Subsidy Control Bill

Baroness Hayman Excerpts

Committee stage
Monday 31st January 2022 Grand Committee

[Baroness Sheehan (LD)]

It is always a pleasure to follow the noble Baroness, Lady Jones of Moulsecoomb —we are often on the same page. I shall speak to Amendments 9, 10, 12 and 29 in the name of the noble Baroness, Lady Boycott, who is unfortunately unable to be with us this afternoon. I am grateful to the noble Lord, Lord Whitty, who also, sadly, cannot be here this afternoon, for adding his name to the amendments, along with my own. The main purpose of these amendments is twofold. First, they would embed consideration of climate and environmental targets in the Bill, to ensure that they are factored into the decision-making of public authorities when designing and deciding to award subsidies. Secondly, they would ensure that subsidies align with, or at least are not contrary to, our net-zero and environmental targets.

COP president Alok Sharma in a recent speech said that

“inaction or delayed action on climate will create immense risks and costs.”

He went on to highlight the economic opportunities for businesses of acting now and stated that

“my absolute focus for the UK Presidency year is delivery.”

The Government’s own Net Zero Strategy states:

“Our goal is to go even further to embed net zero across government activity. This will mean that government takes net zero into account when taking decisions.”


It further calls for

“a whole system approach to tackling climate change”,

which includes:

“Embedding net zero in a wider range of decision-making levers.”


I have purposely used the Government’s own words.

The fact is that if we do not ensure that alignment with our climate and environmental goals is embedded into new policy frameworks, such as our new subsidy control regime, we risk missing a key opportunity for delivering climate action. Delivery will not happen effectively and quickly unless both net-zero and nature considerations—because nature is inextricably linked to the climate crisis—are consistently woven into the fabric of all that Governments do at every tier of decision-making; not just centrally but devolved Administrations and regional and local government. The Government said in their response to the consultation on the Bill that

“public authorities will be able to take subsidy decisions that facilitate strategic interventions to support the UK’s economic recovery and deliver government priorities such as levelling up and achieving net zero.”

I welcome the Government’s recognition that subsidies can be a valuable way of supporting the achievement of the UK’s net-zero targets. However, there is nothing in the Bill to ensure that subsidies are directed towards interventions that can help to achieve our net-zero and environmental goals or, even worse, to avoid a situation in which subsidies that are contrary to or do not align with these goals could be introduced. Unfortunately, not all public authorities are as focused on delivering net zero as others—the Cumbrian coal mine comes to mind. Without this strategic direction, opportunities could easily be missed. I hope the Minister will agree that we need to include our net-zero and environmental goals within the Schedule 1 principles as laid out in Amendments 9 and 10 from the noble Baroness, Lady Boycott, which would guide decision-making on subsidies.

The Government did, in fact, consider including a specific net-zero principle but decided against this, which is a real shame because including consideration of net zero would not have precluded the achievement of wider policy objectives. It simply provides that when granting any subsidies, not just those related to energy and environment, public authorities must consider whether they align with our net-zero and environmental goals. This would not compromise the Government’s flexible, proportionate approach to the new regime.

It is important that the broader principles in Schedule 1, which apply to all subsidies, provide clear direction to the hundreds of public bodies that will use these rules and embed the consideration of net-zero and environmental goals. This would show strategic direction and leadership from the Government, and support the COP president’s aims for a clear focus on delivery. With the urgency of the challenge ahead of us—to take action to reduce emissions and restore our depleted nature—we cannot afford to miss opportunities such as this to help to deliver it. I hope that the Minister will consider embedding consideration of climate and environmental goals in the Bill and look sympathetically at Amendments 9 and 10.

Amendments 12 and 29 would provide simple clarifications aimed at ensuring that the law stated that the grant of subsidies did not release a beneficiary from its other legal duties in relation to environmental protection. Amendment 12 would clarify, within the principles, that all subsidies should be subject to that prohibition, while Amendment 29 would provide for a stand-alone clause within the general prohibitions with the same effect. We are saying that, without the amendments, there may be perverse incentives and the “polluter pays” principle could well be lost. I look forward to a response from the Minister on those amendments.

I support the amendments in this group in the name of the noble Lord, Lord McNicol of West Kilbride, and the noble Baroness, Lady Jones of Moulsecoomb, which are very much in the same vein as those of the noble Baroness, Lady Boycott.

I want to mention Amendment 33 in the name of the noble Baroness, Lady Jones, about subsidies for fossil fuels. The Minister and I have frequent disagreements on what defines a subsidy, so I am pleased that this amendment has been tabled. I support it because I hope it will give the Minister an opportunity to clarify, first, whether taxpayers’ money should be used to support exploration for new oil and gas fields, and secondly—there are many subsidies but I will restrict myself to two questions—whether the Government should in fairness continue to allow the decommissioning costs of fossil fuels in the North Sea to be met by the UK taxpayer. Oil companies at the moment are pocketing vast sums of pure profit—eye-watering and fairly obscene profits—and we are giving them money on top of that. The Minister will have his opportunity to answer that—I hope he will.

I also welcome the Motion by the noble Baroness, Lady Jones, that Clause 51 not stand part of the Bill, which is a probing amendment. I, too, want to know why nuclear energy is excluded from the energy and environment principles in the Bill; there seems to be little rationale for doing so.

[Baroness Hayman (CB)]

My Lords, I declare my interests as set out in the register, particularly as co-chair of Peers for the Planet. I am grateful for the opportunity to speak to this suite of amendments dealing with climate change and environmental issues. I particularly support Amendments 9, 10, 12 and 29, which have just been so ably introduced by the noble Baroness, Lady Sheehan, and are in the name of my noble friend Lady Boycott, who I know is deeply disappointed not to be able to be here. I did not manage to get my name on the amendments but I am here, so perhaps I can say a few words about the general tenor of this group.