Subsidy Control Bill Consideration of Lords amendments [Relevant
Document: Oral evidence taken before the Business, Energy and
Industrial Strategy Committee on 30 November 2021on State Aid and
Post-Brexit Competition Policy, HC 742.] Mr Speaker Financial
privilege is not engaged by any of the Lords amendments. Clause 10
Subsidy schemes and streamlined subsidy schemes 12.48pm The
Parliamentary Under-Secretary of State for Business, Energy
and...Request free trial
Subsidy Control Bill
Consideration of Lords amendments
[Relevant Document: Oral evidence taken before the Business,
Energy and Industrial Strategy Committee on 30 November 2021on
State Aid and Post-Brexit Competition Policy, HC 742.]
Mr Speaker
Financial privilege is not engaged by any of the Lords
amendments.
Clause 10
Subsidy schemes and streamlined subsidy schemes
12.48pm
The Parliamentary Under-Secretary of State for Business, Energy
and Industrial Strategy ()
I beg to move, That this House agrees with Lords amendment 1.
Mr Speaker
With this it will be convenient to discuss the following:
Lords amendments 2 to 12.
Lords amendment 13, and amendment (a) thereto.
Lords amendments 14 to 51.
Let me begin by expressing my appreciation for the shared
ambition, across both Houses, to create a domestic subsidy
control regime that will work for people and communities
throughout the United Kingdom. The rigorous debate in both Houses
has resulted in the improved Bill that is before us today, and I
hope that the Government amendments passed by the House of Lords
will in turn be accepted by this House.
I shall start with Lords amendments 13 to 38, 44 to 47 and 51,
relating to the topic of transparency. This topic has been well
championed in this House by my hon. Friend the Member for
Weston-super-Mare (), who is no longer in his
place. First, in place of the higher transparency thresholds that
applied to subsidies given under a published scheme, and given as
minimal financial assistance or services of public economic
interest assistance, we have introduced a single upload threshold
of £100,000, which now applies to all subsidies that are subject
to the transparency requirements. Of course, there has never been
a threshold for regular stand-alone subsidies, which all need to
be published. This represents a substantial 80% reduction from
the original threshold of £500,000 for subsidies given under the
schemes.
Secondly, we have significantly shortened the upload deadlines;
for non-tax subsidy awards, we have halved them from six to three
months, so that subsidies will be visible on the database far
sooner. The third change is that we have introduced new
obligations to upload certain permitted modifications of a
subsidy or scheme to the database. Public authorities will now be
subject to the same obligations to upload even minor changes,
with the same upload deadlines as for the original subsidy. This
will ensure that the database continues to provide up-to-date
information about subsidies or schemes that are modified after
they have been granted. Fourthly, we have placed a duty on the
Secretary of State to review the transparency database at such
intervals as they consider appropriate, thereby ensuring
additional quality control.
(Strangford) (DUP)
I thank the Minister for what he is saying. He referred to the
fact that there had been thorough discussions in this House and
in the other place. I am wondering whether those thorough
discussions involved the devolved Administrations, particularly
the Northern Ireland Assembly, but also the Scottish Parliament
and the Welsh Assembly. If there is disagreement, how do the
Minister and the Government intend to deal with it?
The hon. Gentleman makes a really good point. We tried to work
with all the devolved Administrations right the way through the
process from beginning to end, and we have continued
conversations with each of them over this period. Clearly there
are, and will be, differences in the process. This needs to work
for the whole of the United Kingdom, so I am keen that we
continue the dialogue, whether it is with Scotland, Wales or
Northern Ireland, to ensure that we can do as much as we can to
reach agreement, though clearly that will not always be possible;
that is the nature of dialogue.
(Edinburgh North and Leith)
(SNP)
Is the Minister not saying that ultimately, on these devolved
matters, the English Government, as represented down here in
Westminster, will have a power of veto over the decisions of the
Scottish, Welsh and Northern Ireland Governments?
No. However, the UK Government have a reserved power over subsidy
control, so it is the UK Government who act on that reserved
power.
Finally, we have introduced an amendment specifying that the
Secretary of State may provide statutory guidance to public
authorities on pre-action information requests—that is, the
provision of information following a request about a subsidy
decision to an interested party that is considering whether to
ask the Competition Appeal Tribunal to review the subsidy.
I shall now move on to two amendments related to levelling up.
Lords amendment 50 makes it clear that addressing local or
regional disadvantage is considered to be an equity rationale for
the purpose of assessing compliance with principle A. This puts
beyond any doubt that a subsidy to address local or regional
disadvantage can be given, provided that the other principles and
requirements of the regime are met. Lords amendment 9 exempts
from the prohibition on relocation those relocation subsidies
that have the effect of reducing social or economic disadvantage.
The subsidy must, of course, also comply with the principles and
other requirements.
On the issue of levelling up, I know that the Government and the
Prime Minister have given a commitment to levelling up all the
United Kingdom of Great Britain and Northern Ireland, but I am
always conscious that we want to see that actually happen, not
just words. Can the Minister give me some assurance that Northern
Ireland—where the cost of living is higher, wages are lower and
products and consumer goods are higher in price—will, through the
Northern Ireland Assembly, receive the levelling up that we
should?
Indeed, yes. Levelling up does not exclude any one area of the
United Kingdom. It also does not exclude levelling up within
regions; that is really important. This legislation only provides
the framework; the levelling-up fund, the shared prosperity fund
and other measures that can use the framework will, I am sure,
benefit the hon. Gentleman’s constituency and Northern Ireland as
a whole. It is really important that we get this right.
I am happy to report that we produced Lords amendments 1, 5 to 8,
10 to 12, 39 and 40 to respond to concerns about the Bill in the
17th report of this Session by the Delegated Powers and
Regulatory Reform Committee. Lords amendment 1 addresses a
concern with clause 10. Parliamentary scrutiny of streamlined
subsidy schemes made under clause 10 has been strengthened by
giving either House the ability to annul any streamlined schemes
after they have been made, by applying the negative
procedure.
Lords amendments 5 to 8 replace the direction-making power in
clause 16 relating to the designation of marketable risk
countries with a power to make regulations for the same purpose.
Lords amendments 10 to 12 relate to the powers in clauses 25 to
27 to change definitions in secondary legislation. Those powers
will be removed. Finally in this group, Lords amendments 39 and
40 address concerns raised by the DPRRC about secrecy regarding
the financial stability direction-making power in clause 47.
These amendments make it clear that such directions will need to
be published in due course. In addition, the Economic Secretary
to the Treasury has written to the Public Accounts Committee and
the Treasury Committee to commit to notifying the Chairs of those
Committees confidentially about the use of a financial stability
direction.
I turn to Lords amendments 41 to 43 and 49, relating to the
Competition and Markets Authority and the Subsidy Advice Unit.
Although the Secretary of State could already direct the SAU to
complete a monitoring report for a specified time period under
clause 65(4), these amendments make specific provision in the
Bill for more frequent scrutiny in the early years of the new
regime. Instead of mandating a report within five years of the
implementation of the regime, the tabled amendments require an
initial report after only three years, to be followed up with a
further report after another three years. After that, reporting
will revert to a five-year cycle. The Secretary of State will
retain the ability to direct that a report be made at a specified
period after the publication of the second three-year report. The
sunsetting provisions in clause 87(6) have been extended so that
they take effect after the second three-year report. Lords
amendments 2 to 4 and 48 are minor and technical in nature. They
clarify definitions under clauses 11 and 82.
In summary, this substantial package of amendments represents an
improved set of measures that will strengthen the new domestic
subsidy control regime and make it more transparent and
accountable. There will now be greater transparency of subsidies
awarded, and improved oversight and monitoring of the regime by
Parliament and the CMA. I am grateful to colleagues in both
Houses for their hard work on, and attention to, this important
Bill. They have helped to bring about these improvements, which I
hope will be endorsed by Members from across this House.
(Feltham and Heston)
(Lab/Co-op)
It is a pleasure to speak in the debate. I start by acknowledging
all the efforts in the other place, and thank the peers, staff
and civil servants who have helped to move the Bill along to this
stage. I also thank colleagues on both sides of this House,
including all the Opposition parties.
As Labour has outlined throughout the Bill’s progress, we support
the principle of a quicker, easier subsidy regime now that we
have left the EU. However, we recognise that any subsidy regime
must provide sufficient transparency and accountability for the
spending of billions of pounds of public money each year. We have
also repeatedly raised our concerns that this regime has failed
to match up to the Government’s levelling-up rhetoric. We are
pleased to see that many of the Lords amendments, including our
amendment to Lords amendment 13, will improve the Bill in some of
those areas.
I turn briefly to areas in which we would have liked the
Government go further, and I would be grateful for the Minister’s
comments on these issues. The first is net zero. Labour has been
clear that while this is framework legislation, it should not be
an empty vessel. The Government should have used the opportunity
of an independent subsidy policy to design a regime that
supported their wider industrial policy and our national
priorities. We were also disappointed that the Subsidy Control
Bill was not published alongside a subsidy strategy. Net zero is
a good example of this. The climate crisis is the greatest
long-term threat facing our country and the world, and we need
urgent action to drive down emissions. That is why, in Committee,
we called on the Government to support our amendment to hardwire
net zero into the principles that public authorities have to
consider when awarding any subsidy or designing any scheme. There
was cross-party and cross-Bench support in the other place for a
similar amendment.
1.00pm
The Government’s response was that the Bill already contains
specific principles that apply to subsidies relating to energy
and the environment, but that is far too narrow a view of climate
impact. Net zero should be a consideration for public authorities
on all subsidies, from public transport to supporting R&D in
our energy intensive industries. In rejecting both amendments,
the Government have missed an opportunity to use subsidy policy
as a tool to achieve their net zero targets.
As I turn to the amendments, it would be remiss of me not to
mention the recent scandal at P&O Ferries and the Bill’s
implications, which I have raised with the Minister. P&O
Ferries is owned by DP World, the operator of the Southampton and
London Gateway shipping terminals. As of today, DP World is still
a partner in the London Gateway freeport and is potentially set
to benefit from £25 million-worth of public funding. The senior
executives of that company have admitted to the House that they
broke employment law. However, they will benefit directly from
public funding of the Government’s new freeports.
Beyond freeports, P&O Ferries has received £15 million of
Government support since the start of the pandemic, both through
furlough and the freight subsidy scheme. As the Minister will
know, UK public procurement law contains grounds that bar
businesses from bidding for public contracts. To pick one
example, a bidder can be excluded because they have breached
national minimum wage legislation.
By contrast, the Bill affords no power to the Secretary of State
or the public authorities to exclude DP World from the receipt of
public subsidies. I would be grateful if the Minister set out in
his response how he will ensure that subsidies are not provided
to firms that do not meet minimum expectations, including
complying with the laws of this country.
Finally on the areas that we have carried over from previous
debates, on devolution, it is a disappointment that we have not
seen more movement on powers for the devolved Administrations.
The Minister will be aware that we will continue to push for that
as the Bill becomes an Act and on its implementation.
On the financial thresholds for reporting, Labour has raised
concerns throughout the Bill’s progression that the threshold of
up to £500,000 for publishing subsidies on the database and the
gobsmacking £14.5 million threshold for subsidies to services of
public economic interest were far too high. There were
cross-party efforts in Committee—including from Labour and
colleagues who represent Aberdeen—to introduce greater
transparency into the database. I also pay tribute, as the
Minister has, to the hon. Members for Weston-super-Mare () and for Thirsk and Malton
() for their work in this
important area.
In the Commons, the Government resisted calls to lower the
monetary thresholds, but we were pleased that, in the Lords,
Government amendments 14 and 25 took heed of Labour’s calls and
lowered the threshold for publishing subsidies on the database to
£100,000. Lords amendments 26 to 30 and 32 lower the threshold
for publishing subsidies to services of public economic interest
to £100,000. Although we welcome the reductions in reporting
thresholds, we are concerned that Lords amendments 22, 33, 34, 35
and 37 allow them to be changed by the Government without good
reason. Having accepted the premise of greater transparency, will
the Minister explain under what circumstances the Government
would seek to change the thresholds? Without a clear explanation,
we are concerned about why the Government felt the need to keep
those powers in reserve.
I turn to the time thresholds for uploading information on to the
database. Throughout the Bill’s progression, Labour has been
clear that the six-month deadline for publishing subsidy details
on to the database was simply far too long. Without their
publication, interested parties have no way of identifying
subsidies that may be harmful. Six months is enough time for
damaging subsidies to inflict significant harm on competitors
and, more broadly, on British competition and investment. We
therefore support Lords amendments 17 and 20, which reduce the
publication deadline to three months, and Lords amendment 19,
which states that any modifications made to subsidies also have
to be uploaded within three months. Although Labour would go
further in reducing those timeframes, we welcome the
amendments.
We also support Lords amendment 16, which sets a three-month
deadline for uploading tax schemes on to the database. However,
Lords amendments 15 and 18 still provide public authorities with
one year to upload a tax subsidy on to the database and one year
to upload modifications in relation to tax subsidies. Will the
Minister explain why there is still a nine-month difference
between the deadlines for publishing tax subsidies and publishing
tax schemes? Why are the Government allowing such a long period
for modifications in relation to tax subsidies?
On the issue of audit, as well as calling for the publication
deadlines to be reduced, Labour called for the Secretary of State
to take ownership of the transparency database and what is
uploaded on to it. In their White Paper on Companies House
reform, the Government recognised the dangers associated with
creating a register without a regulator, yet they risk making the
same mistakes. The information uploaded and published on the
database is crucial to alerting interested parties to potentially
damaging subsidies. If the information on the database is not
accurate or complete, there is no transparency or
accountability.
Lords Amendment 13 goes some way to ensuring that the Secretary
of State reviews the database, but we are concerned that that
amendment is too vague. It does not make it clear what the
purpose of the review is, who will conduct it or how regularly.
Labour has tabled amendment (a) to Lords amendment 13, which
clarifies that the purpose of the review is for the Secretary of
State to ensure the accuracy and completeness of the information
in the database. Amendment (a) has been tabled in a constructive
spirit to clarify the legislation.
Although improvements have been made to the database—as we
acknowledge— since the evidence we heard in Committee about its
serious deficiencies, practitioners continue to have concerns.
The name of the granting authority is currently not included in
all entries. That is clearly a major gap, as it is the key piece
of information that an interested party wishing to challenge a
subsidy in the very short window available to them needs.
I turn to the Lords amendments on the Competition and Markets
Authority. Lords amendments 41 and 42 mandate that the CMA lays
its first report on the regime three years after the Bill
commences and its second report three years after that. I spoke
about increasing the frequency of the CMA’s reporting in
Committee and I am pleased to see that that has been taken
up.
We also support Lords amendments 43 and 49. However, under the
Bill, the CMA has the power to report only on subsidies and
schemes that are reported to it. As we have heard from experts,
that leaves a black hole for accountability where a public
authority wrongly concludes that it is not granting a subsidy.
Such payments will not be published on the database and
interested parties will therefore not be able to challenge them.
In Committee, Labour tabled new clause 3, which would have given
the CMA the power to investigate subsidies that may be of concern
and subsidy schemes on its own initiative. Unfortunately, the
Lords amendments have failed to address that issue.
There has been some progress on the issue of regional economic
disadvantage during the Bill’s passage in the other place. As the
Minister will have heard, there was anxiety from the devolved
Administrations and Members across this House about the
implications of the loss of assisted areas. The Bill, as
introduced, contained no measures to ensure that subsidies could
and would be used to reduce economic disadvantage between and
within the regions and nations of the UK.
On Second Reading and in Committee, I stressed that the Bill
failed to live up to the Conservatives’ levelling-up rhetoric. I
am therefore pleased that the Lords tabled Lords amendment 9,
which removes the relocation prohibition on subsidies that work
to reduce social and economic disadvantages.
Labour also tabled an amendment to schedule 1 that would have
explicitly added addressing a local or regional disadvantage as a
policy objective that subsidies can pursue. That was voted down
in the Commons, but I am pleased it was accepted by the
Government in the other place with Lords amendment 50. The more
than 300 pages of the levelling-up White Paper do not reference
subsidies once, but I look forward to the Government publishing
details of how subsidy policy will be used to achieve the White
Paper’s objectives.
We support Lords amendments 1 and 4 relating to subsidy schemes
and subsidies of interest. We are concerned, though, about when
the streamlined subsidy schemes will be put in place. The schemes
will be important for granting authorities to avoid unnecessary
bureaucratic workloads, so when will the details be
published?
Practitioners have expressed concern to us that clause 70(2) is
not clear enough on the power to challenge an individual subsidy
made under a scheme, or on when the clock starts ticking on that
period of challenge. As drafted, the Bill appears to indicate
that a damaging subsidy can be made, say, two years after a
scheme is set up. As the deadline for challenging the scheme
itself would have passed, there would be no mechanism for
interested parties to challenge such a harmful subsidy. Is the
Minister aware of that problem and is he taking any action to
address it?
Finally, we support all the technical amendments—Lords amendments
2, 3, 10 to 12, 5 to 8, 39, 40, 44 and 51 —and the greater
scrutiny they add to the Bill. However, Lords amendment 46 allows
the Secretary of State to rely on consultation carried out before
the Bill receives Royal Assent when issuing guidance. Ongoing
engagement with public authorities and business is critical, and
I hope the Minister can reassure the House that the Government
will not be ducking this obligation.
Labour recognises the need for this legislation, which is
necessary to meet our international obligations and, more than
that, to protect the UK’s internal market and to ensure public
funds are made available to firms, with appropriate safeguards
put in place. The Lords amendments may not go as far as we hoped
in some cases, including on devolution, but they significantly
strengthen the Bill by providing the scrutiny and oversight
Labour has called for from the beginning. However, it is
regrettable that some concerns, including on the CMA’s powers and
net zero, have not been addressed.
Well-designed, proportionate subsidies are a critical part of an
effective industrial strategy to grow the sectors of the future
and to invest in our transition to net zero. The Government now
need to bring forward a plan to make that happen.
(Aberdeen North) (SNP)
It is very good to be here to talk about the Subsidy Control Bill
again. The Lords amendments that have been accepted and put
forward by the Government do make the Bill better. The Bill is
better as a result of almost all the amendments that have been
introduced; I accept that that is the case. I feel sorry for the
Minister because he had to argue against many of these amendments
in Committee and on Report. Now they are in the Bill and he is
arguing for them, which is great—I am glad he is arguing for them
now—but I feel he has been put in a pretty unfortunate
position.
Although the Lords amendments make the Bill better, it still
falls far short of where the UK’s subsidy control regime should
be. We still have major concerns about a number of significant
issues. I recognise the improvements on transparency,
particularly through Lords amendment 14, which I drafted in
Committee, so I am pleased that the Government have put that
forward and that it is now in the Bill. It reduces the threshold
for subsidies to be included in the transparency database from
£500,000 to £100,000. That is incredibly important.
The database will work, and we will know whether subsidies are
working as the Government intend, only if we can see which
subsidies have been made. The threshold of £500,000 was too high
for us to have a good enough overview, and that is without
mentioning people’s inability to challenge subsidies if they do
not know they exist. Setting the threshold at £100,000 makes it
much less likely that a company will be badly damaged by a
harmful subsidy that it is unable to challenge because of the
lack of transparency.
I am also pleased that the CMA will report on the regime after
three years; the period has been reduced. Again, I moved an
amendment on that in Committee. I proposed two years, but we can
meet in the middle at three years. I am pleased that that
reporting is going to happen. Particularly in the initial period,
it is important that we know how the subsidy schemes, the
database and the challenges are working. This legislation will
work only if it is kept under review, and I am pleased that there
is an amendment to that effect.
1.15pm
I am also pleased with the Lords amendment on the Secretary of
State’s ability to review the database, as it will move and
change. Things will need to be improved because this is not the
end of the story on subsidy control. Once the Bill is on the
statute book, there will still be a lot of consultation and
guidance to come. The shadow Minister mentioned Lords amendment
46, which means that a significant proportion of the consultation
will happen in advance of the Bill coming into force. The
authorities that will be granting subsidies, those who will be
receiving the subsidies and those who might be harmed by the
subsidies need to have an idea of what the regime will be before
it kicks in. It is important to consult and publish guidance as
early as possible, and I urge the Minister to make good on his
promises about ensuring that guidance is published in good time
so that everyone can make the regime work. It will work only if
people know how it works.
People still do not have enough time to challenge, and I would
have liked the list of people who can make a challenge by right,
without having to demonstrate that they have been individually
affected by the subsidies, to include the Scottish Government,
Welsh Ministers and Northern Irish Ministers.
It is disappointing that agriculture continues to be included in
the Bill.
I am extremely disappointed that the views and concerns of the
Scottish and Welsh Governments and the National Farmers Union
across these islands, including NFU Scotland, about agricultural
subsidies being in scope have been virtually ignored by this
Government. They are certainly not reflected on the face of the
Bill. Does my hon. Friend share those concerns?
I absolutely do. The Government cannot hide behind agricultural
being in the trade and co-operation agreement, because the TCA
specifically says that agricultural subsidies can and should be
excluded from subsidy control regimes. The Government still have
not given a good reason for including agriculture in the subsidy
control regime. It works in the EU and in the state aid regime,
so it is perfectly workable to exclude agriculture from the
subsidy control regime. Including such subsidies will cause
problems. The fact that NFUs across these islands have raised
concerns shows that it is incredibly serious. I urge the Minister
to think again about how the issue of agriculture is treated by
the Bill.
The shadow Minister extensively addressed net zero. Granting
authorities are required to consider the environmental and net
zero impacts of energy-related subsidies, but that is not what
net zero is about. This is not the only time we will be thinking
about how to reduce our impact on climate change. If a granting
authority decides to give a significant amount of money to a bus
company, for example, it does not have to consider the climate
impact. If it decides to scrap all the buses and replace them
with diesel taxis, it does not have to consider the net zero
impact, because it is not an energy-related subsidy. I am
massively concerned that net zero is included only in schedule 2
and not in schedule 1. If the Government are serious about
tackling climate change, they need to be looking at every piece
of legislation that comes through this place and ensuring that it
does not have a negative impact on our ability to meet net zero;
and if it does, they should be ensuring that that is then
balanced by further, more dramatic actions in order that we can
meet net zero.
In summation, the Bill is better than it was, but it still falls
far short. I am still concerned about transparency and massively
concerned about agriculture. I am hugely concerned about the lack
of importance this Government are giving to net zero—that should
go through everything we do.
I thank all hon. Members for their engagement throughout the
passage of this Bill and for their contributions this afternoon.
I am glad that there has been broad consensus, albeit with some
questions, which I will try briefly to address. The importance of
that new independent subsidy control regime has been clear
throughout the passage of the Bill and it was evident again
today, so I thank hon. Members for their broad support.
Let me respond to the question from the hon. Member for Feltham
and Heston () about P&O and that kind
of example. Clearly, we are shocked by the action of P&O
Ferries and angered by the lack of empathy and consideration it
has demonstrated towards its employees. The Government are
continuing to work to establish whether P&O Ferries or DP
World are in breach of any requirements of them as partners in
the Thames and Solent freeports. Speaking more generally, I can
confirm that the Bill ensures that public authorities can recover
a subsidy where it has been misused, but it is important to note
that the purpose of a subsidy is to achieve specific change in
behaviour to facilitate a specific policy objective; it is not to
give the Government ongoing leverage over how a company conducts
its affairs. It is for other areas of law to set out the limits
of what is acceptable corporate behaviour. None the less, because
the subsidy is there to have that specific policy objective, we
will make sure that that policy objective is met as best we can.
However, it is difficult to enforce—
I am grateful to the Minister for his consideration of this
point, but will he clarify whether a company that breaks the law
and does not meet minimum standards on employment law, on
environmental law or in other areas could still be in receipt of
public subsidies through the subsidy control regime?
It is difficult to come up with the examples, but in essence a
subsidy is there to determine a particular policy objective. We
would want to partner with businesses and companies that are most
likely to deliver those policy objectives: reliable partners.
Clearly, ones that are in breach of the kind of examples that the
hon. Lady mentions are less likely to be those reliable partners.
Technically, she is correct, but this is about how we enforce
something, probably after the event; similarly, had we given
P&O Ferries a subsidy last year, we probably would not have
been able to get that subsidy back. That is the difficulty with
enforcement after the event. None the less, the sentiment is
absolutely there: we do not want to be partnering with unreliable
companies to achieve our policy objectives.
The issue with that is that if a company is given money to run a
freeport and it runs a freeport with that money, it can sack all
the staff it likes at P&O and still be eligible for the
subsidy. The issue is that there is a gap, which has been well
highlighted by the shadow Minister.
We will work out how the subsidy control regime is working; it is
part of what I will come back to in a moment about the CMA’s
approach to reporting back how the regime is working. We have to
make sure that this is watertight—excuse the pun—if we are going
to go down the road of making sure that we can recover any
subsidies. I suspect that other areas of law will be better
suited to approaching that, rather than specifically dealing with
it within this framework Bill.
I am conscious of time, but let me make this brief point, for
clarity. There is an important distinction between companies or
businesses with which the Government may be working to achieve
policy objectives, and their eligibility still to receive public
subsidies, potentially to the tune of hundreds of thousands of
pounds or millions, where they have explicitly even admitted to
this House that they have broken employment law. There is an
important distinction here about how public money could be spent
and about rewarding those who have behaved badly.
I thank the hon. Lady for her intervention. This is what I mean
about using other areas of law; other areas testing the value of
the use of public money will be better suited for addressing
exactly those points, but I very much take the one she makes.
(Wokingham) (Con)
Would it not in future be possible for the Government, when
offering a subsidy to companies, to specify that they need to
meet certain labour standards so that the subsidies regime would
apply?
Again, that is up to the public authorities. The whole point
about this regime is that it is a loose, permissive framework,
rather than something more onerous which adds layer upon layer to
recreate the EU state aid system. None the less, I would expect
that, again, because of value for money and good governance, any
public authority, whether national Government, local government
or another public body, would expect to have exactly that kind of
criteria—
The Scottish Government asked that the freeports that were going
to be in Scotland had green stuff in them and fair work rules,
but the UK Government said no. Now the Minister is saying, “Yes,
we can totally do that. That definitely should be in it.” The UK
Government refused to let us have that in the freeports planned
for Scotland.
I am not going to get involved in a wider discussion about
freeports; I am talking about a framework Bill, which is exactly
why I said that other areas of legislation and of governance will
better frame this area, as opposed to having it within this
framework Bill. I am going well over time on this issue, because
I wanted to cover some of the other areas.
Net zero has been mentioned. Schedule 2 contains a lot of
common-sense principles already, which support the UK’s
priorities on net zero and protecting the environment. They
require subsidies in relation to energy and the environment to
meet one of the specified aims, such as increasing the level of
environmental protection, and to ensure that subsidies do not
undermine the polluter pays principle. We talked about the tax
subsidies and the timings. Clearly, within the timings of the tax
subsidies a longer period is still necessitated, because of the
fact that tax returns and such things take longer to go through
the process—as opposed to having the immediacy of sponsorship
through a subsidy or more immediate cash assistance.
The hon. Member for Feltham and Heston talked about CMA
thresholds and limitations, but ultimately that is what the CMA
will be looking at in any case as part of its reporting back on
the regime and its overall effectiveness. So we will always be
able to look at how those thresholds and limitations are working
in practice; we want to make sure that that can be put in
place.
I wish to conclude by reaffirming what I set out in my opening
remarks: this Bill creates a domestic subsidy control regime that
will work for people and communities across the UK, creating a
robust yet agile system that allows public authorities to provide
subsidies where they are needed most. The rigorous debates in
both Houses have resulted in the improved Bill we have before us,
so I commend it to the House.
Lords amendment 1 agreed to.
Lords amendments 2 to 51 agreed to
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