My Lords, in the event that the proposition put prior to this debate by the noble Lord, Lord Adonis, comes to pass, and this SI is not needed, my time will not have been wasted: a more cogent seminar on state aid I could not have asked for than the one I have just received from the noble Lord, Lord Stevenson. I am grateful to him for placing these amendments before your Lordships’ House as this is an issue that requires greater clarity; I associate myself with the questions put by the noble Baroness, Lady McIntosh.
My remarks will be less structured than those of the noble Lord, Lord Stevenson. Regarding the question he posed of what qualifies as state aid, I put before your Lordships my experience of working in the United States and where, for example, a company might be looking to establish a new facility. When considering where that facility might be located, the company speaks to the administrations of various states—this is literally state aid. It asks about the tax structure it would receive in that state, the training regimes that universities might deliver, the buildings and planning regulations that might be needed. All these things qualify as aid which may be offered to companies to locate in a particular place.
The United States would talk about not being a country that distorts the market. Yet the local market is heavily distorted by literally billions of dollars that different US states put in to attract businesses to their location. How does this future regime of state aid fit into that pattern? We have unitary authorities. My noble friend Lord Purvis is going to ask about the role of devolved authorities, but we already have a degree of devolution to unitary authorities in England. They are required to deliver local or regional industrial strategies; LEPs are being granted money to deliver them. How does this fit into a structured state aid programme?
We talked recently about Nissan, which received a secret letter from the Government reassuring the company that it should keep one of its models in the north of England—a large sum of money was secretly committed by the Government in that letter. I contend that that was state aid; whether it would be recognised internationally as state aid is another matter. But we have a dichotomy: there is aid that the state—through a central, local or devolved budget—can give to companies or individuals to help them flourish or locate to particular areas, but it may or may not qualify in terms of whatever international agreements we are under. The noble Baroness, Lady McIntosh, is right to say that, whether we are operating under an EEA, WTO or any other regime, this will become an important distinction. What work are the Government doing on distinguishing between these various forms of state aid?
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The noble Baroness, Lady McIntosh, and the noble Lord, Lord Stevenson, also talked about the role of the CMA. There is scope for the Minister to flesh out that role. In particular, the Minister said that broadly equivalent powers were being granted to the CMA, with the one exception that he separated out. There is some disparity on the CMA’s ability to claw back, or otherwise, aid given. I have been given to understand that the CMA has an advisory role in this, rather than an authority role. Can the Minister explain why the Government are seeking to diverge from reproducing the way this is done in the European Union in full?
The structural fund issue is tied in, so it is right that we debate these instruments together. It is good that those who have received funds can be assured that they will continue. It is very important that the mechanism for continuing the peace arrangements is contained in this. Everyone in this House would say that it is very
important that we continue to support that process in every way. However, the fundamental point is that the cohesion fund worked in terms of relative poverty, or relative disparity. The reason that not much cohesion money came to this country is that, relative to other parts of Europe, particularly the east of Europe, this part is well off. However, there is huge relative disparity between regions in this country.
The Government need to recognise that while they are honouring their obligations from a European point of view, there is no indication that they realise that what the cohesion fund sought to do—to level the playing field across Europe—remains an issue because we have to level the playing field across the United Kingdom of Great Britain and Northern Ireland. The Minister needs to recognise that there is work to be done. As the noble Lord, Lord Stevenson, rightly says, those requirements will fight with all of Her Majesty’s Government’s other budgetary necessities. Therefore, there needs to be an element of prioritisation and ring-fencing; otherwise, the money will not be spent and we will see disparity grow in this country, rather than narrow. There is room for the Minister to explain this a little further.