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output continuing to grow faster than inputs, and Departments being challenged to improve efficiency and modernise outdated processes.”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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“But even those who then did think a bit further and disagreed commented that six months was too generous and could be shorter, and apparently suggested a range of alternatives. What is important is to get this right. The Minister made a couple of points in relation to where there may be some information that is not fully available—I do not know what specifically that would be—that would result in edits to correct some information, which could be after a month or two. I would like the Committee to have an opportunity to reflect on that and perhaps to talk to local government and other public authorities about what difficulties they might perceive if the period was to be greater than one month, or whether they did think that one month could be workable in the context of an easy-to-enter database.”
“I thank the Minister for his comments. There has been quite an important discussion and debate today. I want to highlight why this matter is complex and why more is needed on it. The Government quote from their consultation response, but on the specific point about the public authorities consultation question—should it be within six months?—I think it was actually quite a loaded question: “Do you agree that the obligation should be to upload information within six months of the commitment to award a subsidy?” That is hard to disagree with, even if people think that it should be one month or less. As with many of the questions, we had 15% of respondents answering this, and a majority did agree with the proposal. I do not think people would necessarily disagree with it.”
“The decision to change the minimum threshold for publication on the database is one example that would alter the transparency and clarity of the new regime. It is not right for it to be nodded through Parliament or go under the radar. It should be given parliamentary scrutiny and the vote that it demands.”
“I beg to move amendment 36, in clause 33, page 18, line 7, leave out “negative” and insert “affirmative”. This amendment makes the regulations set out in Clause 33(8) subject to the affirmative procedure . This amendment would ensure that any future changes made to the minimum threshold for publication were decided through the affirmative rather than the negative procedure. We have said throughout the passage of the Bill that too many aspects of it are set to be decided at a later date by the Secretary of State. Decisions that could and will have a significant impact on the new subsidy regime, such as those that would change authorities’ database obligations, should be afforded appropriate parliamentary scrutiny.”
“I appreciate that the Minister has stated the Government’s position on the £500,000 threshold but he has not made the case for it, neither on the operation of the regime nor on value for money or transparency. The hon. Member for Aberdeen North powerfully made the point that the Government have the power to change the £500,000 threshold under the negative procedure. Has the Minister held discussions—with the Secretary of State or others in government—about whether there should be a maximum that the Secretary of State may propose? The consequence is much less transparency over greater amounts of public funds. That surely cannot be the right direction of travel for any Government, and certainly not for a scheme that we want to stand the test of time and enjoy the confidence of the public.”
“I thank the Minister for his comments. In the light of the complexity of many of the issues that we have debated, I will not push the amendment to a vote. However, the issue must be looked at in the round to ensure that clause 33 is as robust as it can be and will stand the test of time. I beg to ask leave to withdraw the amendment. Amendment, by leave, withdrawn. Question proposed, That the clause stand part of the Bill.”
“This is an important clause, but it requires significant improvement. We will not vote against clause stand part, but I hope that the Minister will engage positively on the issues. This is not a party political matter. It is genuinely in people’s interests to have a robust regime, and we have outlined the cornerstones of that. Question put and agreed to . Clause 33 accordingly ordered to stand part of the Bill. Clause 34 Information to be included in the subsidy database”
“I beg to move amendment 40, in clause 34, page 18, line 9, remove “may” and insert “must”. This amendment makes the regulations listed in subsection (2) mandatory for entries on the subsidy database.”
“To quote Jonathan Branton: “It is really difficult to argue against transparency and say, ‘Why wouldn’t you have transparency about the dispensation of public money in this way?’” –– [ Official Report, Subsidy Control Public Bill Committee, 26 October 2021; c. 55, Q76.] Finally, to change the substance of the Bill, Labour also proposes amendment 42, which would allow the Secretary of State still to make the regulations on the content of the database. I hope that the Government can therefore see that the amendments, taken together, do not seek to make the provisions stated in subsection (2) static and would rather ensure that the database is necessarily informative, to ensure that the regime can run effectively and that subsidies can obey the control principles. Ordered, That the debate be now adjourned.—( Michael Tomlinson.)”
“The amendment seeks to ensure that the date each subsidy under a scheme is granted is published on the database, as well as the duration of each subsidy under a scheme, any time limits as might relate to the conditions and each subsidy’s amount. I cannot see any reason in the public interest that that should not be so. The amendment would ensure that not only the schemes, but each individual subsidy under them, was subject to appropriate transparency. It would enable the Secretary of State, the CMA and interested parties to check that subsidies given under the schemes, as well as the schemes themselves, are consistent with the principles laid out in schedules 1 and 2.”
“I hope the Committee can see how necessary amendment 43 is, as it includes the publication date on the database. Without it, I fail to see how the interested parties will be able to exercise their power in the ways intended in the Bill to bring challenges within the timeframe to damaging subsidies or those they consider of concern. Amendment 44, on similar lines, sets out mandatory requirements that public authorities need to meet when entering information. We recognise that subsidy schemes will provide public authorities with a surer framework under which to grant subsidies. However, that does not mean that subsidies granted under them should escape scrutiny and transparency.”
“Given that the legislation states that interested parties have just one month from the date of publication on the database to challenge subsidies, it seems odd that the information required by the amendment is not already included in the Bill. It is a critical piece of information. As Alexander Rose stated, “the key piece of information on that website”— —the database— “is the date the entry is made, and the reason that is so important is that the challenger has as little as a month to challenge once that information is placed on the website.”—[ Official Report, Subsidy Control Public Bill Committee, 26 October 2021; c. 52, Q73.] Will the Minister explain why the Government do not think the database needs explicitly to include and mandate publication dates, even though the dates are so crucial to the challenge process?”
“It is also why, if they decide to put it to a vote, we will support amendment 19 tabled by the hon. Members for Aberdeen North and for Aberdeen South, which achieve similar outcomes. The amendments would ensure that entries onto the database include the information necessary for transparency and for interested parties to make informed decisions about whether subsidies obey the control principles. As Jonathan Branton summarised: “If you cannot see what is going on, you do not know what to challenge, or even if to challenge.” –– [ Official Report, Subsidy Control Public Bill Committee, 26 October 2021; c. 51, Q72.] Amendment 43 would include the date that the subsidy or scheme was entered on to the database as part of the mandatory information that public authorities must include.”
“I am sure the Secretary of State would appreciate the Minister making changes in Committee that could make his life, or her life in future, easier. That is in the public interest. The requirements should also be put to the whole House rather than nodded through Parliament through a process with less scrutiny. They should be included more firmly in the primary legislation to allow public authorities and interested parties a strong, clear message from Parliament about what information as a minimum should be prepared and uploaded on the database. That is why we propose amendments 40 and 41 to make the regulations listed in subsection (2) mandatory, rather than obligations that the Secretary of State may or may not include in future regulations.”
“An explanation of why that is the case would be welcome from the Minister, particularly following Jonathan Branton’s assertion that, “a national transparency register has been established, but when you look at that register and at the relevant rules around it, you do not see that it is functioning well.” –– [ Official Report, Subsidy Control Public Bill Committee, 26 October 2021; c. 51, Q72.] The Government must surely recognise that the information included on the database will be crucial for the effectiveness of the regime, and that there should be a common standard—one that is an obligation—for public authorities to enter that information, rather than yet again leaving it to the Secretary of State, a very busy person, to decide later what should be included in subsidy entries. The Bill should mandate those requirements now.”
“It is a pleasure to move our amendments to clause 34, which is about the information to be included on the subsidy database. The clause outlines that the Secretary of State can make regulations about what public authorities must include in their entries on the database and it lists certain regulations that the Secretary of State may make provision for. As well as ensuring that subsidies are published on the database and with accurate information, it is important that public authorities are obliged to include all the necessary information in their entries. It is therefore strange that the Bill does not contain minimum requirements that must be included in the subsidy entries.”
“It would be made mandatory for information to be entered, and that is done by the amendment changing the word “may” to “must” in subsection (1). Although I will not press the other amendments, I would like to push amendment 43 to a vote. For the reasons I outlined, it is fundamental that the date on which the subsidy or scheme was entered on to the database be included in the entries. So much can be hooked on to that date and if it is not, scrutiny becomes much more fragile, as is the ability of interested parties to bring forward cases with clarity. Those are fundamental points if information is to be debated robustly. The system cannot be at all robust if those important elements are missing. Question put, That the amendment be made.”
“I thank the Minister for his remarks and the hon. Member for Aberdeen North for speaking to her amendments. I remain concerned that the provision is not nearly robust enough and I was not fully reassured by the Minister’s comments. I take on board some of his remarks. Further work and research may be needed to check that the list is complete or whether more information may be needed on the database. However, I did not understand some parts of the Minister’s response. Which bit of subsection (2)(a) to (i) would he not want included in any subsidy entry? Why are they in the Bill to start with? They all seem eminently sensible. I would like to push two of our amendments to a vote. The first is amendment 40, which would make it mandatory for the Secretary of State to make the provisions by regulation.”
“I am grateful for the opportunity to say a few words in this stand part debate. We have discussed extensively the considerable concerns about the framing of clause 34. We will not vote against clause stand part, and there is no mechanism for us to abstain. I will make one final comment, on the content of subsection (3). It is extremely important that there is a thorough set of requests from public authorities to make sure that the criteria being used for the calculation of the subsidy are explicit, for all the reasons of transparency that we have talked about. We need to see that embedded through the Bill. To be fit for purpose, there are a number of areas where we believe that needs to be strengthened. We intend to come back to these issues at future stages of the Bill.”
“The clause explains this part of the Bill, which sets out where certain subsidies and schemes are to be exempt from the requirements of the regime. We do not have any specific issues with the clause, and are happy to support that it stand part of the Bill. Question put and agreed to. Clause 35 accordingly ordered to stand part of the Bill. Clause 36 Minimal financial assistance Amendment proposed : 33, in clause 36, page 19, line 17, after “requirements” insert “with the exception of duties under section 33,”.— (Kirsty Blackman.) This amendment requires that Minimum financial assistance under £315,000 is subject to the subsidy database requirements in clause 33, despite being exempt from the other control requirements in Part 2. Question put, That the amendment be made.”
“They should not be distortive or cause overwhelmingly negative effects. They should not affect competition and investment within the UK. Those principles should stand regardless of the size of the subsidy. A subsidy being smaller does not mean that it cannot be disproportionate or bring about negative effects. All subsidies have the power potentially to harm the economy. They should be transparent and subject to scrutiny and the potential for challenge, and therefore all should be required to be in line with the subsidy control principles. I have not heard anything from the Minister, although he may yet persuade me otherwise, about why the clause is needed and why the Bill cannot require all subsidies to be transparent and in line with the subsidy control principles—it is the Subsidy Control Bill.”
“We will not support clause stand part. My contribution will build on the arguments made by the hon. Member for Aberdeen North. We debated amendment 33, which I think went part way to covering some of our concerns, but our concerns are broader, in questioning the exemptions from some of the control requirements. The clause outlines subsidies that are exempt from the subsidy control principles, stating that the principles do not apply to subsidies worth less than £315,000 to one enterprise over three years. We believe that subsidy control principles exist for a reason; we are having these debates and setting up this regime for a reason. Subsidies should help to pursue a specific policy objective. They should be proportionate. They should encourage certain behaviours. They should not fund unnecessary costs.”
“If it has not been given consideration, perhaps he will take it away and we can look at it as part of ongoing discussions with local authorities and other public authorities on other areas in the Bill, particularly clauses 32, 33 and 34. Given that clause 36 remains part of the Bill, however, we recognise that the regulations listed under clause 37 will be necessary to bring some procedure to minimal financial assistance. We will therefore not vote against clause stand part.”
“The Minister said earlier that the MFA notification would not need to be published. Will he clarify whether that is still the intention if an MFA notification goes to an enterprise? Local authorities and public authorities can simply publish on their websites, for example, when they have given some form of notification. That is a common thing to do, and publishing on a website what has been given to an enterprise does not in my view involve any issue of commercial confidentiality or of not being in the public interest; it would simply be transparent. If we do not win the argument about changing the detail of the regime, there might be a middle way: at least the notifications ought to be published. Will the Minister tell us whether that has been given consideration and, if so, what the conclusion was and why?”
“Clear guidance will be needed for interpretation by the enterprise of what it needs to consider when answering the question under subsection (2)(c). I hope that the Minister will set out in his remarks how he intends that to happen, to give surety to the enterprise and to the public authority. As I said, Labour does not support clause 36. In my view, we have not heard a convincing case for such exemptions, which seem to be beyond what is needed. Our starting principle must be and must remain transparency. Confidence in this regime is all about transparency, to ensure that there is no cronyism or potential fraud. Once we have set up an agile, simple and robust system, which it is surely not beyond our wit to do, it should be straightforward to provide that information.”
“It is a pleasure to speak to clause stand part. The Minister could have saved himself a whole debate had he supported our arguments on clause 36, because this clause sets out the procedural requirements attached to subsidies given under the clause 36 exemption. The clause outlines how public authorities must provide the intended recipient with a notification, stating that they cannot award a subsidy until they have received confirmation from the intended recipient in a number of areas, including that the relevant threshold will not be breached. There are a whole set of debates to be had about what is considered a subsidy and what is not—we have had that on other aspects of the Bill—and about the lack of full clarity on the interface with the freeports policy or on taxation and subsidies.”
“The question I was asking was whether consideration had been given to whether public authorities should publish those letters. Some may and some may not, but there is not necessarily a downside to publishing letters that are already being sent. Has active consideration been given to that question? Has advice been received? Has any consultation been done, and what was the outcome of it, or is this an area that has not yet been considered?”
“I thank the Minister for his opening remarks. Subsidies given through the exemption do not have to apply the subsidy control requirements if the amount of assistance received by the beneficiaries totals less than £725,000 over a three-year financial period. Clause 38 sets out that services of public economic interest are exempt from the subsidy control principles. We recognise the force of some of the arguments made by the Minister, that these are generally in relation to services that are not being provided by the market, and that the SPEI assistance is different from other subsidies. There are some areas that we would like to explore further, but overall we are not arguing against this today and therefore we will support the clause.”
“I thank the Minister for his opening remarks. He has outlined that clause 39 establishes some of the procedural requirements to be attached to SPEIs. We think, for reasons outlined in previous debates, that these requirements will be important and add necessary procedures to the granting of assistance to SPEIs. However, I think the question whether there is to be publication of notifications is a matter that the Minister might take away and consider in relation to the similar debate that we had on clause 37. I will be grateful for that and will perhaps come back to this issue during the Bill’s future stages, after we have time to further consider it.”
“I congratulate my hon. Friend on this most excellent Bill and on the work of the all-party group on menopause. The work of the group also helped to inspire activity with employers across the country. I attended an event on the menopause with Shevaun Haviland, the new head of the British Chambers of Commerce, and the Dorset chamber. There was tremendous engagement from employers, who had never been able to have this kind of conversation. Does my hon. Friend agree that, alongside improving awareness in the medical profession and in society to help to encourage discussion in families, supporting employers to have this conversation is vital for their understanding and for women’s employment?”
“I, too, just want to pick up on the point that my hon. Friend made about women and the workplace. We know that, according to the Centre for Ageing Better, 800,000 people over 50 were wanting to work more and were under-employed—that was the case a year ago, at least. Does she agree—”
“Clause 2 “Subsidy” Question proposed, That the clause stand part of the Bill.”
“The Bill may establish a regulatory framework of subsidy control, but it fails to provide any real indication of how, where, and on what scale the Government plan to spend subsidies. As Alexander Rose said in his written evidence, “there is currently no preferential system to incentivise investment into disadvantaged regions.” The Bill also fails to provide a fair role for the devolved Administrations, and we are concerned that there is not enough balance between efficiency and oversight, particularly related to the CMA. We will debate some of these issues later, but it is important to note in our discussion of the overview why we will want further debate on the gaps in the Bill, and that we will seek to amend it in Committee. Question put and agreed to. Clause 1 accordingly ordered to stand part of the Bill.”
“I thank the Minister for his opening remarks on clause 1 stand part. We support the clause, but I will make a few remarks on it. It provides an overview of the Bill. There are concerns that we will discuss further later, but that I want to mention in relation to the overview in clause 1. As we said on Second Reading, we recognise the need for subsidy control legislation that establishes the framework for state aid post Brexit, but the new regime proposed in the Bill will work only if it provides transparency, oversight and scrutiny. While the Bill’s chapters reflect what the key issues are, there are areas where the Bill does not provide sufficient detail and clarity. We are concerned about a number of areas. First, crucial aspects of the regime are yet to be defined.”
“Who could fall under the scope of subsection (3)? That is important, because it defines who has the authority to bring forward and grant subsidies. We would like greater clarity about what is intended by that; it was not very clear from the explanatory notes. That also relates, to some extent, to subsection (4). We do not have an issue with subsection (6), but would like clarification on what is defined, and on why the subsection relates to “modification for air carriers”. We do not have a major problem with that; I just thought it would be helpful to clarify it, as it is the first time it comes up in the Bill.”
“I thank the Minister for his remarks on clause 2. We support the clause standing part of the Bill, but there are some areas that I would be grateful for the Minister’s comments on. He described the fall-in test: where the condition in each limb of subsection (1) is met, financial assistance is defined as a subsidy. That definition applies to goods and services. Subsection (2) outlines the means by which a subsidy is given. That effectively includes a direct and indirect transfer of funds. Could the Minister outline what that means for tax reliefs? Perhaps he could provide clarity on what the boundary is, and say what is and is not regarded as a subsidy. Subsection (3) refers to a person who is not a public authority, but could be treated as one for the purposes of subsection (1). Will the Minister clarify who this is intended to refer to?”
“I thank the Minister for his remarks on clause 3. We have no general comments, but could clause 3(2) be brought in as a challenge if, for example, a cheaper loan could arguably have been obtained in the market? To avoid challenge, would that be something that the public authority needed to verify when granting the subsidy, and when a subsidy is posted, would there need to be some sort of confirmation that such a check had been made?”
“I hope, from what the Minister says, that there will be tighter guidance on how a public authority ensures that the subsidy it is giving is compliant, and on whether it will need to verify or confirm that—saying, “I confirm that,” or “All this complies with x”—in any entry it needs to make. During the evidence session, it was highlighted that there is a gap in auditing the quality of the checks a public authority makes; if there is no process for that to be recorded, it is not transparent.”
“Another issue that came up in evidence was that local or other public authorities that have not been involved in granting subsidies before want to be sure that they are making the right decisions, and want to understand the regime and the intentions of the Government.”
“I thank the Minister for his remarks on the clause. Will he clarify what guidance sits behind it? This is a similar issue to that raised on clause 3(2). A concern was raised by some of our witnesses about potential tax reliefs not being defined as a subsidy, but having the same outcome as a subsidy for all intents and purposes. We obviously want to ensure that there is integrity in the implementation of the regime, so that it does not give rise to concern that there are subsidies being made through the back door that are not subject to the regime’s transparency and control measures. Will the Minister confirm that guidance will be developed around this, to make it very clear what the delineations are, and will that guidance be given and explained to local authorities?”
“I have no comments or questions on clause 5. Question put and agreed to. Clause 5 accordingly ordered to stand part of the Bill. Clause 6 “Public authority” Question proposed, That the clause stand part of the Bill.”
“This is a helpful discussion. Further to that point, is it to differentiate—I think the Minister alluded to this—who has the power to grant the subsidy? For example, the Houses of Parliament may not but the Secretary of State or Ministers may. Is that the distinction that we should read here, or am I confusing things?”
“Will the Minister clarify whether that definition extends to social enterprises and co-operatives for the purposes of organisations that may be involved in economic activity? Will those organisations be within scope to potentially receive subsidies from public authorities?”
“I thank the Minister for his comments on clause 8. For the purposes of clarity around where public resources may go, will he explain what the clause means if, in a group of companies, one of them is granted a subsidy? Could that subsidy be shared with others in the group? I am not fully clear what the clause means. Secondly, what if one of the other companies in the group has interests abroad? Is there something in the legislation that prevents public subsidies in the UK going through company structures within the same group to then subsidise activities abroad? I would be grateful if the Minister could clarify that—it is genuinely not very clear.”
“Secondly, on this point about potential ownership of a group or the enterprise, are there any constraints or guidance—or is there an intention of producing any guidance—in relation to companies that may be, for example, foreign-owned but trading here, where some subsidies could end up going into other countries? Is there clarity about how that is potentially going to receive guidance or be regulated to ensure it does not happen, if that is the Government’s intention?”
“I thank the Minister for those points. However, there could be an unintended difference between what the Government intend and what the law and guidance, if not clear, could result in. I would be grateful if the Minister could come back in writing to explain, specifically, what the Government’s intentions are for the guidance that may be given to an enterprise receiving a subsidy as to whether, once it has been given, there are controls on where the subsidy could be passed on to. I know that somewhere else in the Bill, it says that if a company’s ownership changes, the subsidy can pass through, but this is a point about clarity and guidance regarding what controls exist once that subsidy is given.”
“I thank the Minister for that. He is referring to subsection (5), but it would be of benefit to the Committee to receive a response in writing on those broader points.”
“I thank the Minister for his comments. Labour has no further issues with this clause. Question put and agreed to. Clause 9 accordingly ordered to stand part of the Bill. Schedule 1 The subsidy control principles”
“It is a simple way of addressing the issue within the Bill.”
“The notes on the Bill’s intention allude to levelling up, and the Government created a specific Department for levelling up. Given how much the Government have been talking about levelling up, I must say it was surprising not to see it more explicitly in the wording of the Bill. Could the Minister respond to that? We are concerned about the overall principles. I understand that they are derived from agreements within the TCA, but they can be amended. It is not that we do not have the authority to do that. Where, if not here, do the Government intend to include and support the equity rationale that subsidies are supposed to be addressing? We believe that the amendment would make it clear that the new subsidy regime can and should play a role in reducing regional and sub-regional inequality.”