My Lords, Clause 68 requires that the CMA establishes a new committee of its board called the subsidy advice unit for the purposes of undertaking the subsidy control functions set out elsewhere in the Bill. I recognise that nothing I can say at the Dispatch Box will completely allay the fears of the DAs that this is a power grab or that we have malevolent intent in all this. All I can say is that the Government are very well aware of these issues. We talk about them constantly and will endeavour to continue the dialogue as we go forward on many fronts.
To return to these amendments, the subsidy advice unit will be a specific committee within the CMA dealing with subsidy control. It will comprise exclusively staff and members of the CMA. In this instance, “members” of the CMA refers to, among others, the chair and individuals who sit on the CMA board, the CMA panel of competition experts and the office for the internal market panel and its chair; “staff” refers to the civil servants employed by the CMA.
Amendment 64 seeks to allow the CMA chair to appoint to the subsidy advice unit non-executive members
“with relevant experience in relation to each of Wales, Scotland and Northern Ireland.”
The CMA was chosen as the home of the subsidy advice unit because of its experience and credibility in acting as a regulator and adviser in matters of competition
and consumer law on a UK-wide basis. In carrying out its new functions under the SAU, the CMA will continue to act as it always has successfully, with the whole of the UK in mind.
It is notable that the amendment does not make any mention of “relevant experience” in relation to England, perhaps implying that the CMA already has an excess of England expertise but a deficit in relation to the other parts of the UK. I cannot possibly agree with the noble Lord on that point, if indeed that was the implication.
The amendment is unnecessary because the CMA can and does already recruit to the unit personnel with “relevant experience” in relation to all its functions, various different markets and all parts of the UK. The CMA has an excellent track record of recruitment and retention of staff and members from across the UK, and currently employs staff in Belfast, Cardiff, Edinburgh and London. The CMA has already undertaken external recruitment to a number of posts in the SAU. These were advertised on a location-neutral basis and were open to applicants willing to be based in any of the CMA’s existing offices. It is unnecessary to impose excessive and unhelpful complexity on the CMA’s recruitment process when it has already proved quite capable of finding persons with the “relevant experience” to carry out its functions.
I turn to Amendment 65. Part 4 of the Subsidy Control Bill represents an important pillar of the new domestic regime. The additional flexibility that public authorities will enjoy to design bespoke subsidies and schemes and quickly bring them to fruition to address identified policy problems must be balanced by a proportionate mechanism to provide an appropriate degree of scrutiny. This scrutiny will be crucial for the most potentially distortive subsidies and schemes, which is why the SAU has been given a role in advising public authorities before they award the most potentially distortive subsides or schemes. In response to the noble Lord, Lord Bruce, I say that neither the SAU nor the Secretary of State will be able to block a subsidy being awarded.
The CMA will also have the role of monitoring the efficacy of the entire regime through a periodic review and report to Parliament. This will ensure appropriate oversight and scrutiny of the regime by Parliament to confirm that it remains relevant to the needs of the whole of the UK.
Amendment 65 requires that the Secretary of State must undertake an assessment of the CMA’s capacity to fulfil its new functions under Part 4 of the Bill and make a Statement to both Houses on their findings. If the Secretary of State finds that the CMA is not sufficiently resourced, their report to Parliament must also outline the steps the Government intend to take to address this. I appreciate the noble Lord’s intention and that this is a probing amendment to ensure that the CMA is properly prepared to carry out its new statutory functions. I therefore offer the following statement on preparations for the new subsidy advice unit.
The CMA was allocated funding of some £20.3 million at the spending review in 2020 to establish three new functions within the CMA: the subsidy control function,
the office for the internal market and the digital markets unit. Following the 2021 spending review, this budget of around £20.3 million will be maintained for the next three years. The CMA will continue to allocate funding in the 2022-23 financial year to reflect the estimate of resources needed to establish the new subsidy advice unit. This estimate reflects both the functions set out in the Bill on introduction, and the estimated number of subsidies and schemes of interest and particular interest that would be referred to the SAU.
The estimated case load of around 20 cases of both categories per year was arrived at using the methodologies set out in the Bill’s impact assessment. There is unavoidable uncertainty in this estimation, since the SAU’s referral functions are new and unprecedented. However, Her Majesty’s Government remain confident that this represents a reasonable estimate based on the best available evidence.
In terms of recruitment, to establish the SAU, the CMA has estimated that approximately 50 new posts will need to be created across all its professions. The CMA has recently undertaken external recruitment to fill several policy and project management posts in the subsidy advice unit, as well as allocating resource internally. The CMA will continue to recruit to its pools of economist, legal and business adviser resource over the coming months. The CMA is looking to recruit staff with a range of skills and experience, which includes building on its core competition expertise, as well ensuring the necessary skills in areas such as stakeholder engagement.
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I must challenge the apparent assumptions of the noble Lord, Lord Bruce. As I have mentioned, the SAU will sit within the CMA, which is a pan-UK institution and already has offices in the four parts of the UK, with members of staff who have experience of working for each of the devolved Administrations as well as the UK Government. I absolutely agree with noble Lords that it is important for the CMA to recruit expertise that recognises the UK-wide subsidy control regime and will work with them to ensure that this is reflected through implementation.
In addition to all of this, the CMA is already undertaking a range of activities in order to prepare for its new statutory functions, and these will gather further pace as the Bill progresses. This work will include the development of SAU guidance, engagement with public authorities, and the development of an online portal to streamline the referral of subsidies to the SAU by public authorities. I hope that noble Lords have to some extent been reassured on these matters, and I humbly request that Amendment 64 be withdrawn.