Resources on the Subsidy Control Bill

As the Subsidy Control Bill is now before Parliament, I thought it would be useful to collect together resources on the Bill, debates on it, and articles being written about it. I will also try to summarise key issues that are debated and pick up any statements likely to be useful in interpretation of the legislation under Pepper v Hart principles.

Please let me know (gperetz@monckton.com) if there is anything that I have missed – in particular any further articles and comment that I could usefully link to. I will try to keep this post updated.

Bill texts

Text of Bill as introduced to the House of Commons

Explanatory Notes to Bill as introduced

Amendments

Current list of amendments in the House of Commons

Note – there are a couple of technical amendments by the Minister: the main substantive amendment put down by the Minister removes nuclear energy subsidies from the list of subsidies that are not liable to be referred to the CMA.

Main opposition proposed amendments: to require consultation of devolved administrations before regulations are made under the Act; to add devolved administrations to the list of parties automatically entitled to apply to the CAT for judicial review (a list that so far consists only of the Secretary of State); to shorten the time limits for placing subsidies on the database and to add to the information that msut be placed on it; to increase the time limit for applications to the CAT; to give the CMA power to investigate and report on subsidies of its own intitative.

Debates and evidence

Commons

Second Reading debate (Commons)

Evidence given to, and debates of, the Public Bill Committee (Commons)

Witnesses were: Professor Fothergill of the Industrial Communities Allieance and Dr Pazos-Vidal of the Convention of Scottish Local Authorites; Thomas Pope of the Institute for Government and Dr Stephanie Rickard of the LSE; Dr Roger Barker of the Institute of Directors; George Peretz QC of Monckton Chambers; Alex Rose and Jonathan Branton of DWF, and Richard Warren of UK Steel; Daniel Greenberg, Counsel for Domestic Legislation at the House of Commons; Rachel Merelie, senior director for the Office for the Internal Market at the Competition and Markets Authority; Ivan McKee, Scottish Government Minister for Business, Trade, Tourism and Enterprise.

Comments on the debates so far:

On the subsidy principles, the Committee rejected an amendment to principle G that that would have required all granters of subsidies to consider as negative effects any adverse effects on the UK meeting its net zero climate commitments. The Minister stated that “it is unnecessary explicitly to require public authorities on the face of the Bill to consider the negative effects of subsidies on the UK’s net zero commitment as part of their compliance with principle G. Public authorities will clearly need to consider the effects of subsidies in the round before awarding them, but the amendment would give undue prominence to net zero considerations with respect to subsidies that may have entirely unrelated objectives, such as high street regeneration or providing training opportunities for young people.”

The Minister confirmed that clause 18 applies only to “subsidies that explicitly require enterprises to relocate economic activities from one area of the UK to another, where this relocation would not have occurred without the subsidy”. Since subsidies that explicitly require relocation are going to be rare (at least when legal advice is taken) clause 18 is unlikely to have much application.

The Committee rejected an amendment that would have enabled devolved administrations to make streamlined subsidy schemes (subsidy schemes that are not liable to be referred to the CMA). The Minister stated that “The Government intend that streamlined subsidy schemes
will be a pragmatic means of establishing schemes for commonly awarded subsidies, including in areas of UK strategic priority, that all public authorities in the UK would able to use if they wish. They will therefore function best when they apply across the entire UK.” It also rejected an amendment that would have required the Secretary of State to consult with the devolved governments before making regulatations that define the categories of subsidy “of particular interest” that must be referred to the CMA: the Minister stated that the UK government was committed to engagement with the devolved administrations but that the amendment would lead to delay.

On 2 November, the Committee rejected amendments that would have required granting authorities to furnish compete and accurate information to the database and for there to be an audit of the database. The Minister stated that as a matter of general public law, the obligation to put information on the database included an obligation for that information to be complete and accurate, and that if the public authority did not properly fulfil its obligation to upload the required information, the clock for the end of the limitation period would not start, so the subsidy or scheme could be challenged indefinitely.

There was a discussion of the reason for the 6 month/1 year (tax) time limit for plaing subsidies on the database. The Minister argued that those periods were necessqary to ensure accurate information. He also stated that guidance would be given on the meaning of “tax decalration”.

In the afternoon , questions were asked as to the application of Article 10 of the Protocol: the Minister referred to the existing BEIS guidance and to the possibility that Article 10 may be amended in ongoig discussions, while opposition members criticised lack of clarity as to the application of Article 10: the Committee however rejected an amnedment requiring the Government to make a statement to Parliament on the matter.

A summary of the results of the debates so far (the clauses agreed to and amendments accepted, rejected, or withdrawn).

Written evidence to the Bill Committee by Alex Rose and Jonathan Branton, and by Rolls Royce plc.

The Rose/Branton paper discusses the absence of any express preference for aid to disadvantaged areas, and argues for a streamlined subsidy scheme to facilitate subsidies in disadvantaged areas vis-a-vis richer ones; for improvements to the transparnecy database; and for it to be possible to challenge subsidy schemes at the point when a subsidy under them is granted (NB as explained here I think the better view is that the CAT would, by analogy with cases such as Boddington, allow challenges to the lawfulness of a scheme at the point of challenge to a subsidy under it, but agree that it would be better to be clear about that).

The Rolls Royce paper seeks clarity about the definition of “ailing and insolvent enterprise”, urges caution about defining subidies of interest and particular interest solely by reference to amounts granted and sector, and welcomes the fact that “national security” is (as is standard) left undefined.

Devolution texts

Statement by the Welsh Government on the Bill, and draft Senedd Legislative Consent Memorandum (recommending refusal of consent)

Scottish Government Legislative Consent Memorandum (recommending refusal of legislative consent)

Trade and Cooperation Agreement Subsidy Control Provisions

See Part One, Heading One, Title XI, Chapter 3, Articles 363-375.

Articles and comment

See the list of blog posts on this site.

In addition, see my summary of the Bill, and my articles on the tax implications, devolution implications, and on the public law and constitutional implications of the Bill.

Gordon Downie has written a summary of the Bill’s provisions.

The Institute for Government has commented on the Bill.

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