My Lords, the Subsidy Control Bill, following on from our experience of the internal market Act and of the loss of EU funding after leaving the EU, provides those of us from the devolved nations with another battle. Our battle is, of course, to protect and defend the powers of the Ministers of the devolved Administrations, given to us by this Parliament. Our fellow citizens would expect no less of us. So, what are our concerns about the Bill? I will concentrate on two issues: consultation with the devolved Governments and the powers bestowed on the Secretary of State. I also wish to make a short comment on transparency.
The Bill makes provision about the control of subsidies following the UK’s exit from the EU, and it is a new system, replacing the EU state aid rules. It sets out a new domestic subsidy control regime, which binds all the countries of the UK together. In doing so, the UK Government have, almost unilaterally, produced a Bill that impacts on the devolved Administrations, and they have drafted it in what is becoming their customary fashion. There was little or no consultation with Welsh Ministers before the Bill was introduced to the Commons, although the UK Government consider that policy development on the Bill has involved
“frequent consultation with devolved Governments”.
So what does “frequent consultation” mean? The draft copy of the Bill was shared with the Welsh Minister on 29 June last year—the day before the UK Government laid the draft Bill before Parliament, where it passed its First Reading. This unnecessarily tight timescale has resulted in a distinct lack of any meaningful engagement on its detail and little or no opportunity for devolved government Ministers to
influence its content. Indeed, the Welsh Finance Minister has commented that meetings with the UK Government on the Bill have been
“little more … than opportunities for the UK Government to outline their position and … their intentions moving forward”.
She added:
“when UK Government has provided us with draft documents, the deadlines for our inputs have been too short to provide a reasoned and considered response, or the drafts … have been just so vague and so general as to provide us with minimal insight into the development of the policy.”
It appears that the two Governments have differing definitions of the word “consultation”. The UK Government are missing a trick here. The Welsh Government have vast experience in the distribution of EU subsidies and are calling for a collegiate approach to drafting the new subsidy regime.
The Bill also provides that functions held at EU level are now held by the Secretary of State, the CMA or the CAT. The role of the Secretary of State is far reaching. The Bill empowers them to shape the subsidy regime in future, with little scrutiny from this UK Parliament and with no scrutiny at all available to Welsh Ministers or the Senedd.
A number of regulation powers are bestowed on the Secretary of State that do not require the consent of or consultation with Welsh Ministers, even when the regulations cover devolved issues. The Secretary of State will also have the power to refer subsidy awards or schemes in policy areas of devolved competence to the independent regulator. These new powers alone would undermine the power of Welsh Ministers to act in relation to matters such as economic development, agriculture and fisheries, which are within their devolved competence at present. So, there will be no meaningful consultation and no involvement in the future drafting of subsidy control measures—in essence, this is a complete neutering of Welsh Ministers’ powers.
On transparency, under EU state law, individual subsidies of over €500,000 were published online, as the noble Lord, Lord Forsyth of Drumlean, explained. The Bill increases that threshold to £500,000. This of course means that subsidies of £499,999 will not need to be published. So, because the subsidies are not cumulative, one business can receive repeated subsidies without publishing their details.
The Centre for Public Data recommends that all subsidies over £500 should be published. Why do the Government not agree with this? Perhaps they should seize the benefits of Brexit which the Minister spoke about and provide the UK with a more transparent system than that of the EU.
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