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output continuing to grow faster than inputs, and Departments being challenged to improve efficiency and modernise outdated processes.”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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“Its reports and advice will influence the challenging and carrying out of subsidies and schemes, and will provide important guidance for public authorities. The demands on its time and expertise will be considerable, as it sets up and carries out that very important function. Rightly, the unit ought to have all the right input. A diversity of input means that some of the best decisions will be made. It is important to ensure that the right advice and input will be there in the unit, in particular that representing all four nations of the UK. Its work will be applicable not just to England, but to Scotland, Wales and Northern Ireland. However, the clause does not appear to ensure that all nations will be represented fairly in the subsidy advice unit. Why is that?”
“The clause establishes regulations for the CMA to establish a board called the subsidy advice unit, which will carry out the CMA’s duties under the new regime. We support the creation of the subsidy advice unit and the duties it gains under the Bill. However, yet again, the Government have failed to create a role for the devolved Administrations. The Minister might wonder whether I sound like a broken record, but the reason is that the theme continues to be a cause of concern throughout the Bill. The subsidy advice unit will play an extremely important role in the new regime, consistently assessing all subsidies and schemes referred to the CMA, by public bodies and by the Secretary of State.”
“The Minister has said that having the voice of the devolved Administrations is unprecedented. Before I come back on whether we will press any of the amendments to a vote, can he clarify whether that is really unprecedented? He was involved in the Office for the Internal Market legislation in a way that I was not directly, so is there a difference in how the Office for the Internal Market is constituted in relation to the devolved Administrations?”
“I thank the Minister for his comments. I do not think he fully answered the question, which is whether there is anything different about the representation of the devolved Administrations in relation to the Office for the Internal Market. Perhaps he can answer that specifically. The Minister is right about allowing for independence, but it is independence to operate within a framework that I think is being set in the Bill. There is room for us to do this without challenging the independence of the CMA or the subsidy advice unit by simply laying out what Parliament would expect. Perhaps he can come back to me specifically on the point about the Office for the Internal Market and the voice of devolved Administrations in it.”
“I thank the Minister for that, but I do not feel that he has been completely clear. These are not God-given institutions; we are talking about decisions made by the same Government. The question becomes whether there is a reason, and whether it would be helpful and effective in the way that the regime is set up and operates, to have independent expert voices that are from and work with the four nations of the UK. I do not feel that there has been a clear response to that important issue.”
“Perhaps the Minister and I will have to agree to differ on this point, because seeking to have particular areas of expertise reflected in the membership of the subsidy advice unit is not challenging its independence; it is setting out the expectation of Parliament. It is within the Minister’s gift to say that, and it could be contained in the Bill if we chose to do so.”
“There will be no determination by Parliament of which specific people should be on those boards—we need to separate those issues. On the basis of what the Minister has said, I do not think the Bill currently goes far enough, so we will press amendment 67 to a vote. Question put, That the amendment be made.”
“I think we will come back to the point that the CMA is likely to do what is required by Parliament and Ministers. It is important to remember that distinction: we are the ones who are making decisions on legislation, so we are accountable to the public and the taxpayer for making legislation that will stand the test of time and operate in the interests of the four nations of the UK, as is intended. That is not for the CMA to make decisions on; it will be looking to the Minister to advise and help make decisions on that. I put it to the Minister that making sure that the subsidy advice unit contains expert voices from across our devolved Administrations is an important part of how we make sure it is constituted to have the inputs we need. After that, as I am sure we all agree, there needs to be independence in how the CMA operates.”
“I thank the Minister for his comments. Notwithstanding the debate we have had, the Labour party supports clause stand part, but some areas need to be reflected on, including how the Office for the Internal Market is working, and what we can learn for the CMA and this regime. Clarity ahead of Report would be very helpful to settle some of those questions.”
“I accept that the structures are different, but sometimes we can learn from principles. There is a difference between structures, functions and principles, and we are quite interested in the principles point.”
“As the Minister has said, clause 69 enables the subsidy advice unit to make reference to the chair of the CMA for the constitution of a CMA panel group. We have no issues with the clause and will support clause stand part. Question put and agreed to. Clause 69 accordingly ordered to stand part of the Bill. Clause 70 Review of subsidy decisions”
“Is it right that although an interested party may have suffered as a result of the awarding of a subsidy, if it is made under a scheme, they have no basis to bring a challenge? If that is right, can it be right? Labour’s amendment reflects both our concern and a suggestion to remediate that deficiency, which is to leave out subsection (2). The result would be that an application to review a subsidy decision could also be made for a decision to award a subsidy made under a scheme. That seems to be one way to address the issue. I would be grateful for the Minister’s response, first, on the issue and, secondly, whether he thinks there is a better way to address it in legislation.”
“Subsection (2) states that: “Where an application for a review of a subsidy decision relates to a subsidy given under a subsidy scheme, the application must be made for a review of the decision to make the subsidy scheme”, meaning that an application cannot be made in respect of a decision to give a subsidy under a scheme. The Bill is explicit on that matter. The evidence from the law firm DWF is quite scathing about that aspect of clause 70: “We also believe preventing challenges to awards made under a scheme runs contrary to the logic of the system, which seems to be to allow those affected to test the lawfulness of awards at the point they are affected.” I would be grateful if the Minister could respond on that.”
“I beg to move amendment 72, in clause 70, page 39, line 30, leave out subsection (2). This amendment would allow an application to be made to review a subsidy decision related to a subsidy given under a scheme. The amendment would enable interested parties to apply to the Competition Appeal Tribunal for a review of the decision to give a subsidy or make a subsidy scheme. An interested party is defined in subsection (7) as “a person whose interests may be affected by the giving of the subsidy or the making of the…scheme” or the Secretary of State.”
“I thank the hon. Gentleman for that. Will the Minister clarify that last point, as to how a subsidy under a scheme could be regarded—if I understood him correctly—as a new subsidy, and treated as a new subsidy for the purposes of a challenge?”
“I must say that I find that a little confusing. I am not fully clear on how a challenge can be brought to a subsidy under a scheme to even determine—what the Minister said in relation to it. Perhaps I am missing the point here, but it currently seems to be very explicit: it ends up being about the scheme rather than an individual subsidy under the scheme. Nine out of 10 subsidies under a scheme may have no challenges against them, with only one being challenged.”
“I thank the Minister for his answer; I want to ensure that we correctly understand what he is trying to say. On the basis of what I think he is saying—that there may be a mechanism for challenging subsidies under a subsidy scheme—I will not press the amendment to a vote today, but I would like the Minister to explain, in writing, how he would see that scenario working, and where the power to bring a challenge sits. I am still not clear where a determination—that a subsidy is to be treated as a subsidy, rather than a subsidy under a scheme—would come from. That does not feel clear, so let us get that clarified. If we could have that in writing, that would be extremely helpful. I beg to ask leave to withdraw the amendment. Amendment, by leave, withdrawn.”
“23, Q25.] Does the Minister recognise that the subsidy’s impact can extend beyond those who are more narrowly defined as interested parties? The amendment could bring the test for standing in line with judicial review. It would be helpful if the Minister could clarify whether there was an intention to subtly deviate from the definition in the Senior Courts Act. We hope the Government recognise that it could be a way of improving how the Bill operates as well.”
“It should not only be those whose financial interests are or may be affected and the Secretary of State who can challenge subsidies. As Professor Rickard, professor of political science at the London School of Economics, explained in October: “Thinking about who has a particular interest in challenging those subsidies, there may be good reasons to expand the potential set of challengers to ensure that it includes not just competitors but maybe also employees, trade unions, taxpayers or interest groups. That would give us more eyes on the subsidies to ensure that they are complying with the principles, ensuring value for money and achieving the economic outcomes that they set out to achieve.”––[ Official Report, Subsidy Control Public Bill Committee , 26 October 2021; c.”
“Let us use an example: the Good Law Project has serious concerns about the awarding of a tax relief to a particular business and does not believe the subsidy is consistent with the subsidy control principles. It is not inconceivable that the business could be owned by a friend or relative of a Minister who is awarding the tax relief or being involved in some other way. In light of the current climate around sleaze, perhaps it would not be surprising at all. Can the Minister clarify what standing an independent challenger, such as the Good Law Project, would have under subsection (7)(a) to bring a challenge to such a tax relief, and if not why not? Labour proposes amendment 70 to make the definition of interested party consistent with section 31(3) of the Senior Courts Act 1981.”
“The test under subsection (7)(a) is “a person whose interests may be affected”. By contrast, the test under section 31(3) of the 1981 Act is a person who “has a sufficient interest in”. While it may not seem so different on one level, it could have important consequences. George Peretz and others have suggested that the definition of interested parties under the Bill narrows the standard public law right and could be interpreted as limiting those who could bring a challenge to parties whose commercial or financial interests have been affected. What would that mean for the ability of those acting in the public interest and not in a private interest to challenge a subsidy?”
“I beg to move amendment 70, in clause 70, page 40, line 9, leave out “whose interests may be affected by” and insert “who has sufficient interest in” This amendment would alter the definition of interested party to make it consistent with clause 31(3) of the Senior Courts Act 1981. The purpose of clause 70 is to enable interested parties to challenge subsidies before the CAT. It defines an interested party as “a person whose interests may be affected by the giving of the subsidy or the making of the subsidy scheme” or “the Secretary of State”. We are concerned that the definition is too narrow and is deficient in two respects. The definition of interested parties—the test that establishes standing for the purposes of judicial review—applies a test at subsection (7)(a), which seems narrower than under the Senior Courts Act 1981.”
“This is an interesting and important discussion about who is included in the definition of “interested party”. I would like to reflect on the Minister’s comments and perhaps test them with expert advice and a detailed review of the definitions and explanatory notes for the Bill. On that basis, I will not press the amendment to a vote. I beg to ask leave to withdraw the amendment. Amendment, by leave, withdrawn. Ordered, That further consideration be now adjourned.— (Michael Tomlinson.)”
“Years of Tory neglect and inaction mean the UK is falling further behind in the race to win the future of green steel production. Governments around the world are committing to their steel industries with long-term investment, but the Minister, the Budget and, indeed, the hydrogen strategy have failed to deliver any timetable for how the Clean Steel Fund will be implemented. There appears to be no urgency and no plan. Will the Secretary of State tell us today whether he will back Labour’s plan for a £3 billion steel renewal fund to achieve near-zero-emissions steel production by 2035 to secure UK steel’s future? If not, why is he so content to see British industries lose out, more British businesses go under and more British jobs lost?”
“It is a pleasure to serve under your chairship, Ms Nokes. I thank the hon. Member for Aberdeen North, who laid out some very strong arguments for amendment 23. I will speak briefly to amendment 71, which is very similar.”
“I thank the Minister for his comments. We have no further comments on the clause beyond what we raised on the amendments. We support clause 70 standing part of the Bill. Question put and agreed to. Clause 70 accordingly ordered to stand part of the Bill. Clause 71 Time limits for applications under section 70”
“I beg to move amendment 74, in clause 71, page 40, line 31, at beginning insert— “Except where subsection (1A) applies,”. This amendment is linked to Amendment 75.”
“Evidence from DWF, which I will not repeat at length again, revealed how many of the entries currently uploaded to the database are far from complete or accurate. Amendments 75 and 74 would provide a statutory consequence where a public authority has not complied with its duty to upload information to the database, as set out in clause 33(1): namely, an extended challenge period of six months from the date on which it is established that the clause 33 duty has not been complied with. In our view, that would create a strong incentive for public authorities to upload information to the database promptly, comprehensively and accurately. Transparency is central to the new regime, and protecting it is at the heart of the amendments.”
“The clause amends the Competition Appeal Tribunal rules to establish the time limits for making an application to the CAT for a review of a subsidy control decision. Interested parties must send their notice of appeal to the CAT within one month of the relevant date. The tribunal may not extend the one-month time limit unless there are exceptional circumstances. As we have already stated, we believe very strongly that public authorities should have a clearer statutory duty to upload full and accurate information to the subsidy database. Where a public authority fails to comply with that duty, there should be consequences. The regime requires a better incentive for public authorities to upload accurately and fully.”
“I thank the Minister for his comments—I think he picked up on some of the issues that we were raising. He gave the example of a public authority not acting in line with its duties, meaning that those in receipt of a subsidy could end up waiting for longer. That could be administrative error, and nothing to do with the subsidy, but we would not know. I think it is fair to say that the amendment is not perfect, but we wanted to make a general point about time limits, which we want to look at in the round, and about how the whole regime can work fairly. On this occasion, I will not press the amendment to a vote. I beg to ask leave to withdraw the amendment. Amendment, by leave, withdrawn .”
“We need to get the balance right between providing legal certainty and ensuring damaging subsidies can be effectively challenged. It feels as if the balance is not right at the moment in the context of this regime and how it is designed in the Bill. We propose to correct the balance in amendment 73, which would give interested parties three months to bring a subsidy or scheme before the CAT. In doing so, there would be more time to consider subsidies and their effects. It would give interested parties and public authorities a fair chance to ensure a challenge can be brought, still within a limited amount of time, and the balance between that and legal certainty can be effective.”
“That means that if interested parties are not given the appropriate amount of time to consider new subsidies and schemes, damaging subsidies or schemes will face no risk of challenge. That seems extremely risky, and I hope the Minister recognises that. Jonathan Branton, a lawyer at DWF, summarised this and said: “I think one month is too short, because that requires people to be extremely alert about checking things.” –– [ Official Report, Subsidy Control Public Bill Committee, 26 October 2021; c. 52, Q73.] People can get busy and have other deadlines for two, three or four weeks. It seems to be an extraordinarily short time that may create inefficiencies in other areas, as people ask, “What subsidies have come out? How quickly should I be checking?” This is about making sure there is a fair, well-scrutinised and effective regime.”
“I do not want to suggest that there might be attempts to reduce opportunities for scrutiny and challenge by timing uploads to the database, but at the end of July, for example, there are school holidays, and even Parliament does not return until September. One month can be a very short time for scrutiny and challenge, especially at particular times of the year, and it is about what is chosen to be published and when. Labour recognises the importance of giving subsidies legal certainty in this quicker, more flexible regime. However, given that public authorities will have six months or even a year to publish subsidies on the database, why will interested parties be given only one month to challenge them? Once the one-month period has elapsed, there will be no other routes for challenging subsidies and schemes.”
“I beg to move amendment 73, in clause 71, page 40, line 33, leave out “one month” and insert “three months”. This amendment would extend the period for interested parties to submit an application for review of a subsidy to three months. The amendment would extend to three months the period for interested parties to submit an application for review of a subsidy. We think that is extremely important, because as it stands, interested parties would have one month from the publication of a subsidy or scheme on the database, or from receiving requests for information from the public authority in respect of a subsidy or scheme, to bring a challenge before the CAT. That is an extremely short timeframe. Uploads to the database could be made on July 22, for example, or on December 16, when we rise for recess.”
“I thank the Minister for his comments. I was intending to press the amendment to a vote, but there is a wider question about how we improve the balance regarding how this amount of time is used within the framework of the Bill. Should public authorities be given a shorter time in which to upload, to allow more time for a challenge to be brought? The same amount of time would have elapsed, but that could be a far better framework for the regime. In the light of the comments made and the consideration that we need to look at this as a whole, I will not press the amendment to a vote today, but we intend to return to this. It will be important for the certainty that we want to see and the transparency we need. I beg to ask leave to withdraw the amendment. Amendment, by leave, withdrawn .”
“Notwithstanding our concerns that the right balance has not been struck, we will not vote against clause stand part. Question put and agreed to. Clause 71 accordingly ordered to stand part of the Bill. Clause 72 CAT powers on review: England and Wales and Northern Ireland Question proposed, That the clause stand part of the Bill.”
“The Minister has outlined in some detail what the clause does. It grants the CAT power to give certain forms of relief, similarly to the High Court. The CAT may grant a mandatory order, a prohibiting order, a quashing order, a declaration or an injunction. We recognise the importance of these powers, so we will support the clause. Question put and agreed to. Clause 72 accordingly ordered to stand part of the Bill. Clause 73 CAT powers on review: Scotland Question proposed, That the clause stand part of the Bill.”
“We have no further comments on the clause, which we support. Question put and agreed to. Clause 73 accordingly ordered to stand part of the Bill. Clause 74 Recovery orders”
“I beg to move amendment 76, in clause 74, page 43, line 34, at end insert— “(4A) The annual report prepared by the CMA under section 25(4) of, and paragraph 14 of Schedule 4 to, the Enterprise and Regulatory Reform Act 2013 must contain details of all recovery orders made in the relevant period including the names of the public authority and beneficiary and the amount to be recovered.” This amendment provides for the CMA’s annual report to provide details of all recovery orders made the by the CAT in the relevant period.”
“That is why we are proposing amendment 76, which would require the CMA’s annual report to provide the full details of all recovery orders made by the CAT in the relevant period. That is what transparency looks like, that is what ensuring value for public money looks like, and that is why we hope the Government will give due consideration to the amendment.”
“If we are lucky, which we would need to be without adequate transparency, perhaps someone internal to their organisation would discover the malpractice. Without a publicly available report or register where the public can scrutinise which subsidies have been recalled and for what reason, that individual would get away with it and that malpractice could be swept under the rug. It was discovered, for example, that Andrew Mills, an adviser to the Board of Trade who miraculously secured a £250 million PPE contract despite never having produced PPE in his life, received a pay-out of £32 million in that deal. That is an extremely large amount of money, which was paid out of the public purse, but that figure was only recently uncovered because one individual leaked it to the press. Transparency is therefore vital.”
“Professor Rickard noted in her evidence to the Committee: “The benefits of transparency, and more of it, outweigh the costs.” She went on: “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.] Transparency, and more of it, is a good thing. Imagine for a moment that an individual in charge of awarding a subsidy has taken the decision to corruptly award a subsidy to a business or sector from which he or she may gain direct financial benefit.”
“A recovery order requires a public authority to recoup an amount of the subsidy from the beneficiary of the subsidy. This clause therefore creates a provision to allow any losses that the Government face when they mistakenly confer a subsidy on a business or industry that is in contravention of their own regulations to be recouped. Does it not make sense, then, that parliamentarians and the public should be able to scrutinise subsidies that have been inadvertently conferred, to make sure that does not happen again? Indeed, as we seem to keep needing to remind Members, there should be adequate public oversight of the spending, or potentially mis-spending, of public money.”
“The clause confers a power on the CAT to make a recovery order if it has granted relief in respect of a subsidy decision and found that the decision was in contravention of the subsidy control requirements in chapters 1 and 2 of part 2 of the Bill. A recurring theme in the Bill is the lack of transparency baked into how the Government confer subsidies and the subsequent management and reporting of those subsidies, with subsidy referrals, exemptions for certain subsidies from the regulations, and the blocking, rather inexplicably, of transparency for smaller subsidies. In our view, clause 74 represents the latest example of poor transparency. It confers a power on the CAT to make a recovery order if a subsidy is found to be in contravention of the control principles.”
“I thank the Minister for his comments. He is right that recovery orders are published alongside hearings, but they are not collated, and it is not possible to see them easily in one place in order to understand collectively what is going on. If we want to know where things are not going well and what is happening across the regime from an end-to-end point of view, it is important to have that information not just publicly available, but easily accessible.”
“I thank the hon. Member for her comment, and she is right. When we develop legislation and introduce a regime, it has to stand the test of time and last beyond the time we spend in our individual roles. In five or 10 years, the Minister might have become Prime Minister.”
“Others are starting their campaigns, so perhaps the Minister also will do so. We need to think about making such information more easily accessible. We thought about whether the CMA should publish it simply because if we have data on the regime as a whole, it should not be too onerous to find a way of reporting some of it, perhaps in partnership with the Competition Appeal Tribunal. To enable us to see what is going on and where there are recovery orders, that would be useful alongside other information that we talked about, such as geographical information, so that we have an end-to-end view.”
“I beg to ask leave to withdraw the amendment. Amendment, by leave, withdrawn. Question proposed, That the clause stand part of the Bill.”
“The hon. Member makes a good point. I come back to our broader discussion about needing to have a clear view and how we can be efficient. Data collection and reporting requires thought and design about what will be most useful for coming forward into reporting and therefore fit for making decisions on. Nobody wants to collect the data for the sake of it; it is always for a purpose. How do we make it as streamlined, straightforward, accurate and quick as possible? It is worth coming back to this issue. In the light of our earlier conversation about the Minister writing on what he expects to see in the annual report, that would also be an opportunity for us to revisit the issue and making sure that the reporting across the whole system is coherent and effective, as well as what would be annual and what would be in the more periodic reports.”
“I thank the Minister for his remarks. We support the clause. Question put and agreed to. Clause 74 accordingly ordered to stand part of the Bill. Clause 75 Appeals against decisions of the CAT Question proposed, That the clause stand part of the Bill.”