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Subsidy Control Bill - Sitting 7

04 November 2021

Proposing MP
Caroline Nokes Con
Romsey and Southampton North
Type
Public Bill Committee

At a Glance

Issue Summary

The statement addresses a proposed amendment to Clause 52 of the Subsidy Control Bill to mandate referrals to the Competition and Markets Authority (CMA) for subsidies granted by the Government department responsible for the subsidy control regime or those exceeding £2 million. The statement addresses concerns and amendments related to the Subsidy Control Bill, specifically clause 52 which mandates referrals to the Competition and Markets Authority for certain subsidies and schemes. The statement discusses the timeframe for the Subsidy Advice Unit (SAU) to publish reports on mandatory referrals and addresses concerns about the SAU's capacity to meet deadlines. The debate focuses on amendments to the Subsidy Control Bill regarding the cooling-off period and the authority to extend it. The statement discusses amendments aimed at defining 'serious deficiencies' for extending the cooling-off period in the Subsidy Control Bill. The amendment aims to extend call-in powers under Clause 55 of the Subsidy Control Bill to include the Scottish Ministers, Welsh Ministers, and the Department for the Economy in Northern Ireland. The debate centers on the powers granted under clause 55 of the Subsidy Control Bill and whether devolved Administrations should be able to call in subsidies or subsidy schemes. The debate focuses on the Subsidy Control Bill's Clause 56, which addresses voluntary referrals to the Competition and Markets Authority (CMA) for subsidies that fall outside mandatory referral categories. The statement discusses the Subsidy Control Bill's provisions allowing public authorities to voluntarily refer certain subsidies or schemes to the subsidy advice unit (SAU) for scrutiny before implementation. The statement addresses concerns regarding the Secretary of State's power to amend CMA reports through regulations, questioning the independence of the Competition and Markets Authority. The statement addresses concerns about the Government's ability to alter independent reports produced by the Competition and Markets Authority (CMA) under the Subsidy Control Bill.

Action Requested

Kirsty Blackman proposes an amendment that would require mandatory referrals to the CMA when a subsidy is issued by the Government department responsible for the subsidy control regime, or if it exceeds £2 million. She seeks additional scrutiny and checks to avoid conflicts of interest.

Key Facts

  • Amendment 28 addresses mandatory referrals to the CMA.
  • The amendment would require referral for subsidies above £2 million granted by the relevant Government department.
  • Clause 52 focuses on criteria for mandatory referrals to the CMA.
  • The clause deals with mandatory pre-award referrals to the CMA for subsidies or schemes of particular interest.
  • BEIS can already seek advice from the CMA using powers in the Enterprise Act 2002.
  • Regulations defining 'subsidies of particular interest' will be subject to affirmative procedure, allowing parliamentary scrutiny.
  • The SAU has a five-day working period to respond to requests for information.
  • The general reporting period is 30 working days after mandatory referrals.
  • Extensions can be granted by mutual agreement or Secretary of State direction in exceptional circumstances.
  • Clause 54 provides a cooling-off period of five working days before a public authority can give a subsidy or make a subsidy scheme after a mandatory referral process.
  • The Secretary of State may direct an extension to this cooling-off period if serious deficiencies are found in the SAU’s report.
  • Amendment 48 proposes moving the power to extend the cooling-off period from the Secretary of State to the CMA.
  • Amendment 50 proposes the Secretary of State define 'serious deficiencies'.
  • Caroline Nokes moves amendment 51, which is related to amendment 50.
  • The cooling-off period can be extended if serious deficiencies are identified in a CMA report.
  • The amendment seeks to insert “, the Scottish Ministers, the Welsh Ministers and the Department for the Economy in Northern Ireland” after “Secretary of State” in clause 55.
  • Thomas Pope from the Institute for Government stated that subsidy control affects devolved competence in all four nations of the UK.
  • George Peretz highlighted why it is important that call-in powers should apply to all four nations.
  • The amendment proposed by the Opposition would allow referrals to the SAU under clause 55 to be made by devolved Administrations.
  • Clause 55 provides a mechanism for catching potentially highly distorted subsidies that may not meet the criteria for subsidies of particular interest.
  • The Secretary of State will carefully consider any request from their counterparts in the devolved Administrations.
  • Clause 55 gives the Secretary of State power to direct a public authority to request reports from the subsidy advice unit on proposed subsidies.
  • Clause 56 is under debate with concern over its scope regarding voluntary referrals to the CMA for non-mandatory interest subsidies.
  • MPs seek additional provisions allowing authorities to voluntarily refer subsidies to the CMA beyond those of 'particular interest'.
  • Clause allows public authorities to voluntarily refer certain subsidies or schemes to the subsidy advice unit (SAU).
  • Public authorities must provide specific information about the proposed subsidy, including an assessment of whether it meets the principles and prohibitions set out in part 2 of the Bill.
  • The Secretary of State has power to specify the form and additional information required for referrals.
  • Amendment 53 removes the power for the Secretary of State to amend section by regulation.
  • Amendment 54 is a consequential amendment linked to Amendment 53.
  • The Competition and Markets Authority (CMA) describes itself as an independent non-ministerial department.
  • Clause 59(4)(a) allows the Secretary of State to make provision about the content of the CMA’s report.
  • Amendments 53 and 54 seek to remove this power except by future primary legislation.
  • Any changes to the form of the report can be made using the negative procedure, while changes to its content require parliamentary scrutiny.
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