Subsidy Control Bill

Baroness Altmann Excerpts

Committee stage
Monday 7th February 2022 Grand Committee

[Baroness Bennett of Manor Castle (GP)]

My Lords, I rise briefly to offer Green group support for all these amendments, to which we might well have attached our names were we not caught in this massive legislative pile-up. I should declare my interests as a vice-chair of the LGA and of the NALC. With the amendments having been so comprehensively and effectively introduced by the noble Baronesses, Lady Blake and Lady Humphreys, I shall make just a few additional points.

One of the most popular hashtags in my rather busy Twitter feed is #LandofCronies. There is grave public concern about corruption, cronyism and the nature of decision-making on government spending. Indeed, I put it to the Minister that these amendments collectively could be a great protection for Ministers in future, enabling them to say, “Here’s the transparency. What we’re doing is very clear and very obvious.” I note that in the other place such diverse and broadly respected organisations as the Centre for Policy Studies, the Adam Smith Institute and Transparency International backed similar amendments and that the Financial Times has warned that the new planned flexible regime could pose a “significant risk” and

“On the altar of speed, it has sacrificed scrutiny”—


it being the Government.

We are in a very interesting situation whereby the subsidy regime, having been under the control of EU rules and the UK having traditionally provided much less public funding than most other countries—around £8 billion a year—is now about to increase dramatically just as the controls utterly fall away. This is about showing people what is done; it is democracy and transparency in action. There is broad support for these amendments, so I would be delighted to hear the Minister express that the Government are moving in this direction.

[Baroness Altmann (Con)]

My Lords, I support these amendments. I support the aim of a more flexible scheme than the EU has, and I welcome the Government’s commitment to introduce transparency to their new subsidy scheme, but, as others have explained, this Bill potentially reduces transparency.

The amendments in this group had strong support in the other place, not least from our honourable friends John Penrose and Kevin Hollinrake. I also thank the Centre for Public Data, which has worked with them to provide information to help the Government achieve what they want to achieve perhaps in a better way, which is what these amendments may enable to be done.

I support the use of subsidies to achieve the levelling-up agenda and the net-zero agenda. I think that we all realise that regional growth and infrastructure need an extra boost now. However, can the aim of reducing central control of subsidies and relying on transparency, so that interested parties can challenge subsidies that they believe are unlawful, be achieved by a process whereby those interested parties will not know that there is a subsidy unless it is more than £0.5 million and there could be a series of subsidies just below that which could amount to quite substantial sums? It would help me understand how this aim could be realised if the transparency that I think we could rely on cannot be achieved because the database does not include a record of those very subsidies that are meant to be challenged. I suggest that this seems somewhat illogical, and I urge my noble friend either to bring back his own amendments on Report or to consider accepting these amendments.

[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.

--- Later in debate ---

[Lord Callanan (Con)]

My understanding is that, yes, that is the case. If that is not correct I will certainly clarify that to the noble Lord, but my understanding is that that would be the case.

[Baroness Altmann (Con)]

I apologise to my noble friend, but may I ask for clarification from him as well? He mentioned a cost to implementing this; can he confirm that the Government’s estimate of the cost is £20,000 and that local authorities already have such databases right now?

[Lord Callanan (Con)]

Just to clarify the points from the noble Lord, Lord McNicol, yes, it would need to meet the scheme requirements if it was given under a scheme. If the subsidy is not minimal financial assistance —so it exceeds £315,000 accumulated over three years—it does have to meet the principles; if it is MFA, it does not need to meet the principles. Reviewing the cost as an impact assessment does not necessarily cover all those options.

--- Later in debate ---

[Lord Callanan (Con)]

I will come back to the noble Lord in writing. It is a complicated area to clarify the exact legal position on that. Sorry, can my noble friend Lady Altmann remind me of her question?

[Baroness Altmann (Con)]

Can my noble friend confirm that the Government’s estimate of the cost in relation to the subsidy scheme—which he referred to as a potential reason why the Government might not accept these amendments—is £20,000 and that local authorities do already have databases that could be used?

[Lord Callanan (Con)]

That returns to the point that I made earlier. The commitment given by Minister Scully in the other place is that we will review the costs; I committed to return to the Committee with the relevant cost provisions, which I will do before Report.

Amendment 38 would remove, for the purposes of transparency, the distinction between a subsidy awarded under a scheme and a stand-alone subsidy. The amendment seeks to have one, uniform threshold for all subsidies. Taken together with Amendment 39, this new uniform threshold would be just £500.

Subsidies given under a published scheme are currently required to be uploaded to the database if they are more than £500,000. This threshold is set at that level because the database will already include information about the scheme under which these subsidies are given. In our view, this information will be sufficient for others to understand whether their interests will be affected by any subsidy given under that scheme and whether they should therefore seek to challenge the scheme.

The Bill provides for various reasons why a subsidy or scheme cannot be challenged on subsidy control grounds. For example, a subsidy award given under a published scheme cannot be judicially reviewed in the Competition Appeal Tribunal on subsidy control grounds. This is because it is the scheme that is assessed against the principles and is challengeable, rather than the individual award made under that scheme. As such, this Bill does not provide for the possibility to challenge subsidies given under schemes in the Competition Appeal Tribunal. The scheme itself should be challenged, not the individual awards.

Additional information about small subsidies would therefore have very limited value for those concerned about potentially distortive subsidies and would detract from the core purposes of the database. These requirements would lead to additional red tape for public authorities—well beyond the requirements they had to fulfil under the EU state aid regime—and in a great many cases, as I said earlier, the information would simply duplicate what those authorities already publish in appropriate formats elsewhere.