My Lords, I will not detain the House too long. Before Committee, I talked all those who were interested through the work we have done to engage with the devolved Administrations and the commitment we gave to take on board many of their suggestions. I know that some Members have had sight of the draft memorandum of understanding that we are trying to agree with the devolved Administrations. There is a commitment from the Government to engage with them. I accept that they have a principled objection to the fact that subsidy control is a reserved matter, so of course they are not willing to provide LCMs on that basis. Having said that, and accepting that reservation, we are still talking to each other, officials are still liaising and we will still attempt to reach agreement with them on the MoU. We have taken and will take into consideration many of the suggestions they have made.
Amendment 64 from the noble and learned Lord, Lord Thomas of Cwmgiedd, would require the Secretary of State to seek the consent of the devolved Administrations before issuing guidance under Clause 79 or making regulations under Clauses 11, 33, 34 and 59. It would require the Secretary of State to wait for up to a month before issuing guidance or making regulations to obtain the consent of the DAs. Where the consent is not given, the Secretary of State will still be able to make the regulations or issue the guidance, but will have to publish a statement explaining the reasons for making the regulations or guidance without DA consent.
I realise that this is a contentious area but, as stated earlier, it is the settled will of Parliament that subsidy control is a reserved matter. In our view, it would not be appropriate for the UK Government to be required by legislation to undertake selective consultations with the DAs on guidance and regulations regarding reserved policy matters, which will affect all UK public authorities, before laying them in the UK Parliament.
Furthermore, as I stated in Committee, a formal consent mechanism would delay the issuing and updating of statutory guidance and regulations. It is important that the Government are able to update guidance quickly should circumstances change, for instance due to the development of new UK case law. Delaying changes would be unhelpful for public authorities and subsidy recipients alike. There is already a requirement in the Bill for the Secretary of State to consult such persons as they consider appropriate before issuing any further guidance—the DAs, of course, being appropriate in this case.
I hope noble Lords are reassured by these commitments. I have already set out that we will continue the extensive engagement we have had with the devolved Administrations in developing the policy for the new regime, including by sharing draft consultation documents on the definitions of subsidies and schemes of interest and of particular interest. It is right that the UK Government are not slowed down by the need to seek the formal consent of the devolved Administrations before issuing guidance.
Amendment 6 in the name of the noble and learned Lords, Lord Thomas and Lord Hope, the noble Lord, Lord Wigley, and the noble Baroness, Lady Randerson,
would in effect allow the devolved Administrations to create streamlined subsidy schemes under Clause 10 by making a request of a UK government Minister. To respond directly to the description of this as “modest” by the noble and learned Lord, Lord Thomas, I am concerned that it would significantly affect the Government’s discretion to set out a wider strategy for developing streamlined routes, given the impossibility of refusing “a reasonable request”.
Streamlined subsidy schemes have an important role to play in supporting public authorities to deliver well-designed subsidies that address market failures and UK strategic priorities, while minimising risks of excessive distortion to competition, investment and trade. They are not subject to mandatory or voluntary referral to the subsidy advice unit under the provisions of Chapter 1 of Part 4 of the Bill.
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The Government intend that streamlined subsidy schemes will be a pragmatic means of establishing schemes for commonly awarded subsidies. Streamlined subsidy schemes will therefore function best when they apply across the entirety of the UK. The Government will design these streamlined subsidy schemes so that they are fit to be used by public authorities in all parts of our United Kingdom. In addition, the clause also sets out the procedural requirements when making a streamlined subsidy scheme, including the requirement that it be laid before Parliament. Per the debate on government amendments earlier today, streamlined subsidy schemes will also be subject to the negative procedure and may be prayed against by either House within 40 days of being laid.
Finally, it is important to stress that any public authority in the UK will be free under the terms of the Bill to create subsidy schemes for their own purposes. The DAs, as primary public authorities under Clause 10(2), will also be able to create subsidy schemes for their respective local authorities to use. Schemes have many of the same attributes as streamlined subsidy schemes, in that only the scheme, and not the individual subsidies awarded under it, need to be assessed against the principles. Schemes therefore offer an administratively light-touch means of awarding many subsidies that are also open to use by all public authorities, including the devolved Administrations.
As emphasised earlier, we will continue to work closely with the DAs in developing different streamlined routes. This will include inviting DA officials to sit on expert working groups for each route we are developing. The DAs will, of course, also be able to suggest areas that future streamlined routes might cover, and we will undertake to consider any proposal extremely carefully.