Subsidy Control Bill

Lord Judge Excerpts

Committee stage
Wednesday 2nd February 2022 Grand Committee

[Baroness Jones of Moulsecoomb (GP)]

I agree with every word that the noble Lord, Lord Fox, just said. I liked him shouting “tosh!” at the Government; that was great. That is a very gentle word for it. He also sent me into a mild panic, because I had not realised that my noble friend Lady Bennett had tabled a clause stand part debate in this group. All I can do is repeat her explanatory statement which says that this

“is intended to elicit why Bank of England monetary policy subsidies are excluded from the provisions of the Bill.”

I hope there is an answer on that in the Minister’s speech. I had thought the noble Lord, Lord Fox, was perhaps talking about my Amendment 33 which we have of course already debated. I thank him for his remarks.

On this group generally, I have argued many times about government regulation-making powers, because I am absolutely sick of the Government bringing skeleton legislation that needs little more than a parliamentary rubber stamp for them to make substantive law by future regulations. This is a power grab that most of us absolutely abhor. However, this is a unique case. I want to support these amendments for new regulation-making powers because the alternative envisaged by this Bill is that, instead of making regulations which are passed by Parliament, the Government would simply make a decree and then inform Parliament after the fact. I support the amendments.

[Lord Judge (CB)]

My Lords, I apologise that I was not able to attend Second Reading. I had other commitments in the House, so ask noble Lords to forgive me.

I put my name down in support of the noble Lord, Lord McNicol, and was delighted to do so. However, I am sure he will forgive me if I explain that I am actually not supporting him but the Delegated Powers and Regulatory Reform Committee, which is what we should be looking at. The noble Lord, Lord Fox, thought there might be some erudition, but there is no need for it; this is a perfectly simple constitutional aberration.

When the Minister comes to reply, I would like him to kindly look at paragraph 16 of the committee’s report, where there are three “extraordinary” provisions—that was the word used—which need attention. Unless he can answer in a way that convincingly refutes their effect, we might as well keep on fighting about this. As I say, it is a constitutional aberration and we should not have it. It is an amazing thing for one of our committees to say that a subsection, in this case Clause 47(7), should be removed from the Bill. We need to know why it should not.

[Lord Thomas of Cwmgiedd (CB)]

I shall add two very short points. First, it seems to me absolutely fundamental to a democratic society that the laws made by a legislature permit everything to be done openly and stop anyone prohibiting publication at any time. As the committee said, there is enough discretion in the earlier subsection. Secondly, accessible and open legislation is essential to the rule of law. It seems to me that this clause is an attack on both democracy and the rule of law and has no place in this Bill.

--- Later in debate ---

[Lord Callanan (Con)]

We think that subsection (7) is important for financial stability and legal certainty but, as I have said on the other amendments in this group, I am happy to take this away and look at the matter further.

This is the very effect that assistance, and the direction that facilitates that assistance, would be deployed to avoid. Northern Rock serves as a clear example, where the revelation that the firm was in receipt of emergency liquidity assistance led to a run on the bank. That exacerbated its problems and, in the end, hastened its failure. Consequently, if disclosure of financial stability directions cannot be deferred, it would effectively render them unusable in situations where it is necessary to provide lending on a covert basis. Making a direction unusable in this way would be especially problematic if the success of the financial assistance was dependent on the use of a financial stability direction to disapply any of the requirements.

In relation to the specific statement being referenced in paragraph 16 of the report, as mentioned by the noble Lords, Lord Purvis and Lord Fox, that statement makes it clear that the concern is not about the risk of parliamentary defeat. The concern surfaced in the statement is the perception of stakeholders of a risk that non-approval could result in the rejection or undermining of the proposed subsidy. In that circumstance, the primary concern would not be in relation to a defeat in Parliament but that, as a result of that risk perception among stakeholders, the subsidy would be ineffective in the short term or even rejected by the proposed recipient. This would mean that the use of the power would not even get to the point of a vote.

The current drafting of Clause 47(7) provides a clear mechanism in law for delaying publication and a basis on which the Treasury can make the decision that the publication would undermine the purposes for which the direction was given. When the Treasury considers that publication would no longer undermine the purpose of the direction, it would at that time—this comes to the point made by the noble and learned Lord, Lord Hope—be required to publish that direction in accordance with the duty in Clause 47(6). Therefore, subsection (7) simply makes explicit the ability to delay publication where that publication would undermine the purpose for which the direction was given. It does not provide a means for the Government to avoid scrutiny indefinitely.

[Lord Judge (CB)]

What is the point of Clause 47(7) if the object is to allow, in appropriate circumstances, a deferral or a delay in the publication of the information?

[Lord Hope of Craighead (CB)]

Might I add to my noble and learned friend’s question? To whom is the information to be given? Who needs to know about this direction? It is rather important to understand how the scheme is supposed to work. Presumably, the publication is to serve a purpose; one needs to know to whom it will be disseminated.