Subsidy Control Bill

Lord Hope of Craighead Excerpts

Lords Hansard - Part 2 & Report stage
Tuesday 22nd March 2022 Lords Chamber

[Lord Hope of Craighead (CB)]

My Lords, I have put my name to Amendments 6 and 64 and I would like to say a word or two about them. I did not put my name to Amendment 58, partly because it came a bit later, although I discussed it with the noble and learned Lord, Lord Thomas, and I understand its structure and support the reasons behind it.

I remember standing here and smiling at the Minister about a week ago because he had put forward an amendment to another Bill in which he was proposing, with our agreement, that the consent of the Scottish Ministers should be obtained before certain steps were taken. I am afraid I have forgotten the name of the Bill and the particular amendment but I think we all congratulated the Minister because he was, I think, following advice that came from the Constitution Committee, which suggested that it was appropriate that this kind of measure should in the Bill. I had the feeling that the tide had turned and that we might see more of that sort of thing.

The noble and learned Lord, Lord Thomas, already made the point that Amendments 6 and 64 are really quite modest, and it is difficult to see any harm that is done to the structure of the Bill or indeed the way matters are worked out by putting into the Bill—through Amendment 6, for example—that a Minister of the Crown may be requested by the devolved Administrations to put forward a streamlined subsidy scheme. The Minister is not bound to give effect to that request, but it does mean that there is an avenue for the devolved Administrations to ask for a particular scheme to be proposed by him. It would be a reassurance to the devolved Administrations that their position has been properly recognised. After all, it is a partnership throughout the United Kingdom to make this scheme work. We do not want to fall into the trap of the then internal market Bill, which was notorious in seeming to ignore the devolved Administrations altogether.

These are modest amendments, as the noble and learned Lord said, which do not disturb the overall working of the Bill. If one is trying to recognise the position of the devolved Administrations, this kind of provision in the Bill would be very welcome, as it was in that Bill last week.

Amendment 58 enables me to ask the Minister about what paragraphs 6 and 7 in Schedule 3 are really doing. They refer to the “appropriate court”; the noble and learned Lord, Lord Thomas, asked whether it is properly designed. It talks about

“subsidy proceedings before the appropriate court”

in which the issue before the court is to be

“assessed by reference to the considerations and views of the promoter of the proposed devolved primary legislation”.

Who will bring these proceedings? It is an important question which I hope that the Minister might answer. What is meant by the assessment

“by reference to the considerations and views of the promoter of the proposed devolved primary legislation”?

Who will be the promoter? The wording of these provisions leaves a great deal to be discovered later. I would very much like to know what exactly is going on here, who will initiate the proceedings, and why the assessment is designed as it is in these paragraphs.

That brings me to the point that the noble and learned Lord, Lord Thomas, was making—that we are dealing here with a matter of great constitutional importance. Apart from the Scotland Act, no other provision directs a court on how to deal with proceedings brought against legislation passed by the devolved parliament. It must be remembered, as he was saying, that the devolved legislatures are democratically elected with the mandate of that democratic election behind them. One is not dealing here with delegated legislation. A much higher order of legislation is being considered, which deserves to be assessed with reference to the mandate that the parliament or assembly has from the electorate which gave it life. It is very important to appreciate the extent to which one is dealing here with matters of real importance to the Administrations and giving proper weight to the democratic mandate which they have.

The advantage of going to the Supreme Court is twofold. First, it avoids the possibility of appeals in the normal process, where the appropriate court takes its decisions and there are then appeals and the proceedings are delayed. The Supreme Court process is very simple and very quick. You go direct to the highest court under a reference which identifies the issue. The court then deals with it. The other point is the uniformity which the Supreme Court can bring through all the jurisdictions.

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[Lord Hope of Craighead (CB)]

My Lords, this group of amendments gives me an opportunity to express my appreciation to the Minister and his team for the work they have been doing under the legislative consent process. The Constitution Committee studied the working of this process for much of last year and in its report, Respect and Co-operation, expressed the concern that the process was not working properly—indeed, we heard quite a lot of evidence from the devolved Administrations that they were dissatisfied with the way it was working.

My impression has been that since late autumn of last year the working of the system has very much improved, and the remarks made by the Minister at the beginning of his reply on the last group of amendments tend to confirm that a great deal of work has been done behind the scenes to try to make the process work. I am therefore much encouraged by what he said, both in private conversations and in the Chamber.

I have one particular to request to make. When we come to Third Reading, I wonder whether the Minister would provide the House with a report to explain why, if it is the case, that consent Motions have not been passed by the devolved legislatures. It would be helpful to know what the sticking points were and why the Government were not prepared to give ground to the devolved legislatures to obtain their consent. It would inform the House. It would also enable us to understand how the process is working and to appreciate that the Government have been working as hard as they could to obtain consent and that there were genuine reasons for their inability to obtain it. I would be grateful if the Minister could do that when we come to Third Reading. I make that point now so that he can take it into account when the time comes.

[Lord Fox (LD)]

Your Lordships will remember that I made a very long speech on the DPRRC’s reports and I would like to think that it was the power of reasoning within that long speech that led to these very welcome amendments from the Government. I suspect, however, that it is the reputation of the DPRRC and the rigour of its work that caused these changes to be made. For that, we should be grateful and pleased. It is a shame that the Government had to go through this process to do it, but it has happened.

We on these Benches also welcome the announcement made by the Minister on financial stability issues and bringing in the PAC and Treasury Select Committees confidentially on that. That is a common-sense approach, and it goes a long way to solving any issues.

On defining subsidies and schemes of interest and of particular interest, we are disappointed that the definitions are not brought into the Bill, but I hope that following the consultation process the Government will come back and, either formally or informally, inform the Front Benches and those others involved in the Bill of progress, so that when the regulation is made, we will in a sense have been brought into that process. This is a good set of amendments that we broadly welcome.

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[Lord Thomas of Cwmgiedd (CB)]

My Lords, I will speak to Amendment 55. I first thank the noble and learned Lord, Lord Hope of Craighead, and the noble Lords, Lord Wigley and Lord Fox, for their support. The amendment has two purposes, one of which has been outlined by the noble Lord, Lord Fox, dealing with the position of the CMA. The second is to deal with the position of the devolved Governments and legislatures.

I ought to deal first with the position of the CMA. Although I co-signed amendments with the noble Lord, Lord Lamont, before Committee, the amendments he put down did not include two of them; I am not sure why. I have restored them all, because it seems to me that, on analysis, if the Bill is to be regarded as a serious attempt to uphold the rule of law and not as a piece of window dressing to satisfy our international obligations, we need to look more carefully at the position.

There are three methods of enforcement. The first is to have transparency and force disclosure. We know of the force that has; the effect of sunshine as a disinfectant is well recorded in history.

Secondly, there is the need for the CMA to investigate. It seems to me that without the CMA having powers of investigation, you do not have a properly independent system of enforcement compliant with the rule of law. It cannot be right to leave enforcement to those giving subsidies. You must have someone independent and objective in making the investigation. That is a requirement of the way in which all investigations are carried out; they have to be independent and impartial. I simply do not understand why the CMA cannot be allowed to conduct investigations that it thinks should be carried out, not merely those that the Secretary of State wants carried out or that are referred to it. Of course it will carry out the investigations referred to it by the Secretary of State independently, but it does not have the necessary power to do it where it thinks it is in the interests of enforcement.

For a similar reason it seems clear that, as was proposed in the amendments in Committee, the CMA ought to have powers of enforcement before a CAT—this is where it differs slightly from the amendments put forward by the noble Lord, Lord Lamont. Again, independent powers of enforcement are essential. The Secretary of State will have some powers, as will those who say they are injured as a result of what has happened. But that is essentially, to take an analogy with the ordinary enforcement system, a system of effectively private prosecution. My experience of private prosecutions has always been that, unless they are funded for extraneous and charitable purposes, such as is done by the RSPCA, or there is money in it by obtaining a conviction for those who are businessmen interested in getting a private prosecution, it is unlikely that there will be private enforcement. There is no doubt that this kind of enforcement action is extremely expensive. Therefore there is a real risk that there will not be much effective enforcement and that such effective enforcement as there is will be directed only at what I would call big money cases. Having a justice system that deals only with big money cases is recognised to be no just system at all.

The noble Lord, Lord Lamont, put it very pithily by creating Juvenal: “Quis custodiet ipsos custodes?” It seems to me that that summarises it in four words. There must be someone independent, both to investigate and to bring a matter before the courts if necessary, who can ensure that the Secretary of State and others uphold the rule of law. That is all I wanted to say about the position of the CMA.

On the second purpose of the management, I can deal with that briefly. It is an important question even at this hour of night, because it raises the issue of equality between our nations. I spoke at length about this when proposing the amendments in respect of seeking the consent of the devolved authorities and giving them certain powers, but this is an egregious example of inequality. Whereas the Secretary of State qua Minister responsible for England and the giving of subsidies in England can refer matters dealt with by, say, the Welsh, Scottish or Northern Ireland Governments to the CAT, there is no equality the other way round. That seems a fundamental flaw in this part of the Bill. It could be remedied by an undertaking by the Secretary of State that, if he was asked by the devolved Governments to make a reference, he would do so, and I very much hope that the Minister will be able to give such an undertaking.

What is important about these issues of equality is that they matter in two respects: first, that there is equality, but also that there is seen to be equality, and the equality between the nations is fundamental to the union. Secondly, there is the purpose of the amendment relating to the devolved authorities—this differs from the amendments in the name of the noble Lord, Lord Lamont. It seeks to make clear that the devolved Governments will always be interested parties for the purposes of appearance before the CAT. Again, this could be clarified. It would be far better if this was done in legislation, but at least it could be taken some way by the Minister making this clear.

I am sorry to have spoken at such length at this hour of night but these are important points of principle. They go to the rule of law and the position of the CMA, but also go to the equality between our nations and the survival of our union.

[Lord Hope of Craighead (CB)]

My Lords, I have added my name to this amendment. We should pay tribute to the noble and learned Lord, Lord Thomas, for his insight on the importance of enforcement to make the system work. His two points do not need repetition but the first, about the role of the CMA, begs a question. Why should the CMA not have the powers that are being referred to in this amendment? As far as the equality issues are concerned, the question is: why not? One point in the amendment that particularly appeals to me is the reference to interested parties. All the bodies mentioned there—the CMA and the three devolved Governments—are interested parties. It may be that, as the jurisprudence of the system works its way through the process, this will be established; but it is far better to have it made clear at the beginning, so that its position is plainly established, and the enforcement process can be put through in a proper manner. Paying tribute as I do to the noble and learned Lord, I entirely support his amendment.