Subsidy Control Bill — House of Commons, 2021-12-13
Topic: Macroeconomics
Jonathan Neil Reynolds (Labour, Centre-left): It is a privilege to come to the Dispatch Box for the first time as the shadow Secretary of State for Business, Energy and Industrial Strategy. This is an important Bill. On the face of it, it is a technical matter, as our exit from the European Union and single market means that a replacement for the former state aid rules is a legal and practical necessity. However, the debate we have had about how the new regime will be used shows that it is much more important than that I thank all hon. Members who have worked on the Bill, particularly my hon. Friends the Members for Feltham and Heston (Seema Malhotra) and for Sefton Central (Bill Esterson) for their work in Committee. I repeat the Secretary of State’s thanks to all the Clerks and ministerial officials for getting it ready The current Government’s economic record sadly combines the worst of everything. Our long-term growth forecasts are low, our taxes are high, our productivity is appalling, inflation is growing and our trade is shrinking. In short, the Conservative Government have created a high-tax, low-growth economy, so the country needs a plan for growth if we are to generate the living standards and public services that the British people rightly expect. Therefore, how the powers and responsibilities that are contained in the Bill will be used is of major interest to us all. I want to see some ambition from the Government—not just big talk, but real delivery. Throughout the Bill’s passage, we have tried to tease out the outlines of their strategy, or some indication of their plans, but we are none the wiser, mainly because they do not seem to know what they want to do. For any industrial policy to be successful, its focus must be the long term and its fundamental objectives should be cross party to give industry and firms the reassurance that they need to invest for the future This Government cannot even agree with what former Conservative Governments proposed and adopted as policy just a few years ago. I have still heard no clear reason from them as to why the previous industrial strategy and bodies such as the Industrial Strategy Council have been abolished. It smacks of the fundamental short-termism and lack of seriousness that infects the whole Government. That matters because for the powers contained in the Bill to work, they have to be a part of a coherent strategy. I do not believe that we have that I do not believe in corporate welfare; it is not the Government’s job to bail out firms that are not viable or to distort fair competition in markets. But I do believe that there is a huge role for the Government in partnering with industry to meet our national objectives, particularly on net zero. A good example of where that support is needed is our energy-intensive sector, which has a significant carbon footprint domestically but which compares favourably to the same industries in other countries when international comparisons are made. I want to see from the Government a coherent and effective strategy to use the powers in this Bill to support these industries because, without that, all we will do is offshore our emissions by making these sectors uncompetitive. At present, we have a Government who are willing to intervene, but whose approach is best described as completely scattergun. I know some Conservative Members are converts to economic intervention, but they have skipped the part where that intervention needs to be driven by purpose, rather than short-term political expediency. Michael Heseltine put it best when he said that the Government appear to have "no coherent approach" and the Prime Minister is just "lurching from crisis to crisis." That is harsh criticism, but it is fair In many ways we will not be able to judge the success or not of this legislation until we have learnt more about how the Government intend to use it. Quite simply, the Government must do better. If they had taken our amendments, and those of other colleagues here today, on board, that would have substantially improved what we are being presented with on Third Reading. It would have given us greater transparency to show where public money is going and a commitment that any subsidies help the UK achieve the net zero targets, and ensured that the nations and regions have the powers they need to make the new regime a success. It is a real regret that those amendments are not part of the Bill, but I hope members in the other place will take these arguments up To return to my opening remarks, although the Bill is not the one we would have proposed, it is clearly a necessity. We will therefore not be opposing it on Third Reading. However, in the months and years ahead, it will only have meaning for the British people if it is combined with the kind dynamic and coherent policy agenda that so far has eluded this Government at every level.