My Lords, I rise to move Amendment 4 in the name of my noble friend Lord McNicol. As the explanatory statement says, it
“seeks the creation of a clear subsidy strategy, to be laid before and approved by Parliament. Such a strategy would set out how Her Majesty’s Government expects subsidies to be used to support a wider industrial strategy and progress towards the 2050 net zero target. It would also outline how the new subsidy control scheme works alongside … the Shared Prosperity Fund and Levelling Up Fund.”
I am pleased also to speak in support of Amendments 5 and 25 in my noble friend’s name, and Amendments 4A and 5A in the name of the noble Lord, Lord Ravensdale.
I will preface my comments by setting some context. The real desire to seek to improve the provisions in the Bill comes from a place of ambition for the economy of the whole United Kingdom, unlocking potential while recognising regional inequalities. As we have heard in the debate thus far, we are approaching this issue, as always, in a spirit of transparency, fairness and purpose. As we know, at Second Reading a number of noble Lords voiced their concerns that this new subsidy control system does not appear to be linked to a wider strategy, whether that is delivering strands of an industrial strategy—does one still exist?—or supporting the Prime Minister’s levelling-up agenda and the net-zero strategy, which I mentioned and which we will come on to in debates on later amendments.
These are interesting and potentially stressful times for authorities across the country, as new funding mechanisms and policy initiatives are implemented and the realities of Brexit become more apparent. I confess that I believe Her Majesty’s Government have somewhat dragged their feet on implementing their long-promised UK shared prosperity fund. The early indications are that many of the biggest recipients of
the European Regional Development Fund are not only losing out but are likely to lose out to the tune of tens of millions of pounds a year.
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I refer noble Lords to the Treasury Select Committee report into the Autumn Budget and spending review, which estimates that the UK shared prosperity fund is worth just 60% of the EU structural fund that it is replacing: the EU structural fund, worth £2.5 billion, is being replaced with a £1.5 billion UK shared prosperity fund. It is difficult to come to terms with the estimate that, even when we include the levelling-up fund across the north of England with the shared prosperity fund, the north of England alone stands to lose up to £300 million a year. This translates across the country. These are factors that we are to take extremely seriously if we are to realise our ambition for the country’s prospects.
Of course, we are speaking in the week that we expect to see Her Majesty’s Government’s levelling-up White Paper, but it is not clear that that document will offer the coherent vision we have been waiting for since the 2019 election campaign. I hope no one will take this the wrong way, but there is a joke that if you have half a dozen lawyers in the room, you are likely to hear a dozen opinions on a given subject; levelling up feels very much like that.
That is why the strategies envisaged in Amendments 4 and 5 are so important. Amendment 5 would amend the common interest principle outlined in Schedule 1 to explicitly include reference to
“areas of relative economic deprivation”.
As my noble friend Lord McNicol said at Second Reading, subsidies can have a transformational impact on the communities they target, but there is currently nothing in the Bill that would prioritise hard-up communities over those that enjoy relative privilege. We understand Her Majesty’s Government wanting to move away from the EU assisted areas map, but we need something as a replacement, based on dialogue and consensus. Warm words will not deliver the change that many areas need, and it is hard to believe warm words when we look at how the early rounds of levelling-up funding have been allocated. We had the very unfortunate experience over the weekend of the Government announcing figures that gave the impression of new funding to specific areas of the country but which then, under close examination, had to be retracted. There is a real issue of trust around at the moment. As we heard earlier, the Covid loans only add to that perception.
Amendment 6 from the noble and learned Lord, Lord Thomas, highlights the need for political agreement between the constituent parts of the UK if we are to avoid some of these issues being left to the CMA and the CAT to resolve. I was very struck by the noble and learned Lord’s comments at Second Reading about these being political judgments. Once again, as with the UK Internal Market Bill and other pieces of legislation, it feels as though the Government are rushing ahead without a clear plan. If the Minister has one, there should be no problem in laying it before Parliament for approval. If there is no plan, the new system could prove to be all the things we want to avoid: inefficient, ineffective and divisive.