Seema Malhotra
MP for Feltham and Heston · Labour (Co-op) · United Kingdom
“Public sector productivity is improving, with the latest Office for National Statistics figures showing output continuing to grow faster than inputs, and Departments being challenged to improve efficiency and modernise outdated processes.”
“I was proud to support the Feltham Convening Partnership’s young leaders summer programme last month. What struck me was their ambition for themselves and their community, as well as their call for more work experience opportunities.”
“We will be working to commence the socioeconomic duty on public bodies in section 1 of the Equality Act to require public authorities to put addressing socioeconomic disadvantage at the heart of their strategic decision making. There will be more on that to follow. Let me again thank my hon.”
“For generations, the message to those who want to enter public life or elite professions has been that if they want to get on, they must sound like everybody else. When Margaret Thatcher became leader of her party in the 1970s, she famously underwent intensive elocution lessons with a tutor from the National Theatre.”
“Whether a young person chooses a degree or a trade, their journey must be determined by merit and their potential—never by whether they have to change their voice or pretend to be someone else to fit in.”
“Interestingly, studies also regularly show that regional accents such as Welsh or Yorkshire are rated by the public as trustworthy, warm and honest. Yet when those same studies measure perceived intelligence or employability, standard southern English and received pronunciation invariably top the metrics.”
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“The hon. Member is making a powerful speech, and I wholeheartedly support his call to reduce the fees. I also want to mention the right to vote, which Gurkhas have raised with me. I want to ask a brief question about the hunger strike this year, which was raised with me by the mayor of Hounslow, Bishnu Gurung, who was a British Gurkha staff sergeant himself. Does the hon. Member agree that we should never again see our Gurkhas going on hunger strike to try to get attention because they feel there is not an ongoing dialogue that will resolve these issues effectively, and that it is incredibly important that we have a commitment from the Minister today on his call for a clear process that has the confidence of the Gurkhas?”
“My hon. Friend talks about the Gurkhas’ ongoing service, describing the journey of our mayor in Hounslow and others. Does she agree that it is indicative that he has chosen SSAFA as his mayor’s charity this year, drawing into all he does the story of the veteran community and their engagement in our public life?”
“Normally, it is the hon. Member who intervenes on me, so it is a great honour to intervene on him. He makes an important point about the huge difference in payments received. Does he agree that one of the reasons behind that inequality was the assumption that many would go back to Nepal who did not do so, and that we need to understand and address the reality of their lives, not the assumption that was made many decades ago?”
“There was a concern from the Welsh Government about where there could be overlap, or unintended consequences, with policy decisions being made under devolved competencies, particularly on economic development—that there could be some interplay between the provisions in this Bill and existing competencies. I would be grateful if the Minister could respond on those points.”
“When subsidies are provided by the means of primary legislation, will he clarify whether there will be any differences on reporting, transparency and so on, or will they be expected to be subject to the same control arrangements? Secondly, the application of principles in paragraph 6 of schedule 3 also “applies to subsidies provided by means of devolved primary legislation”. Are there any either unintended, or intended, effects on the competencies of the devolved Administrations? This issue was one that came up in evidence with the devolved Administrations.”
“It is a pleasure to serve under your chairship, Ms Nokes. There are a number of technical provisions here relating to how implementation will take place. I thank the Minister for his opening remarks. There are areas relating to the application of principles, transparency referrals and recovery orders that we have covered in other debates, and I do not propose to go over those arguments. There are points that the Minister is coming back to us on and we will also review the areas to take further ahead of the Bill moving to Report stage. I have a couple of queries, which I would be grateful if the Minister could clarify.”
“I think the Minister did cover schedule 3. We will reflect further on the Minister’s responses to points that we have made, and I will not raise any further issues now. We will support that the schedule stand part of the Bill. Question put and agreed to. Schedule 3 accordingly agreed to. Clause 79 Guidance”
“I beg to move amendment 80, in clause 79, page 45, line 9, leave out “may” and insert “must”. This amendment, together with Amendment 81, would require the Secretary of State to issue guidance about the practical application of the areas listed under 79(1)(a), (b), and (c).”
“We hope that the Minister will appreciate the importance of guidance on the principles and requirements of this new regime, and why the Bill ought to state that they will be—not that they may be—issued for the practical application of those parts of the Bill. If the Minister does not believe that guidance on those areas should be mandated, could he tell us how he expects the Secretary of State to issue guidance on subsection (1)(a) to (c), and indeed (d) to (g), and what the timeframe for such guidance is expected to be?”
“That is why we believe it is vital that the Secretary of State provides information and clarity about what he—or she, in the future, or even the Minister, as we have discussed—expects around the principles and requirements of the new regime, how they should be interpreted and carried out by public authorities and interested parties, and the expectations of subsidy recipients. That is why we propose amendment 80, which would mandate the Secretary of State to issue guidance on the practical applications of subsection (1)(a), (b) and (c). We want to draw the distinction that we are not being overly prescriptive, so amendment 81 would continue to allow the Secretary of State the option to issue guidance on subsection (1)(d) to (g).”
“In particular, we believe that guidance must be issued for the subsidy control principles, the energy and environment principles and the control requirements laid out in part 2, chapter 3 and chapter 4. Those areas are crucial to the regime. They will ensure that public authorities create subsidies that match the aims of this Bill; that British subsidies meet the requirements of the TCA; and that public authorities and interested parties are aware of the transparency and scrutiny expected of subsidies.”
“It is a pleasure to move amendment 80 and to speak to amendment 81. Clause 79 gives the Secretary of State the power to issue guidance on the new subsidy regime. We agree with the general principle of the clause, which is that the Secretary of State should be able to provide clarity and advice on the practical application of the regime, but we believe that clause 79 is lacking in significant ways and it is important that we look to strengthen it. Clause 79 states that the Secretary of State “may issue guidance” on the areas listed under subsection (1). However, there are areas of the Bill where we think that guidance is not just beneficial, but necessary for the effective and fair running of the regime, and we should not leave that to chance.”
“It is heartening that the Minister has said that where the clause says “may”, he thinks it means “must”. From that we conclude that the Secretary of State will issue guidance. It would be helpful to know how soon we can expect that guidance. That was one of the questions. That will be very important in making sure that implementation is accelerated as much as possible, but that there is scrutiny, and time to review the guidance.”
“I thank the Minister for his comments, and for his strengthened interpretation of “may” in the clause. I appreciate his saying that he hopes that guidance will be issued, perhaps in stages, so that there is time for scrutiny. I will not press the amendment to a vote. I beg to ask leave to withdraw the amendment. Amendment, by leave, withdrawn.”
“(5B) If regulations are made in reliance on subsection (5B), the Secretary of State must publish a statement 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 gain the consent of the devolved administrations before issuing guidance under Clause 79.”
“I beg to move amendment 82, in clause 79, page 45, line 39, leave out subsection (5) and insert— “(5) Before issuing guidance under this Section, the Secretary of State must seek the consent of the Scottish Ministers, the Welsh Ministers and the Department for the Economy in Northern Ireland. (5A) If consent to the making of the regulations is not given by any of those authorities 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.”
“Therefore, guaranteeing that the devolved Administrations are involved in the decisions that affect them too will only improve the way in which the guidance is developed and confidence in how it will be implemented.”
“There should be a duty to make sure that different parts of the UK have full ownership of the final outcome—it is true that the Secretary of State will issue the guidance—but also the intelligence and the local know-how about these ideas.” –– [ Official Report, Subsidy Control Public Bill Committee, 26 October 2021; c. 8, Q4.] I ask the Minister, for the final time, to support amendments 82 and 86, which in our view give the devolved Administrations the role they should have and that is appropriate in the Bill. The guidance that the Secretary of State issues on the new regime and the regulations that will be put in place will have just as large an effect on Wales, Scotland and Northern Ireland as on England.”
“We have said throughout the debates on the Bill that we want to ensure that there is a settlement that will stand the test of time, that will be flexible in terms of how we all work together, and will be successful for the UK as a whole. It is not just the Labour party or indeed the SNP that thinks along those lines; we have heard evidence from a number of our witnesses alluding to it. I quote Dr Pazos-Vidal, who is head of the Brussels office at the Convention of Scottish Local Authorities, who outlined that the Bill currently is, “too general and not reflective of the territorial constitution of the UK as it stands. There should be a provision that the Secretary of State must consult the devolved Administrations in a dedicated system that should also involve local law.”
“As we have seen, perspectives is a theme running through this legislation, which will be an integral part of how the UK works as a whole, and it will be a more effective regime if those voices are loudly heard. We agree that Westminster is primary in the way that the legislation is implemented. However, we call on the Minister to consider amendments 82 and 86 seriously. Amendment 82 would mandate the Secretary of State to seek the consent of the devolved Administrations, with a fair backstop, before issuing guidance under clause 79. Amendment 86 stipulates that the Secretary of State must also seek the consent of the devolved Administrations before making the regulations under clause 87.”
“So we must consider how we act in line with those intentions to ensure the importance of devolution and the framework that we have, and how inevitably there will need to be some adjustment, as what happened through the EU is absorbed within our constitution. We must consider some of those roles, responsibilities and judgments about where there needs to be some tweaking of the way our constitution works, with the main principles of devolution—as they have been established and how they are working effectively—and the importance of ensuring that the voices of Scotland, Wales and Northern Ireland are put into legislation that affects all of our nations, and the UK as a whole. The devolved Administrations will have perspectives that are closer to their own nations.”
“That is why we feel that, if there are ways in which that very important role in our constitutional settlement may be diminished by the way this legislation is crafted and then implemented, it is important for us to consider that issue and also what should be made more explicit in the Bill. I believe, and I am sure that the Minister believes it too, that all four nations of the UK are stronger together. This Bill is an example of post-Brexit legislation and we are looking at elements of how what was done previously via our membership of the EU will be implemented in a way that will stand the test of time and retain the confidence of all the devolved Administrations.”
“This is again about devolution. There is some overlap with the debate we just had. I would have hoped that we were in a position where by the end of this Committee we were not having debates similar to the ones that I feel we had at the start. However, it is important to keep coming back to where engagement with the devolved Administrations matters in particular parts of the Bill, and to say why. Devolution gives all nations of the UK the chance to make more decisions locally. We have respect for our devolved Administrations and their respective powers, and their input into our economic and social development and our UK-wide democracy.”
“I thank the Minister for his comments, and I agree with his statement that this regime needs to work for the UK as a whole: I think that is something on which we all agree. I am not quite clear, though, on whether the Minister is saying that there is an incompatibility between the reserved competence and seeking consent, because I am not sure that there is. If there was, we would not have had evidence—including from Daniel Greenberg, parliamentary counsel—about how there could be some co-ordination mechanisms and consultations in and around how the Bill operates.”
“Thirdly, the amendment says that “If regulations are made in reliance on subsection (7B), the Secretary of State must publish a statement explaining why the Secretary of State decided to make the regulations without the consent of the authority or authorities concerned”. I cannot see anything in the amendment that is incompatible with the fact that this is an area of reserved competence. It simply seeks transparency on where there may be disagreements and why. In my view, that is part of how we have a mature relationship between Westminster and the devolved Administrations—not everyone is always going to agree, but they should be included and views on how the Bill is implemented should be respected. Being able to disagree on the record is, I think, part of how our democracy should be working.”
“My hon. Friend is correct, and that is the reason I wanted to make this point. I do not think that the arguments the Minister has made about risking delay and changing the dynamic are really arguments against this amendment, which clearly says that “Before making regulations under this Act, the Secretary of State must seek the consent of the Scottish Ministers, the Welsh Ministers and the Department for the Economy in Northern Ireland…If consent to the making of the regulations is not given by any of those authorities within the period of one month”— so this is not an extensive delay— “beginning with the day on which it is sought from that authority, the Secretary of State may make the regulations without that consent”, but it will be on the record that consent was sought.”
“As the Minister outlined, the clause establishes that any duty to disclose information under the powers in the Bill does not override provisions laid out in the data protection legislation. This is technical and important, and we support the clause. Question put and agreed to. Clause 80 accordingly ordered to stand part of the Bill. Clause 81 Modifications to subsidies and schemes”
“I beg to move amendment 83, in clause 81, page 46, line 39, leave out “of up to 25%” and insert “up to the rate of inflation”. This amendment would prevent modifications that increase subsidy budgets by up to 25% from being permitted, and would instead permit modifications that increased subsidy or scheme budgets by up to the rate of inflation.”
“Amendment 85 would scrap subsection (3)(g), because those long extensions could have significant consequences for the market, and the market could change in that period of time. Any extension of a scheme’s timetable should be subject to full transparency, and it should be treated as though a new subsidy was being created. I would be grateful if the Minister could respond to our legitimate concerns and explain what underlies the decisions that led to subsections (3)(f) and (3)(g). If there is something that we have missed, we would be happy to reconsider, but in the interests of transparency, value for money and public confidence, we think these are two points that should be addressed.”
“Otherwise, there is a risk in increasing a subsidy, particularly a large subsidy, by up to 25%,and, indeed, in extending a subsidy scheme by six years—that is well beyond the period for which local authorities, devolved Administrations or almost anyone in any Administration is elected in this country—without it being subject to some renewal. There does not seem to be a clear explanation of why the clause is framed as it is. We therefore also propose amendment 83, which would allow for subsidies to adapt to changing economic circumstances by allowing a subsidy’s budget to be increased by no more than the rate of inflation, rather than by a whole 25%. While allowing for adaptation to changing economic circumstances, the amendment would ensure that any significant changes to subsidy amounts were still subject to appropriate transparency.”
“Again, I wonder whether detailed consideration was given to that. Perhaps the Minister can enlighten us on the basis for deciding to make a six-year extension and a 25% increase permitted modifications. There is a risk that such modifications will have significant effects on subsidies and schemes. They could cause a previously finely-tuned subsidy to distort the market or become out of proportion. As such, we should question whether they should be allowed to occur without any checks or renewed transparency.”
“Labour recognises the importance of allowing certain modifications to subsidies, especially under a regime that is intended to be quicker, where there is leave to support a subsidy’s outcomes in line with the control principles and the underlying goals and principles of the legislation. However, such permitted modifications must be reasonable; otherwise, they risk allowing subsidies to undermine the principles of the regulations set out in the legislation. I wonder whether the Minister has considered in detail subsection (3)(f), which allows an increase in a subsidy’s budget by what seems to be a fairly high and fairly arbitrary 25%. I question whether that is a reasonable modification. There is also a question about subsection (3)(g), which allows the extension of a subsidy scheme by six years. That is longer than a parliamentary term.”
“It is a pleasure to move amendment 83 and to speak to amendments 84 and 85. The clause establishes that unless a modification of a subsidy or scheme is a “permitted modification” listed in subsection (3), including an uplift of up to 25% of the budget or an extension by up to six years, changes to a subsidy or scheme will be regarded as a new subsidy or scheme. Consequently, the public authority will have to comply with the subsidy control requirements. The clause outlines that most modifications to subsidies or schemes must result in said subsidies or schemes being treated as new. The issue is that it also outlines a list of permitted modifications that can be made without having to re-establish the subsidy.”
“It would be important, for the purposes of our deliberations and to have confidence in the regime, if the Minister were able to address that point, in writing, for the Committee. On the Minister’s point about “unlikely to”, surely we do not want to design a system based on things that are unlikely. The way the legislation is drafted could incentivise particular behaviours. We do not want a regime or legislation that make more likely things that we want to be unlikely. There is a small financial incentive for people to look at ways of working around the legislation.”
“I may have said in my remarks that amendment 85 scrapped subsection (3)(g), but it was amendment 84, as the Minister has outlined. It is important for our deliberations that the point raised by the hon. Member for Aberdeen North is addressed in writing. It is a fundamental point, and there does seem to be a loophole. Surely, we would not want an inefficiency in the regime that could mean public money being pushed through that little loophole by design. An increase of 25% is significant and could result in the subsidy being pushed over a particular threshold against the requirements of the legislation. Surely, we should design out loopholes rather than designing them in.”
“It is important to recognise that if there are to be permitted modifications, they should be designed with transparency in mind, and with ways of tracking how and where they are used. The Minister has just said that the EU regime allows a 20% budget uplift and has an approvals process. The Government are proposing a 25% uplift, but there does not seem to be any clarity in the legislation about the publication of any decisions. Do the Government envisage that, in the event of a permitted modification—of over 5% or 10% of the budget, say—there will be public knowledge of that decision, and if so, where would that information be published?”
“I thank the hon. Lady for her comments. We are extremely concerned about the Government’s lines on this. I do not think there has been any clear explanation, nor any proper assessment of what this could mean and how it could create quite a significant loophole. We will push amendment 83 to a vote. Question put , That the amendment be made.”
“The holes in this clause are bigger than those in a big piece of Swiss cheese, and I am concerned about that. We will not be voting against it, but if we had an equivalent of abstain, we would be doing that. Question put and agreed to. Clause 81 accordingly ordered to stand part of the Bill. Clause 82 Gross cash and gross cash equivalent amount of financial assistance Question proposed, That the clause stand part of the Bill.”
“The clause is important and we support it. Question put and agreed to. Clause 82 accordingly ordered to stand part of the Bill. Clause 83 Minor amendment to the Financial Services Act 2021 Question proposed, That the clause stand part of the Bill.”
“I thank the Minister for his remarks. We will be supporting the clause. Question put and agreed to. Clause 83 accordingly ordered to stand part of the Bill. Clause 84 Financial provision Question proposed, That the clause stand part of the Bill.”
“I thank the Minister for setting out how clause 84 will ensure that the costs incurred by the Bill will be met by Parliament. We support the clause. Questions put and agreed to. Clause 84 accordingly ordered to stand part of the Bill. Clause 85 Crown application Question proposed, That the clause stand part of the Bill.”
“I thank the Minister for his remarks. We will be supporting the clause. Question put and agreed to. Clause 85 accordingly ordered to stand part of the Bill. Clause 86 Power to make consequential provision Question proposed, That the clause stand part of the Bill.”
“I thank the Minister for his remarks. We have had various discussions over the course of the Bill about how regulations are to be made. Overall, we support the clause. Question put and agreed to. Clause 86 accordingly ordered to stand part of the Bill. Clause 87 Regulations”
“I thank the Minister for his remarks. Clause 87 sets out the procedures for when regulations are made under the Bill. We have expressed earlier our opposition to the lack of involvement given to the devolved Administrations; I will not repeat myself, but we continue to have those concerns. However, we will not vote against this clause. Question put and agreed to. Clause 87 accordingly ordered to stand part of the Bill. Clause 88 Directions Question proposed, That the clause stand part of the Bill.”
“We have no further comments on this clause, and will be supporting clause stand part. Question put and agreed to. Clause 8 8 accordingly ordered to stand part of the Bill. Clause 89 Interpretation Question proposed, That the clause stand part of the Bill.”
“I thank the Minister for his remarks. Throughout some of our discussions, the fact that we have not had greater definition of some of the terms used in the Bill has been a challenge, but we will support clause stand part. I hope that some of the more detailed definitions will come forward as soon as possible. Question put and agreed to. Clause 8 9 accordingly ordered to stand part of the Bill. Clause 90 Extent Question proposed, That the clause stand part of the Bill.”
“We obviously agree with this clause. It is a shame that a four-nations approach has not come forward in the drafting of some of the Bill, but in any case, we are not opposing clause stand part. Question put and agreed to. Clause 90 accordingly ordered to stand part of the Bill. Clause 91 Commencement”
“I beg to move amendment 87, in clause 91, page 50, line 26, at end insert “which must be no later than six months following the day on which this Act is passed.” This amendment would require that the Act comes into force no later than six months following Royal Assent.”
“It is important that the guidance is introduced in good time so as to ensure that the Bill receives proper scrutiny as it continues its passage through Parliament. I expect that the hon. Member for Aberdeen North will speak to amendment 25. We want to make sure that the process moves more quickly, and there is a discussion to be had about the best way to make that happen. I would be grateful if the Minister could outline the Government’s planned timetable for bringing the Bill into force and the important and necessary steps they will take as part of that road map.”
“All of those measures are necessary. In this low-growth environment, it is important to get investment, and the necessary incentives for it, as soon as possible. An interim subsidy regime is in now place, but it does not provide the guidance or reassurance necessary for the long-term effectiveness of subsidies, nor does it take advantage of the potential opportunities provided by designing and scoping a new regime now that we have left the European Union. Amendment 87 would mandate that the Bill comes into force no later than six months following Royal Assent, reflecting the important need to make quick progress on introducing the regime, the guidance and the regulations. There should be no avoidable delays.”