Subsidy Control Bill

Debate between Richard Fuller and John Penrose

3rd reading
Monday 13th December 2021 Commons Chamber

[John Penrose]

My hon. Friend makes a very good point. For those of us who worry about the scale of subsidies, who take pride in ours being a relatively low-subsidy country and economy and who want it to stay that way—we do so because we care about competitiveness and people competing only on the basis of their ability to please their customers rather than whom they know in Government—that must be the right approach. That American example of how transparency can drive down subsidy levels is a good one. Incidentally, it would be fascinating to see how that applies to countries such as Spain, which have low thresholds for declarations and therefore high levels of declarations. We can follow that carefully.

[Richard Fuller (North East Bedfordshire) (Con)]

My hon. Friend is making a very useful speech, and I very rarely say that in Parliament—not about him, but generally about speeches here. Does he agree that the value of his amendments is that they would increase the number of pieces of information we have, and that the Government are missing the value of predictive analytics in considering the way in which subsidies are or are not working, as that can then be applied to other areas of Government expenditure?

[John Penrose]

That is absolutely right. Transparency is of course about trying to improve the productivity of our economy and avoiding distortions of our economy, and of course it is also about trying to reduce cronyism, but my hon. Friend is right to say that there is a longer-term benefit in that we can then tell whether the subsidies we are offering are any good: are they actually having the effect we want them to have and can we learn from that? I am afraid there is a long and ignoble history—we can all see this and cite examples from Governments of all political types and stripes in history—of politicians just getting it wrong and not learning that extra data might very well achieve something. I am afraid the old phrase that politicians are terrible at picking winners but really good at picking losers applies here in spades, and data and objectivity are essential in pricking that bubble and avoiding that happening again.

The good news is that Ministers get it: Ministers are clear about the value of transparency. They have said so to me and others. In fact, the Minister said to me in a letter earlier in December:

“Transparency is fundamental not only to the future subsidy control regime but also to good governance more widely.”

That is absolutely right. So, the principle is clear: there is no disagreement in any part of the House that this is the right thing to do.

So, why are we not doing it? That has been covered partly in Committee, but it bears being repeated here strongly and forcefully. The EU regime which the Bill is supposed to supplant has a series of transparency declaration thresholds. Everything over half a million euros must be declared; there are thresholds too for cumulative grants, which we heard about in the speech of the hon. Member for Aberdeen North, although half a million euros is the basic threshold. This Bill, however, says that everything over half a million pounds has to be declared. Unless the exchange rate has gone completely doolally in the last 10 minutes, that is a much, or moderately, higher level than half a million euros, and as a result we will in the future be declaring fewer subsidies under this transparency regime than we were in the past, in spite of the fact that Ministers have rightly said transparency is absolutely essential and a core principle with which we all agree. We are not delivering on the central principle on which everybody agrees, and that is why I have tabled basically three groups of amendments. They do three things, some of which we have already heard about; the hon. Lady summarised them nicely, so I will not go through the detail again.

The first group addresses amounts and says, “Look, we shouldn’t just say we have to declare anything over half a million pounds; we should be much more transparent than that.” If we are really serious about trying to be world-class about this issue, let us knock three zeros off that number: let us go for £500 instead. What have we got to hide? What have we got to be scared of? Why do we not just put it all out there and let people see? That would be transformational, for the reasons I have just described.