Subsidy Control Bill — House of Commons, 2021-09-22
Topic: International Affairs
Samuel Wilson (Democratic Unionist Party, Right): Of course, the Government have the power to do it under article 16 where it is deemed that provisions in the withdrawal agreement are damaging economically to Northern Ireland. I cannot think of anything more damaging to Northern Ireland than a subsidy regime that applies in the rest of the United Kingdom but which can be stopped from applying in Northern Ireland Let me give some examples of how conflict between the dual systems could operate. One of the principles outlined in schedule 1 is that subsidies should be proportionate—there is no fixed percentage; it is simply that they be proportionate—but under the EEA-EU state aid regime, subsidies cannot be more than 50%. For example, if a subsidy is made available to a firm in Scotland that could equally be looking at Northern Ireland, Scotland would have the advantage of saying that it is so important to Scotland and fits in with its objectives that it will give it a subsidy equal to 70%—that may even be accepted under the control regime in the rest of the United Kingdom. However, Northern Ireland would be excluded from seeking to attract that firm on the basis that the EU state aid rules say it cannot go over 50%. That is one way in which the dual system is going to be a disadvantage Another example is that the EU refuses to allow state aid to be given where it is simply for expansion, but under the principles outlined in schedule 1, a subsidy of that nature could be given in the rest of the United Kingdom. We could find that a subsidy complies with the control regime in GB, but does not comply with EU state aid rules in Northern Ireland, so placing Northern Ireland at a disadvantage On the EU state rules—and the Secretary of State said it—one of the reasons for bringing forward our own control system is that it can be more flexible and quicker. In fact, I think he said that a decision could be made within 30 days, but under EU state aid rules, there has to be a standstill period that can last up to a year. The Secretary of State said that in the House today. Again, when it comes to attracting businesses by using subsidies in Northern Ireland—even if we could match the subsidy available in England, Scotland and Wales, or wherever else somebody is trying to attract the firm—the slowness of the process, imposed by the fact that we are subject not only to the control regime in the rest of the United Kingdom, but to EU state aid rules, could mean that we find that a firm simply says, "Well, we can get a decision quicker in England, Scotland or Wales, and that is where we are going", and Northern Ireland would be disadvantaged. That is one of the reasons why no fiddling about with regulations is going to make a difference here. If Northern Ireland still remains firmly under article 10 of the withdrawal agreement, state aid rules apply there and the dual system has to apply there, then this is not a case, as someone has said, of trying to control the subsidy race, because Northern Ireland cannot even enter the race. We will be spectators of the race, stopped from entering it by the provisions of article 10 and the requirement for Northern Ireland to remain under the state aid rules Lest people think that this is just an issue for Northern Ireland—they may say, "Well, tough! That was what happened with Brexit."—let me say that this is the elephant in the room and the issue has not been addressed in this Bill. Those state aid rules apply to trade between Northern Ireland and the Union, but any subsidies to a firm that operates through Northern Ireland into the EU, even though it is based in England, Scotland or Wales—or might even trade into the EU through Northern Ireland—will also be caught up in this The issue of the reach of the state aid rules has not been addressed in this Bill, and it is not just an academic argument. It is not even just for subsidies that may be given to firms in England, Scotland or Wales; this can also affect the international trade deals that the Government do with the rest of the world For example, British Sugar has challenged the deal made by the Secretary of State that allows 250,000 tonnes of sugar cane into the United Kingdom tariff free. That has been challenged by British Sugar on the basis that it represents unfair competition in the European market. British Sugar sells on the European market. It uses sugar beet, and tariff-free sugar cane would give Tate & Lyle an advantage. That is being challenged in the courts, and article 10 has been cited. If we are to ensure that a subsidy control regime does not disadvantage one part of the United Kingdom, or catch some of the subsidies that may be made available to firms located in other parts of the United Kingdom, rather than in Northern Ireland, article 10 is all-important. It is important for the Minister to provide clarification on that I have spoken to officials in the Department for the Economy in Northern Ireland. They have said—it is quite clear why—that they are finding it difficult to get information about how this scheme will work. So much of the Bill depends on new regulations being made. The general headlines are there, but the regulations need to be made. For example, what is an interested party, and will the Minister regulate to widen the scope of that? What about guidance for the subsidy and the person of interest, or about subsidies of particular interest? We do not know which subsidies are likely to be of particular interest, but that will be made by regulation. The Bill is peppered throughout with indications that such things will be clarified by regulations from the Minister, and that is important when it comes to the operation of subsidy control. We are dealing with the Bill, yet we are blind to some of the issues that need to be addressed Another issue is the time allowed for appeal or challenge, which is 30 days. I do not want the same long drawn-out process that the EU has, but 30 days in which the subsidy is registered or placed on a database is particularly short. Why has that period been selected, especially since getting information together for such a challenge might be that much more difficult? Lastly, the tribunal has significant powers, but it is how those powers will be used that is important. When the Bill comes to Committee, it is important that many of these issues are addressed From a Northern Ireland perspective, I hope that the promise made from the Dispatch Box is correct. If it is, I would love to see where that is being delivered in the Bill. If not, I would say that the Bill does not deal with some of the factors that have caused the greatest distortion of trade when it comes to the application of subsidies, namely a dual regime in Northern Ireland—a regime that allows the European Court of Justice to make those decisions. The promise made by the Minister in his opening speech that the Bill represents the freedoms we have thanks to Brexit is not quite true. The Bill still leaves a significant foothold in the United Kingdom for Brussels and the European Court of Justice when making final decisions about subsidies that apply in Northern Ireland, or about subsidies that are given to firms in England, Scotland or Wales, but that may fall under the EU state aid regime because, through their trading in Northern Ireland, they impact on the European market.