Subsidy Control Bill

Deidre Brock Excerpts

2nd reading
Wednesday 22nd September 2021 Commons Chamber

[Seema Malhotra]

I thank the Secretary of State. Indeed, I did hear those comments in his opening remarks. I was seeking to clarify the issue because I do not think it is clear across the House, and it is important that it is tested and made clear in the course of the passage of the Bill.

Crucially, what is the Government’s intention if the Bill does not receive legislative consent from Scotland, Wales and Northern Ireland, as has been requested?

[Deidre Brock (Edinburgh North and Leith) (SNP)]

Is the hon. Lady suggesting a four-nation approach whereby any one of the nations has a veto over decisions taken by those four nations that they feel are not in their interest?

[Seema Malhotra]

I am not clear why the hon. Lady refers to a veto. I think we are talking about the symmetry of powers in terms of being able to bring forward a challenge. I hope that makes the point clear.

[Deidre Brock]

rose—

[Seema Malhotra]

If it is okay, I want to move on because I am conscious of time, but the hon. Lady may want to make her point in her own remarks.

Finally, on the issues of oversight and enforcement, while well-designed subsidies can support Government objectives and foster growth and opportunity, there are risks too. Subsidies can distort markets, undermine competition and unfairly discriminate between businesses. Effective oversight and enforcement are critical to the success of our subsidy control regime, yet they are lacking in certain areas of the new regime. The Bill does not provide enough certainty as to the definition of “interested parties” that are able to challenge a subsidy. Does that definition extend to local authorities and devolved Administrations?

There are also concerns about the limited powers of the CMA’s new subsidy advice unit under the Bill. We are pleased that a trusted independent regulator is being given key responsibilities. However, as the Bill stands, the CMA lacks any power to instigate an investigation on its own initiative or to take enforcement action. This requires careful consideration, particularly when transparency issues around the Bill are taken into account.

--- Later in debate ---

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Paul Scully)]

It is a pleasure to respond to the hon. Member for Feltham and Heston (Seema Malhotra) and to follow the hon. Member for Newcastle upon Tyne Central (Chi Onwurah). I thank all hon. Members who have spoken in this important debate. I aim to respond to as many of their points as possible in the time available—I know that we have further business—but I would like to begin by quickly reminding the House of what the Bill signifies and what it will achieve.

The Bill is the very first subsidy control framework designed by the UK for the UK. It will be flexible and agile, allowing all public authorities to design subsidies that deliver strong benefits across the whole UK. For the first time, in all instances, public authorities will decide whether to grant a subsidy. The Bill will provide certainty and confidence to businesses investing in the UK. It will enable public authorities to deliver strategic interventions that will support our economic recovery and deliver on the priorities of the British people, such as levelling up.

We have talked a little about scrutiny; the hon. Member for Newcastle upon Tyne Central spoke about scrutiny of secondary legislation and guidance. I am glad that my hon. Friend the Member for Clwyd South (Simon Baynes) raised the issue of the lack of scrutiny in this debate. It is nice that the Opposition have found a couple of Back Benchers to come and join the debate, but it is outrageous that we have had so little input from Opposition Members.

This Bill will strengthen our Union by protecting our internal market through a single coherent framework that fully complies with our international obligations. On that note, I thank the hon. Members for Feltham and Heston, for Aberdeen South (Stephen Flynn) and for Aberdeen North (Kirsty Blackman) for their points. To ensure that the new regime works for all parts of the UK, we look forward to continuing to work closely with the devolved Administrations, as we have throughout its development, as the Bill passes through Parliament. We hope that the devolved Administrations can understand and support the approach that we have taken, and will give their legislative consent. I can say to the SNP Members who spoke earlier that to date we have had 30 meetings with the devolved Administrations on an official-to-official basis to discuss the Bill, and 10 at ministerial level.

We also heard a bit about the devolved Administrations’ input into guidance. Obviously an agreed framework is needed before there is something to give guidance for, and we have made that clear in discussions with our devolved Administration colleagues. We will continue to work with them as we work through that guidance.

[Deidre Brock (Edinburgh North and Leith) (SNP)]

The Minister will have noted the concern of the Welsh Government about the fact that the agriculture and fisheries subsidies will be within the scope of the UK subsidy regime as a result of the Bill. We have already heard today a member of the Minister’s party express concern about his local farmers being undercut by devolved Governments’ support for their farmers. Can the Minister assure us that this Bill and the United Kingdom Internal Market Act 2020 will not be used to interfere with decisions by the devolved Governments on devolved matters such as agriculture?

[Paul Scully]

We have consulted on agriculture, fisheries, and sanitary and phytosanitary measures. There was no particular agreement among the devolved Administrations, but some people raised those issues.

The Bill introduces a permissive framework. It is totally different from the EU state aid regime, which is the only regime of its kind in the world. No other country, no other trading bloc, has such a restrictive regime, whereby authorities must ask permission and then wait for months to receive it. The Bill flips that on its head. A public authority can give support where it feels the need for it, and only the most distortive levels of support will then be challenged and go through the courts.

Let me turn to some of the issues raised by the hon. Members for Feltham and Heston and for Aberdeen North, and by the right hon. Member for East Antrim (Sammy Wilson) in relation to how this interacts with the Northern Ireland protocol. I reiterate that the UK will continue to be a responsible trade partner that respects our international obligations. However, as the Secretary of State for Business, Energy and Industrial Strategy said in his opening speech, the robust subsidy regime that the Government propose makes it clear that there is no need for EU state aid rules to continue to apply in Northern Ireland, and that all subsidies will be within the scope of the domestic regime. This framework has to work with whatever is involved in our international obligations. However, as the right hon. Member for East Antrim will know, the Command Paper gives the details of that, and I should love nothing more than to hear of rejoicing in his constituency.

Subsidy Control Bill

Deidre Brock Excerpts

Consideration of Lords amendments
Wednesday 20th April 2022 Commons Chamber

[Paul Scully]

The hon. Gentleman makes a really good point. We tried to work with all the devolved Administrations right the way through the process from beginning to end, and we have continued conversations with each of them over this period. Clearly there are, and will be, differences in the process. This needs to work for the whole of the United Kingdom, so I am keen that we continue the dialogue, whether it is with Scotland, Wales or Northern Ireland, to ensure that we can do as much as we can to reach agreement, though clearly that will not always be possible; that is the nature of dialogue.

[Deidre Brock (Edinburgh North and Leith) (SNP)]

Is the Minister not saying that ultimately, on these devolved matters, the English Government, as represented down here in Westminster, will have a power of veto over the decisions of the Scottish, Welsh and Northern Ireland Governments?

[Paul Scully]

No. However, the UK Government have a reserved power over subsidy control, so it is the UK Government who act on that reserved power.

Finally, we have introduced an amendment specifying that the Secretary of State may provide statutory guidance to public authorities on pre-action information requests—that is, the provision of information following a request about a subsidy decision to an interested party that is considering whether to ask the Competition Appeal Tribunal to review the subsidy.

I shall now move on to two amendments related to levelling up. Lords amendment 50 makes it clear that addressing local or regional disadvantage is considered to be an equity rationale for the purpose of assessing compliance with principle A. This puts beyond any doubt that a subsidy to address local or regional disadvantage can be given, provided that the other principles and requirements of the regime are met. Lords amendment 9 exempts from the prohibition on relocation those relocation subsidies that have the effect of reducing social or economic disadvantage. The subsidy must, of course, also comply with the principles and other requirements.

--- Later in debate ---

It is disappointing that agriculture continues to be included in the Bill.

[Deidre Brock]

I am extremely disappointed that the views and concerns of the Scottish and Welsh Governments and the National Farmers Union across these islands, including NFU Scotland, about agricultural subsidies being in scope have been virtually ignored by this Government. They are certainly not reflected on the face of the Bill. Does my hon. Friend share those concerns?