Bill Esterson
MP for Sefton Central · Labour · United Kingdom
“As the Prime Minister said on Tuesday, our energy supply and our energy security are not a question of having either oil and gas, or renewables; they are about both. It is a great pity that proper process was not followed in 2022 or 2023. [ Interruption.”
“I warmly welcome my right hon. Friend’s commitment to continuing Britain’s global leadership on climate action, including by going to COP31. I also welcome his focus on breathing space for people and businesses, but, as he said, it will take a lot more than that to deliver the growth and reindustrialisation that he is so committed to.”
“Last week the Committee heard from Claire Dykta, the director of strategy and policy at NESO, who told us: “Operational decisions are taken by authorised, trained personnel only.” Her comments were confirmed by Alastair Martin, the chief strategy officer at Flexitricity, who, in the same session, said: “I do not think the idea that the he…”
“As the Minister has just said, new nuclear is essential for energy security. It is also essential as an alternative career for workers in oil and gas.”
“Paul and Susan Robinson each worked for the Health and Safety Executive for more than 40 years. They have not been able to plan for their retirement since finishing work last year; they have been living off their savings and the small loan that they have had. They are typical of the dozens of constituents who have contacted me.”
“Hudson primary school in my constituency does a brilliant job. It is a family hub, it specialises in support for children with SEND and autism, and it has a nursery, but its building, which is 80 years old, suffers from a high water table that brings damp, mould and structural problems for the building—as does occasional flooding.”
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“I start with the evidence from Thomas Pope, deputy chief economist at the Institute for Government, who told us that subsidy control “affects devolved competence and the operation of policy in all four nations of the UK. I therefore think it is appropriate that there be better devolved representation.” –– [ Official Report, Subsidy Control Public Bill Committee, 26 October 2021; c. 31, Q43.]”
“Clause 55 allows the Secretary of State to request an assessment of a subsidy or subsidy scheme if the Secretary of State believes it could be breaking regulations or having negative effects on competition and investment in the United Kingdom. As we have said a number of times, it is important that the First Ministers and the Northern Ireland Department responsible have those same powers. It makes no sense that the Secretary of State should be empowered to call in Scottish, Welsh and Northern Irish subsidies that may damage English interests, but the Scottish, Welsh and Northern Irish leaders cannot call in subsidies that may damage the interests of their own nations. That is what we heard in the evidence sessions.”
“I beg to move amendment 52, in clause 55, page 30, line 29, after “Secretary of State” insert “, the Scottish Ministers, the Welsh Ministers and the Department for the Economy in Northern Ireland”. This amendment extends the call in powers under this section to the Devolved Administrations. It is great to see you back in the Chair, Ms Nokes, bright and early this time. The amendment addresses the call-in powers as they relate to the devolved Administrations. We think that the power to call in is a good power to have in the Bill, but it needs to be consistent and apply to the devolved Administrations, not just to the Secretary of State.”
“Just because the Government keep winning the votes, which they always will do because they have a majority in Parliament and therefore on the Committee, that is not a reason for us to not make valid arguments. This is a slightly different point on our concerns about the failure to reflect the devolution settlement in the Bill. Call-in is a slightly different aspect of the powers needed for a functioning subsidy regime, and it is right that we are raising it at this stage of the deliberations.”
“I think the hon. Gentleman missed the point I was making, but there we go. It is entirely appropriate, given that the regime is a four-nation regime, that the four nations have the powers of call-in to the CMA in the way that our amendment sets out.”
“Rachel Merelie, senior director for the Office for the Internal Market at the CMA, noted: “It is really important that all granting authorities are treated fairly and equitably, regardless of whether they are in the devolved nations or in England.” –– [ Official Report, Subsidy Control Public Bill Committee, 26 October 2021; c. 69, Q98.] I am not the only one talking about the devolved nations by any means; we have it from the CMA.”
“I will quote what George Peretz told us about why it matters that there should be a call-in power for all four nations: “In a situation where an English local authority, the Secretary of State or another UK Government body acting as an English Department does something that is designed to benefit England but causes serious concern in Scotland or Wales, why should the Welsh or Scottish Ministers not be able to do the same thing if the concern is with competition or investment within the United Kingdom? I find it slightly hard to see what the argument against that is.” –– [ Official Report, Subsidy Control Public Bill Committee, 26 October 2021; c. 44, Q63.] I have not heard from either the hon. Member for Clwyd South or the hon. Member for Aberconwy an argument against what he told us last week.”
“I suspect that more than one party would be very interested in repeating those remarks multiple times, certainly in two of the nations of this country. They are called nations within the devolved settlement; we have a devolution settlement that has “four nations” within it. It will be interesting to see how many times the hon. Gentleman is quoted saying that.”
“The hon. Gentleman does not have a mask on, so I will not. He will be able to make a speech afterwards, as I think one of his colleagues said. The devolved nations of the United Kingdom cannot be treated as second class when it comes to economic matters that could have potentially monumental impacts on the proper functioning of their markets. The devolved Administrations must have equitable powers with the Secretary of State to call in subsidies where they could be damaging to their own economies.”
“Unless there is that power—potentially in the case of a conflict of interest where the Secretary of State is the awarder—there is a limit to the way the Scottish, Welsh and Northern Irish Administrations can ensure there is a fair application of the system in terms of call-ins. I would be grateful if the Minister could come back on this point about the potential conflict of interest where the Secretary of State is the awarder in relation to the use of call-in powers.”
“The hon. Member for Aberdeen North correctly made the point that the amendment asks for a limited set of powers. I set that out using the evidence. We should follow the evidence of people who are experts on these subjects. We had a range of very good witnesses, who set out why there should be the sorts of powers that we are proposing. I cannot help think that there will be occasions when the Secretary of State is making awards. If he, as it says in the Bill, is making those awards, is there not a potential conflict of interest if there is not another way of providing that call-in if there is perceived damage in the other three nations? The Minister might want to respond to that point. The amendment makes a limited request. The Minister talked about requests to the Secretary of State for a call-in, but a request is not the same as a power.”
“I do not think that we got an answer to my question. There is still the concern that if the Secretary of State says no and there are legitimate concerns in the three nations, there needs to be the additional limited opportunity of call-ins. We will push the amendment to a vote. Question put, That the amendment be made.”
“I was not entirely clear which clause the hon. Member for Aberdeen North was speaking to. We are still on clause 55 stand part—but it was a very good speech on the next clause, so we now know what she will say. We expressed our concerns in the debate on our amendment. I hope that the Minister will reflect on those concerns and consider whether greater strength is needed in this clause and, similarly, I suspect, in clause 56—when we get to that debate.”
“I beg to move amendment 53, in clause 59, page 33, line 13, leave out paragraph (a). This amendment removes the power for the Secretary of State to amend this section by regulation.”
“The timing of the change, given the shameful proceedings in the Commons Chamber yesterday, leaves the suspicion that it is, again, about removing the principle of independence from the heart of the CMA’s role. We saw this with the Prime Minister’s own adviser on ministerial standards, Sir Alex Allan, resigning because of the breach of the ministerial code, and we saw it yesterday with members of the ruling party scrapping the rules or attempting to scrap the rules on MPs’ conduct because one of their own was found guilty of what the Standards Committee described as an “egregious” breach and then wanting to scrap the role of the independent standards commissioner.”
“We have concerns about the way the clause allows the Secretary of State to use regulations to affect the content and form of CMA reports. This is a question of the CMA’s independence. On the Competition and Markets Authority website, it describes itself as “an independent non-ministerial department”. The CMA’s work “is overseen by a Board, and led by the Chief Executive and senior team. Decisions in…investigations are made by independent members of a CMA panel.” In contrast, the clause would empower the Secretary of State to amend, by using regulations, the content of the CMA’s reports. It is very hard to see how this is anything other than a direct contradiction of the principle of independence, baked into the CMA’s set-up.”
“Our amendments would remove the power for the Secretary of State to do that. It would remove the power to edit reports published by the CMA, and it would ensure that the independence of the CMA stays as it is.”
“Thank you, Ms Nokes. On that basis, it will probably not be wise to take the interventions. I am using these things as an example of the ruling party’s attempts to remove independence. The CMA is also supposed to be independent. We have seen a desire to break the rules and then just remake the rules in the main Commons Chamber, and I fear that now we may be seeing something similar—we need to ensure that we do not see something similar—when it comes to the independence of the CMA in its role with regard to the subsidy control regime. Without amendment, the clause will allow the Government to rewrite the contents of an independent report if there is any warning that it will say something that they do not like. That is not how independence works, and it is not good government.”
“Clause 59(4)(a) uses the phrase “amend subsection (1), (2) or (3) to make provision about the content of the CMA’s report”. The Minister used the terms “text” and “content” interchangeably, which highlights our concern. Using secondary legislation, the Secretary of State is able to give himself the power to amend CMA reports. That is the problem—that is what overturns the power.”
“The Minister did not answer the hon. Lady’s question, so maybe he can do that after I finish my summing up, which will not take much longer. We will push the amendment to a vote, because the Minister did not address our concerns about removing the independence of the CMA. Question put, That the amendment be made.”
“It is good to see you back in the Chair, Mr Sharma. The hon. Member for Aberdeen North makes a good point, which we reiterate, about amendment 5, which we will come to because of its relation to our amendments to clause 64.”
“Member for North Shropshire (Mr Paterson)—I understand, hot off the press, that he has resigned. Some £3.5 billion-worth of covid-19 contracts were awarded to firms with links to the Conservative party, according to Government procurement data. That is an example of why we need adequate scrutiny.”
“If there is not a problem with a subsidy, there is nothing to be concerned about, but if there is a problem with a subsidy awarded under a scheme, there needs to be a mechanism, and I hope the Minister will explain what that mechanism will be, because I do not think we have heard during our deliberations about the scrutiny of potential problems with subsidies awarded under schemes. There is the potential for a back door of free, unscrutinised public cash being opened up. We have seen problems throughout the pandemic where scrutiny was removed. I will not go over them in too much detail. We have heard about them already, such as the Health Secretary’s pub landlord, advisers to the Board of Trade, and the problems of Randox and the now former right hon.”
“I think he is trying to intervene. I would not take an intervention from him anyway, because he does not wear a mask. I rise to reiterate our concern about the lack of transparency throughout the Bill and how subsidies cannot be called in when they are under schemes. That is a continuous thread. The real concern is that potential abuses can be missed as a result of that approach. The clause exempts subsidies under schemes from a review, from post-award referrals and from voluntary referrals. We agree that schemes provide a quicker and easier route to provide subsidies, but that should not mean that subsidies awarded under those schemes should escape due scrutiny.”
“I want to tease out some information from the Minister. He used the phrase “risk-based scrutiny”, but I get no sense of what, if there is abuse of a scheme, the mechanism is to ensure that the subsidies within the schemes are not applied in a distorted way or in a way that misuses public money. That is the bit that I do not get.”
“Our amendments would ensure that when a subsidy is awarded in unexceptional circumstances, there is adequate transparency. Again, I have to ask the Minister why he is so resistant to increased transparency in this part of the Bill.”
“Members asked during the evidence session were of a similar nature: they were about what we could learn and what we could do in order to have the best possible system and lead the world. That is what the spirit of this amendment is about: improving transparency to deliver the best quality of regime possible. As Thomas Pope said when summed up his evidence: “My view is that there is a benefit to more transparency.” — [ Official Report, Subsidy Control Public Bill Committee, 26 October 2021; c. 20, Q24.] We have made the point multiple times about the importance of transparency in public expenditure and what a good thing it is, because without it, there is a danger of public finances being spent recklessly without consideration of value for money.”
“I go back to what Professor Rickard told us in Committee: “The benefits of transparency, and more of it, outweigh the costs…I would encourage Members to think carefully about the ways in which we could further increase the transparency to ensure that the UK was a world leader in transparency in subsidies and so as to help to provide consistency and certainty for business and accountability to taxpayers.” –– [ Official Report, Subsidy Control Public Bill Committee, 26 October 2021; c. 19, Q22.] The Minister—and, from memory, the Secretary of State on Second Reading—talked about this domestic subsidy scheme being an opportunity to demonstrate a new way of operating a state aid regime, having left the EU system behind us. Indeed, some of the questions that hon.”
“Member for Aberdeen North has made a number of times today alone, about whether subsidies awarded in unexceptional circumstances—namely, streamlined subsidy schemes and minimal financial assistance—should be free from appropriate transparency and scrutiny. We are being consistent by continuing that point. During the debate on clause 63 stand part, I did not get an answer to my question about why the Minister believes that those subsidy schemes should be exempt from regulations.”
“During a natural disaster or a national or global economic emergency, it makes sense that subsidies designed to alleviate those emergencies should be exempt from the regulations. The same goes for a national security emergency; matters related to Bank of England monetary policy; legacy and withdrawal agreement subsidies; tax measures; special public economic interest assistance; and large cross- border or international co-operation projects. However, Government amendment 5 acknowledges that it would not be appropriate for subsidies in relation to nuclear energy to be exempt from due scrutiny, so this is about being consistent. That goes to the point that the hon.”
“I beg to move amendment 59, in clause 64, page 36, line 11, leave out paragraphs (a) and (b). This amendment removes the exemptions in relation to the CMA’s referrals and functions, for streamlined subsidy schemes and minimal financial assistance. We are all having fun changing our minds this afternoon—well, maybe the Government are not changing theirs too much. We have tabled amendments 59 and 60, and the combined effect of those amendments would be to remove “the exemptions in relation to the CMA’s referrals and functions, for streamlined subsidy schemes and minimal financial assistance.” We understand that it may well be appropriate to exempt certain subsidies from review.”
“For those reasons, we will push the amendment to a vote. Question put, That the amendment be made.”
“Again, we just are not getting from the Minister certainty about the creation of the regime, and this is a common problem all the way through. We are waiting and it is uncertain exactly how this will operate, which makes it very difficult for us to judge whether what we will end up with will provide a degree of scrutiny and transparency in the use of public funds. That applies both to streamlined subsidy schemes and to minimal financial assistance. Although I think the Minister is right about the broad point that smaller payments are unlikely to have the potential to distort in economic terms, they can still be misused. As part of the regime, we are still missing an adequate way to scrutinise, and the hon. Member for Aberdeen North gave some good pointers on how that might be addressed.”
“We have debated the amendment and the need for the change to this clause. We have tested the will of the Committee already and will not oppose clause stand part. Question put and agreed to . Clause 64, as amended, accordingly ordered to stand part of the Bill . Ordered, That further consideration be now adjourned. — (Michael Tomlinson .)”
“It is a pleasure to see you back in the Chair this afternoon, Ms Nokes. We have no objections to the clause. Question put and agreed to. Clause 40 accordingly ordered to stand part of the Bill. Clause 41 Subsidy database: exemption for SPEI assistance Question proposed, That the clause stand part of the Bill.”
“21, Q24.] Does the Minister disagree with that analysis? Can he tell us what drawbacks he sees to subjecting subsidies given to SPEI enterprises to more transparency? We agree with Professor Rickard that better transparency reduces corruption, reduces cronyism and leads to better value for money. The clause unnecessarily reduces the transparency for subsidies that could amount to tens of millions of pounds—perhaps more in some cases. As such, the clause should not stand part of the Bill and we will vote against it.”
“We have discussed that a number of times. Subsidies to SPEI enterprises are no exception. Although they may go towards enterprises that differ from other subsidy recipients, they are still financed by public funds and should therefore still be subject to transparency, and the public should still be able to access information about them. These are much larger sums of money. If that does not happen, subsidies given to SPEIs risk being abused and given to inappropriate recipients—including, as we have seen over the past year and a half, those with connections to the Conservative party. During last week’s evidence session, Professor Rickard told us: “Through transparency, we can get better compliance and better value for money”. –– [ Official Report, Subsidy Control Public Bill Committee, 26 October 2021; c.”
“In the case of Andrew Mills, who was an adviser to the Board of Trade, a company that he set up last year assisted in the awarding of a £252 million contract to Ayanda Capital, but a significant proportion of the personal protective equipment that it supplied turned out to be unusable. That was very wasteful and inefficient, but the process was very lucrative for individuals with such connections. That is why transparency is so important. Recent history has given the country the impression that the Government are reluctant to engage in proper transparency. That is not a place in which anybody on this Committee should want to be. It feels at times that the Government fail to grasp that subsidises are financed by public money and that they should therefore be subject to appropriate transparency and scrutiny.”
“The bigger question on the clause is why the Government have chosen to exclude payments to services of public economic interest from the database at all. The Minister talked about transparency. Why is there no transparency for these payments? The Government’s recent track record is—as the Public Accounts Committee put it—one of enormous sums of money being given with no apparent return in the case of Test and Trace, and hundreds and millions of pounds-worth of contracts going to people with connections to Government Ministers or other connections to Government.”
“We do not believe that the clause should stand part. That is consistent with our approach to the problems with the lack of content on the database and the lack of transparency. The clause outlines that subsidies of less than £14.5 million given to SPEIs are exempt from having to be published on the database. As my hon. Friend the Member for Feltham and Heston laid out in her comments on clause 38, we understand that the subsidies to services of public economic interest should not have to obey the subsidy control requirements, but we cannot see why they should not be published on the database. I also do not think I heard the Minister explain why the £725,000 threshold applies in clause 38. Perhaps he could answer that in his response.”
“We believe that the amendment would help to increase the effectiveness of subsidies across the UK and respects the role of the devolved Administrations.”
“61, Q80.] We of course understand the role of the Westminster Government in the creation and operation of the UK subsidy regime, but preventing the devolved Administrations from creating streamlined schemes undermines their important role in our democratic infrastructure, as well as their responsibilities for their respective nations. We therefore seek to amend clause 42 to allow Welsh Ministers, Scottish Ministers and the Northern Ireland Department to require the Secretary of State to seek the consent of the devolved Administrations before making regulations under the clause. Where such consent is not given within one month, beginning on the day on which it is sought, the Secretary of State may make the regulations without it but must publish a statement explaining the decision.”
“That includes such matters as setting the value thresholds for the minimal financial assistance and services of public economic interest assistance exemptions, as well as the transparency exemption for SPEI assistance. Last week, Daniel Greenberg told us in evidence that ‘throughout the Bill, you see “Secretary of State, Secretary of State, Secretary of State”—all powers of HMG—and you think, “Hold on, the devolved institutions are also public authorities. They appear in the list of public authorities in clause 6, so why is it that they do not also share Secretary of State powers?”’ –– [ Official Report, Subsidy Control Public Bill Committee, 26 October 2021; c.”
“As with many aspects of the Bill, the clause fails to take into consideration the important role that the devolved Administrations have in state aid governance. The ability to impose regulations unilaterally by secondary legislation, without seeking the consent of the devolved Administrations, is inconsistent with the approach that Labour has sought to instil in Committee—to consider the devolved Administrations as public authorities equal in responsibility for state aid to the responsibilities of the Secretary of State. Devolved Administrations are on balance more likely to understand what subsidies will be most beneficial for their respective nations than the Secretary of State.”
“(1C) If regulations are made in reliance on subsection 1(6B5), the Secretary of State must make a statement to the House of Commons explaining why the Secretary of State decided to make the regulations without the consent of the authority or authorities concerned.” This amendment would require the Secretary of State to seek the consent of the Devolved Administrations before making regulations under this section. Where such consent is not given within one month beginning on the day in which it is sought, the Secretary of State may make the regulations without that consent, but must publish a statement explaining their decision. So much confusion today, in so many ways, in dealing with the Bill and in some of what is going on in the Bill, Ms Nokes, but there we are. It is all set to make the afternoon go by in a more entertaining fashion.”
“I beg to move amendment 45, in clause 42, page 23, line 43, at end insert— “(1A) Before making regulations under subsection (1), the Secretary of State must seek the consent of the Scottish Ministers, the Welsh Ministers and the Department for the Economy in Northern Ireland. (1B) If consent to the making of the regulations under subsection 11(A) is not given by any of those authorities listed in subsection (1A) within the period of one month beginning with the day on which it is sought from that authority, the Secretary of State may make the regulations without that consent.”
“I have to pick the Minister up on this: he thanks Members for our ongoing interest in the Committee’s deliberations, and the devolved Administrations for their interest. Come on. We are supposed to have a four-nation system. I think it is a bit more than just showing ongoing interest. Perhaps he can tell us the result of the discussions and the consultation feedback on the clause. What was the devolved Administrations’ response? Did they say that they were happy with the clause, or did they want to be in a position to give their consent before the implementation of its provisions? Certainly from what I have seen, they would want the ability to give consent, notwithstanding the importance of the UK-wide system that is in place and the Westminster Government’s role. I would be interested in his response.”
“What we are saying is that it would make perfect sense to include and engage properly with the devolved Administrations, not least because they have a much better idea of how to apply subsidies in their areas. We even recognise that there will be times when that would not be possible, which is why we suggest that after a month it would fall to the Secretary of State to make a statement as to why consent had not been sought. We have done our best to give the Government a way to meet the consultation results and show that they really are serious about a four-nation approach to the new regime. It is a shame that the Minister has not taken that on board, and we will push our amendment to a vote. Question put , That the amendment be made.”
“My hon. Friend the Member for Aberavon and the hon. Member for Aberdeen North have made some powerful points about why it is so important to get this right. I did not get a satisfactory answer from the Minister. He mentioned engagement having taken place 34 times, but he could not tell me what was said about the point addressed by the amendment, and neither did he answer the points made by Daniel Greenberg last week about why the devolved institutions do not share the Secretary of State’s powers. As my hon. Friend the Member for Aberavon has quite rightly said, we are not saying anything different about the role of the UK Government in setting up the subsidy regime.”
“Members will appreciate that natural disasters are not political by nature. A natural disaster does not discriminate who it targets and where it affects. By that logic, devolved Administrations, which are just as likely as anywhere else to experience natural disaster, should be granted powers to request that the Secretary of State declares a natural disaster or exceptional circumstance so that the exemptions listed in clause 43(1) may apply. We believe the amendment would respect the role of devolved Administrations in managing their response to disasters effectively, while still ensuring the Secretary of State has the final say.”