My Lords, I heard state aid described this morning as something that people do not get very interested in, yet the range of speakers in this debate, starting at such a ridiculously late hour, puts paid to the claim that there is a lack of interest. Indeed, there could hardly be anything more crucial than what the Government support or do not support—and that, indeed, is a decision not to support. As the noble Lords, Lord Purvis of Tweed and Lord Whitty, pointed out, Governments have often tried to suggest that it was the EU’s fault that the UK Government were not providing support, but that claim does not stand up. That lack of support has given us industries, sectors and communities that are struggling to get a decent quality of life for their members, while living within the boundaries of this one fragile planet. It is something we are far away from today, be it the level of child or pensioner poverty, or the way our society collectively consumes the resources of our share of three planets, when we have only one.
My noble friend Lady Jones of Moulsecoomb will later in this debate be looking at the issues of environment and the lack of a strategic direction here, as in so much
of the Her Majesty’s Government. It is hard to have a strategic direction when the ship of state is being tossed around by a party whose members are running to and fro on leadership manoeuvres. My speech is going to focus on the democratic and structural concerns about this Bill, of which many have already been clearly set out, and I shall seek to add to that rather than repeat.
One issue that has not yet been raised is the Bank of England’s monetary policy activities, which are explicitly exempted from the subsidy regime in Clause 46. The Explanatory Notes do not give any explanation or justification for this. This is significant, because we are talking about billions of pounds frequently supplied in cheap credit. It could be used in a positive way, for environmental or social objectives, and the Bill could give direction to that effect. But of course, there is also the problem, which I have often raised in other contexts, of what is known as “too much finance”. One reason why we are in that situation today—the threat to our security that the over-large financial sector presents—is the massive government subsidies of the past, including guarantees for banks that remain “too large to fail”.
I want to pick up the point made by a number of noble Lords, notably the noble Baroness, Lady Humphreys, about the reduction in the publication threshold and the removal of legal controls. Rather than a central pre-approval of subsidies, the system will now rely on challenges from rival businesses to stop harmful subsidies. But with very high levels of subsidies, rather than the £500 that is so often the public sector norm, how can anyone challenge a subsidy that they do not know exists? There is effectively no control at all. Given the issues with government contracts—issues that have been so well-aired that I hardly need go into detail—here we have another potential huge concern about lack of transparency.
We have already talked a lot about the devolved Administrations, and I will not go over the same ground. But I will note that one of the reasons why Scotland is particularly concerned about agricultural subsidies is that it has made far more progress on land reform and has retained far more small land holdings—a very different agricultural structure from what we see in much of England. These crofts and small land holdings are a hugely valued part of Scottish agriculture, community and society and surely require special arrangements and support.
Finally, many noble Lords have covered the issue of how, oddly, the Government’s levelling-up agenda seems to be missing from the Bill. There is actually a levelling down from the EU regional aid system, which permits higher aid ceilings in less developed areas.
As we have heard from every part of your Lordships’ House, we are in a total muddle. This Bill does not hold together, and it is asking a lot of your Lordships’ House to try to pull it together. All I know is that we will try.
8.32 pm