My Lords, the starting point I have for this Bill is that we need a subsidy regime for the United Kingdom and we need a rulebook. However, this Bill, as has already been said, falls far short of what is needed. It is, in fact, a rulebook with a lot of blank pages.
I want to focus on Wales. The construct of the new subsidy regime is incredibly important to Wales. As the prime beneficiaries of EU funding, a substantial amount of EU money was made available for the Welsh Government to utilise. To be clear, the power to use these funds came with a great deal of flexibility. An operational programme had to be approved by the Commission but these programmes spanned a six-year period and allowed for a wide range of policy options. For example, the agricultural subsidy regime in Wales was significantly different from that of England and still is. Importantly, all the EU money received was not countable as state aid. They were not considered to be a distorting subsidy.
I have two specific questions for the Minister. How does this Bill provide the same or a better level of flexibility to the Welsh Government on the use of subsidies than that which they previously had? Secondly, since this Government promised—here in this House, at least twice—that they were going to match the EU money Wales had previously received pound for pound, can the Minister tell the House the scoreboard? How much money has been made available to Wales already? Please separate out the agricultural subsidies, because that could cloud the overall picture. I am pretty sure that the Government have fallen short of their promise to this House substantially.
The second major issue relating to this Bill and its impact on the devolved Administrations is the very wide powers it places in the hands of the Business Secretary, mostly by regulation. As an aside, as the Minister said, the Bill gives the Secretary of State the power to change primary legislation by regulation as well. So, for example, the power to define a subsidy and subsidy schemes “of interest” and “of particular interest” is for the Secretary of State by regulation. These types of subsidies will be treated differently from other subsidies and we do not have any detail of what they are. Without them and without an industrial strategy, how can we and other public bodies be expected to understand what these are? There are more blank pages in the rulebook. I must say that I find it very strange that in a piece of primary legislation we get a clause—Clause 79—headed “Guidance”. This House has taken a very grim view of the use of guidance and trying to treat it as a legal power.
We had a debate just last week in this House in which noble Lords, almost universally around the Chamber, looked at how secondary legislation and guidance was being used. The Minister will be well aware that that will cause some problems during the course of this Bill. Given the economic development powers of devolved Governments, surely these details should be worked on together as they are developed, because they will impact significantly on the Welsh Government’s ability to exercise their legal powers for economic development. This House will surely want an opportunity to scrutinise them properly—another matter that this House explained and had great disdain for in the debate last week. Owing to the nature of the powers given to the Secretary of State, it seems that the framework could be an ever-changing one, depending on the views or objectives of the Secretary of State at any one time.
Last week, the Government announced a new council of United Kingdom and devolved Governments, which will be chaired by the Prime Minister—so I presume that trumps the Secretary of State for Business. So it is now the policy of this Government, according to the Written Statement made to this House just last week, that this new council
“provides … new processes to increase impartiality and to avoid, resolve and, where necessary, escalate disputes.”
So where does this dispute resolution procedure fit into the context of this Bill?
The Welsh Government and the Welsh Parliament have declined to give consent for this Bill to legislate in devolved areas, so does it constrain the new council in resolving disputes about the operation of the subsidy regime or not? Given the failure to achieve the legislative consent agreement from the Welsh Government and Welsh Parliament, how does this Bill respect the devolved competency of the Welsh Government? I am afraid that we are looking forward to a rule book with all these blank pages. I hope that they will be filled in, but I suspect that that is a forlorn hope.
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