I am more than happy to offer a written response, but the Government have been clear throughout. My noble and learned friend Lord Keen set out our position in various debates on the withdrawal Bill and so on. I will dig that out and offer it to the noble Lord. Other Ministers, equally learned in the law, have also made similar points in another place. As I said to the noble Lord, Lord Purvis, this is a matter for the Government but we believe we should continue to consult the devolved Administrations.
The noble Lords, Lord Fox and Lord Stevenson, also wanted me to flesh out the role of the CMA and asked whether it would have the power to overturn legislation. I repeat that our intention is to make sure that the regime covers the same sectors, applies to the
same actors and does the same job as it does at the moment. It is worth noting that there are very limited circumstances in which aid is granted directly by Act of Parliament. To ensure that aid granted by any future Act of Parliament can be reviewed in a non-binding way by the CMA, which is the domestic regulator, Schedule 3 creates a process for it to consider aid that may be granted directly by an Act of Parliament. It provides for a Minister of the Crown to seek a non-binding advisory opinion on proposals for grant aid by an Act of Parliament. It also provides for interested parties to request the CMA to prepare a non-binding advisory opinion. I hope that explains the matter, but I will expand on it in any letter that I write to noble Lords in future.
The noble Lord, Lord Stevenson, also asked how we were intending to use this provision in future. I will expand on this a little more. The rules are not intended to prevent public authorities supporting industries or businesses, or even—dare I say it—nationalising assets. A rigorous state aid system is good for taxpayers and consumers and ensures an efficient allocation of resources. There is a large degree of flexibility in the rules to ensure that a wide range of interventions can still be deployed, but in a way that minimises distortions to competition. The future regime will still allow the Government to act swiftly if necessary, much as they have been able to under the existing one. EU state aid rules do not prevent, and have not prevented, the UK pursuing its active industrial strategy. In practice, the existing EU rules have always been sufficiently flexible to allow the UK to make innovative state aid interventions where necessary.
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The noble Lord, Lord Stevenson, also asked a purely factual question about how this would work with the backstop. In the unlikely event that we have not agreed a future economic partnership at the end of the implementation period, the Northern Ireland protocol, which provides for the single customs territory between the EU and the UK, would come into effect. Under Article 12 of that protocol, the full EU state aid acquis will apply dynamically for goods and the Commission will act as a regulator in Northern Ireland for measures in support of goods in so far as these affect trade between the EU and Northern Ireland. Under Article 7 of Annexe 4 of the protocol, the rest of the UK will take the state aid acquis for support of goods only in so far as it affects trade between Great Britain and the EU, and align dynamically. This will be regulated by the CMA.
The noble Lord also asked whether Parliament should have some sort of role in the guidance that the CMA would be given by my right honourable friend the Secretary of State. He will provide guidance on the approach to providing aid under Article 107(3), also known as the balancing test. That guidance will draw on the Commission’s working paper, setting out how to balance the good effects of an aid measure against any potential distortions of competition. The department will publish that guidance shortly and certainly before exit day. This is appropriate because the guidance does not substantially alter the current state aid balancing test.
My noble friend Lady McIntosh was concerned about the WTO rules and whether, without a state aid regime, the UK would still be bound by the WTO’s agreement on subsidies and countervailing measures. This does not regulate subsidies within countries and would not, therefore, prevent distortions of competition between the different parts of the UK. This regime also only applies to goods, not services, so does not provide cover for the whole economy. Without a state aid regime there is also no right of redress for individual companies and complaints cannot be brought against domestic aid which a company may feel unfairly benefits its competitors.
I do not want to go into detail on the question of the structural funds as, at the moment, we do not know what the new shared prosperity fund will look like. The statutory instrument in front of the House purely concerns no-deal planning for structural funds including, as I made clear in my opening remarks, its European territorial co-operation component. It enables those funds to continue to operate with no deal much as they would have done before exit. It does not make provision for the UK shared prosperity fund, which we will bring forward in future. There will be ample opportunities to discuss that.
Under the terms of our funding guarantee, structural funds projects signed before the UK exits the EU will continue to be funded even in the event of no deal. The guarantee also enables new projects to be signed after exit, until 2020, with funding from Her Majesty’s Government. That practical measure ensures that beneficiaries can expect to receive the same amount of funding under the guarantee as they would have received if the UK had remained a member state. I believe that provides additional certainty to communities, businesses and local partners, guaranteeing investment in regional growth until the end of the current structural funds’ programme period. As I said, we will have ample opportunity to debate the UK’s shared prosperity fund, but now is not necessarily the right time or place to do that.
I intend to make two final points—