My Lords, I shall speak also to Amendment 53 in this small group, which relates to the interaction between this legislation and EU legislation that will continue to apply to Northern Ireland. I do so in the context of the news today that the Agriculture Minister in Northern Ireland has unilaterally ended the checks on the Irish Sea border at midnight tonight. That will inevitably raise more tension in a situation where we would have hoped that, as a result of the Foreign Secretary’s talks with the vice-chair of the Commission, there would be de-escalation of tensions. However, it seems that that the context has changed dramatically.
The Northern Ireland consideration of the Bill is still live. The Government have already taken an approach on the levelling-up agenda that is different from that in Northern Ireland. I am confused about why Northern Ireland was given a distinct status within the levelling-up fund. However, the key element is this legislation. Amendments 22 and 53 are probing amendments and are designed to be constructive because, regardless of any outcome of the negotiations between the Foreign Secretary and Vice-President Šefčovič, EU law will continue to apply in certain areas in Northern Ireland, even if they are limited. There has been a debate about how limited that might be, but in certain areas it may be fairly substantial. Even if the Commission accepts everything in the Government’s Command Paper on renegotiating or resetting the Northern Ireland/Ireland protocol and the Government get everything they want—that is a large if and has probably become much larger after the news today—EU law will still operate and Northern Ireland will still operate under two legal systems for certain areas of subsidy control. These were raised at Second Reading, so I do not need to go into detail on what they are.
The Foreign Secretary said that the UK should never have to notify another power—that is the European Commission—on any decision about setting tax. That will still be the case because part of this provision is on revenue and taxation. The guidance published under Section 48 of the United Kingdom Internal Market Act, which was designed to clarify the situation, did not clarify it in many areas. I read it thoroughly. Separate guidance was published on 24 June last year. It included an annexe, Public Authorities’ Assessment of How Individual Subsidies Comply with UK-EU Trade and Cooperation Agreement Principles. It had a checkpoint system. There are 18 questions that anybody providing a subsidy in Northern Ireland or GB will have to satisfy in order for them to have a greater understanding of whether EU law applies. Some of those questions are almost impossible to answer, but nevertheless there is a process that must be gone through. The Northern Ireland Department for the Economy states that 14 ongoing subsidy schemes are covered within the GBER and are likely to be in the European Union’s purview. My reading of this legislation is that, in any new scheme put forward by the European Union, Northern Ireland public authorities will be able to choose to operate under a new European Union scheme. That would be under state aid and the purview of the CJEU so, regardless of any negotiation, we are going to be operating under separate and distinct reporting schemes.
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The Government say that this legislation will then effectively render redundant any of the duplication approaches. Many have suggested otherwise. For example, evidence provided to the sub-committee of the European Affairs Select Committee that the noble Lord, Lord Lamont, and I currently serve on by George Peretz QC has highlighted that there will be a lack of clarity over which regime should apply, which could make public authorities reluctant to give subsidies. We potentially have a situation where there is a chill effect because of the lack of clarity as to whether state aid rules or subsidy control principles apply, in addition to the separate concern about the differential support or likewise to Northern Ireland businesses.
Amendments 22 and 53 are designed to assist in this process and find ways, through the existing mechanisms of the Bill, so that a public authority can make a statement to provide clarity about the scheme it operates under to those who will potentially receive subsidies. Amendment 53 proposes that the CMA should have an additional ability to provide a report on whether state aid or subsidy control rules will apply. I could not think of other options but there may be some, so if the Government wish to bring forward their own amendments now that the dam has broken under the previous scheme, I would certainly welcome discussions with them on this.
I fear that there will be ongoing concern, so suggest we find ways to reduce the tension, as much as possible, in some of these areas for the benefit of schemes that will operate within Northern Ireland or, in particular, for businesses which will operate within GB but have some form of economic relationship with Northern Ireland, including parent companies. Then they would
be able to get clarity at the outset, to make sure that the schemes can be operable. I beg to move Amendment 22.