Draft State Aid (EU Exit) Regulations 2019

Lord Mann Excerpts

Wednesday 10th April 2019 General Committees

[Bill Esterson]

The hon. Gentleman tempts me down various different routes. I shall come to how the Government have diverged from their normal practice of straight transposition with these regulations. That applies particularly to the debate we had about the devolved Administrations. These regulations do not follow the normal pattern, as will become clear as I set out my argument.

State aid plays a vital role in our economy. Ensuring that we have a functioning state aid regime means that putting in place regulations that deliver exactly what is needed is very important. It is therefore essential that we carry out the detailed scrutiny this afternoon in the same way that the Lords did on 14 March. Given the scale of the regulations and their far-reaching nature, I will put on the record our concern about whether we have been provided with sufficient evidence of whether they deliver the technical details required for a functioning state aid regime that supports our economy and communities up and down the country. We will, however, do what we can to tease out some of the concerns that we have been able to identify about the technical nature of what is being proposed.

This set of regulations comes to 80 pages. I, and other Members, have been on Public Bill Committees that have been allocated many days, if not weeks, to consider far shorter Bills with line-by-line scrutiny, quite often following pre-legislative evidence sessions from expert witnesses. Yet we are given 90 minutes, of which about 64 remain, and we will have to do our best to identify the key areas for such scrutiny. It is a most unsatisfactory situation, but we will do what we can.

[John Mann (Bassetlaw) (Lab)]

I hear that we may be free next week. Will my hon. Friend propose that the Committee adjourn until then, so that we can sit throughout the week in order to do the necessary, detailed line-by-line scrutiny—a proposal that I would be totally in accord with?

[The Chair]

Order. Just for your information, Mr Mann, whether the Committee is adjourned or not, it can last only an hour and a half, come what may—and we have already had 27 minutes.

--- Later in debate ---

[John Mann]

I am rather opposed to the regulations. I do not disagree with what my hon. Friend said, but I take a more robust view, more in line with that of the Labour party leader, on state aid—namely, that we should have state aid without any restrictions. Indeed, that was one of the arguments used very successfully during the EU referendum campaign as a reason why we should leave the European Union. Many people in areas such as mine were very persuaded by that argument.

I recall leading a joint mining union delegation to Brussels to try to keep Harworth and Welbeck collieries alive, as Harworth colliery, which was one of the most productive in the world, was on the verge of closing down. There was unfair competition worldwide, and the country’s alternative was to bring in South African and Australian coal in particular. Having met Ministers here, we went to Brussels, where they were very polite. We got a cup of coffee and biscuits, which demonstrated what the answer would be. The answer was, “No. You signed up to this when you joined the European Union. You knew what you were signing up to, and such state aid is prohibited.”

Our argument was that we had a highly productive colliery and that we had an energy plan in the country that matched whatever the environmental protocols of the day were, pre-Kyoto. We wanted to dig the coal in my constituency as opposed to importing it, damaging the environment as fuel was used to ship over coal from Australia and South Africa. We were unsuccessful because of the state aid rules.

I had an earlier experience of why the state aid rules have worked against this country in the fledgling industries of the future. In 1988, I led the world-leading project on what came to be called DVDs—at the time, it was called interactive video—with Dr George Harland of the Open University, the late Vincent Hanna and Tony Lazzerini, an expert software engineer. We were the top award winners in the world at the time, but the competition was American, and in California the Americans were subsidising hugely, on both state level and national level, their industries competing against the fledgling ideas of geniuses elsewhere. I do not include myself in their number; I was merely a process producer or facilitator of the genius of the people I had managed to get together. They were world leaders—provably the best—but the Americans, through state aid in California and through the use of military contracts that tied in a state obligation on developing technology, wiped us out. Silicon Valley, as it became known, made huge gains.

[The Chair]

Order. I am listening carefully to the hon. Gentleman. He is discussing state aid in general terms, but I would be grateful if he linked his comments to the provisions of the statutory instrument, which transfers powers from the European Union to another body. The instrument is very specific.

[John Mann]

The instrument is very specific, and what I am doing is outlining why I will vote against it. I object to the transfer—there should be no transfer and no restrictions on giving support to the innovative entrepreneurial industries of the future. When we have left the European Union, we should not hamstring ourselves with these regulations and have the Competition and Markets Authority say, “No, we can’t give support.” Areas like mine will be more than willing to give support to incubate those new sectors, yet as outlined in the instrument, all that is permitted under the European Union is European-level projects, such as Horizon, where the European Union gives state aid—sometimes wisely or even very wisely, in my view—but stops individual nation states and the governmental levels beneath them doing so. My objection to the regulations is that they will not allow local government or national Governments, parliamentarians or local councillors, to act in the interests of existing industries or the new industries of the future in the way that is economically rational.

We will be competing with India, China and America, and their approach, without a level playing field. We are hamstringing ourselves. The SI is a mistaken SI. The Government should withdraw it and go back to the drawing board. Do not give these powers to the CMA. Do not hamstring us. I hope that the Labour Front Benchers will, for those reasons—and because Jeremy agrees with me—robustly oppose the regulations.