Subsidy Control Bill — House of Lords, 2022-03-22
Topic: Government Operations
Iain McNicol (Labour, Centre-left): My Lords, this group of concessions, as the Minister has outlined, is significant because of both the number of amendments and, more importantly, their text and practical effect. We are grateful to the Minister and the Bill team for their engagement on these issues over many weeks now; our discussions have been very useful, and although we have not achieved everything we wanted, as the noble Lord, Lord Fox, said, the new subsidy control scheme will be far more transparent than the Bill initially proposed. There are 31 amendments in this large group, 30 from the Government and one from me. I still think mine is a good amendment but I understand the Minister’s points, which we will come on to in a second The main issue is that we remain somewhat unconvinced of the Government’s argument in relation to the £100,0000 threshold. Given that many public authorities already have to publish details of spending at much lower levels—in many cases, it is £500 for local authorities—the £14 million cost quoted by the Minister to take the transparency threshold down from £100,000 to £500 would be well spent because that transparency would then sit across the whole of the subsidy controls and subsidies issued. However, an 80% reduction, coupled with the universal requirements across different subsidy types, is a clear step in the right direction. To be fair, the noble Lord, Lord Fox, has already stolen a lot of my thunder in relation to Amendment 20. The points he made were absolutely spot on so I will not repeat them; I look forward to the Minister’s response. I tabled Amendment 20 in an attempt to deal with the potential for public authorities to award multiple payments that fall under the £100,000 disclosure threshold. As the Minister outlined in his opening remarks, there are a number of possible reasons why a subsidy may be given at that level. The noble Lord, Lord Fox, is right: it is the final one of those three points, about a nefarious reason why an individual in a local authority would encourage a local authority to give multiple awards under the reporting threshold. A fundamental question still sits there: how will we and, more importantly, businesses and organisations that are or could be affected by a subsidy, challenge it if we have no sight of it We would be delighted if the Minister accepted this amendment but he explained in his opening remarks why he will not. If the Government are not willing to accept it, can the Minister outline any other safeguards that could be brought in to check this possible kind of behaviour? He did not touch on safeguards in outlining the three points; his response was that the Government do not expect this to happen or do not believe that it could happen. I hope that the Minister can also confirm, because this is important, that the ministerial delegated powers to amend the transparency thresholds will not be used before—I would prefer that they were not used at all, but especially before—the CMA and other interested parties are able to see the new system in operation. We appreciate that any future increases are subject to a cap but it would make a mockery of the process and the concession package if any of the thresholds were increased before the new system was up and running and had been tested and checked by the CMA One area not subject to amendments today but which we see as incredibly important is the process around MFA subsidies. At present, beneficiaries in receipt of MFA subsidies must maintain paper records, which not only increases the bureaucracy involved but goes against the grain of the general transition to paperless record-keeping. We do not believe that moving this system to a digital process would require any amendments to primary legislation, so can the Minister commit today to looking at the available options for digitising the MFA process, either as part of the department’s existing subsidy database workstream or as a stand-alone project I will touch on one final point about the move on upload from six months to three months. Again, I fully support this. The sooner this information is uploaded on to the database, the better for all, but we still have concerns about the right to appeal against a subsidy that a business or an organisation could be affected by. That is limited to one month; the Minister and the department have not moved that to six weeks or two months. I have some concern that we could have gone a bit further. With the reduction from six months to three months, we could have increased the ability for someone—or an organisation—adversely affected by a subsidy awarded to a competitor to challenge this by giving them a little more time. I understand the Minister’s argument about wanting the subsidy to be in place, agreed and unchallengeable, before the business will spend it, because it then has certainty. None the less, we could have given a bit more time to those who could possibly be adversely affected by it to make a challenge. With that, I again thank the Minister for the 30 amendments—it is just a shame that he could not go one more and make it 31.