Subsidy Control Bill

Baroness Blake of Leeds Excerpts

Committee stage
Monday 31st January 2022 Grand Committee

Moved by

[Baroness Blake of Leeds]

4: After Clause 9, insert the following new Clause—
“The subsidy strategy
(1) The subsidy strategy is a strategy made by regulations made by the Secretary of State which outlines how, in the opinion of the Secretary of State—(a) subsidies should be used by public authorities to support the delivery of an industrial strategy,(b) subsidies should contribute to progress towards meeting the target in section 1 of the Climate Change Act 2008 (carbon target for 2050), and(c) the subsidy control scheme established under this Act should interact with, or be otherwise influenced by, other public schemes including (but not limited to)—(i) a UK Shared Prosperity Fund, and(ii) the Levelling Up Fund.(2) Regulations under this section are subject to the affirmative procedure.”Member’s explanatory statement
This amendment seeks the creation of a clear subsidy strategy, to be laid before and approved by Parliament. Such a strategy would set out how Her Majesty’s Government expects subsidies to be used to support a wider industrial strategy and progress towards the 2050 net zero target. It would also outline how the new subsidy control scheme works alongside other initiatives including the Shared Prosperity Fund and Levelling Up Fund.

[Baroness Blake of Leeds (Lab)]

My Lords, I rise to move Amendment 4 in the name of my noble friend Lord McNicol. As the explanatory statement says, it

“seeks the creation of a clear subsidy strategy, to be laid before and approved by Parliament. Such a strategy would set out how Her Majesty’s Government expects subsidies to be used to support a wider industrial strategy and progress towards the 2050 net zero target. It would also outline how the new subsidy control scheme works alongside … the Shared Prosperity Fund and Levelling Up Fund.”

I am pleased also to speak in support of Amendments 5 and 25 in my noble friend’s name, and Amendments 4A and 5A in the name of the noble Lord, Lord Ravensdale.

I will preface my comments by setting some context. The real desire to seek to improve the provisions in the Bill comes from a place of ambition for the economy of the whole United Kingdom, unlocking potential while recognising regional inequalities. As we have heard in the debate thus far, we are approaching this issue, as always, in a spirit of transparency, fairness and purpose. As we know, at Second Reading a number of noble Lords voiced their concerns that this new subsidy control system does not appear to be linked to a wider strategy, whether that is delivering strands of an industrial strategy—does one still exist?—or supporting the Prime Minister’s levelling-up agenda and the net-zero strategy, which I mentioned and which we will come on to in debates on later amendments.

These are interesting and potentially stressful times for authorities across the country, as new funding mechanisms and policy initiatives are implemented and the realities of Brexit become more apparent. I confess that I believe Her Majesty’s Government have somewhat dragged their feet on implementing their long-promised UK shared prosperity fund. The early indications are that many of the biggest recipients of the European Regional Development Fund are not only losing out but are likely to lose out to the tune of tens of millions of pounds a year.

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[Lord Callanan (Con)]

It is for the CMA to provide guidance on those matters but for the authorities themselves to determine whether the subsidy in question is justified. Then, but only if it is challenged against the principles in the Act, will the CAT be empowered to make a judgment on whether it is in compliance with the specific provisions in the Act.

[Baroness Blake of Leeds (Lab)]

My Lords, I express my gratitude for all the contributions to this increasingly important debate. Judging by the response from the Minister, there are still many areas that I am sure we will want to pursue and explore and to which we will come back at later stages of our proceedings. I echo the comment by the noble Lord, Lord Ravensdale, that there is a clear question here: is there a clear strategy? That is something that we can all question as we go forward.

Many of us in the Room today have been involved with the vexed issue of distributing regional funding, which is extraordinarily complex. I come back to the very clear comments by the noble and learned Lord, Lord Thomas, about the nature of the political decision in this. I have enormous concerns about how the whole process will be taken forward if it is allowed to stay in its current form, and real concern about the lack of focus on what it is going to mean in terms of benefit for communities and for people. As the noble Baroness, Lady Sheehan, emphasised, a lack of clarity, very little in the way of guidance and too many gaps have been the theme that has run through this debate.

I have to pick up one of the comments that the noble Baroness, Lady Jones, made concerning tension within the Government. I think that helps to explain where the lack of clarity has come from.

I think we would all welcome improvements. No one is trying to suggest that what we had before was perfect. I myself go back to the time of SRB funding, for example, when local authorities were put by a national directive in the position where communities were split down the middle, with funding going into an area on one side of a street but not the other. We do not want to move away from local determination, and that is very much the spirit in which we are taking this up.

With those comments, and with a clear understanding that we will be coming back to discuss these important matters, I beg leave to withdraw the amendment.

Amendment 4 withdrawn.