My Lords, I shall also speak to Amendments 57A, 57B and 60A. The purpose of this group of amendments is to give the CMA the right to call in subsidies quite separately from the mandatory referral process, not just those referred by the Secretary of State. The amendments would not give the power of veto to the CMA and would still leave the Competition Appeal Tribunal as the final arbiter. They are designed to introduce some independent enforcement of the rules into the process. In recent years, we have seen more independence given to bodies such as the Bank of England or the OBR. These amendments try to give the CMA, in its new role, a degree of independence for enforcement.
The noble Lord, Lord McNicol, earlier drew a contrast between the position under this Bill and how it was under the EU, namely that no subsidy was legal until it was approved. This is a much more permissive regime which relies heavily on being policed by competitors and citizens who, for the reasons that we discussed earlier in the series of amendments about the thresholds and the timing, may not always spot the need to draw attention to a subsidy that has been granted.
Let me say that I fully accept that subsidies are necessary for social purposes, for areas of deprivation and for remote communities, sometimes just to soften the blow of industrial change. But we also know the reality that subsidies distort competition; there is sometimes a temptation for Governments to throw good money after bad; one can have the politicisation of subsidies; and one can have pork barrelling. The provisions in these amendments are designed to prevent that happening.
This country needs to improve productivity. We need to strengthen the competitiveness of the UK economy and one way in which that can be done is by having a Government who are disciplined and subject to an independent discipline in their use of subsidies. The Government have been spending a lot of money recently on subsidies, some of which I accept are well justified, but we have a list of areas into which money has been injected—electricity, airlines, train operators, OneWeb, the steel industry. When we were discussing this earlier, the noble Lord, Lord McNicol, referred to the absence of a strategy. I am not personally an enthusiast for an industrial strategy, but I find it difficult to see the rationale for all the subsidies that the Government have given.
I have referred before to the Chancellor of the Exchequer’s future fund. In fairness, the Chancellor said he thought people would have a lot of fun with the investments into which he had put taxpayers’ money. More and more information has come out about it. It was recently revealed that millions have been ploughed into one online betting company. Large amounts of money have been deployed into a luxury Caribbean firm selling holidays on private islands, with some of the properties costing £400,000 a week to rent. There are also the cannabis producers, the dating agency—and Bolton Wanderers, which is also getting a direct injection from the Government.
I can understand that the Government want to help small businesses, but in that case help the generality of small businesses, not just one particular business.
There may be lots of small Caribbean holiday companies that need help; why should this one be singled out? No doubt Bolton Wanderers needs help, but what about Scunthorpe and Grimsby Town? Why should one dating agency be favoured over another? If you are going to help small businesses then do it by a grant scheme to which small businesses can apply, or by tax relief, which they can benefit from—schemes that can apply to a generality of businesses.
On top of all that, we have had, as has been mentioned several times in this debate, the mysterious investment of £400 million into OneWeb, which required a directive to the Permanent Secretary before he would approve it. The Government really have been extraordinarily reticent about the purpose of that investment, and the amount of information that has been given to Parliament has been very meagre indeed. There is a cause and a need for explanation and investigation of many of these investments.
The words “market failure” are often mentioned; they were mentioned today and in our debate the other day. Market failure can be used to justify almost anything that Governments want to do: a firm cannot find money; the Government want to give it a subsidy, so they just label it “market failure”. But what exactly is market failure? The Minister referred to it the other day, and we have had it referred to several times. One might define market failure as barriers to entry or inadequate information being available to all market participants, but it is another reason why Governments can just slither off the hook and give money to someone for, perhaps, political reasons.
We need to have a careful look at what is called market failure. The British Business Bank was set up in order to cope with market failure but is itself now the subject of great criticism by the Public Accounts Committee for not overseeing the Covid loans properly. So much for its ability to correct market failure.
The whole point of my referring to these rather questionable subsidies, as I regard them, is that I do not think the Government ought to be able to mark their own homework on these issues. They need an enforcer and an independent view. I say that what is wrong with the Bill is that it is designed to give expression to the agreement that was struck with the European Union, the TCA; it is not really a rigorous enforcement of subsidy control at all. The regime is very permissive compared to what we had in Europe and relies far too much on individual citizens and competitors as enforcers. Those who are affected have to spot and know about the subsidies, and they have to do that within a very tight time limit. As I said earlier, what if the website is not working? All these things can make it very difficult for the competitor to take the action to control the subsidies being given to people with whom they are competing.
We need to have more independence in the process. We need the CMA to have the ability to investigate on its own initiative. We need a degree of independence, similar to that which is increasingly being given to government agencies. I hope the amendment will commend itself to Members of the Committee, and I beg to move.