Subsidy Control Bill

Debate between Baroness Boycott and Baroness Blake of Leeds

Committee stage
Wednesday 9th February 2022 Grand Committee

[Baroness Blake of Leeds (Lab)]

I rise to move to Amendment 62, in the name of my noble friend Lord McNicol. I am also looking forward to discussing Amendment 63, in the name of the noble Baroness, Lady Boycott, which is supported by the noble Baroness, Lady Sheehan, and my noble friend Lord Whitty.

Following on from the discussion of the purpose of the work of the CMA and the opportunities it will present, I want to express the concern that we could be missing a real opportunity if we do not look more closely at the way it will work. Amendment 62 has been tabled to probe the question of what practical effect the CMA’s work will have, beyond on the making of individual decisions taken in isolation on the basis of its advice. Also, as we have discussed, what powers will it have to investigate or highlight areas of concern which come to light?

On a general note, in many cases the delegation of responsibilities to a regulator or other form of arm’s-length body creates a symbiotic relationship whereby day-to-day work can be carried out independently of the department, but that same department can benefit from the experiences of its agency. We remain concerned that, as I have said, we are missing trick and that the whole process is weakened by the lack of a need to respond annually on what work the CMA is undertaking collectively. It is not clear whether there will be a sense of the overall contribution that the CMA and subsidy control will make to key policy areas. Will its findings have an impact on future policy and statutory guidance, or is its sole purpose simply to state opinion or comment on the individual cases before it?

Amendment 63 will enable us to have a specific debate on the policy objectives around net zero, particularly linking to the outcomes of COP 26, as we have discussed before in Committee, and highlighted by the publication this week of the levelling up White Paper. Where are we going to be able to assess progress? Surely, a section of the CMA’s annual report would be a very good place and opportunity to bring together the sense of purpose of the subsidy regime.

We have talked a great deal about what subsidies are and who they are there to benefit. Surely this presents an opportunity to make sure that there is the transparency, clarity and real sense of forward thinking that will help take strategic objectives forward. As I say, we are concerned that the Bill is fairly silent on these areas, and we would like to hear from the Minister what the contribution of the CMA and its work will be to the progress of strategic priorities going forward. With those comments, I beg to move.

[Baroness Boycott (CB)]

My Lords, I declare my interests as set out in the register and apologise for being unable to attend day one in Committee. I am very grateful to the noble Baroness, Lady Sheehan, for introducing my amendments on that day, and to the noble Lord, Lord Whitty, and the noble Baroness, Lady Hayman, for their support.

Today I am introducing Amendment 63, again with the welcome support of the noble Baroness, Lady Sheehan, and the noble Lord, Lord Whitty. Some of the reasons for this amendment have just been set out. It is linked to my earlier amendments in that it is aimed at ensuring that progress towards achieving our net-zero and environmental goals is reported on and monitored after decisions on subsidies have been made.

Amendment 63 provides that a review of the impact of the subsidy control regime on progress towards achieving net zero and our environmental goals should be included in the annual report prepared by the CMA, as has just been mentioned. The Government have said that the new subsidy regime aims to enable public authorities to deliver

“strategic interventions to support the UK’s economic recovery and deliver government priorities such as … net zero.”

As debated on day one, the framework permits subsidies that support our net-zero goals, but there is very little in the Bill that actually enables subsidies that support or encourage consideration of net-zero and environmental goals in their design and the way they are awarded.

Ultimately, if we do not do this, the Government will not know whether the subsidy regime is delivering on its net-zero and environmental priorities. Tracking underlying progress is absolutely crucial to identifying whether their aims are being met and to understanding what progress or changes we need to further make.

On day one, the Minister said that:

“Net-zero and climate change considerations are not inherent to all subsidies”,


and that placing a principle that considers our climate change and environmental commitments in the Schedule 1 principles

“could lead to public authorities having to do bespoke, possibly onerous, assessments for every single subsidy awarded or subsidy scheme made”.—[Official Report, 31/1/22; col. GC 158.]

The delivery of net zero is one of the key strategic priorities of this Government, but if there is to be no specific principle ensuring that public authorities properly factor this into their decisions, it seems even more important that we put clear monitoring and reporting of these issues in the Bill.

The Bill sets out an overarching monitoring and reporting process, predominantly led by the subsidy advice unit within the CMA, which includes determining

“whether any changes should be made to the regime as a whole or certain aspects of the regime.”

However, absolutely nothing explicitly suggests that this monitoring and reporting process will encompass the impact of the new subsidy regime on achieving the strategic net-zero priority.

With nothing in the Bill that embeds this consideration, it is really difficult, if not impossible, to understand how the Government intend to monitor whether their strategic objectives are being met, or indeed possibly being undermined. The Government have declared a climate emergency, so it seems quite astonishing that we are prepared to put public money towards efforts that could undermine that goal. Indeed, all public money should be put towards anything that makes this goal more available and possible for us all.