First, I thank the noble Lords, Lord Purvis and Lord Fox, for their amendments. They seek to probe the interactions between the OIM and the Bill, as well as the functions of the CMA more generally; I will take them together. Seeing as we were all involved in the debate on the then internal market Bill, I am getting flashes of déjà vu with all the different acronyms, such as the OIM and the SAU. Perhaps it is a Venn diagram, as the noble Lord, Lord Fox, indicated, but I will set out the position and, hopefully, resolve it.
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Before I do that, I will briefly address the question asked by the noble Lord, Lord Purvis, on the UK shared prosperity fund, a matter which we return to regularly. Let me clarify the points that the noble Lord was raising. I am unable to give per capita figures for the fund at the moment, but the Government will publish further details on it in due course. However, as I explained in the letter, which I know the noble Lord received only recently, there is no overall shortfall in funds while the UK shared prosperity fund ramps up to its full amount. The UKSPF is not yet at its full amount because it is tapering up as EU funds in the UK taper down and, of course, those EU funds are funds that the UK has already contributed to. I am getting flashbacks to my DExEU days and the debate that we had on the EU withdrawal Acts at the same time.
Amendments 66 and 78 relate to the United Kingdom Internal Market Act 2020, under which the CMA may authorise an Office for the Internal Market task group to carry out the relevant functions under the 2020 Act on the CMA’s behalf. Amendment 66 seeks to exclude any subsidies or schemes which fall under the terms of this Bill from referral to an OIM task group. To address the fundamental concerns of the noble Lords, Lord Purvis and Lord Fox, mention of subsidies in the
UK Internal Market Act sets out the areas of regulation that are reserved to the UK Parliament. The Act does not prohibit the giving of subsidies but prevents devolved Administrations from regulating the giving of subsidies, as that matter is now reserved to this Parliament.
A subsidy is, by definition, potentially or actively distortive. We are therefore seeking to regulate the giving of subsidies through this legislation. I must stress to noble Lords that the Government take the integrity and effective operation of the UK internal markets most seriously, and the terms of the Bill that we have been considering over the last sessions reflect this. It is important to note, therefore, that principle F in Schedule 1 requires subsidies to be designed to minimise distortion to UK competition and investment. This was an important priority for respondents to the subsidy control consultation which we carried out in 2021. The schedule also includes principle G, which is a general requirement to ensure that the beneficial effects outweigh the negative effects, including on competition and investment within the UK.
Under the UKIM Act, the CMA has the power to provide non-binding advice and reporting, at the request of the relevant national authorities, on the economic impacts of regulatory provisions where these are in scope of the mutual recognition and non-discrimination market access principles set out in that Act. The CMA is also required to report on the effective operation of the UK internal market at regular intervals. As I said earlier, this is a distinct legislative framework with a different purpose and policy objective to the subsidy control regime that is set out in this Bill. In terms of governance, the CMA may exercise its functions under the UKIM Act through the OIM panel, for instance with task groups of the OIM panel constituted by the OIM panel chair.
The OIM panel chair will not have the power, under the relevant provisions of the UKIM Act, to establish a task group of the OIM panel for purposes other than the exercise of the CMA’s internal market advice and reporting functions under Sections 33 to 36 of the UKIM Act. An OIM task group can only be constituted to carry out the functions of the CMA under the UKIM Act and can therefore not be constituted to carry out the CMA functions under this Subsidy Control Bill.
It is right to say that there may be some overlaps, to take account of the famous Venn diagram of the noble Lord, Lord Fox, between the monitoring and reporting functions of the OIM and the functions of the subsidy advice unit, because subsidies and grants can affect the operation of the UK internal market. It is important to emphasise that that overlap exists only for the general functions of the OIM, under Section 33 of the UKIM Act, and not its specific powers under Sections 34 to 36 to advise on certain regulatory provisions that fall within the scope of Part 4 of the UKIM Act.
However, we do not expect that the OIM will routinely look into matters related to subsidy control. The OIM has broad discretion to review matters that it considers relevant to assessing or promoting the effective operation of the UK internal market under Section 33 of the UKIM Act. However, any analysis
by the OIM would differ from that undertaken by the SAU in that it would focus on impacts such as intra-UK trade, rather than evaluating a public authority’s assessment against the principles and requirements set out in the Subsidy Control Bill.