Subsidy Control Bill

Baroness Blake of Leeds Excerpts

3rd reading
Monday 28th March 2022 Lords Chamber

We will continue to gather feedback as the regime is developed ahead of implementation. I am happy to report that our subsidies of particular interest regulations consultation is now live and will run until 6 May, for any colleagues who wish to participate. I am grateful once again for your Lordships’ House’s scrutiny and the improvements to the Bill that have resulted from it, and I look forward to the Bill receiving Royal Assent.

[Baroness Blake of Leeds (Lab)]

I will start by sharing our concern at the information the Minister gave regarding the devolved authorities. We look forward to being involved in ongoing consultation and discussions as time goes forward. I echo the comments already made by the noble and learned Lord, Lord Thomas, and the noble Lords, Lord Wigley and Lord Dodds, on this issue.

I think it is fair to say that this Bill might not have been noticed by as many people as the more high-profile Bills that are going through the House at the moment, but everyone who has been involved in it recognises the significance of the work undertaken and just how deep the implications are for how public money will be spent for years to come. As we made clear from the outset, we agreed with the Government’s core principles in this area, including introducing greater flexibility through the removal of pre-notification requirements. However, as we have stressed throughout the debates on this Bill, with power comes responsibility. It is for this reason that we have focused on increasing the transparency obligations on public authorities, as the Minister just outlined. We are talking about large sums of public money, which must be easily accounted for and deliver real value for money. Unfortunately, we have had too many examples recently where we cannot claim that that is the case.

However, we are very grateful to the Minister and to the Whip, the noble Baroness, Lady Bloomfield, for their genuine engagement on these matters. Although we did not achieve everything that we would have liked, we believe the Bill is much improved as a result of the substantial package of concessions brought forward on Report.

I would like to echo our profound thanks to everyone involved through the Bill team. Our access to officials has been particularly helpful; they have been very open. It has enabled us to delve into the detail and discuss potential ways forward, whether legislative or non-legislative.

Despite good progress being made in most areas, there are significant concerns in others—particularly, as we have already highlighted, in relation to the involvement or otherwise of the devolved Administrations and the substantial financial and practical barriers imposed on SMEs and others if they wish to challenge individual subsidies. A particular concern of the business community is the lack of clarity in the guidance around the decision-making on when subsidies will be awarded.

We will have a review, as is outlined in the Bill, of some of these matters in three years’ time, and we hope the Government will act quickly in response to the findings. Until then, we hope public authorities will make the most of this new framework. In particular, I am appreciative that the Government listened to all the arguments about focusing and directing money towards areas with economic deprivation. This is a welcome shift from the Government across this area.

Another regret is failing—just—to pass the amendment to improve the Bill’s green credentials. We hope all levels of Government will continue to have regard to the fight against climate change. Pursuing a net-zero strategy is not just a statutory duty but a moral one. I firmly believe we have missed a trick by not more firmly linking net-zero obligations to the awarding of subsidies.

All that remains is to thank all colleagues who took part during the Bill’s various stages—particularly, as has been highlighted, the noble Lords, Lord Fox, Lord Lamont, Lord Ravensdale and Lord Wigley, the noble and learned Lord, Lord Thomas, and the noble Baroness, Lady Sheehan. I would like to pay tribute to my noble friend Lord McNicol. Unfortunately, he cannot be with us today, but I think we all recognise the amount of work he put in. I would like also to add my thanks to all the staff, clerks and doorkeepers in the normal manner. I end by thanking sincerely Dan Stevens, the officer in our office, for his unfailing patience, support, and clarity of thought and purpose, and for helping us to put down the improvements sought.

[Lord Fox (LD)]

My Lords, it is genuinely pleasing to see the Minister looking in a substantially better state than he did at the end of Report. I am pleased that he is back up and at the Dispatch Box.

As the Minister has repeatedly told us throughout the process, this Subsidy Control Bill is a consequence of the TCA. The Minister also claimed that it was rare for such controls to exist in other countries around the world, and said it would be a permissive regime, the antithesis of the regime it is replacing. So it is something of a legislative experiment as it goes forward.

Since its introduction, as has been stated, improvements have been made, and the Bill leaves your Lordships’ House much improved. My noble friends, Her Majesty’s loyal Opposition and some important voices from the Cross Benches and Conservative Benches have helped to make these improvements, along with the work of the Minister and his colleagues.

But noble Lords would expect me to say that it remains a flawed Bill. As was highlighted, it is more transparent—but a £99,999 subsidy need not be reported, and that remains a very large sum of money that can be passed from government to business without a report. It invests some powers to the CMA, but insufficient authority. I align myself with the comments of the noble Baroness, Lady Blake, on the subject of the burden on SMEs and the absence of any net-zero quantity.

The biggest uncertainty hanging over the Bill, as far as we can see, is this: if it is permissive, what will it permit? True to the nature of this Government, they have delivered a Bill that is not designed to deliver a strategy—almost the opposite. By permitting authorities to deliver subsidies or subsidy schemes in their area of control, essentially independent of schemes in adjacent areas, they are creating the potential for huge confusion and conflict, with money flowing from the richest areas back into their own communities to ensure that they remain the richest areas. The failure to grasp the need to map deprivation systematically could well render this system very divisive.

My noble friend Lord German used the Welsh example, but I will use an English one, because the Minister is the English Minister. As we know, EU funding in Cornwall over the seven years from 2014 to 2020 was nearly €600 million. This was based on a realistic assessment of the relative poverty of that county. The proof of this Government’s subsidy scheme, system or control, and of their promises, will be how much UK money flows into Cornwall.

As the Minister mentioned, there was the whole devolution issue. I will not repeat all the arguments, but the Government’s mantra of repeating over and again “It is a reserved issue” does not represent negotiation, nor is it designed to win the hearts and minds of those who sit on the edge of the unionist/separatist divide—quite the opposite; to then include agriculture, which is a devolved issue, in the Bill made matters substantially worse. We heard from the Minister that these were the issues driving the absence of legislative consent. Despite the many improvements we have seen, we on these Benches remain very concerned about the effect this Act will have on the union, but I will pass from this critique and move on to the Oscars ceremony part—the Minister can be assured that I do not mean that part of it.

I again thank the Minister. He showed remarkable fortitude during the Bill’s passage, along with his Whip, the noble Baroness, Lady Bloomfield, who showed the customary availability and relatively good humour. Those in Bill team itself were, as usual, authoritative and helpful. I thank them, as set out by the Minister.

During the debates, the noble Lord, Lord McNicol, and the noble Baroness, Lady Blake, the noble Lord, Lord Ravensdale, the noble and learned Lords, Lord Thomas and Lord Hope, as well as the noble Lord, Lord Lamont, made significant contributions that helped to shape the Bill. On these Benches, my noble friends Lady Sheehan, Lady Randerson, Lady Humphreys, Lord German, Lord Bruce and Lord Purvis offered wisdom and experience. In the office, making sure that the whole thing held together, we must once again thank Sarah Pughe, along with Dan in the Labour office, who helped to drive us along.

So the Minister will have his Act. Whether it is indeed a subsidy control regime remains to be seen. I think many of us still suspect that it is actually a mechanism for central government to parachute schemes into areas of its choice, unchallengeable by devolved authorities, local authorities or indeed the CMA.