Subsidy Control Bill — House of Lords, 2022-03-22
Topic: Government Operations
Martin Callanan (Conservative, Centre-right): My Lords, I will not detain the House too long. Before Committee, I talked all those who were interested through the work we have done to engage with the devolved Administrations and the commitment we gave to take on board many of their suggestions. I know that some Members have had sight of the draft memorandum of understanding that we are trying to agree with the devolved Administrations. There is a commitment from the Government to engage with them. I accept that they have a principled objection to the fact that subsidy control is a reserved matter, so of course they are not willing to provide LCMs on that basis. Having said that, and accepting that reservation, we are still talking to each other, officials are still liaising and we will still attempt to reach agreement with them on the MoU. We have taken and will take into consideration many of the suggestions they have made Amendment 64 from the noble and learned Lord, Lord Thomas of Cwmgiedd, would require the Secretary of State to seek the consent of the devolved Administrations before issuing guidance under Clause 79 or making regulations under Clauses 11, 33, 34 and 59. It would require the Secretary of State to wait for up to a month before issuing guidance or making regulations to obtain the consent of the DAs. Where the consent is not given, the Secretary of State will still be able to make the regulations or issue the guidance, but will have to publish a statement explaining the reasons for making the regulations or guidance without DA consent I realise that this is a contentious area but, as stated earlier, it is the settled will of Parliament that subsidy control is a reserved matter. In our view, it would not be appropriate for the UK Government to be required by legislation to undertake selective consultations with the DAs on guidance and regulations regarding reserved policy matters, which will affect all UK public authorities, before laying them in the UK Parliament Furthermore, as I stated in Committee, a formal consent mechanism would delay the issuing and updating of statutory guidance and regulations. It is important that the Government are able to update guidance quickly should circumstances change, for instance due to the development of new UK case law. Delaying changes would be unhelpful for public authorities and subsidy recipients alike. There is already a requirement in the Bill for the Secretary of State to consult such persons as they consider appropriate before issuing any further guidance—the DAs, of course, being appropriate in this case I hope noble Lords are reassured by these commitments. I have already set out that we will continue the extensive engagement we have had with the devolved Administrations in developing the policy for the new regime, including by sharing draft consultation documents on the definitions of subsidies and schemes of interest and of particular interest. It is right that the UK Government are not slowed down by the need to seek the formal consent of the devolved Administrations before issuing guidance Amendment 6 in the name of the noble and learned Lords, Lord Thomas and Lord Hope, the noble Lord, Lord Wigley, and the noble Baroness, Lady Randerson, would in effect allow the devolved Administrations to create streamlined subsidy schemes under Clause 10 by making a request of a UK government Minister. To respond directly to the description of this as "modest" by the noble and learned Lord, Lord Thomas, I am concerned that it would significantly affect the Government’s discretion to set out a wider strategy for developing streamlined routes, given the impossibility of refusing "a reasonable request" Streamlined subsidy schemes have an important role to play in supporting public authorities to deliver well-designed subsidies that address market failures and UK strategic priorities, while minimising risks of excessive distortion to competition, investment and trade. They are not subject to mandatory or voluntary referral to the subsidy advice unit under the provisions of Chapter 1 of Part 4 of the Bill.