Subsidy Control Bill

Consideration of Lords amendments
Wednesday 20th April 2022 Commons Chamber

Consideration of Lords amendments

[Relevant Document: Oral evidence taken before the Business, Energy and Industrial Strategy Committee on 30 November 2021 on 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

12:48

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Paul Scully)]

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.

[Paul Scully]

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 (John Penrose), 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.

[Jim Shannon (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?

[Paul Scully]

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.

[Deidre Brock (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?

[Paul Scully]

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.

[Jim Shannon]

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?

[Paul Scully]

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.

[Seema Malhotra (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.

13:00

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 (John Penrose) and for Thirsk and Malton (Kevin Hollinrake) 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.

[Kirsty Blackman (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.

13:15

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.

[Deidre Brock]

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?

[Kirsty Blackman]

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.

[Paul Scully]

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 (Seema Malhotra) 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—

[Seema Malhotra]

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?

[Paul Scully]

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.

[Kirsty Blackman]

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.

[Paul Scully]

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.

[Seema Malhotra]

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.

[Paul Scully]

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.

[John Redwood (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?

[Paul Scully]

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—

[Kirsty Blackman]

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.

[Paul Scully]

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.

Building Safety Bill (Programme) (No. 3)

Motion made, and Question put forthwith (Standing Order No. 83A(7)),

That the following provisions shall apply to the Building Safety Bill for the purpose of supplementing the Order of 21 July 2021 (Building Safety Bill (Programme)), as varied by the Order of 19 January 2022 (Building Safety Bill (Programme) (No. 2)):

Consideration of Lords Amendments

(1) Proceedings on consideration of Lords Amendments shall (so far as not previously concluded) be brought to a conclusion three hours after their commencement.

(2) The Lords Amendments shall be considered in the following order, namely: 93, 94, 98, 107 to 109, 145, 184, 6, 1 to 5, 7 to 92, 95 to 97, 99 to 106, 110 to 144, 146 to 183, 185 to 191.

Subsequent stages

(3) Any further Message from the Lords may be considered forthwith without any Question being put.

(4) The proceedings on any further Message from the Lords shall (so far as not previously concluded) be brought to a conclusion one hour after their commencement.—(Alan Mak.)

Question agreed to.