Subsidy Control Bill

Lord Wigley Excerpts

3rd reading
Monday 28th March 2022 Lords Chamber

[Lord Hope of Craighead (CB)]

I am grateful to the Minister for fulfilling his commitment and producing the report for which I asked. It is disappointing, but I am reassured by the latter part of his statement—that engagement with the devolved Administrations will continue. I very much hope that that will produce a more fruitful result than has been achieved so far.

[Lord Wigley (PC)]

My Lords, I also express concern that it has not been possible to get agreement. Quite clearly, it is in everybody’s interest that the devolved Administrations and the UK Government should be working in harmony on these matters. There are issues, concerning agriculture in particular, that are causing concern. Could the Minister therefore give an assurance that, as his discussions go on with the Governments in Cardiff and Edinburgh, he will keep the House informed and give us an opportunity to debate, discuss, or at least put questions forward to him on, the outcome of any such deliberations?

[Lord Dodds of Duncairn (DUP)]

My Lords, could the Minister outline the position as far as the devolved Administration in Northern Ireland is concerned? He mentioned Scotland and Wales, but perhaps he could touch on what the situation is as far as any legislative consent from the Northern Ireland Assembly—before it was dissolved at the start of this week for the Assembly elections. He is aware—this was raised in Committee—of the grave concerns that there is there now a dual subsidy control system: the EU system in Northern Ireland and the GB system now applying to England, Scotland and Wales. This could, as he said in his own letter to the chair of the Protocol on Ireland/Northern Ireland Sub-Committee on 22 March, cause real problems and confusion for Northern Ireland.

Subsidy Control Bill

Lord Wigley Excerpts

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

[Lord Thomas of Cwmgiedd (CB)]

My Lords, I will speak to Amendment 9 and I am grateful for the support of the noble Lords, Lord Ravensdale and Lord Wigley, and the noble and learned Lord, Lord Hope of Craighead. I should first say how grateful I am to the Minister and to others for the amendments they have made to Schedule 1 to bring in the words “local or regional disadvantage”, to give some concrete context to the words “equity rationale”. This is an important and considerable advance. I am also grateful for the change to Clause 18, which again takes out any argument that if you are trying to attract a business to an area of disadvantage you can be penalised by that call.

However, despite that praise, there is a problem—I see the Minister smile—and it is this: what is lacking are the standards to ensure that there is some proper objective basis for the Secretary of State, the CMA and others to assess whether the use of the subsidy for this purpose is one that is properly justifiable, proportionate to the policy objectives and complies therefore with the subsidy control principles.

The proposal does not, as the Minister may think, seek to constrain local authorities from being imaginative, from being ingenious or from thinking what is the best standard or what is the best way to spend money for their local area. It does not seek to do any of that. What it seeks to do is to set standards to ensure that there is an objective basis for judging whether these bright ideas—this local freedom, which I welcome—are actually objectively justifiable. In short, the amendment seeks first to provide for efficiency and to ensure that scarce government money is spent wisely on thought-through and justifiable schemes that are proportionate to the policy objectives.

It also has another purpose: to ensure that all parts of our kingdom which are not economically disadvantaged cannot use this rationale to grant a subsidy. Levelling up is essential and subsidies can achieve that objective. As I said in Committee—but need not repeat in the time we have available for this important Bill—there has been a lot of controversy about the way in which the shared prosperity or levelling-up fund was used. That was very damaging. It is not appropriate for us to enter into that controversy tonight, but you have to have clear and objective standards. Some say that there were standards for the way in which those funds were distributed. If so, they were not clear and they plainly did not achieve a view among most people that the funds had been well spent. That controversy shows a number of things. First, there will be close examination of the way in which the subsidies are given and whether they are being properly directed to the right areas of our kingdom and not to the wrong areas. Secondly, you will never persuade the disadvantaged that something is being done for them unless it can be objectively shown that the use of funds across the kingdom is directed to helping those who need it most. The only way to do this is to set out clear criteria, and a failure to do so will be damaging to the unity of our kingdom.

In Committee, some commented that one of the terrible issues of the past number of years is that the rich have got richer and the poor poorer. We cannot go on like that, and we must not allow subsidies to facilitate that. I advocated a map. I have listened to what was said and moved away from that. What I therefore advocate are principles, and it seems to me that these principles are simple and could easily be adopted. I will listen carefully to what the Minister has to say, because my amendment is not the only way.

This Bill is going to have guidance, and I am not going to repeat what I said about the undesirability of legislating on an important matter with guidance. It is bad enough doing things by regulation. Guidance is just a step down the road away from what we should be doing. I have to be realistic and I very much hope therefore that, when the Minister responds, he will make it clear that guidance will cover this, will set objective standards and will include the standards to which I have referred. There is a lot of research on this, but we must be very clear. If we are not, we will waste money, be inefficient and make the rich richer. That is something we must not do.

[Lord Wigley (PC)]

My Lords, I am delighted to follow the noble and learned Lord, Lord Thomas, to whose amendment I have added my name. We discussed these matters in Committee at some length. I am also delighted to see the Government’s Amendment 2, which is a step in the right direction. However, we need to address the purpose of having subsidies and how the achievement of that purpose or failure to achieve such objectives is measured, and we need some quantified basis on which to monitor and fine-tune policy.

We in Wales, unfortunately, have had far too long an experience of so many parts of our country having to depend on assistance to try and overcome economic difficulties. From the rundown of coal and steel in the 1950s and 1960s through to now, that has happened. There has been investment from the public purse to areas such as the north-west of Wales, including Anglesey, and the Gwent valleys, where the income per head is a 10th of the level of Kensington in west London; clearly, policy has failed. Objective criteria were laid down by the European Union with regard to the Objective 1 funding and the subsequent programmes we have had since 1999. They were based on areas below 75% of GVA per head being eligible for assistance. Millions of pounds have gone into programmes of that sort, but they have not necessarily solved the problem. We are looking for a mechanism that enables the economies of these areas to become self-regenerative, not to depend on handouts for ever and a day. That must be the objective. Therefore, there need to be clear criteria.

It is a good step that the Government recognise the need for there to be a regional and social dimension to this, but there needs to be a means of monitoring and fine-tuning and ensuring the growth of the economy from within. Rather than just compensation for not having that economic growth, the ability must be created among people and businesses to generate growth and economic well-being for the future. If we get it right in this Bill, it could be a very important step forward. If we fail, it will be a missed opportunity.

[Lord Ravensdale (CB)]

My Lords, starting with the government amendment to Clause 18, I must thank the Minister for listening to my concerns in Committee and for responding by putting forward this amendment, which addresses my concerns with the impact of Clause 18 on the levelling-up agenda and meets the intent of my original stand part amendment. I must also thank the officials for the work they put into drafting and finding an acceptable way forward and for engaging with me throughout the process. I thank the noble Baroness, Lady Blake, the noble Lord, Lord McNicol, and the noble and learned Lord, Lord Thomas, for all their support throughout.

The Government have proposed a comprehensive amendment in Amendment 14, which will ensure that subsidies that target regional disadvantage are exempted from the prohibition on relocation of economic activities. It will address concerns from stakeholders I worked with in the Midlands Engine, home to many of the most deprived regions in the UK, that this would be a constraint on supporting disadvantaged areas; and it will address concerns from local authorities and other disadvantaged regions. I believe it will prove an important part of the Government’s toolkit in levelling up, through allowing productive relocation activities that reduce economic disadvantages within the UK as a whole.

I also welcome the clarification, provided through Amendment 2, to the equity rationale in Schedule 1 to the Bill, that it covers subsidies aimed at regional economic disadvantage. This whole package of amendments goes a long way to address concerns expressed by noble Lords in Committee. However, there is always more that can be done.

I very much support Amendment 9 in the name of the noble and learned Lord, Lord Thomas of Cwmgiedd, to which I have added my name. It addresses an issue in that the way the common principles are drafted can be viewed through a local context; there is nothing in the Bill to define what a disadvantaged area is, as opposed to an advantaged area. If national direction is absent, there is no means via subsidy control to steer intervention to those areas that need it most. The amendment seeks to set objective criteria to define a deprived area, which would resolve this difficulty. It would also give legal certainty for business on which areas would count as deprived, and hence work to drive investment into those areas.

The other way this could be approached is through streamlined routes. A streamlined route or routes could be created, through the mechanism in the Bill, to provide national direction on funding into deprived areas. This could be on the basis of the same economic indicators as in the amendment of the noble and learned Lord, Lord Thomas, where any one of several markers of deprivation is present. Again, the legal certainty that comes from this route would then help direct business investment into the deprived areas. There would be a clear definition of what a deprived area is, and therefore the areas of the country for which support would be available through the streamlined routes. Obviously the streamlined route would not prevent subsidy in a non-deprived area. It would just mean that the giving of a subsidy in a non-deprived area would be more complex, require more scrutiny and therefore help direct investment into deprived areas.

I would be most grateful if the Minister could give some clarity on a couple of things. First, to echo the request from the noble and learned Lord, Lord Thomas, can the Minister provide some reassurance that the Government will provide some specification or objective criteria of what a deprived area is within guidance? Secondly, can he provide some detail on the government programme for streamlined routes and how these will feed into the levelling-up agenda?

In concluding, I was delighted to see the appointment of Professor Sir Paul Collier to the Government’s levelling-up advisory council. Several years ago he wrote that what was needed was a shock to expectations, which in itself would provide the momentum required to level up the country. Noble Lords will recall Mario Draghi saying that he would do “whatever it takes” to save the euro. In a similar way, the Government need to take on the challenge of levelling up by stating that they would do whatever it takes to level up the regions. The Bill will be a key part of the Government’s toolkit for achieving just that.

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[Lord Bruce of Bennachie (LD)]

My Lords, I shall speak to Amendment 4 in the name of my noble friend Lady Randerson and myself. As has already been reported, my noble friend is unfortunately self-isolating with Covid, but we are cosignatories of this amendment.

I hope to have a short but important debate about the role of agriculture in the context of this Bill. In Committee, we moved for the removal of agriculture from the Bill, and it remains our view that it is not appropriate for agriculture to feature in it. The European Union and World Trade Organization, as well as most countries and other organisations, keep agriculture as a completely separate administration, for all kinds of good reasons to do with issues such as food security and the environment. It is also important for the social and economic life of rural communities. In that context, given that the Government have made it clear that they are determined to keep agriculture in the Bill, we have tabled this amendment to try to ensure that the criteria by which agriculture is treated give some comfort—and, more than comfort, substance and reality—to how our marginal farming areas can prosper in future.

It is no secret that there is real concern among farming communities not only about the consequences of leaving the EU and its agricultural regime but about the trade agreements that the Government are signing with Australia and New Zealand, which open up our market to competitive imports—and without a subsidy regime for our marginal areas, we will simply not be able to compete. For example, 86% of the land area of Scotland is designated as less favoured; it is marginal and difficult to farm. It has mostly been dependent, therefore, on a range of different subsidy regimes, whether that is headage or area payments, market intervention or price support. All of those mechanisms have been designed to ensure that farming can be viable in those communities, and that the rural economy of those areas can be sustained.

Therefore, our amendment would put it into the Bill that particular account should be taken of areas of agricultural disadvantage and the levels of marginality of the land. I have cited the figures for Scotland; I do not have the exact figures for Wales, but it involves a significant proportion of the land area of Wales—and it is important for parts of England, such as the border country with Scotland, the Lake District, Cumbria and the ridge of the Pennines. Left to a completely open market and no subsidy support, agriculture on those hills would pretty well disappear. While it may be that the return of wilding is currently supported, it cannot maintain a viable community if there is no activity on that land that can be sustained.

In simple terms, we ask the Government to recognise that marginal land and land that is agriculturally disadvantaged should be explicitly stated as deserving of support. If the Government recognise that, they will give a degree of assurance to farmers across the areas identified, which they desperately need. It is already clear that subsidies are being reduced, and the marginality of those farms gives rise to real concern that they will not be viable in future—and the whole of our landscape will change.

This is a serious issue. It really matters to our hill farmers that they survive, and it matters to our rural culture that they survive, and this amendment would help to ensure that they do.

[Lord Wigley (PC)]

My Lords, I am delighted to support this amendment. I wish the noble Baroness, Lady Randerson well; it is a shame that she is missing this debate as her heart would very much be in it. She has quoted figures for Wales regarding the marginality of land.

In the context of European funding, which this regime is now replacing, the reality in Wales was that many of the schemes to help rural areas were under European grant systems rather than under specific agricultural systems. There is a coming together of the agricultural support and the support for the rural communities in which those agricultural businesses must exist, and both must work together if they are to underpin the future of the small farms, the hill farms, in Wales. There are many uncertainties at present, as the Minister answering this debate is aware. She has met the farming unions in Wales, and she knows their worries. One way of at least giving some hope for the future is to pass an amendment along these lines; if the Government cannot accept the exact words here, they can come back at Third Reading with an amendment that ensures that there is no inhibition, no prevention, in the new system of helping those rural communities in such vital matters.

[The Duke of Montrose (Con)]

My Lords, I declare my interests in farming in Scotland and as a member of the National Farmers’ Union of Scotland.

Agricultural support in Scotland is fully devolved but is an area where, as the noble Lord, Lord Bruce, has just emphasised, many elements of rural life can qualify as disadvantaged or marginal. Therefore, I sympathise with those who are keen to see that similar areas of the United Kingdom are adequately supported. However, I weigh it up with the fact that my noble friend the Minister has emphasised in earlier stages of our consideration that existing support schemes will be allowed to continue.

Those seeking to put this amendment into the schedule are surely looking at the rules that might apply to any new support schemes, but at the moment we are not looking at many new schemes. The measures put before us yesterday in Grand Committee were largely to do with amending existing support schemes. There is a possible exception in that elements of the lump-sum scheme, which at present is aimed at encouraging farmers to contemplate retirement, appear to contain the possibility that it could be applied to completely different circumstances. I asked the Minister yesterday whether it would apply for those in financial difficulty.

Subsidy Control Bill

Lord Wigley Excerpts

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

I have asked questions and am searching for a real understanding of what is going on in these provisions. I join my noble and learned friend Lord Thomas in inviting the Minister to consider the advantages of going to the Supreme Court instead of to the individual courts. There are the advantages of speed, certainty and uniformity throughout the jurisdictions because without those there is a risk of different decisions being taken in different jurisdictions, which is to nobody’s advantage.

[Lord Wigley (PC)]

My Lords, I am delighted to have added my name to Amendments 6 and 64 in the name of the noble and learned Lord, Lord Thomas of Cwmgiedd. I did not add my name to the other amendment in this group because I did not have time to study its implications, but I am grateful to him for having put these amendments forward and to the noble and learned Lord, Lord Hope, for his comments.

I am a little worried because these are described as very modest amendments. Are they too modest for me to urge on the Government? No, they are not. The Government, who have been forthcoming on some amendments tonight, should be sending a message to Cardiff and Edinburgh, and to Belfast—to the extent that there is a Government there—that there are acceptable mechanisms for dealing with any disputes. As the noble and learned Lord, Lord Hope, said, there is every argument for having a framework that is acceptable to Westminster and the devolved Administrations so they can at least respect the mechanism and when problems arise they can turn to it. I hope that the Government will be forthcoming on this tonight, and perhaps they will be. If they cannot accept these amendments, there may be other forms of words whereby this can be achieved.

This issue has arisen in so many pieces of legislation over the past two or three years where the relationship between devolved Governments and Westminster is concerned that a framework that is acceptable to both sides need to be established—all four sides, in fact. I hope that doing so will ensure that problems can be resolved before they have been created and that there is a transparent mechanism for everyone to do so, and for that reason I support these amendments.

[Lord Purvis of Tweed (LD)]

I shall make a few remarks with regard to Amendments 6 and 64 in particular. The noble and learned Lord, Lord Thomas, is modest. He did not need to take us through the hoops of Amendment 58. His argument that the Government should be thinking again on this approach was very powerful. As the noble Lord, Lord Wigley, said, this is now the third Bill, I think, which will become an Act, where the devolved Parliaments have withdrawn consent at the outset and there have been rather tortuous discussions during the passage of the Bill to try to receive consent. Those Parliaments, properly constituted under our constitutional arrangements, feel that the Government are deliberately encroaching on their territory.

We debated this at length in Committee and I do not need to rehearse any of the arguments, but, as the noble and learned Lord, Lord Hope of Craighead, said, the Government seem to be open, when it suits them, to moving the dial towards consultation before further regulations are made. I think the noble and learned Lord was referring to Part 3 of the economic crime Act. In Section 14, the Government indicated that if there were going to be further provisions, the Secretary of State must consult the devolved Administrations on them. In this Bill, the Government have been reluctant to take a similar position of forcing Secretaries of State to consult where there are implications on devolved legislative areas.

In Committee, the Minister fell back repeatedly on saying that this Act is a reserved issue. That has been disputed by some, but even if we take it as read, the implication is that some of the schemes will impinge on devolved legislative competence. Therefore, the amendments in this group are very well made. Amendment 6, which has been supported by my noble friend Lady Randerson, regards offering some form of equivalence. While the Secretary of State indicates that this is a fully reserved issue, when there are schemes that are applicable to England only, there is no equivalent power for Wales, Scotland and Northern Ireland. That is what this amendment is seeking to correct.

I call this devolution equivalence. We are not disputing reserved or devolved competences; we are simply saying that when there are schemes that will be put forward for one nation under the legislative framework for that nation—England—there should be legislative equivalence for schemes operating within other nations. The noble and learned Lord, Lord Thomas, might say that that is modest; I say that it is reasonable. Surely one fundamental principle of our system of devolution could be that when it comes to the implementation of legislation, the reasonable test should apply.

With regard to Amendment 64, as I said, the Government seemed to move in the economic crime Act, but they seem very reluctant in this Bill. I simply do not know why, because both are comparable. Both indicate that there are reserved functions but devolved competences. Ultimately, if the Government believe, as the Minister will make the case, that this Bill will bring about great benefits, there should be equivalence between those authorities to utilise those benefits. Therefore, I hope the Government will consider these modest and reasonable amendments today and, if not, bring back at Third Reading some indications of moving.

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[Baroness Bryan of Partick (Lab)]

My Lords, I too support Amendment 55. I travelled from Scotland this morning to support it, so I hope that despite the late hour, your Lordships will bear with me.

On the devolved Governments, this is yet another very modest amendment and provides the very minimum recognition that devolved Governments have responsibility for important areas of their economies and should have the right in relation to call-in and enforcement.

I thank the Minister for his letter of 15 March with the update on the Bill’s progress. I do not think that anyone was surprised to read that, despite what he terms the Government’s best efforts, they have not been able to secure the legislative consent Motions. However, I was very sorry to read that the Government have decided to proceed without them. The Minister wanted to emphasise the Government’s determination to continue working collaboratively and transparently with the devolved Administrations, but both the Scottish and Welsh Governments do not believe that there has been a strong attempt to work collaboratively. Instead, they feel that they have been told rather than consulted.

The explanation given in Committee by the noble Baroness, Lady Bloomfield, in her closing comments on the set of amendments dealing with devolution, made it clear that the Government believe that they have every right to override the concerns of devolved Governments on the grounds of the UK Parliament’s status as

“the supreme legislative body of the United Kingdom”,

believing that it is merely

“a reflection of constitutional reality.”

She also stated that she simply did not believe that

“it is appropriate to require the Secretary of State to seek consent even when the Secretary of State may ultimately proceed without that consent on a reserved matter.”—[Official Report, 31/1/22; cols. GC 115-117.]

This issue is at the heart of the problem that this amendment tries, in some small way, to deal with. As has been mentioned, the Secretary of State is acting for what the Minister describes as the “supreme legislative body” but at the same time is representing the interests of England.

Speakers in Committee described this as lacking justice and being unfair. The Minister did not answer on this issue in Committee, nor was it referred to in his letter. We hope that we will find out in due course whether the review of intergovernmental relations will make a real difference. While the UK Government show so little understanding of and lack of esteem for the devolved Governments, it is hard to imagine that there will be a significant change. I hope the Minister can give some reassurance that the Government will reconsider allowing the role for devolved Governments outlined in Amendment 55 as, if they do not recognise the legitimate concerns of the devolved Governments, I fear it will contribute to the break-up of Britain, as the noble and learned Lord, Lord Thomas, and the noble Lord, Lord Bruce, warned.

[Lord Wigley (PC)]

My Lords, I will detain the House for only a moment as it must take for read my feelings on the devolved questions which we have threshed around so much. I want to put on record how much I and, I hope, the House appreciate the contribution of the noble and learned Lord, Lord Thomas of Cwmgiedd, not only to this debate and earlier debates but for his work in Committee. That he is willing at this stage of his distinguished career to put hours of work into an amendment such as this demands that the Government take notice. He has raised serious points in a professional manner. If the Government cannot respond positively to them now, there is still a chance for amendments to come forward at Third Reading to take on board the points that he has made so eloquently.

Nuclear Energy (Financing) Bill

Lord Wigley Excerpts

Committee stage
Tuesday 8th March 2022 Grand Committee

Moved by

[Lord Wigley]

1: Clause 1, page 1, line 7, at end insert—
“(2A) “Nuclear energy generation” includes the generation of energy by either nuclear fission or nuclear fusion.”Member’s explanatory statement
This subsection is to clarify that the provisions of the Bill may extend to nuclear fusion electricity generation if that process becomes viable.

[Lord Wigley (PC)]

My Lords, it is an honour to be moving the first amendment in our Committee deliberations on the Nuclear Energy (Financing) Bill. It is fair to say that this is a probing amendment in the true meaning of the term. If I had received an answer on the issues relating to nuclear fusion when I raised them at Second Reading, I would not have needed to have tabled this amendment now.

Amendment 1 proposes to insert the definition that

“‘Nuclear energy generation’” includes the generation of energy by either nuclear fission or nuclear fusion.”

The Bill is clearly intended to serve as a long-term framework for the financing of nuclear projects. It could hardly be otherwise, since the cycle of agreeing a location for a new nuclear facility, securing all the necessary consents, getting a credible financial package into place and then building the facility, testing it and engaging it with public electricity networks takes over a decade, and probably two, to bring to full fruition. It is by definition a long-term project, and all the uncertainties arising from such long-term gestation periods are what make this Bill necessary.

It is in this context that I tabled Amendment 1, relating to nuclear fusion. Many people may mutter, “Nuclear fusion? But surely we’re many decades away from that becoming an economic possibility.” Yes, it is true that for most of my lifetime nuclear fusion has been the big white hope lurking just over a distant horizon. Back in the 1950s we were told about what I think was then called the Zeta project, which could harness abundant fuel made from seawater, as was quoted, in a process that was far safer than nuclear fission and whose waste product had a half-life of less than 100 years. That project stuttered on through the 1960s, seen as having the possibility of producing an inexhaustible source of energy for future generations, but with scientific and engineering challenges that seemed then to be insurmountable.

Then in 1997 there was a breakthrough, and, excitingly, only last month scientists at the Joint European Torus project, JET, at Culham near Oxford, succeeded in generating by fusion 11 megawatts for five seconds—a small amount, yes, but an indication of things to come. This came shortly after American scientists, using the world’s largest laser, achieved burning plasma, a major stride towards self-sustaining nuclear fusion energy, and in America the National Spherical Torus Experiment will be fired up in the autumn of this year. So at long last we are at a credible position where nuclear fusion may be a practical proposition for the second half of this century. As such, that possibility should be on our agenda as we map out the means of funding the production of electricity with a very low carbon footprint.

However, there is a problem as far as we in Britain are concerned. Last year EUROfusion decided to end JET’s operations at Oxford next year after 40 years, and according to reports the UKAEA intends to decommission the experiment. The focus of research is sadly moving from the UK to France, where the International Thermonuclear Experimental Reactor—abbreviated as ITER—is being built, funded by the European Union, the United States, China and Russia. When it is fired up in 2025, it will be the world’s largest fusion reactor. If it works, it will make fusion power a viable source of energy, with realistic hopes of it being in commercial operation between 2030 and 2035. It will generate usable electricity without carbon emissions and with low levels of radioactivity.

So we are falling off the bus just as it moves towards its destination. Does this not just encapsulate the botched manner in which successive UK Governments have dealt with the nuclear industry? I want to see a pledge from the Government that they have some commitment to nuclear fusion technology and that they would be prepared to put their money on the table to help make this happen.

In the context of this Bill, Amendment 1 would ensure that projects related to nuclear fusion would be fully entitled to seek funding through the avenues opened by the proposed legislation before us today. The best way of ensuring that this possibility does not fall by the wayside is to accept Amendment 1 and provide that nuclear fusion is included on the face of the Bill. I beg to move.

[Lord Teverson (LD)]

My Lords, I will make just a brief intervention. I do not disagree at all with the noble Lord’s amendment, except that clearly we should not use this form of funding for research until we know that we are building something that is going to work. It would be absolutely wrong to use this sort of funding for the research side. In defence of this Government and previous ones, in the area of fusion we have probably been more consistent in terms of our policy and research than we have with nuclear power— so that was probably slightly unfair criticism of the Government in that regard.

At this stage, without getting into heavy weather, the point I want to make is that we have an energy crisis at the moment, which makes this Bill slightly less relevant than anything else. I would be interested to have a statement—just a short sentence—from the Minister on what BEIS is doing at this moment to accelerate the alternative forms of energy that we have in the UK, particularly renewables, given the situation that we are now seeing: not just even higher energy prices but energy prices that will probably remain high for a long time, and the wish and absolute need of the West—Europe and the UK—to disinvest from supplies of Russian energy. I realise that is not great in terms of the UK, but we are as much subject to these global markets as anyone else.

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[Baroness Bloomfield of Hinton Waldrist (Con)]

I take the noble Baroness’s point. Indeed, the Bill has been drafted in a technology-agnostic way to cover all forms of energy infrastructure.

[Lord Wigley (PC)]

My Lords, I am very grateful to the noble Baroness for her response and for the interventions on the points that I raised. A moment ago, the noble Lord, Lord Teverson, appeared in the uncharacteristic role of being a protector and defender of the Government on these matters, and I am sure that that will be bankable by the Government at some stage. This is not a party-political point because it is not party politics; I am speaking on my behalf, as my own party has divisions on these issues. Over the past 30 years, we have had “stop-start-stutter” with regard to nuclear; if you do not want nuclear, perhaps “stutter” and “stop” are good options. But if nuclear is going to play a role, it has to be treated in a serious and coherent manner. It needs to be transparent, and we will be coming on to questions of transparency in a number of later amendments.

Returning to the core of my amendment—

[Lord Teverson (LD)]

I hesitate to interrupt, but I was relating only to fusion, rather than fission, in my comments.

[Lord Wigley (PC)]

I accept that clarification, of course. With regard to fusion, I accept that successive Governments have been generous in helping to sponsor research but, over the last couple of years, we seem to have had some difficulty with our European partners as to the ongoing role of Oxford, which apparently is coming to an end, and the fact that the Russians, Americans and Chinese are providing finance for the location in France where the major project is going forward. I very much hoped that we would have been involved in this, because so much of the work on fusion has been done in the United Kingdom. It is something that we should be proud of.

I hope that, when this eventually comes through, it is something that is of benefit. That is why I want to see, if this Bill goes forward—and it has shortcomings, but any such Bill is bound to, because of the uncertainties that we have in this area—that we have full provision for fusion as one of the nuclear alternatives. The Minister stated quite categorically that fusion is included in this Bill, so that anyone who is considering fusion projects for the future may be able to rely—other things being equal—on this Bill as a source of finance and a framework within which to operate. That is a helpful clarification and, on that basis, I beg leave to withdraw the amendment.

Amendment 1 withdrawn.

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[Lord Wigley (PC)]

My Lords, I wish to speak to Amendments 17 and 20 in my name, which have been linked with this group headed by Amendment 3 which—I have written here—has been spoken to with considerable force by the noble Lord, Lord Oates. That may need to be adjusted a little, but I agree with the principles put forward in Amendment 3. However, my Amendment 17, which paves the way for Amendment 20, writes into the Bill—

[The Deputy Chairman of Committees (Lord Lexden) (Con)]

My Lords, there is a Division in the Chamber. The Committee stands adjourned for 10 minutes.

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[The Deputy Chairman of Committees (Lord Lexden) (Con)]

My Lords, in the circumstances, all voting having taken place, let us resume. The noble Lord, Lord Wigley, can continue his speech and perhaps the noble Lord, Lord Oates, might follow.

[Lord Wigley (PC)]

I am grateful to you, Lord Chairman. As I was saying, my Amendment 17 paves the way for my Amendment 20, which writes into the Bill, on page 3, line 13, a duty on the Secretary of State to impose conditions that provide: first, for pinpointing responsibility for the eventual decommissioning of a project; secondly, for specifying the extent of the nuclear company’s liability for decommissioning and rendering the site safe; and, thirdly, for providing that all residual costs for decommissioning, over and beyond those shouldered by the nuclear company, are paid by Parliament.

This amendment deals head on with one of the arguments used, sometimes very effectively, by the opponents of nuclear power concerning the cost of decommissioning nuclear power stations and the danger, of which local communities are understandably fearful, of the site of a nuclear power station being left as a radioactive hulk. They are also concerned that under- takings given at the time when planning consent was approved might just be abandoned, with the local community being left to deal with a problem way beyond its ability to handle.

We see at Trawsfynydd today, over three decades after the ending of the generation of electricity, the hulk of the station still there. It is still radioactive and still awaiting full decommissioning. In 2020, it was announced that there would be a new programme for the demolition of the reactor buildings and that the site would be fully cleared by 2083—yes, another 60 years. If the Government are serious about bringing forward another programme of nuclear power stations—as colleagues will know, I support that, because I believe that it is the way to tackle the global warming issue—they must show that they are prepared to take on the ultimate responsibility of rendering the site safe, clean and in a condition acceptable to the local community.

Part of the responsibility for securing this must, of course, be placed on the plate of the nuclear company; after all, if it is to make money from the site, it has a moral duty to clear up the station when it has ended the generation of electricity. But such companies can easily walk away from their responsibilities and the buck must surely stop with Parliament for the residual work of clearing up and rendering safe the site that the Government and Parliament have approved.

This amendment tests the Government’s resolve on this issue. If they are serious about having a new programme of nuclear power stations, they must grasp the nettle and write these, or equivalent provisions, into the Bill. I look forward to their response and, in the event of them failing to give adequate, bankable assurances, I give notice of my intention of returning to this issue on Report and pressing an amendment along these lines to be written on the face of the Bill for MPs to further consider.

[Lord Oates (LD)]

My Lords, I apologise for my delay in arriving; I misunderstood and thought that the Committee was adjourned until the end of the special session, which was slightly delayed.

I am pleased to follow the noble Lord, Lord Wigley. Amendment 3 in my name and that of my noble friend Lord Teverson would require a geological disposal facility, or GDF, to have been constructed in the United Kingdom and be operational before the Secretary of State could designate a nuclear company under this Bill. The amendment’s objective is to bring some focus to the issues of nuclear waste and decommissioning, which were largely and curiously absent from the debate at Second Reading.

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[Lord Stunell (LD)]

Let us try Portugal. The Duke of Wellington was required to liberate Portugal from Spanish and Napoleonic domination. It is easy to forget Napoleon and Hitler and all sorts of things but—not that it is particularly relevant to this debate—political stability is important and rare. This country is one of the places that has been able to exhibit that despite our sometimes fractious debates on nuclear storage.

The conclusion of my report was that you need deep geological storage. It would be sensible for it to be in England. This is not, and never has been, Liberal Democrat policy, but my report pointed out that there was a big business opportunity because nobody else in the world—neither then nor, for that matter, now—had a good place to put their nuclear waste. I am certainly not opposed to having a deep geological disposal point.

The purpose of this is to establish the risk and the cost to the public purse. I go back to where I was in 2010—that there should be no cost to the public purse. We have gone backwards since 1999. Then we at least had a site and a plan—or BNFL did, which was strongly advocating it—but at the moment we have neither. We had a timescale; it would have been operational in 2024, which would have been very convenient for the passage of this Bill. Now it will probably not be for another 25 years, even if it gets a fair wind.

[Lord Wigley (PC)]

When the noble Lord says that there should be no cost to the public purse, is that in regard only to future projects or also to existing nuclear power stations? I mentioned in my intervention the situation in Trawsfynydd, the cost of decommissioning which could never have been anticipated when it was built. Is there not a case in those circumstances that the public purse is the only way to bail out that sort of situation?

[Lord Stunell (LD)]

The noble Lord is almost certainly right. That ship has sailed, to say the very least. In phases one, two and three of the nuclear programme, no adequate provision was made for decommissioning or any way of storing the waste. Unfortunately, that will clearly fall back on to the public sector in some form or another.

We are talking about a new generation. It is surely right and proper to learn from the mistakes of the last 60 years and make sure that that is properly costed in the formulation given for the construction and operation of these plants. I do not think that it is particularly controversial that we should learn from previous experience, although it is often very hard to do so.

Is the Minister satisfied that the public purse will be properly protected over a period of time from finally picking up the costs of geological disposal of nuclear waste from the plants that this Bill is intended to finance? The Government ought to answer that honestly and frankly so that there is no illusion on anyone’s part either about what is happening in terms of public subsidy or that the true costs of delivering a nuclear programme incorporate the costs of decommissioning, rather than shuffling them off at the start and delivering them as a bill of unknown but undoubtedly large size to the public purse.

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I hope that I have reassured noble Lords of the robust existing statutory regime that we have in place to ensure that prudent provision is made for the full costs of decommissioning and waste management by the operator of a new nuclear power station. This is complemented by the excellent work currently being undertaken to develop a GDF. I therefore ask that the amendment be withdrawn.

[Lord Wigley (PC)]

Will the Minister clarify her response on Amendment 20? If the cost of decommissioning, including of the site, goes beyond that which has been built in to the financial agreement at the origin of the scheme, is she saying that the Government would pick up the bill in those circumstances and that there is already a provision to provide for that, or is she saying that in no circumstances would the Government use public money for that purpose? If she is saying the latter, getting a nuclear power station such as Wylfa off the ground does not have a snowball’s chance in hell. There has to be a guarantee that ultimately the public purse will pick up the cost.

[Baroness Bloomfield of Hinton Waldrist (Con)]

All I can say is that all these issues will be negotiated up front in the agreement that we make with the potential operator of a new nuclear site.

[Lord Wigley (PC)]

I am sorry to press this further, but of course there will be negotiations and some sort of a deal will be made with those developers, but if the circumstances change, as happened at Trawsfynydd, and there are immense additional costs beyond what was anticipated, surely there has to be a public guarantee to those communities. Those communities have supported nuclear power on the basis that such an understanding exists. If it is not there, there will be a volte-face, and there will be a reaction against nuclear power. This assurance has to be given one way or the other. If the Government want to go away, think about what mechanism is appropriate and come back on Report, I accept that, but to say that in no circumstances would the Government pick up the tab is to kill off the prospect of those locations.

[Baroness Worthington (CB)]

I do not think that that assertion is correct, because my understanding is that once the nuclear industry stopped building new reactors it moved into decommissioning. What we had was a period in which the entire sector was making all its money from decommissioning costs. The reason that those costs kept rising was that we had a very poor regulator which allowed a reciprocal relationship with private contractors, who brought forward all sorts of faster decommissioning timetables. That was nothing to do with what society needed or required; it was to do with the profitability of the industry. I hesitate to say that there are these red lines where society will not accept a new reactor because of decommissioning. It is much more complicated than that. We must be careful that we are not gold-plating regulations that deliver millions of pounds to contractors unnecessarily.

[Lord Wigley (PC)]

I entirely accept what the noble Baroness is saying, but circumstances will change and there will be costs that have not been anticipated. Those will be picked up either by the local community or by someone else. If it is someone else, who else can it be but central government?

[Baroness Bloomfield of Hinton Waldrist (Con)]

What I can say is that the Government will meet all our obligations to communities in decommissioning the site.

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[Lord Wigley (PC)]

My Lords, before the Minister concludes this debate—oh, I beg your pardon.

[Baroness Bennett of Manor Castle (GP)]

Sorry, I have been trying to find a space to get into a number of amendments here. On the debate we have just been having, I shall quote Steve Holliday, the CEO of National Grid, who said in 2015 that the idea of nuclear for baseload was “outdated” and that:

“From a consumer’s point of view, the solar on the rooftop is going to be the baseload. Centralized power stations will be increasingly used to provide”


variable power.

In the interests of taking us forward, I will speak fairly briefly to my Amendments 7, 8 and 23 in this group. I apologise if Amendments 7 and 8 might have been better grouped with Amendment 2, which I did not spot at the time.

Amendment 7 seeks to ensure that nuclear companies be either a not-for-profit entity, a co-operative, a community-interest company or wholly owned by UK public authorities. This comes back to the point about the ownership of the designated nuclear company and a point I made earlier. I will not replay it at length, but we have very often seen through our whole system of privatised public services—railways, power companies, et cetera—the socialisation of costs and the privatisation of profits. This is an attempt to say that this is a core public service: this is not a competition, and it should be provided through that means of ownership.

I will also comment very briefly on Amendment 23 in my name, about what happens when a nuclear company is sold. This addresses the issues I referred to in group two. It is to make sure that, whatever rules we have, they continue to be the rules.

[Lord Wigley (PC)]

My Lords, I will speak very briefly indeed. I hate to disagree with my friends in the Green Party and in the Liberal Democrats, but the question has been asked about the impact on those on lower incomes. It is absolutely a fair question, but it must surely be resolved through the social security systems and the underpinning of people who are in that position. Surely, the crunch here is that, if there is one thing that is worse for those people than the impact of the cost of energy, it is there being no energy available: no electricity available when you put the switch down. That is the real, stark possibility that we could be facing in the world that is coming. We have to gear up for that, and then we have to arrange matters in such a way that those on the lowest incomes are protected from it. That surely must be our priority when facing the challenges of global warming.

[Baroness Wilcox of Newport (Lab)]

My Lords, as in the previous group, we have heard a variety of views trenchantly expressed. The Labour Party has tabled four amendments in this group: Amendments 10, 16, 29 and 38. Amendment 10 would require the Secretary of State to gain assurances about the delivery of a project.

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[Lord Teverson (LD)]

My Lords, I rise very briefly. In the last group, I mentioned some of the countermeasures to the variability of renewables, including interconnectors, energy efficiency, demand-side management and many more. But I also mentioned battery storage and I should have declared an interest: I was not expecting to get on to battery storage, but I am a director of a company involved in the development of battery storage. I apologise to the Committee that I did not raise that interest during the debate.

[Lord Wigley (PC)]

My Lords, I will speak very briefly indeed. I have added my name to Amendment 27 in this group alongside that of the noble Lord, Lord Foster; I did so with particular regard to my strong feelings on new paragraph (e), proposed by the amendment, which concerns

“how decommissioning costs of the project will be met”.

Of course, this issue appears in sub-paragraph (iii), proposed by new Amendment 5, which refers to

“an estimate of the costs of decommissioning the project”.

As I indicated in our earlier debates, I feel that this is a critical aspect of the Bill that needs to be covered and where assurance needs to be given, whatever the mechanism of doing so. I would have thought that the Government could recognise that and say that, whether or not these amendments meet the standards that are acceptable to them, there may be some way of giving an assurance that the questions asked by these amendments can be answered—and that the answers will be forthcoming to this Committee.

[Lord Foster of Bath (LD)]

My Lords, I am afraid that I cannot be quite as brief as the noble Lord because I have a number of amendments in my name. I am also conscious of the pressure on the Committee’s time, so I will do my very best to be as quick as I possibly can. I will concentrate rather more on Amendment 12 than on any other of the amendments in my name, that of my noble friend Lord Teverson and those of other noble Lords.

Basically, Amendment 12 would require the department to define “sufficiently advanced” in its guidance. What we know is that designation will come at a certain point. We have already debated the fact that we have no idea what the criteria will be and that we may or may not see them before we finish our deliberations on this Bill. However, we are at least grateful that the Minister is apparently listening to what we have to say. I hope that he will listen to this particular bit because the designation can come only when the Secretary of State is satisfied that the project is sufficiently advanced; this amendment merely requires the Secretary of State to be clear about what that means.

Earlier, I referred to the fact that I live near Sizewell so it is a particularly good example to use, not least because it is the only project in the offing that might use this methodology. In the case of Sizewell, it is worth being aware that the planning application has been submitted and is awaiting the decision of the Secretary of State. Yet, at the conclusion of the planning examination, numerous issues were outstanding. They still have not been sorted out.

They include the crucial issue of the design of the hard coastal defences. If you live near Sizewell, as I do, you know that the coast there is eroding incredibly rapidly. Three weeks ago, I went for a walk on the clifftop and saw, in a field where the crops were planted this year, that some of the initial plants have already fallen over the edge of the cliff. The erosion is very rapid; appropriate measures must therefore be put in place, yet this has not been done.

Moreover, nothing has been done to ensure that there will definitely be potable water. Frankly, if you have a nuclear power station with no guarantee of potable water, it is a completely pointless exercise; that work has not been done. Also, there has been no work to look at soil mixing and ground anchor trials, which are vital because a huge hole will be dug in the ground and we have to be sure that the whole thing is not going to collapse. There are numerous issues that have not yet been sorted at this stage.

Using those three examples, my question for the Minister is this: does he see that a designation could take place without those three things having been addressed, or not? Will there be sufficient progress? I seek a definition and an understanding. I have given some specific examples for the Minister to consider; I hope that he can tell me whether they have gone on.

The other amendment in this group, Amendment 18, aims to provide further transparency about how taxpayers’ money is going to be allocated and what taxpayers’ money is being used. The recent announcement of £100 million of taxpayers’ money being given to the project at this stage, before any decision has been made, does not look good locally. It almost appears as if the green light has been given to Sizewell before any of the issues that I have been raising have been taken into account. We need to have more transparency about the taxpayer contribution to projects.

Amendment 27 picks up an issue that was raised on an earlier amendment by my noble friend Lord Oates, so I will not go through it in any detail. It requires the Secretary of State to provide a report about the up-front and overall expected cost of the project, the likely cost of electricity going on to the national grid and decommissioning costs, which have already been the subject of much debate, so I shall not repeat that.

The subject of Amendment 28 was also raised in an earlier amendment by my noble friend Lord Oates. It is something that various consumer organisations have been calling for, which is that before final agreements are made, there should be an independent assessment of the information that is being provided to the Government. It would require an independent impact assessment to be conducted and to be approved by the House of Commons before licence modifications could be permitted.

The amendments in my name are all about transparency. If I go away at the end of the proceedings with one message, it is that at the moment the Government seem unable or unwilling to provide a great deal of information about the Bill. This is not about being pro or anti nuclear but about transparency, and at the moment I do not think we are getting anything like enough of it from the Government.

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[Baroness Bennett of Manor Castle (GP)]

My Lords, it is a pleasure to follow that powerful and clear exposition by the noble Lord, Lord Foster of Bath. I declare my position as a vice-president of the Local Government Association.

Consulting the upper-tier local authority is certainly an important factor. It is one way of addressing local consultation; the noble Lord has set out all the reasons why that is needed. However, we are talking here not just about Sizewell C but about a potential model for the future. It is possible that a site might be located right on a boundary where it is within one local authority but covers a substantial number of people in the adjoining one. That is the reason why I went for a radius of 50 miles in my amendment.

If the Committee is wondering why I chose 50 miles, I would be happy to debate what it should be. There are of course significant construction impacts, as the noble Lord outlined, but also, after the Fukushima disaster, the US Nuclear Regulatory Commission recommended that the evacuation area around a nuclear power plant, should there be a serious issue, should be 50 miles. Obviously that has an impact on people’s lives, on their feelings about their locality and even, dare I say it, on property prices. That is why I picked 50 miles. The people in the immediate vicinity are affected and they should be consulted as a simple matter of democracy.

[Lord Wigley (PC)]

My Lords, I support the amendments and the principle of consultation, particularly with local authorities. I, too, declare my interest as a vice-president of the Local Government Association.

The point made a moment ago by the noble Lord, Lord Foster, with regard to the impact of the workforce is of significance; the proposed 50-mile radius is relevant to that. I draw the Minister’s attention to the construction scheme of the Dinorwig pumped storage scheme in Snowdonia. It started in 1973 and was built, remarkably, with hardly any industrial disputes at all. More than 2,000 people were in that workforce; it was believed that they could not be recruited locally but, in actual fact, some 86% of the hourly paid were recruited locally while more than 70% of the office staff were recruited from within a radius of about 50 miles, which is the definition used for that purpose.

The outcome—it is relevant for the Minister to consider this when any new nuclear programme goes forward—was that there were remarkably good labour relations on that site, with close co-operation between the then CEGB and the trade unions. At a time when the Ince B project, for example, which will be known to the Minister, was suffering from tremendous labour problems, with strikes all the time, these were overwhelmingly avoided on the Dinorwig scheme. In other words, consultation with the trade unions, local authorities and representatives in the area enabled those dangers to be avoided. I believe that it is in the interests of everybody—the local community and the Government themselves, as well as the company—that the maximum degree of consultation is built in.

[Baroness Neville-Rolfe (Con)]

My Lords, there has been a lot of consultation about Sizewell C and there is, of course, a nuclear power station next door to the proposed site. I remember visiting it many years ago when I was a director of John Laing which built it, so I went inside. The whole process of getting to this proposal for a new nuclear power station has taken forever, for reasons we will not go into this evening. As a result, we have an emerging energy crisis, which is obviously not helped by wider world events.

There will, I assume—and I am sure the Minister can confirm this—be a planning requirement for new nuclear power stations to be built under these new powers. Any good builder of nuclear power stations will consult and consider the needs of the employees because that is the way these things are done, otherwise you do not get them through planning, as I know well from experience.

I am against adding extra statutory consultees to the Bill. The proposal for a 50-mile radius suggests that the new nuclear power stations might actually be dangerous, which would make people more fearful, whereas we are planning to build safe nuclear power stations learning from things in the past, so I would be against that.

My main point is that we need to get on with this. We cannot go round and round in circles. There is real opportunity, not only in East Anglia but in places such as Wales and, potentially, even in the Lake District, for investments that would be good for local communities, the staff and employees who will work in the power stations.

Russian Oil and Gas Imports

Lord Wigley Excerpts

Monday 7th March 2022 Lords Chamber

[Lord Callanan (Con)]

I agree in large part with what the noble Lord said. Of course we need to expand our renewable capacity as quickly as possible. We already have record amounts and we need to pursue that. We are introducing contracts for difference rounds every year to maintain the ongoing flow of supply. As the noble Lord is aware, we introduced a £9.1 billion package of support for the poorest households.

[Lord Wigley (PC)]

My Lords, we need to maintain the maximum possible pressure on Putin, obviously. The biggest problem facing mankind is global warming, which could wipe out humanity within a couple of centuries. That being so, would it not be totally irresponsible to restart coal burning in order to generate electricity when that generates 30 times more units of carbon than renewable and offshore generation?

[Lord Callanan (Con)]

That is a very wide-ranging question. I think I would disagree with the noble Lord: I think Putin is a bigger threat at the moment to worldwide peace and stability. The important thing to bear in mind with regard to climate change, which is of course an important subject, is the tiny percentage of global warming caused by our emissions in the UK, which are rapidly decreasing. It is something that we need to work on, on a global basis; just eliminating our emissions on our own is really not going to make any difference.

Nuclear Energy (Financing) Bill

Lord Wigley Excerpts

2nd reading
Monday 21st February 2022 Lords Chamber

[Lord Wigley (PC)]

My Lords, I am delighted to follow the noble Lord, Lord Ravensdale. I agree very much with what he said, particularly his reference to hydrogen. I also wanted to comment on the speech by the noble Lord, Lord Rooker, who was spot on, not only in his content but in the passion with which he put forward his points.

I speak in a personal capacity, as Plaid Cymru, like most parties, has a spectrum of views on nuclear matters. Plaid MPs did not oppose Second Reading and the two local authorities, Gwynedd and Ynys Môn, which cover the nuclear power sites of Trawsfynydd and Wylfa, are both Plaid-led. Both councils support re-establishing nuclear energy generation on those sites, subject to safety, environmental, employment and community provisions. Indeed, we were moving towards securing Wylfa Newydd when Horizon proposals faltered on financial issues and Hitachi pulled out, so the Bill is very relevant. There is particular support for SMRs at these sites and, while I appreciate that the Bill is a facilitating measure, not tied to specific technologies, I hope that the Minister can indicate greater urgency by the Government for the SMR programme and for securing from the Nuclear Decommissioning Authority a freeing up of land at Trawsfynydd for Cwmni Egino, the site development company created by the Welsh Government, to facilitate an SMR demonstrator plant and develop medical radioisotope production there.

The main purpose of today’s Bill is to speed up investment in a new generation of nuclear power plants. I support the Government’s aim of fully decarbonising the generation of electricity by 2050, but will the benefits of this Bill be felt in time to meet the 2035 interim target of a 78% reduction in carbon emissions compared to 1990?

I accept that nuclear has a key role in guaranteeing electricity supplies for everyone in these islands when full decarbonisation is reached. This is implicitly part of the energy decarbonisation contract between government and the people.

We do not know what the constitutional relationships within these islands will be by 2050, but I believe that all four nations will be part of an integrated European electricity network through which the sale of low-carbon electricity will offer substantial financial returns.

Writing recently in Social Europe, Sarah Brown of the Ember think tank, warned:

“Europe is still in denial about fossil gas.”


She stated that there is an overwhelming consensus that limiting global warming to 1.5 degrees requires

“the rapid and complete decarbonisation of the power sector”.

A United Nations Economic Commission for Europe report, published in October, showed that for each kilowatt hour of electricity generated the grams of carbon dioxide released into the atmosphere are, for coal, 1,000 grams; for gas, 430 grams; for solar, 37 grams; for wind, 14 grams; and for nuclear, 5 grams. These full-life cycle figures include the carbon implications of mining, construction, operation and decommissioning of relevant plant.

We need a complete end to the use of coal, oil and gas for generating electricity and their replacement by dependable low-carbon sources of energy. There is an important role for renewables—solar power, wind generators and tidal and estuarial energy such as the Severn barrage—but they cannot generate all our electricity on the consistent, reliable, 24/7 basis necessary to meet in a timely fashion the needs of each household and place of work. Developments in hydrogen technology and battery capacity will play a role, but the basic challenge remains. Eventually, we may see a renewable, fully decarbonised electricity generation sector if we have the political will, but the clock is ticking towards a global warming profile in which human life on this planet will be snuffed out. Our present trajectory is unsustainable.

Over time, we shall see new clean sources becoming available. We have long awaited fusion as a better source than nuclear fission; recent developments at the Joint European Torus facility at Oxford are encouraging. I hope this Bill might facilitate nuclear fusion investment in due course, but we cannot base our 2050 target on the assumption that fusion will be in place. We have a period of perhaps half a century when the gap between low-carbon supply and demand must be met from a dependable source. Over that timescale, nuclear electricity is an essential part of the clean energy mix.

There are valid questions about the cost of nuclear power. If we are going to support nuclear with this type of financial intervention, how do we ensure that we maximise the UK’s industrial opportunities with technologies and manufacturing capabilities that can be exported as well as used for our own clean energy needs? With the UK taxpayer funding nuclear in this way, we must ensure that the UK economy benefits fully from the opportunity this affords. One major issue of concern relates to the cost of clearing up nuclear power sites; this must be factored into the equation.

I also want assurance that the Bill can cover a variety of sources of nuclear generation, including SMRs and eventually nuclear fusion. We must ensure that the model which has been developed can benefit other developers, and should not be seen as one customised solution for the benefit of EDF at Sizewell C. What commitment can the Minister give that other technologies and potential projects can benefit from this Bill?

I shall also be seeking greater clarity on the role of devolved Governments in designation, licence modification, consultation, transfer schemes and decommissioning.

Because of the pressing need for a new generation of safe, clean, low-carbon nuclear generation facility to underpin our carbon footprint commitments, I am content for this Bill to have a Second Reading.

Subsidy Control Bill

Lord Wigley Excerpts

Committee stage
Wednesday 9th February 2022 Grand Committee

Actually, any subsidy or preferential procurement could impact on carbon emissions. Whether it relates to transport, public services, digitalisation or whatever, it can have an effect that is not primarily environmental, but with a fairly devastating environmental side-effect. We need to make sure that the regulation of our subsidies reflects the need to focus on that at every level. We need to get the CMA to report the aggregate outcome of its activities of the previous year. I strongly support the amendment from the noble Baroness, Lady Boycott.

[Lord Wigley (PC)]

Could my noble colleague clarify his thinking with regard to subsidies to the steel industry? Clearly, such subsidies could have far-reaching effects on the environment. To make a judgment on that would require people with an intricate knowledge of the steel industry and the background and significance of subsidies in that sector. At what level should that decision be taken?

[Lord Whitty (Lab)]

My Lords, that is probably a question for the Minister rather than for me, but, clearly, the decision on, for example, the Cumbrian coal mine, which is to feed into the steel industry, is an incredibly complex issue which will not be resolved by the narrow criteria of whether it enhances or undermines competition. The noble Lord is correct in that respect, because it would also have a considerable effect on carbon emissions.

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[Lord Bruce of Bennachie (LD)]

My Lords, I speak in support of Amendment 64, to which I have added my name. I also support Amendment 65, which my noble friend Lord German will address in more detail. Overall, and as has been said, this Bill has worrying implications for the devolution settlements. Just as the United Kingdom Internal Market Act may be used to impact the devolved Administrations unfairly—certainly, that is their concern—reserving the subsidy regime to the UK Parliament and the powers that have been given to the Secretary of State are causing alarm across the devolved Administrations.

The Government like to claim, and the Minister has made this point a few times, that leaving the EU gives the devolved Administrations more power and flexibility. Under the EU, they were constrained by the state aid rules that no longer apply. Now, they can pursue their own. That would be true if the UK Government were not introducing legislation that allows them to override the devolved Administrations, without even a requirement for consultation and with no reciprocal rights to challenge UK Ministers’ decisions as regards not only the UK but England.

Oversight of these two pieces of post-Brexit reserve-power legislation, which I would argue are draconian, has been allocated to the Competition and Markets Authority, which has been asked to acquire skills and experience that it does not yet have. It is important for us to recognise that this is new territory for the CMA.

Thomas Pope of the Institute for Government says that this Bill

“does not yet guarantee a Brexit success story. Gaps in the legislation could deny Parliament”—

I would argue are denying Parliament—

“a proper chance to scrutinise how the new system will work—and point to future rows between the UK government and the devolved administrations.”

He further points out that the regulations have no input from the devolved Administrations. The Minister keeps saying that he is consulting, but the devolved Administrations say it is not consultation at all. Pope argues that

“a successful system needs buy-in from all parts of the UK.”

That is absolutely the case. He went on to say that the Institute for Government’s report

“recommended that any regulations should be made in consultation with the devolved administrations”—

I emphasise the following—

“with the process preferably led by experts in the CMA. The government’s approach risks future clashes”.

These arguments have been further developed by George Peretz QC, who points out, as previous debates in this Committee have highlighted, that granting authorities need to test their subsidies against the effects on competition and investment, without reference to the wider issues—in other words, social and environmental implications, and the other issues we are discussing. It is a very narrow definition, which could lead to broader subsidy intentions being overridden. It is true that the TCA refers to the socioeconomic situation of the disadvantaged area concerned. How could the EU not agree to that, given the CAP and its own state aid rules? But there is no definition of what constitutes a disadvantaged area or what disadvantage is. We have discussed the lack of any area map in previous Committee debates.

Mr Peretz goes on to say that

“nothing in the Bill provides for the devolved governments to have any say in the appointment of CMA panel members who will, as part of the Subsidy Advice Unit, exercise the CMA’s powers under the Bill”,

such as they are, and

“there is no equivalent to the provisions of Schedule 3 to IMA20 that require the Secretary of State to seek the consent of the devolved governments before making appointments to the Office for the Internal Market”.

Why is that the case for the internal market Act but not the Subsidy Control Bill? Surely, consistency, at least, requires that. This amendment seeks to remedy this and, I suggest, for very good reason. As I said, the CMA is moving into new and unfamiliar territory. It is surely essential that it understands the needs of the devolved areas and can balance them across the UK.

The powers that the Secretary of State has, which are not reciprocated for the devolved Administrations, put the CMA in a potentially invidious position. If the Secretary of State seeks to challenge, for example, the livestock support regime of any of the devolved Administrations, he or she can do so—on so far unstated but potentially restricting grounds. If a Minister introduces a subsidy, let us say, for London which the devolved Administrations feel disadvantages them, they have no corresponding right to challenge. I would anticipate the argument of grandfathering current regimes and repeat what I said in the debate on agriculture earlier in the week: that, over time, the regimes may change as circumstances change and, at that point, they will not be grandfathered and may be subject to challenge. That is important to note.

As George Peretz points out, the result looks distinctly unbalanced. For example, if the Welsh Government decide to grant a subsidy to which the Secretary of State objects, perhaps on the basis of its impact on England, the Secretary of State may be able to refer it to the CMA and will have standing to challenge it before the CAT. The Secretary of State may also be able to issue guidance that recommends against types of subsidy that the Welsh Government might have in mind, guidance to which the CMA and the Welsh Government have to have regard. On the other hand, if the Secretary of State grants subsidies to businesses in England or, using his or her powers under Section 50 of the internal market Act, to businesses in Wales to which the Welsh Government have objections, none of those possibilities are open to the Welsh Government. I rest that case, because it is crucial.

The Minister may argue that, as with the Monetary Policy Committee of the Bank of England, members are appointed to the CMA for their expertise rather than their geographical base, but he is ignoring that no such expertise yet exists for the new regime. It is surely imperative that, from the outset, the CMA is fully conversant with the needs of the devolved Administrations and that administering the regime evolves in a way which is sensitive to them. The Minister knows my opposition to separatism and nationalism, but I am a passionate home ruler and believe that the devolution settlements should be upheld and not eroded.

The Minister will assert that these are reserved powers—he has done it several times already during this Committee—and are based on the sovereignty of Westminster and not on a federal system which we do not have, or even a devolved consensus. To disregard the devolved Administrations, regardless of where the legal and constitutional power lies, is reckless. The Government are putting the union at risk in the way they are proceeding with this Bill by using reserved powers and failing to recognise the sensitivities. To say to the devolved Administrations, “You have more freedom than you had under the EU, but we’re having reserved powers that will qualify, test or challenge that freedom” is a two-edged sword that does not stack up. Right now, the mood in the devolved Administrations is that they do not trust the Government’s intentions, not yet knowing what they are.

[Lord Wigley (PC)]

My Lords, I am delighted to follow the noble Lord and agree with almost all the comments that he made—not entirely, but almost. In particular, I am glad to support Amendments 64 and 65, proposed earlier by the noble Lord, Lord McNicol, and have added my name to both of them.

My feeling—and this is really what the noble Lord was speaking about a moment ago—is that we are building a grit creation machine here. We are creating the grit that will cause difficulties as the wheels of this operation move forward. I do not think that is what the Government really want to do.

I well remember being on a committee chaired by the noble Lord sitting next to me a couple of years ago, when we were questioning the CMA’s role in these matters. We found that the CMA, quite legitimately, had very little experience of dealing with devolved dimensions. This was not a criticism of it; that was not its role. It still does not. We should therefore ensure that we build the necessary talent and experience into the relevant units or committees of the CMA that can at least advise on these matters, but it seems that we want to tie the hands of the CMA. It does not have that background; it has no obligation to work in close proximity to the devolved regimes under the Bill. It should certainly find a way of doing that if it wants the operation to go smoothly, otherwise problems will arise.

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[Baroness Bloomfield of Hinton Waldrist (Con)]

I think the noble Lord might have to declare an interest on that front, but we will let that lie. I will have to write to him with the specifics on this. Obviously, recruitment is an ongoing process that will continue throughout the next year.

[Lord Wigley (PC)]

Before the Minister sits down, I have what is meant to be a helpful question. Given that there may be a need for expertise in certain areas in the work of the CMA—expertise it does not have in house—could staff be taken on on a secondment basis to overcome the restriction in subsection (4) referred to earlier? This would provide the expertise for the duration necessary in undertaking specialist areas of investigation. I do not expect an immediate answer, but perhaps the Government might consider it.

[Baroness Bloomfield of Hinton Waldrist (Con)]

The noble Lord makes a very interesting point. It does have operational independence, and I am sure that is something it would be able to consider.

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I believe it should, and therefore I would be grateful if the Minister could explain why he disagrees. I beg to move.

[Lord Wigley (PC)]

My Lords, I shall speak to Amendment 72, which I think is linked with this amendment. It refers to the responsibility of the CMA to act in an even-handed manner when carrying out its functions, particularly with regard to the Scottish Ministers, the Welsh Ministers and a Northern Ireland department.

I ask the Minister how on earth one can reject the requirement to act on an even-handed basis. It seems common sense that any action by the CMA would have to be on an even-handed basis. If that is the case, what is the problem with including these words in the Bill? If the argument is that the CMA may not sometimes act on an even-handed basis, that needs further exploration, which perhaps we can come to at a later stage; but if the Government are rejecting Amendment 72, I would like the Minister to clarify on what possible basis they can do so.

[Baroness Blake of Leeds (Lab)]

My Lords, I am grateful to the noble Lord, Lord Purvis, for tabling these amendments. At Second Reading and over the past three and a half days of Committee, we have repeatedly come back to how the new subsidy regime interacts with the broader provisions contained in the United Kingdom Internal Market Act.

As we know, the Government have clearly classified subsidy control as a reserved matter, but there a number of sectors where local or devolved interests may conflict with the wider interests of the internal market Act. The Government repeatedly come back to the notion that the new regime should facilitate the smooth functioning of the internal market. However, if we return to Monday’s discussions about Northern Ireland’s unique position and the inclusion of agriculture, we have to accept that those issues have raised more questions than answers when it comes to how the new regime will balance competing interests.

It is fair to say that some of the responses that we have had thus far have not been entirely convincing, and some of the answers given by the Minister seem to have highlighted the complexity of the issues that we are discussing and, therefore, the need to raise the matters in these amendments.

The wording “even-handedly”, as raised in Amendment 72 and used in other legislation, is particularly interesting. What is the Minister’s personal interpretation of that? How will it be administered and who will make the judgments, if it is deemed that unfairness is built into some of the decisions that are made?

We are repeatedly told when debating this Bill as well as when discussing whole rafts of government policy in other areas that there is a commitment to devolution and that is the most important thing—but, in the same breath, the Government say that subsidies must not undermine the internal market. How can both those statements be true?

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[Lord German (LD)]

My Lords, I rise to speak to my Amendment 79, which neatly follows the questions of the noble and learned Lord, Lord Thomas of Cwmgiedd, about standing.

On 13 January, the following fanfare was announced from Downing Street:

“Prime Minister to chair new council with devolved governments”.

The No. 10 press release described this as a

“Landmark agreement on how UK government and devolved governments will continue to work together”,

and how an agreement on this “has been reached”. It promised “new ways of working”, “Reaffirmed principles” of

“mutual respect, maintaining trust and positive working”

and formalised a “council”, led by the Prime Minister, “overseeing strengthened working”.

I am going to come to the document that lies behind the press release in a moment. Of the five things the Government say this is going to achieve, they end with the principle about conflict resolution:

“Resolving disputes according to a clear and agreed process”.

I am trying to seek consistency in this Bill, which has been severely criticised for the relationships it is trying to and has to build with the devolved Administrations. At the same time, we have another document, setting up more machinery of government, which will look at resolving disputes. I understand that resolution of disputes is in the common frameworks procedure, but there is very little in the Bill about how the devolved Administrations can resolve disputes. I suspect—I am pretty certain—that there will be a lot of criticism over the coming months and years from the devolved Administrations.

In the document which lies behind the Prime Minister’s announcement, about the review of intergovernmental relations, there is a two-page section in which the first paragraph states:

“No Secretariat”—


it is an independent secretariat managing the council—

“or government”—

and that is all Governments in the United Kingdom—

“can reject the decision of a government”—

again, that is any Government—

“to raise a dispute.”

So this is a dispute mechanism which has clearly been put in place by the Government to provide an opportunity for the Administrations to raise their disputes. I do understand that if it is enshrined in law, if the legislation is there, it makes it trickier, but as the noble and learned Lord, Lord Thomas of Cwmgiedd, asked, what happens when somebody wants or objects to an interpretation, particularly that of the Secretary of State, and this process escalates?

The Bill contains a lot of procedures which could well lead to a dialogue between the devolved Administrations and the Secretary of State. There is also a huge amount of what is called “guidance”—which we shall come to later—and a number of documents are going to emerge which will perhaps put flesh on the bones of some of the things we have been talking about in the Bill.

My question is this: will this arrangement announced by the council and by the Prime Minister, no matter what this Bill comes to and no matter what the processes described in it are, allow, as the intergovernmental relations document states, any Government to bring a dispute before all the other Governments? There are 30 or 40 lines and another page about how that dispute has to be resolved and the use of an independent secretariat.

If the right relationships as described in the document from the Prime Minister were built into this Bill, I would rather hope that it would minimise the necessity for such a dispute mechanism to arise. My test of this is to ask the Minister the following question. Given the announcement, and given the availability of this procedure, is there anything that he can see apart from the legislation before us that a devolved Administration could not refer to this council? If that is so, there is a strong case for making it easier for the devolved Administrations to engage through the mechanisms of this Bill without having to go through all the processes which would lead to the dispute mechanism outlined by the Prime Minister. I am asking for consistency, and I hope that the Minister can provide it.

[Lord Wigley (PC)]

My Lords, I am delighted to support the amendment put forward by the noble and learned Lord, Lord Thomas of Cwmgiedd, and agree strongly with the points that he made in opening this short debate. The devolved regimes must surely be in a position in which they can be regarded as interested parties. It stands to reason that that must be the case in certain circumstances, and there must be provision within legislation for those certain circumstances to be looked after in the context of this Bill.

I was delighted to have the opportunity to add my name to Amendment 79 put forward by my colleague, the noble Lord, Lord German. I support the points he made in regard to it. The need for some indication to the devolved regimes that they are partners has surely come out of the debates we have had in the last three or four sittings of this Committee. It is time that the Government found some way of indicating that they are prepared to work on a partnership basis. These two amendments pave the way for that, and I hope the Government can respond positively.

[Lord Hope of Craighead (CB)]

My Lords, I put my name to Amendment 69 as well, and I support exactly what my noble and learned friend Lord Thomas of Cwmgiedd said about it.

It is worth noting that the definition of “interested party” has to be read together with Clause 70(1). The point is that to apply to the Competition Appeal Tribunal you have to be two things: an “interested party” and “aggrieved”. The definition takes you part of the way there. I am thinking in particular of the Secretary of State, who is an interested party but in order to apply has to demonstrate that in some respect he or she is aggrieved by the making of the subsidy decision.

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This head of steam is building in this House and a campaign is emerging, spearheaded by Conservative Members. I hope the Minister will not allow this Bill to fall into the “naughty list” category that they are assembling. I look forward to his explanation of the significant use of guidance in the Bill and particularly the recognition that this guidance is expected to be followed.

[Lord Wigley (PC)]

My Lords, I was delighted to hear the speech of the noble and learned Lord, Lord Thomas, who raised matters of considerable importance to which we will undoubtedly have to return on Report. I support the comments made by my friend, the noble Lord, Lord German.

I shall not speak at length. We have been over and over, time after time, the question of the relationships with the devolved institutions, so I ask the Minister this simple question: will the Secretary of State give an assurance that, in every instance where guidance may have an implication for the Welsh, Scottish or Northern Ireland Governments, he will actively consult them prior to issuing the guidance?

[Lord Berkeley (Lab)]

My Lords, I rise to speak briefly to my Amendment 80, which is a probing amendment. It is grouped with this lot of amendments, but it is a different subject, and I will try to be as quick as I can.

It relates to Clause 85, headed “Crown application”, which provides that the Act will apply to the Crown, but excluding Her Majesty in her private capacity, Her Majesty in right of the Duchy of Lancaster, and the Duke of Cornwall. I am afraid that this continues the debate about the uncertainty of the role of the Duke of Cornwall and the Duchy. It is one little hobby-horse that I have been pursuing for many years, and I apologise for that. I refer noble Lords who want to get into the detail to the Second Reading of my Private Member’s Bill, the Duchy of Cornwall Bill, on 26 October 2018, which seems a long time ago.

Since the Duchy of Cornwall says that it is in the private sector—I am assuming that the Duke and Duchy are synonymous—why should the Duke of Cornwall or the Duchy be given special treatment in this Bill? No other big landowner or property owner is allowed special treatment. I understand why Her Majesty in her private capacity and the Duchy of Lancaster are, but the Duchy of Cornwall says on its website:

“The Duchy of Cornwall is a … private estate … established by Edward III in 1337.”


This was confirmed in the second-tier tribunal in 2016, after a Mr Michael Bruton had claimed that the Duchy was in the public sector and therefore needed to do an environmental study on putting Japanese oysters into the Helford river in Cornwall, which it owned. In the First-tier Tribunal, Mr Bruton had won, largely because the Duchy’s representative said, “To all intents and purposes, we believe we are above the law”, which is quite an interesting statement. Of course, the Duchy then appealed to the next-tier tribunal and, not surprisingly, with all the free legal advice it gets from the Government, it won. The tribunal’s decision was:

“The Duchy of Cornwall is not a public authority for the purposes of the Environmental Information Regulations 2004.”


Why should the Duchy of Cornwall be treated differently from anyone else—any of us—to whom this Act will apply? If the Minister is not able to answer that question today, perhaps he could write to me. He might want to contact the Duchy itself. I warn him that the last time I raised this, in the leasehold reform Bill debates about three or six months ago, the Minister agreed to write to the Duchy of Cornwall, the Duchy of Lancaster and the Crown Estates about the leasehold reform Bill. We got good responses from the Duchy of Lancaster and the Crown Estates but, as far as I know, no response from the Duchy of Cornwall.

I do not think that right, because the Duchy of Cornwall must have given views on this Bill and I would like to know what it said. Did it send a letter? Did the Minister have correspondence? If so, can he put it in the Library? If he did not, how was this decision made? I think it very unfair that the Duchy of Cornwall—probably uniquely among big estates in this country, whatever their rights and wrongs—should be given this special treatment, for it means an exemption to the Bill.

Subsidy Control Bill

Lord Wigley Excerpts

Committee stage
Monday 7th February 2022 Grand Committee

[Lord Thomas of Cwmgiedd (CB)]

I just want to add one very brief word. In a number of the amendments today and on Wednesday, we are really concerned with the movement from the regime that has existed in the EU to a regime more of self-policing. All these amendments interlock, and at the end of the day we will need to pull them together and see how we effect for this country a proper and workable regime.

This amendment deals with one court—the court of public opinion—and we shall turn to the CAT and the Competition and Markets Authority in due course, but it seems to me that, on each of these, the Government have an option. They have to do something to make the move away from the control of state subsidies in the way that the EU did to a more liberal and generous regime. But experience ought by now to have told this Government that, unless there are clear transparency and other mechanisms in place, we will end up with something that will cause more of a problem than we had under the old system. I warmly support these amendments.

[Lord Wigley (PC)]

My Lords, I shall speak to these amendments very briefly. This has been a bipartisan debate, and there is a consensus across the Committee that amendments along these lines can improve the working of the Bill and make it more acceptable in the court of public opinion. I urge the Minister, if he cannot accept the amendments as they stand today, to consider at least bringing forward his own amendments at the appropriate time.

[Lord Fox (LD)]

My Lords, I was not intending to speak to this set of amendments until I received the Minister’s letter—this time before the Committee started rather than during it, which is a great step forward. Unfortunately, the letter creates a problem for me because what I understand from the debate seems not to be represented in this letter, so perhaps the Minister can explain.

On the issue of subsidy schemes, the letter states:

“As my noble friend Baroness Bloomfield stated during the Committee session, all schemes must be uploaded to the transparency database”—


and I understand that to be true, so the scheme will go up on the database. The letter continues:

“This database will be freely accessible and is a key part of the new subsidy control regime, enabling the public and any interested parties to see which subsidies have been awarded, and to whom.”

But my understanding is that people will be able to see only those subsidies that exceed the limit, whereas the implication of the letter is that all subsidies will be accessible to everyone freely via the database. I would like the Minister to acknowledge that that is not the case, whether they are within a scheme or stand-alone, and this letter is therefore incorrect.

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[Lord Bruce of Bennachie (LD)]

My Lords, I am very happy to support my noble friend on this amendment, to which I have added my name. She has explained quite accurately and in detail why we believe this is necessary.

My first point is about the consultation, which is slightly disturbing. The Minister, the noble Lord, Lord Callanan, wrote to me after Second Reading having said in response to my intervention that 81% of consultees had supported the inclusion of agriculture. My noble friend had pointed out that that was 81% of a much smaller percentage, but more fundamentally, the Minister failed to acknowledge two things. First, if 100% of consultees from Wales or Scotland were against—I am not saying it was quite that close—to suggest that 81% were in favour, which just about represents the imbalance of population between England and the rest of the United Kingdom, is exactly the wrong approach to devolution. Devolution has to recognise that if the devolved Administrations are sufficiently different from the rest of the UK, there has to be some real effort to accommodate that difference. Citing UK statistics is the wrong way to do it.

The other issue is much more fundamental. There was quite a bit of debate within the Conservative Party a few years back about whether subsidising agriculture was justified at all—whether free market economics should be let rip—but, as my noble friend has said, food production is a little bit more important than that. Food security has always been recognised by successive Governments as relevant.

The common agricultural policy aimed for self-sufficiency across the European Union. Its climatic variation meant that that was in a much higher proportion of food consumed than would be the case with the United Kingdom, but that makes us even more vulnerable once we withdraw. What percentage of our food should be produced from our own capacity at home surely has to be an article of serious discussion. Now that we have left the European Union and the Government are actively negotiating trade agreements around the world, some people seem to argue that all that matters is that the food should be cheap—not that it should be secure; it should just be cheap. The consequence is that we have concluded agreements with New Zealand and Australia which many farmers and food producers, particularly in Scotland and Wales, feel have substantially disadvantaged them in terms of what their farming methods are about.

When we move to the next phase, if farming and agricultural support are devolved, presumably they are devolved to allow divergence—because divergence exists. Grandfathering is all very well but it does not look forward far enough, to where land use could change quite radically. On this occasion, I note that the Green representatives are not here; I think they might have something to say.

At Second Reading, I mentioned that the issue of rewilding is beginning to create some degree of tension. Yes, there is a lot of excitement about the idea of trying to return things to nature, and that it might be helpful in terms of climate change, but what will its social impact be? What will its impact on employment be? What will it do to communities? Will it reduce access? Will it reduce the employment opportunities that farming currently provides? Those are real questions. Wales and Scotland—and Northern Ireland, for that matter—want to pursue a policy that determines, for their benefit, what the right balance is.

I have no particular animus for or against Ed Sheeran, but he claims that he wants to spend £200 million of his fortune rewilding as much of the UK as possible. I want to know how much sensitivity he has. What is fine in Suffolk might be a bit different in Inverness-shire or Montgomery or wherever. It is important that he understands that the land use regime in Wales and Scotland is a matter for the people there, not a pop singer in Suffolk. He can do it as long as it fits with that policy.

I say this to the Minister: it is not clear what five, 10 or 15-year idea the UK Government have. Grandfathering existing regimes does not allow for divergence later as we change our use. Basically, it is not consistent for the Government to argue that they support devolved agricultural policy but wish to take control of the subsidy regime that is essential to the delivery of that policy.

It is also not good enough to say that subsidy control is a reserved matter. Of course it is—I acknowledge that—just as the internal market is, but if the conclusion of that is UK Ministers, who are also English Ministers, saying, “What we really mean is that we will do as we please and the devolved Administrations will just have to lump it”, that is no way to secure the future of the United Kingdom. It is also no way to ensure that the devolution settlement can continue to work when it is under so much pressure. The Government need to understand that there is real concern that including agriculture in this Bill has implications that are bad for not just agriculture but the United Kingdom.

[Lord Wigley (PC)]

My Lords, I am grateful to the noble Baroness, Lady Randerson, for moving this amendment. I am delighted to follow the noble Lord, Lord Bruce; I agree with his comments. At this point, I should declare my registered interest as a member of the Farmers’ Union of Wales. I am one of the last great landowners of Wales, with six acres of land, so I have a direct interest in the outcome of these debates.

There are at least two dimensions to this issue. The first is whether this sort of legislation is appropriate for application to agriculture in general. Over my lifetime, the question of subsidy in agricultural terms has been related to the security of the supply of food and the price of food. Those are somewhat different considerations to those that may be apposite if we were considering subsidy for the steel industry or other industries. We need a system that is fine-tuned to the agricultural reality, which is different in terms of not only the nature of the product but the scale of the operation; that is particularly true in Wales—and in Scotland as well, I suspect—where there are many small farmers. They are small farmers in terms of their turnover and investment compared with the massive investment one might have in the manufacturing industry.

In Wales, farming is more than just a livelihood, it is a way of life—and a way of life that sustains the community. Therefore, consideration of the impact of subsidy, the relevance of subsidy and when it should and should not be available has many more dimensions to be taken on board than if it were a straight manufacturing subsidy question. My background was in the manufacturing industries, as I have explained before, but I am acutely conscious of the difference that exists between agriculture and the manufacturing industries

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Finally, in response to the query of the noble Lord, Lord McNicol, we are keeping streamlined routes for agriculture under consideration. I hope noble Lords will recognise the importance of including agriculture within the regime, but also the provisions in the Bill that ensure that existing schemes, even with some permitted modifications, are able to continue as they do now. To respond to the noble Lord, Lord Wigley, now that the UK has left the EU, agriculture is no longer subject to EU state aid rules or the common agricultural policy. This has created a regulatory gap, which is best addressed by including agriculture in the new UK domestic regime.

[Lord Wigley (PC)]

I am grateful to the Minister for her response on the points that I raised, but does she accept that agriculture is a very different industry from the others covered by this sort of Bill and should have its own legislation? She mentioned consultation. What was the response to consultation from the agriculture industry and the farming unions?

[Baroness Bloomfield of Hinton Waldrist (Con)]

While I absolutely accept that the agriculture industry is completely different from others that will be covered by the Bill for many of the cultural reasons that have been brought up by others, I do not have the information that the noble Lord requests, but we will write, because we undoubtedly have it back in the department.

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We have also seen of late a Government who publish a huge paper on the subject of an increasing role for local government and, indeed, unitary local government under mayors. It seems to me to be greatly remiss if mayors in this Government’s brave new world were not given the sort of powers that the Secretary of State seeks to protect for himself or herself. Breaking this down to another level, the amendment is very much to probe what the Government have against local authorities having a role in policing the economies that the Minister has said they are so knowledgeable about, so I look forward to hearing what the Minister has to say in that regard.

[Lord Wigley (PC)]

My Lords, I cannot allow this debate to go without intervening very briefly. We have had arguments about the consultation with devolved authorities in previous deliberations of this Committee and I am not going to repeat those points. What I want to do, however, is to stress the need for equivalence, and for that equivalence to be perceived, between the role of the Secretary of State in the context of England and the devolved authorities in the context of Wales, Scotland and Northern Ireland because if we do not have that, we are building up a formula that is bound to cause problems.

I cannot possibly allow the comment about my friends in the SNP to go unchallenged, because they, of course, work very hard indeed in the interests of Scotland, as has been recognised by such a large majority of Scottish voters. However, the debate here is not about the relative strengths of the parties; it is about getting a system in this legislation that works. In the absence of a federal or confederal approach—and that, ultimately, will have to be the context in which these things are addressed—in the meantime, for goodness’ sake, let us get a formula that at least appears to be fair and does not have built within it the contradictions which this Bill has at present.

[Lord Callanan (Con)]

I was expecting more interventions before my reply—I offer my apologies.

These amendments relate to Clause 55, which provides, as has been stated, that the Secretary of State can direct a public authority to request a report from the subsidy advice unit for a proposed subsidy or subsidy scheme. This so-called call-in power will be used as a safety net where the Secretary of State considers that a subsidy or scheme is at risk of not complying with the subsidy control requirements or that it poses a risk of negative effects on competition or investment in the UK and therefore warrants further scrutiny.

In the majority of cases, the most potentially harmful subsidies will be those that meet the criteria for subsidies of particular interest. The Government’s proposal for how these criteria should be defined has been set out in illustrative regulations that have been made available to this Committee. However, it is inevitable that there will be some subsidies or schemes that fall outside those boundaries but would still benefit from the additional scrutiny offered by the SAU. The call-in power is a safety net. It provides a mechanism to catch potentially concerning subsidies that are not caught within the “subsidies of particular interest” definition and have not otherwise been voluntarily referred to the subsidy advice unit. It is expected that such subsidies will be few and will reduce further as the regime settles in.

When the Secretary of State decides to exercise this call-in power, the direction must be published. In addition, the subsidy advice unit must provide annual reports on its caseload, including any subsidies or schemes called in by the Secretary of State. These annual reports will be laid before Parliament. This transparency will help to ensure that the power is being used appropriately and that Parliament has oversight of how and when the power is being used.

Amendments 54, 56, 58 and 60 would allow the devolved Administrations to refer a subsidy or subsidy scheme to the subsidy advice unit under the terms of Clause 55. Similarly, Amendments 55, 57 and 59 would extend the power to call in subsidies for review by the subsidy advice unit to all local authorities in the United Kingdom.

The Secretary of State’s responsibilities and interests in the subsidy control regime are UK-wide. The subsidy control regime is a reserved matter. The UK Government are responsible for the compliance of the UK subsidy control regime in all parts of the United Kingdom with our international obligations, including the trade and co-operation agreement with the European Union. It is therefore right that the UK Government have responsibility for the referral mechanism that deals with any subsidies that fall outside of the established criteria for further mandatory scrutiny. It is also right that the UK Government oversee the functioning of the regime as a whole, including the caseload of the subsidy advice unit.

In response to the specific concerns raised by the noble Lords, Lord Bruce and Lord Purvis, I believe it is important that the positions of the devolved Administrations and other public authorities are taken into account in the exercise of this function. I assure noble Lords that the Secretary of State would take it extremely seriously if he received a request from another public authority to call in a particular subsidy or scheme. Of course, he would engage with the substance of that request and consider it on its merits, but I hope it goes without saying that officials and Ministers in my department would discuss the matter appropriately with the public authority that raised the concern; this would apply even if it were a subsidy given by the UK Government.

Subsidy Control Bill

Lord Wigley Excerpts

Committee stage
Wednesday 2nd February 2022 Grand Committee

[Baroness Blake of Leeds (Lab)]

My Lords, Amendment 14 was tabled by my noble friend Lord McNicol.

We always know in this environment that timing is everything. We must be extremely mindful when debating these elements of the Bill that today the Government published the levelling-up White Paper. It is critical that we bear that in mind as we discuss these important issues, particularly on economic deprivation. We must go back to the lengthy debate that we had on Monday and focus on the benefit that the work we will do here will bring to our communities across the United Kingdom, and focus on the purpose, on what really matters as a result of the improvements that we can make to the Bill. This is an illustration of the importance of joining up key pieces of legislation. Since coming down to the Palace of Westminster I have noticed that this is a work in process and this legislation is something that we can assist with.

Bearing that in mind and being very much aware that a lot of the work that has gone into the levelling-up White Paper has already been released in the media—many noble Lords, I am sure, have had sight of the proposals—I will concentrate on Amendment 14 and refer to the extended list of amendments that have come into this group since Monday afternoon.

As I said, the third group on Monday facilitated an interesting debate on economic deprivation and a number of related issues. It is worth returning to the topic today as the Minister’s responses were not convincing. There is more work to be done on these areas. Some of the amendments in this group go beyond a laser focus on economic deprivation, allowing us to probe slightly broader issues, such as whether and how the concept of social value, used in relation to procurement, will be applied to the subsidy regime. We are grateful to the GMB union for its input on these texts.

The noble Lord, Lord Lamont, made a very powerful contribution on Monday, making the point that areas of high deprivation need a degree of certainty, and that is one of the focuses that we need to bring to bear. Sadly, I have to say that, at first glance, the announcements on levelling up do not provide that certainty. The confirmation of various missions mentioned in the White Paper provides a marginally clearer idea of what the Government want to achieve, but we are still largely in the dark as to how the various 2030 targets will be met.

We have staggering examples of discrepancy in funding. For example, transport in London and the south-east of England received £882 per head in the year 2019-20, while in the north-east it was only £315 per head. Analysis in the Guardian of funds allocated so far through the future high street fund, the community renewal fund and the towns fund also suggests that the wealthiest parts of England are being allocated, in some cases, up to 10 times more money per capita than poorer and, I have to say, often Labour-controlled councils—that point is perhaps best discussed alongside Amendment 35 later today. IPPR North points out that funds allocated to the north thus far amount to an investment of £32 per head, which compares to a £413 per person fall in annual council service spending between 2009-10 and 2019-20. We also have the comments from the National Audit Office, which suggest that grants from two different funds were not based on evidence. We very much want levelling up to be a reality and would support proposals being brought forward that would achieve this end. We have to make sure that, through the work that we are doing in this Bill, we contribute to that end.

Amendment 14 would make clear that streamlined subsidy schemes can be made to support areas of economic deprivation. This would not be a requirement, but would focus the Secretary of State’s mind once the new regime is up and running. Clarity would support the goals of facilitating quicker and more efficient awards of low-risk subsidies. I am sure the Minister will talk up the inbuilt flexibility of the new system, but here is an opportunity to send a signal to the communities that we want to help. I am sure that the noble Lord, Lord Ravensdale, will make the case for his Clause 18 stand apart amendment, which looks at relocation subsidies through an economic development lens, but I hope that Amendments 27 and 28 will at least give us some clarity on how that prohibition will work. Are we talking about movement within or between local authorities, regions and nations of the UK, or does it depend on context? The current drafting is not clear, and this kind of area should not be left to guidance and therefore to different interpretations.

Amendments 34 and 36 seek to move the discussion on to the social value to be derived from subsidies, which might be an alien concept to some considering this legislation. We must avoid always viewing matters purely in terms of the economic bottom line. We all want to create jobs and fuel economic growth, but there is a need to do that in a fairer manner, ensuring job security, good pay and strong employment rights across all sectors and, of course, as we have already discussed, ensuring that we bring in environmental benefits.

In recent years, the Government have spent billions of pounds subsidising a wind sector that sustains a relatively modest number of jobs and has not always supported UK suppliers, including the steel industry. Wind is an increasingly important part of the energy mix, and key to reducing emissions. It is clearly worthy of subsidies, if that is what it takes to make cleaner forms of energy more attractive, and of course to create new jobs. However, the TCA, and international agreements, give scope for the inclusion of social objectives when giving subsidies. We want to understand whether the Government intend to use that flexibility, and if so exactly how.

Amendment 36 draws on the concept of social value, which authorities are compelled to consider under the Public Services (Social Value) Act 2012 when undertaking procurement exercises. Do the Government plan to include similar provisions in the Bill?

There are a great many questions for the Minister to answer on this group. I hope that he will be able to address most of the points today, but I would be pleased to receive further written answers if that is more appropriate. I do not wish to pre-empt other contributions this afternoon, but it feels as if there is much more work to be done in these areas before Report.

[Lord Wigley (PC)]

Amendment 23 in my name has been included in this group. That is a slightly odd grouping, and perhaps I should have pressed for my amendment to be de-grouped. I shall speak to it in a moment, but first may I endorse entirely the comments made in opening this debate? It is vital that we ensure a decent standard of living and income per head throughout these islands. It is not enough to compensate people for being deprived of many of the aspects of life that are valuable to them. We need the economy to be able to sustain populations at a level of income that enables them to get benefits of the sort that are enjoyed in, for example, south-east England.

Let us compare the GDP per head of Kensington and Chelsea and that of the valleys of Gwent, or of Anglesey. Chelsea’s figure is eight times higher. We need economic solutions, not just for Anglesey and Gwent but for the north-east of England, Lancashire and other areas—all the old industrial areas. We need to get the economies working, to ensure that the other benefits that the people of those areas have a right to expect can be delivered.

My Amendment 23 seeks to include in the Bill an assurance that nothing in it prevents a public authority from giving financial support aimed at achieving cultural or environmental objectives. I draw attention to my registered interests with regard to cultural dimensions in which my family is heavily involved. I do not think the amendment should be necessary, for it is a long-standing feature of the cultural scene that grants and subsidies are necessary to underpin activities that otherwise might not be viable. Clearly, in making grant payments to one body, organisation or even company, the Government are in effect giving it a competitive edge over others that do not get such support; the marketplace is hardly designed to support and sustain such activities. Yet many aspects of the arts are inevitably dependent on such interventions, and nothing in this legislation should be open to accusations of undermining cultural viability.

Equally, the objectives of environmental policy must also, surely, be exempt from any restrictive limits placed on public bodies from maximising our ability to reach environmental targets. This is a probing amendment, and I trust the Minister can give me the assurance I seek.

--- Later in debate ---

[Lord Callanan (Con)]

My Lords, I thank the noble Lord, Lord McNicol, for tabling the lead amendment in this group, and the noble Baroness, Lady Blake, who ably introduced it. It was great to be reminded by the noble Lord, Lord Purvis, of my previous existence in the campaign against the northern regional assembly—I dread to think how many years ago that was. I seem to remember that Mr Cummings was also involved in the campaign; the noble Lord missed his opportunity to have a go at poor Dominic for that. This is an interesting group of amendments which promotes some good questions. I will try to address the points from the noble Lord, Lord McNicol, and the noble Baroness, Lady Blake, and from the noble Lord, Lord Berkeley, on Amendment 25A, as well as the points from the noble Lords, Lord Ravensdale and Lord Wigley, and the noble and learned Lord, Lord Thomas.

As the noble Baroness, Lady Blake, helpfully reminded us, the context for this is the publication of the levelling-up White Paper. In that, we have announced a comprehensive programme of policies that will put the UK on a path towards greater economic prosperity in every region and place—including, I hope, the north-east of Scotland. We will do this through significant targeted investment, such as the £4.8 billion levelling-up fund that has been referred to, which will invest in infrastructure that improves everyday life across the UK, including by regenerating town centres and high streets, upgrading local transport and investing in cultural and heritage assets.

It is not in question that any government subsidy scheme set up in the context of this levelling-up fund or otherwise should be in compliance with the provisions under this Bill, once it is in force. However, as we discussed on Monday and as raised by the noble Lord, Lord Purvis, again today, subsidies can of course be an important tool to achieve levelling up, but for reasons of time and efficiency I will focus today on the Bill itself and the amendments tabled. I am sure there will be plenty of opportunities to debate the levelling-up fund and its excellent proposals in this House in future.

[Lord Wigley (PC)]

Does the Minister accept that cultural levelling up is part of the Government’s aim, and that cultural facility away from London and the south-east is a very important part of life and the economic substructure? Therefore, is it in order for money to be used to attract cultural investment, whether in theatres, concert halls or other aspects, which may attract business away from London and might be caught under the provisions of the later clause which arises in this group? How is that going to work?

[Lord Callanan (Con)]

I agree. Personally, I am fully in favour of cultural institutions transferring out of London. I will address the relocation point in my later remarks.

This grouping spans several clauses of the Bill but, in responding to the amendments, I will keep coming back to the central refrain that I iterated on Monday as well. The Bill regulates the giving of subsidies where there is a market failure or an equity rationale, with the intention of minimising distortions to competition, investment and trade. It is intended to be a flexible and minimally burdensome regime that applies to subsidies of all types and in all policy areas. As such, my central contention that applies to a lot of these amendments is that there is no need to privilege or exempt certain sectors or highlight certain objectives. Nor is it for the Bill to dictate rigidly the purposes for which public authorities should use subsidies or how they should achieve their purposes.

Clause 10 concerns the creation of subsidy schemes and streamlined subsidy schemes. A streamlined subsidy scheme is made by a Minister of the Crown for the purposes set out in the Bill. Amendment 14 would clarify that the Government may create streamlined subsidy schemes for the purposes of supporting areas of relative economic deprivation. Specifying particular policy objectives at this stage on the face of the Bill may in fact lead to the power to create streamlined subsidy schemes being interpreted in an unduly narrow way in the future.

EU: Imports

Lord Wigley Excerpts

Tuesday 1st February 2022 Lords Chamber

[Lord Grimstone of Boscobel (Con)]

My Lords, I am grateful that the noble Lord mentioned Brexit freedoms, because there was a Statement made on that topic just yesterday, setting out what the Government intend to do to make sure that those freedoms can be available to everybody in the United Kingdom.

[Lord Wigley (PC)]

My Lords, may I press the Minister on the import of musical instruments from the European Union? I refer to my registered interests. If instruments manufactured in Europe are sent for exhibition in the UK and sold, they have to be shipped back to France to secure a new set of paperwork and then re-exported to their purchaser. Similar problems are faced for instruments sent back for warranty or repair. This is leading to European manufacturers withdrawing sponsorship from events in the UK. Does this arise from incompetence in the department or is Brexit fundamentally flawed?

[Lord Grimstone of Boscobel (Con)]

My Lords, I am afraid that I do not have the instrument to hand which would allow me to answer the detail of the noble Lord’s questions, but I will write to him giving full details on that.