Subsidy Control Bill

Debate between Baroness Sheehan and Baroness Hayman

Lords Hansard - Part 1 & Report stage
Tuesday 22nd March 2022 Lords Chamber

[Baroness Sheehan (LD)]

My Lords, I rise to speak to Amendments 3, 51 and 61, to which I have added my name. I have checked with the Public Bill Office that my name is on those amendments—it is online but it has not made it to the printed copy. I should also add that I am a director of Peers for the Planet.

The reason I have added my name to these amendments is that I feel strongly about this. I hope that the noble Lord, Lord Whitty, will be press Amendment 3 to a Division if the Minister is unable to meet us half way or come some way towards what we are looking for, which is some recognition of an alignment with our climate change and natural environment concerns.

Just last month the IPCC published its sixth report, which is full of dire warnings about the climate. Time is running out and we are fast approaching a 1.5-degree rise. The raw science tells us that we really have to act now. The concentration of carbon dioxide in the atmosphere is at an unprecedented 419 parts per million; it has never been at that level, records show, in the last 800,000 years. It is going up in a straight-line vertical trajectory at the moment, so we really need to act as quickly as we can. The NASA website shows that many other of the planet’s vital signs are moving in the wrong direction and those adverse changes are accelerating.

A Bill laying out a new subsidy regime is an important policy lever to meet our climate ambitions. However, as things stand, there is a deafening silence on climate and nature alignment in the Bill. Amendments 3, 51 and 61 seek to fill that void, not in a prescriptive manner but by allowing the Government to determine how the aims should be achieved. Notwithstanding what the Minister’s response will be to the amendments, I hope that nevertheless he will confirm from the Dispatch Box that the guidance to the Bill will specifically include how public authorities should approach climate and wider environmental considerations with respect to subsidies. The Minister said as much in his letter to my noble friend Lord Purvis but it would be good to have it reiterated on this occasion.

[Baroness Hayman (CB)]

My Lords, I support Amendments 3, 51 and 61. I declare my interests as set out in the register.

The amendments seek to ensure that considerations around net zero and the environment are embedded in the legislation at the stage of principles, at the stage of guidance and at the stage of reporting. They are very similar to amendments well discussed in Committee. I have to say that when responding to those amendments the Minister did not show even a modicum of delight; he said that we were banging on—although he did not use that term—about our favourite topics, a term he did use, and said he had a sense of déjà vu. I am afraid it is déjà vu all over again, because these issues are too important for us not to return to them.

I believe there is a disjuncture in the Government’s attitude. When responding, the Minister made absolutely clear the Government’s view that

“net zero is of critical importance.”—[Official Report, 31/1/22; col. GC 159.]

That is not something between us. He also recognised the relevance of the subsidy regime that we are discussing in achieving the Government’s aims, and pointed out that environmental and net-zero schemes had already been agreed under the interim subsidy control mechanism. So we have a situation where the Government recognise the severity of the climate crisis, the fact that economically we need to shift the economy and growth into a sustainable pattern and into areas that will be productive in terms of jobs—and, indeed, will create the sorts of jobs that support the levelling-up agenda we were just talking about, because they are the sort of infrastructure jobs that go across the country—and that we need to support jobs that will provide energy security in future.

Subsidy Control Bill

Debate between Baroness Sheehan and Baroness Hayman

Committee stage
Monday 31st January 2022 Grand Committee

[Baroness Sheehan (LD)]

It is always a pleasure to follow the noble Baroness, Lady Jones of Moulsecoomb —we are often on the same page. I shall speak to Amendments 9, 10, 12 and 29 in the name of the noble Baroness, Lady Boycott, who is unfortunately unable to be with us this afternoon. I am grateful to the noble Lord, Lord Whitty, who also, sadly, cannot be here this afternoon, for adding his name to the amendments, along with my own. The main purpose of these amendments is twofold. First, they would embed consideration of climate and environmental targets in the Bill, to ensure that they are factored into the decision-making of public authorities when designing and deciding to award subsidies. Secondly, they would ensure that subsidies align with, or at least are not contrary to, our net-zero and environmental targets.

COP president Alok Sharma in a recent speech said that

“inaction or delayed action on climate will create immense risks and costs.”

He went on to highlight the economic opportunities for businesses of acting now and stated that

“my absolute focus for the UK Presidency year is delivery.”

The Government’s own Net Zero Strategy states:

“Our goal is to go even further to embed net zero across government activity. This will mean that government takes net zero into account when taking decisions.”


It further calls for

“a whole system approach to tackling climate change”,

which includes:

“Embedding net zero in a wider range of decision-making levers.”


I have purposely used the Government’s own words.

The fact is that if we do not ensure that alignment with our climate and environmental goals is embedded into new policy frameworks, such as our new subsidy control regime, we risk missing a key opportunity for delivering climate action. Delivery will not happen effectively and quickly unless both net-zero and nature considerations—because nature is inextricably linked to the climate crisis—are consistently woven into the fabric of all that Governments do at every tier of decision-making; not just centrally but devolved Administrations and regional and local government. The Government said in their response to the consultation on the Bill that

“public authorities will be able to take subsidy decisions that facilitate strategic interventions to support the UK’s economic recovery and deliver government priorities such as levelling up and achieving net zero.”

I welcome the Government’s recognition that subsidies can be a valuable way of supporting the achievement of the UK’s net-zero targets. However, there is nothing in the Bill to ensure that subsidies are directed towards interventions that can help to achieve our net-zero and environmental goals or, even worse, to avoid a situation in which subsidies that are contrary to or do not align with these goals could be introduced. Unfortunately, not all public authorities are as focused on delivering net zero as others—the Cumbrian coal mine comes to mind. Without this strategic direction, opportunities could easily be missed. I hope the Minister will agree that we need to include our net-zero and environmental goals within the Schedule 1 principles as laid out in Amendments 9 and 10 from the noble Baroness, Lady Boycott, which would guide decision-making on subsidies.

The Government did, in fact, consider including a specific net-zero principle but decided against this, which is a real shame because including consideration of net zero would not have precluded the achievement of wider policy objectives. It simply provides that when granting any subsidies, not just those related to energy and environment, public authorities must consider whether they align with our net-zero and environmental goals. This would not compromise the Government’s flexible, proportionate approach to the new regime.

It is important that the broader principles in Schedule 1, which apply to all subsidies, provide clear direction to the hundreds of public bodies that will use these rules and embed the consideration of net-zero and environmental goals. This would show strategic direction and leadership from the Government, and support the COP president’s aims for a clear focus on delivery. With the urgency of the challenge ahead of us—to take action to reduce emissions and restore our depleted nature—we cannot afford to miss opportunities such as this to help to deliver it. I hope that the Minister will consider embedding consideration of climate and environmental goals in the Bill and look sympathetically at Amendments 9 and 10.

Amendments 12 and 29 would provide simple clarifications aimed at ensuring that the law stated that the grant of subsidies did not release a beneficiary from its other legal duties in relation to environmental protection. Amendment 12 would clarify, within the principles, that all subsidies should be subject to that prohibition, while Amendment 29 would provide for a stand-alone clause within the general prohibitions with the same effect. We are saying that, without the amendments, there may be perverse incentives and the “polluter pays” principle could well be lost. I look forward to a response from the Minister on those amendments.

I support the amendments in this group in the name of the noble Lord, Lord McNicol of West Kilbride, and the noble Baroness, Lady Jones of Moulsecoomb, which are very much in the same vein as those of the noble Baroness, Lady Boycott.

I want to mention Amendment 33 in the name of the noble Baroness, Lady Jones, about subsidies for fossil fuels. The Minister and I have frequent disagreements on what defines a subsidy, so I am pleased that this amendment has been tabled. I support it because I hope it will give the Minister an opportunity to clarify, first, whether taxpayers’ money should be used to support exploration for new oil and gas fields, and secondly—there are many subsidies but I will restrict myself to two questions—whether the Government should in fairness continue to allow the decommissioning costs of fossil fuels in the North Sea to be met by the UK taxpayer. Oil companies at the moment are pocketing vast sums of pure profit—eye-watering and fairly obscene profits—and we are giving them money on top of that. The Minister will have his opportunity to answer that—I hope he will.

I also welcome the Motion by the noble Baroness, Lady Jones, that Clause 51 not stand part of the Bill, which is a probing amendment. I, too, want to know why nuclear energy is excluded from the energy and environment principles in the Bill; there seems to be little rationale for doing so.

[Baroness Hayman (CB)]

My Lords, I declare my interests as set out in the register, particularly as co-chair of Peers for the Planet. I am grateful for the opportunity to speak to this suite of amendments dealing with climate change and environmental issues. I particularly support Amendments 9, 10, 12 and 29, which have just been so ably introduced by the noble Baroness, Lady Sheehan, and are in the name of my noble friend Lady Boycott, who I know is deeply disappointed not to be able to be here. I did not manage to get my name on the amendments but I am here, so perhaps I can say a few words about the general tenor of this group.