Subsidy Control Bill — House of Lords, 2022-01-19
Topic: Macroeconomics
Shaista Sheehan (Liberal Democrats, Centre to centre-left): My Lords, the Bill raises a number of serious questions, for example, around lower transparency—as articulated in the Delegated Powers Committee’s report—around the strategy that will guide these subsidies, around what a "subsidy scheme" or a "streamlined subsidy scheme" is and around what is meant by "subsidy of interest" and "subsidy of particular interest". Why are these terms not defined on the face of the Bill? As a significant example of the UK’s post-Brexit landscape, these details in the Bill are essential, so I support all noble Lords who have voiced their concerns on these issues It is not enough to have a line in the Explanatory Notes saying, "The Government aims to deliver ... UK ... priorities such as levelling up and achieving net zero", especially because we are now without an industrial strategy, which for inexplicable reasons was done away with early last year. The report of the Commons BEIS Committee last June on the scrapping of the industrial strategy was scathing, calling the axing of the ISC, the Industrial Strategy Council, "a retrograde step", removing valuable independent scrutiny, insight and expertise Business is crying out for long-term consistency and clarity, but instead it is presented with the nebulous "plan for growth", which does nothing to address how policy statements will be shaped to meet the country’s objectives and provides no expert oversight on what Ministers have actually been able to deliver. This Bill could have put some meat on the bones of the Government’s stated policy aims and given a sense of which sectors will be prioritised to achieve those aims, but they have failed to grasp this opportunity I am going to focus on the Government’s aim of achieving net zero. The fact is that, despite the stated strategic approach, there are no climate provisions in the Bill that set out a narrative on how this will be achieved. The Government could have incorporated a robust and systemic approach to climate change mitigation and adaptation, as well as to their "30 by 30" pledge, the aim of which is to protect and conserve 30% of the world’s land and marine ecosystems by 2030 which, by the way, is conspicuously missing from their stated aims. They opted not to do this. Therefore, will the Minister address how the regime would facilitate the future-proofing of industries and promote growth and employment in new, green sectors to ensure a resilient and competitive economy? It is vital that the overarching subsidies regime is aligned with the country’s climate and wider environmental goals and addresses market and systemic failures. However, this Bill gives us no clue as to how they will do that. Perhaps the Minister can enlighten us. How, for example, will they incentivise investment to help to scale up innovative, low-carbon technologies, industries and solutions across the economy, which will require measures that go beyond R&D investment My final point relates to the COP 26 Glasgow climate pact, which included an agreement to accelerate efforts towards the phase-out of inefficient fossil-fuel subsidies. The Government currently subsidise the production and use of fossil fuels in a number of ways, including through tax breaks for high-carbon activities. As an example, in 2019, for each barrel of oil, the UK received $1.72 in tax. In Norway, that sum was $21.35. The Government really need to get a grip on what is happening with regard to advantages that are conferred on the oil and gas industry. Do the Government intend to take a more robust approach to ending subsidies for fossil fuels?