Subsidy Control Bill — House of Lords, 2022-01-19
Topic: Foreign Trade
Nigel Dodds (Democratic Unionist Party, Right): My Lords, I hope that your Lordships will forgive me if I return to the issue of the Northern Ireland protocol and the impact—or lack of it, in many ways—of the provisions of this Bill on Northern Ireland. This is a result of the application of Article 10 of the protocol, whereby EU state aid rules will continue to apply to subsidies related to trade and goods and the wholesale electricity market in so far as these can effect trade between Northern Ireland and the EU. Clause 48(3) makes it clear that the new domestic regime will not apply in circumstances covered by the protocol. So, as was mentioned earlier, Northern Ireland will operate in a dual state aid regime The contrasting interpretations of Article 10 by the UK Government and the EU mean that the Bill presents significant legal and practical challenges. I know that the Department for the Economy in Northern Ireland has faced a lot of difficulties in trying to tease out what this will actually mean for businesses affected in Northern Ireland. I really hope that there will be better co-operation between officials here and those of the devolved Administration on these very important matters. The European Commission has set out the broad scope of which measures it believes can affect trade between Northern Ireland and the EU. In interim guidance, the Government have referred to limited circumstances that might apply under Article 10 The Command Paper of July last year argued that the commitments in the trade and co-operation agreement, together with the Bill, make Article 10 of the protocol "redundant" in its current form. Therefore, it should be taken out of the protocol. I would be grateful if the Minister could tell us how those negotiations are going in this respect. The Government talked about reaching some interim agreements and other matters being dealt with in due course. Is this issue of state aid and subsidy control one of those areas where an interim agreement is being sought? We do not have a lot of time, if the aims in the Government’s Command Paper are to be achieved. I would welcome an update on that particular aspect of the negotiations So although I welcome, in many ways, the Bill’s principles and the aim of establishing an independent state aid regime that reflects the specific interests of the United Kingdom, we obviously have a concern that Article 10 of the protocol will be a serious issue for businesses in Northern Ireland. I will give a number of examples. Clause 53 provides that a report on a proposed subsidy must be published within 30 days, yet the process for determining a referral in the EU can extend to up to a year. This could see Northern Ireland businesses put in a detrimental position and it could have an effect on where people decide to locate their investment. The EU caps maximum support at 50%, but no such provision is made in the Bill, so businesses in other UK regions could benefit under the UK regime and Northern Ireland would lag behind. The Bill allows for support for existing businesses to expand, but that is not the case under the EU regime. These will have a detrimental effect on Northern Ireland One thinks of the situation where there is competition for investment and Northern Ireland is operating under the EU state aid rules. Officials and Invest Northern Ireland, which is the agency in Northern Ireland that seeks foreign direct investment, have already highlighted that Northern Ireland could be at a serious disadvantage in terms of competition between the various regions and countries of the UK because we are operating under a completely different set of rules. It is clear that this will cause confusion and uncertainty for UK public authorities and businesses. The lines will be drawn. I urge the Minister and the Government to get on and give us some hope that the position set out in the Command Paper last July will actually be brought about, and that Northern Ireland will have Article 10 of the protocol removed from it.