of one part of the UK doing something radically different from another part of the UK and that not being really supported by consumers, I think you might see different responses. We haven't seen that circumstance, so I'm merely speculating, but I think that sort of circumstance would be much more challenging. And I think also smaller businesses, perhaps particularly e-commerce, trading the way e-commerce so easily and simply trades across borders, I think businesses in those areas, again, might be more inclined to call upon market access principles at some point. But, as I say, I think, at the moment, we’ve only had a few really quite limited and quite specific cases, where I think the circumstances have meant that people haven’t pushed ahead on the market access principle approach—probably haven’t needed to, even if they’d wanted to.

Okay. So, have you gathered any evidence on whether the market access principles are impacting on the desire to seek policy divergence or whether they’re impacting the way in which Governments develop policy, for example reaching inter-governmental agreements?

I mean, yes, I think that what—. For me, some of the things that are coming powerfully out of the annual report, particularly the case studies, is a richer understanding of the sorts of factors that businesses take into account as they are responding to regulatory difference. I think that, in turn, is really valuable for policy makers as they are assessing their policy choices to understand some of the potential impacts, some of the potential downsides, or the potential business reactions that might be perhaps a little unexpected or that might produce unintended consequences. At least, hopefully, you can identify what some of those consequences might be so that they’re not unintended, they’re understood. So, I think that a lot of what we’ve been able to do is to provide that richer environment that is a better understanding of how businesses might react, and that can then, hopefully, inform the policy-making and the policy conversations between administrations about potential impacts or about potential divergence. So, I think it’s in that sort of space that I think we can provide the value-add. And I think some of those conversations are beginning to happen. Certainly, as we’ve had the conversations with teams around single-use plastics bilaterally, we’ve been able to inform some of those discussions. But I think our role is very much in creating that richer understanding that then means that the policy makers and the conversations between Governments can be better focused on how to make things work as effectively as possible for all parties.

Okay. I feel like you've answered part of the next question, but I'm going to ask that, plus a sub-question that I wanted to get into. So, to what extent is there a potential for regulatory divergence in Wales to be affected by the market access principles? You did touch upon e-commerce in one of your previous answers, and I wanted to know: is this concentrated in any particular sectors or subsectors—aside from e-commerce?

I think some of it we’ve covered. In terms of sectors, potentially it’s huge. In practice, what we are seeing is food and drink, and environmental, particularly the circular economy—so, single-use plastics, deposit-return scheme; all of that nexus of issues are rich areas for potential—. Those are probably the widest. Some of the issues in the animal welfare space—. Somewhere in my notes, and I’m trying to find it, I’ve got a long list, but just to give you a few other examples, there are a few others coming in. Things on disposable vapes, for instance—again, that’s partly in that circular economy space—but also potentially things on, say, taxes on private hire vehicles, and the mandatory licensing of a number of procedures, things like tattooing, those sorts of—. They’re quite specific procedures, and whether some of those sorts of things should be licensed or not. So, there are a number of things coming through. But I think the ones that we see most prominently are in the food and drink and in the environment, but particularly the circular economy space. Those are the ones that I think are at the front of the queue.

Thank you very much for that extensive list. I do appreciate it. In relation to single-use plastics and precision breeding, what impact will the future regulations in Northern Ireland, as a result of obligations under the Windsor framework, have on the operation of existing policy in Wales and, ultimately, the rest of the UK?

So, splitting that into two, to start with single-use plastics. Under the Windsor framework, Northern Ireland needs to implement various requirements under the EU's single-use plastics directive. Principally because of the absence of an Assembly in Northern Ireland, those requirements haven't been fully implemented yet. There are a couple of things on that, though. One is that in our annual report case study, to go back to Tim's reference to a possible highest common denominator approach, what we observed is that large supermarkets, for example, who have operations across the United Kingdom, voluntarily withdrew a number of products that had already been banned in one of the nations in Great Britain from the shelves in Northern Ireland. That's not a single-use plastics directive point, it's a point about how larger businesses that trade across the whole of the UK may act in response to one or more nations' particular regulatory requirements.

Specifically on the single-use plastics directive, we are doing this study into single-use plastics that we aim to conclude probably in the first part of next year. But one of the interesting things we're hearing from businesses is that, even though it's not a legal requirement in the United Kingdom, the measures set out in the EU single-use plastics directive are influencing UK businesses' behaviour, particularly where they might look to export into the European Union. So, a practical example of that is, I think, we've probably all seen tethered caps on our plastic drinks bottles. That's not a requirement anywhere in the United Kingdom, that's an EU requirement that is influencing businesses operating in the United Kingdom.

On precision breeding, the position's different, in that in Northern Ireland, unless there is a change in the law there, Northern Ireland will continue to have its genetically modified organism legislation, as is the case in Wales also and in Scotland. In England, the position is different; there's the Genetic Technology (Precision Breeding) Act 2023 that is law, but the secondary legislation to, if you like, bring that regulatory regime into effect in England hasn't yet been developed. We understand that the goal is to develop it through the course of this calendar year. Until there is greater clarity about what that regulatory regime looks like, the businesses we spoke to as part of the precision breeding case study are, understandably, quite cautious, and they want to see what that regime looks like before they might potentially start marketing precision-bred products in England.

Thank you very much. Thank you, Chair.

Alun.

I'm fascinated by this conversation. This is a real case study, isn't it, into the interplay between policy and business regulation and the actual behaviour of businesses in the real world. What you seem to be finding in your annual reports and your analysis is probably not what we anticipated when the internal market Act was actually passed. It was a great big song and dance; in fact, I was leading some of the dancing, I like to think, about that. It was seen, I think both in London and in the other capitals, as a means of using an English battering ram, if you like, to prevent Celtic difference and divergence. That was certainly how we felt. But what you seem to be saying—correct me if I'm getting the wrong impression here—is that businesses are saying, 'Actually, we're not interested in this sort of conflict playing out between different Governments. What we want to do is to be early adopters of common high standards and actually pre-empt some of the politics and the politicians.'

Up to a point. But I think, as we've said, the real-world examples that we've seen have been very specific. I think one of the very clear messages from businesses is that they would prefer the same regulatory approach taken across the UK wherever possible. That's not surprising; that's in line with standard economic theory of minimising barriers to trade. Of course, there can be very powerful reasons for having regulatory differences, and that needs to be fully respected and acted upon.

I think, in the cases that we have seen, people have been largely going in the same direction. Single-use plastic, it basically overlaps—there were little bits here and there that one has—. The timings were six months different, but fundamentally, it was the same thing, and that's relatively easy for businesses to adapt to. In the deposit-return scheme, I think we're edging towards a similar position; that's been a much more fraught political process to move forward and it's still not clear-cut, but it's moving in the same way.

This comes back, almost, to policy design. I think there will be times when different administrations have very different policy goals and that leads to very different approaches. That's fine. I mean, that's the consequence of devolution. It needs to be recognised and understood and respected on all sides, because what we've also found is that, potentially, the impact of actions in one country might have impacts on another country in a way that was unforeseen, and which, in extremis, may raise some interesting questions about democratic accountability; if one country is legislating in a way that puts substantial burdens on others, that's quite challenging.

But also in answering an earlier question to Natasha, you indicated—. My anticipation was that, after the Windsor agreement, for example, you would see regulatory divergence between Northern Ireland and Great Britain because of the different regulatory environments. But, one of the reasons why—. Certainly my reading of your report is, 'Early days, early days; let's not run away with ourselves here', but we're not seeing that enormous divergence that, perhaps, potentially, we might have seen. But perhaps, looking at your plastic bottle example, one of the drivers is that major businesses actually want to remain within that wider European orbit and that the influence of EU regulation casts a wider, deeper, longer shadow than perhaps we'd anticipated.

I think it's certainly the case that when we've spoken to some very large businesses, they're going to have, in some ways, even global operations, so they're looking at economies of scale, they're looking at economies of scope. And therefore, if they're trading into a large market like the European Union, then they're going to want to simplify their operations as much as possible and that might mean, on that specific example, the tethered bottle caps. I mean, I would echo Tim's point about 'up to a point'. I think it is true, we say in our annual report—and this is quite a notable finding—about a reluctance, it appears, from businesses, where there might be regulatory difference, to avail themselves of the market access principles. But, firstly, that is a limited sample of larger businesses, and SMEs and e-commerce players might respond quite differently.

We've also seen some policy areas where, at first, it looked like there might be some quite significant divergence. On vapes, for example, Scotland moved first and then the previous Prime Minister moved quickly; plasticated wet wipes, there's now a four-nation consultation to ban the sale across all four nations. Both those areas could have seen, actually, some quite significant differences emerging. And, obviously, in the Welsh context, Tim's mentioned deposit-return schemes, and it's true that there has been—. Earlier this year, there was a four-nation policy statement put out, where there has been considerable agreement on some key features of each nation's respective deposit-return schemes, when they finally come into being, but there is still clearly a commitment in Wales to include glass in its deposit-return scheme, to reflect the fact that Wales is at a different point in experiencing recycling than the other nations in the UK, and it actually has had a lot of success in that space. So, there are different players, different types of players and there are different policies, and there are maybe some things where there might have been a lot of difference building up, where the Governments have, ultimately, worked really effectively together to either eliminate those differences, or to reduce them, and so it's a pretty dynamic picture.

I understand that.

I think I would say one other factor that I think has come into focus from the case studies is just how important supply-chain logistics are in all of this. The closer action is to the end consumer, the easier it is to manage a difference. The further up the supply chain, the harder. And, I think, for things like both producing different product, but actually then how do you segregate, how do you deliver, how do you monitor the fact that this product is for the Welsh market, that product is for the Scottish market, that product's for the English market, that starts to get—. And they're all made in the same factory at the same time. That's when it gets incredibly complicated. So, some of those things—. But if it's almost at the point of retail, it's much easier to manage those sorts of differences.

We do a thought experiment, which is very simplistic, but if, say, you wanted to put a new label on a food product, and one country says, 'We don't want a label at all', one says, 'We want a label with these six things on', one says, 'We want a label with those six, plus two more', actually that's relatively easy to manage; people can use a highest common denominator and put all eight on. If you say you want it red and Scotland says it wants it green, that's incredibly difficult to manage. So, it's those sorts of supply-chain logistics, complexities, that I think—. And I think that's what we see also in the European context. The more a product is being made for multiple markets, the more we see that. If it's a product being made for one market, then you will see the ability to incorporate much more difference.

And we've had that conversation about Welsh-language labelling in that way. I appreciate that.

Another lesson that I'm drawing out—I found the annual report really fascinating actually, the most recent one—is that, for policy makers, perhaps the lesson is, 'Be less radical and achieve more', in terms of that wider incremental change approach. The argument you make, Tim, is a really fascinating one about democratic accountability in terms of if, for example, in Wales, we take a decision to do something, and a supplier of a major business decides, 'Actually, this is going to happen at some point, so we may as well reach that little bit further than England, Scotland and Northern Ireland, and go in that direction, come what may', for argument's sake, that's a really fascinating argument about the interplay between politics and regulation and business environment. We probably haven't got time for it this afternoon. But, in terms of policy makers, the findings that you are reporting seem to be that you can achieve more with a more incremental approach to regulatory change than perhaps a more—you've used the word—'radical' approach, which could then pre-empt more difficulties in the operation of a market.

Yes, but I think that depends a bit on the political context. As I say, if your political ambition is radically different, you aren't going to be able to manage that.

Yes, that's why I used the word 'incremental'.

But in most places, actually, the administrations are broadly trying to achieve the same things. There might be differences of detail, there might be differences of timing, and I think, in those circumstances, I would agree with you that you're probably going to reduce costs for business, which reduces costs for consumers, you avoid some of the potential unforeseen consequences, I think. Certainly in the context of the DRS case study, you were getting businesses saying, ‘Well, one of our responses might have been’—and it's a 'might have been'—‘stopping supplying things, or reducing the set of products that we sell in a given market.’ So, I think it's important for policy makers to understand that there may be an impact on their consumers. So, you make these rules in Wales, that's fine, that's an entirely legitimate, reasonable thing to do, but you then have to explain to the Welsh consumers why they can no longer get these products. That's a political choice.

Yes, absolutely.

But I think what I hope we can do is provide some of the evidence that helps people ask those questions, so that, when they're making that choice, you can ask those questions, you can hold those to account, you can make that political judgment. If they work well, common frameworks should enable Governments to have those sorts of conversations to work out, essentially, ‘We're all trying to do the same thing; well, let's see how we can make this work as effectively as we can together’, because that's going to be, ultimately, simpler for business and consumers. If the conclusion is, ‘We can't’, well that's an honest choice.

I'm grateful to you for that. You mentioned common frameworks, and that's what I was going to come on to next. Can you look backwards and look forwards for me, please? To what extent have they achieved the objectives that were set for them? Some of us were very concerned about common frameworks and the way that the UK Government, particularly, was establishing them. To what extent do you think that common frameworks have more potential to manage the approach you just outlined than perhaps they're being used to do at the moment?

I think, first of all, we aren't there to us to assess the constitutional arrangements. We haven't got firm evidence on—. We haven't looked at how frameworks are operating in detail. There are a few areas where we have seen—. As James set out, where there have been those joint consultations that have flowed from the frameworks, we have seen in those cases, but we are we are not looking in detail at how frameworks are operating.

But you're looking at the impact of them, surely, on the market.

We are looking at the impact. At the moment, I think it's too early to—. We’re just beginning to see, as in the DRS example, as in the single-use plastics example, where those framework conversations have led to those results, but those are the examples we have seen to date, and I think it's—

Sorry, can I just quickly add? You'll be familiar with this output, but perhaps with the changes in the composition of the committee, other Members will be a bit less familiar. We did last year publish our periodic report, which looked at the UKIM regime, a little bit more about common frameworks and their interaction with the market access principles. So, I guess, just to repeat a couple of insights from that analysis, what we did note was that, when speaking to businesses and other stakeholders, there was a lack of transparency, perhaps, about what was going on within this thing called the common frameworks programme, and they also wanted to be more included and involved in some of these decisions. So, if Governments are, if officials are, using common frameworks to talk about how to manage regulatory difference effectively, what we said in that periodic report was, 'Don't forget about the interests of other stakeholders when you're having those discussions.' We are required under the Act to publish another periodic report by I think it's March 2028, which is obviously a little way away, but we'll continue to see the internal market evolve and discussions under common frameworks evolve. So, perhaps we'll be able to give you a bit more on that topic at that point.

And it is that level of transparency and accountability, I think, that is in question. Time is moving on, sorry. Can I just conclude with a single question on the Product Regulation and Metrology Bill? It's probably too early—. It's clearly too early for you to assess it, but you've clearly looked at the legislation. Do you see any difficulties or any issues with the relationship between that Bill and the internal market Bill?

Truthfully, it's not something that's been on our radar until, really, very recently, so we haven't looked at it in any detail. We maintain an internal track of different proposed laws and important consultation requirements et cetera. So, it's made it onto that tracker, but we haven't thought about it in any particular depth at this point. If it makes substantial passage through this current Parliament, then it might be something we talk about briefly in our next annual report, but it's not something that we've particularly explored at this point.

I'm content.

Thank you. You did say that you might have things not being able to be bought in one jurisdiction, not another, but, because we are so close, in terms of the borders between England and Wales, if they didn't sell it in Wales, you could just pop over to Chester or Manchester, or any of the other places that abut Wales. So, doesn't it lose something in that, you might have all these rules and that, but they're easily bypassed unless you start having border controls?

And I think that is part of the challenge, that policy makers have to reflect that reality. What about an e-commerce sale? I can perfectly happily pick up the phone or e-mail somebody in England and say, 'Please send me...'. So, that I think has to be part of the reality that policy makers have to think about, if you are saying, 'How do we regulate?' and it creates a difference across a border. And as I say, the closer to the retail end the easier it gets, but those cross-border impacts—. Some of the things around rules on, say, taxi firms, you have a cross-border impact. Most of it is local, but there are some of those cross-border impacts, and those, I think, are some of the things that are beginning to be highlighted as, 'These are the difficult areas that policy makers will need to think about to avoid those distortions.'

Thank you. Natasha.

Thank you so much, Chair. Your report notes that the majority of those who took part in your research represented predominantly large businesses. How do you intend to engage and understand the intentions of small and medium businesses, going forward?

Shall I pick that one up? So, it's absolutely the case that the annual report case studies are mainly, although not predominantly, based on interviews and conversations with larger businesses. On the peat project that I mentioned briefly earlier on, there was some engagement with SMEs. So, in this case, it's about peat, so small garden centres, that type of thing. And it's definitely something on our single-use plastics project we want to try and speak to SMEs about. We obviously look to the main trade associations in this space, like the Federation of Small Businesses, for example, to try and help us. But, in truth, actually speaking to individual SMEs is quite difficult from an internal market perspective, because what we're mostly interested in is where there's a degree of cross-border trading, and, by their very nature, SMEs are less exposed to trading across national borders, with the exception, perhaps, of people border shopping for particular products. So, we're trying to speak to those individual SMEs, as well as the trade associations, but it is quite challenging.

Just a sub-question, actually. You answered a few questions from the Chair and also Alun and myself; I think you mentioned that it's too early to tell, in some cases, with regard to the provision. Time-frame wise—I'm a bit OCD with time, so hence I'm asking for future reference, so when we can call you back in again and question you a bit more—what do you think is a significant amount of time? What is your time frame as to when is a good space of time to say, 'Okay, we can go back, revisit this and have a look and see if it worked or it didn't'—a year, two years, 10 years, five years?

I think probably the longer end of that. We haven't seen very much by way of real-world examples. I think it's as—. I gave you what seemed quite a long list, but that's been a list that Governments have been working on for the last 18 months, and they haven't yet materialised. By their nature, these are longer term issues, so I think it's probably another two or three years before we start seeing an accumulation of actual cases where there has been regulatory action by the different administrations creating those differences that you can then start to get an overall picture. I suspect by the time of our next periodic report, which is the much bigger overview piece, which is 2028, we should have a very much clearer picture. But I think it's probably another two or three years before we get anything more than one or two actual cases that give us real-world insight. It's a slow-burn process. I'm not seeing—. We're not seeing a long list of regulatory initiatives from all the administrations, put it that way.

Understood. Thank you so much. Thanks, Chair.

Over to you, Alun; you've got five minutes.

I've concluded my questions.

Okay. That's very good. If I can just talk about data, what progress have you made towards improving the data availability about the UK's internal market?

So, we published what we called our data strategy road map update in the spring this year. As Tim's already referred to in his opening remarks, our overall goal is to try and be a catalyst to help improve the data across the whole of the UK in relation to the internal market. But I think it's fair to say that there are some challenges. I'll talk about one or two positive developments and then maybe one or two of the challenges. In terms of positive developments, what we had said would happen over the prior 12 months did happen, which is a good thing. So, the ONS published some payment data in collaboration with the Alan Turing Institute. The ONS also published methodology to try and improve inter-regional data, and also, positively, it does look like the ONS, hopefully before the end of this year, will be able to publish, at least at a high level, more consistent so-called—. I use 'inter-regional data', as it has a certain technical meaning, but it basically means all four nations of the UK, with some greater subdivision for English regions. So, that's the positive. Progress is being made.

The challenges are twofold: one, which has existed from the beginning, which is that England isn't a primary producer of its own trade data with the rest of the United Kingdom; it's only the devolved nations that have been doing that. I just make that as a factual observation without any judgment attached to it, but that's the reality. And there are, even for the devolved nations, differences in the methodologies that each nation uses, and that's understandable as well, because each nation is funding its own data collection, so wants to make sure that it works for that, reflects the particular circumstances of that nation. Those are the general challenges. There are some specific—. It probably won't surprise you to hear me say this, but, given the state of public finances, there are some real pressures on budgets for this sort of work. It is not, fundamentally, a front-line hospital, it is data collection, and we totally understand that, but, in Wales, one effect is that funding for the 2023 reference year for the trade survey for Wales—. That survey has been paused. That will have an impact down the line, and I know Welsh Government colleagues are really keen that proper sustainable funding is put in place for business surveys in Wales. We also know that the ONS is really keen that a proper national survey of trade data across the UK internal market is put in place, but it costs money, and we totally understand that it's a difficult funding environment for all of the nations.

Can I ask a question about the Channel Islands, which are a part of our internal market, aren't they? Are they? They seem to be able to trade with us without any problems and they use the pound, but they don't have any frameworks.

That might be one, Chair, that we have to take away, because I think there might be a legal question about whether the Channel Islands are within the scope of the market access principles. So, if it's okay, could we just—

Please do, because I always assumed that—

It's a really good question that I, personally, have not been asked before. So, we can take that away and perhaps write to you.

I'll give you an example: Woolworths still trade. They trade from Jersey, and you can buy things from Woolworths from Jersey. I've assumed, and they assumed, that they're not a foreign country in terms of trading with us. But, please, if you could look at that I would be most grateful.

Yes, we will do.

Thank you very much. We've only taken you a minute over, so I have to thank you for that. I will now tell colleagues that we're going to have a break, and also tell you that there will be a transcript produced. Can you check it? I would always urge people to check it, because if you're anything like me, when you're talking you tend to turn towards the person you're talking to, and sometimes the microphone doesn't pick up all the words.

That's a good line, yes.

Thank you.

Thank you very much for your time. We appreciate it. Thank you.

Thank you.

We're going into private and we'll have a short break. Thank you.