My Lords, this Government are determined to deliver on the commitments upon which they were elected: levelling up the whole United Kingdom, delivering prosperity for all citizens and strengthening the ties that bind our union together. Part 6 of the Bill helps to achieve this. This power to provide financial assistance will enable spending in the areas of infrastructure, economic development, culture and sport. It will also support educational and training activities, and exchanges within the UK and internationally. Previously, as noble Lords have noted, much of this was done at the EU level.
I reassure the noble Lord, Lord Bruce, the noble and learned Lord, Lord Thomas, and the noble Baroness, Lady Finlay, among others, that over the course of discussion and debate on this Bill, throughout Parliament and beyond, the Government have repeated our intention to work with the devolved Administrations. This power, in addition to existing powers, will allow the UK Government to complement and strengthen the support given to citizens in Scotland, Northern Ireland and Wales, without taking away devolved Administrations’ responsibilities.
As noble Lords have noted, the response to Covid has shown how the UK Government, alongside important co-operation with the devolved Administrations, can save jobs and support communities. This could only have been delivered strategically and at that scale by the UK Government. This power will ensure that we can invest UK taxpayers’ money nationwide on UK priorities as we leave the transition period, as well as supporting people and businesses across the UK to recover from Covid.
The UK Government are uniquely positioned to level up across every part of the UK, ensuring that the entire country can feel the benefit of increased trade, improved business conditions and a truly global economy. The power to provide financial assistance will facilitate this. Noble Lords will know that these aims support the Government’s manifesto commitments to strengthen the union, level up the country and match the current levels of EU structural funding in each nation through a UK-wide replacement programme—the UK shared prosperity fund. That is why I commend this clause to stand part of the Bill.
I will now discuss Amendments 167, 168 and 132. Collectively, they seek to remove the power to provide financial assistance in Part 6 of the Bill and replace it with provisions for the operation of a UK shared prosperity commission, detailed in a proposed new schedule. Let me begin by emphasising that the power to provide financial assistance in Part 6 would operate UK-wide to support a variety of purposes. This includes economic development but is not limited to it. It is
therefore wider than any single fund or organisation. I say this in response to the question of the noble Lord, Lord Purvis, about the purposes of the power.
The effect of these amendments would be that the Bill would not confer on the UK Government the power to provide financial assistance UK-wide for infrastructure, economic development, culture or sport, or to support educational and training activities and exchanges within the UK and internationally. Although the UK Government have some existing powers to spend across the whole UK, the power we are taking now creates a unified power that operates consistently UK-wide, to deliver investment more flexibly, dynamically and in partnership with the devolved Administrations and other partners. Part 6 will make sure that the UK Government are well positioned to deliver investments following the end of the transition period, and to meet their commitment to replace EU structural funds.
I understand that the noble Lord, Lord Stevenson, tabled his amendment to probe the Government’s plans on this and I hope to be able to provide some answers. On the level of funding, the Government committed in their manifesto to maintaining, as I already said, at a minimum the existing levels of investment across all four nations from the EU structural funds. The noble Lord is correct that this was based not on Barnett but on an EU formula. In future, the UK can ensure that funding reflects the needs of the UK, not the 27 other member states, as this work is taken forwards. He is also correct that there are a number of ways in which this funding could be done but, if I may reassure noble Lords about the purpose of the funding, the Government have been clear on their aim: to tackle inequality and deprivation, and level up across the United Kingdom.
On timing, the noble Lord, Lord Stevenson, is right that to prioritise the response to Covid-19 and focus on supporting jobs, the multi-year spending review has been postponed. But he is also correct that we have some time, as EU funds are still being provided. Our aim is to ensure a smooth transition from current EU structural funds to the UK shared prosperity fund.
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My noble friend Lord Dunlop is correct to say that the UK Government already spend in devolved nations, and the examples the noble Lord gave of city/growth deals and cultural investments were good examples of that kind of work. We would continue to work collaboratively with devolved Governments to deliver such initiatives, and this power would enable us to do so with greater efficiency and simplicity. Indeed, there is no consistent unified power to support projects that span the boundaries within the UK.
The noble Baroness, Lady Finlay, and others asked about the Barnett formula. The Barnett formula will continue to apply as set out in the Statement of Funding Policy.
In relation to how UK Government funds could be spent and which regulations, standards and laws would apply on housing, for example, I say to the noble Baroness, Lady Humphreys, and others that the investments made through this route would need to comply with standards and requirements that exist in, and are determined by, each part of the UK.
I hope that that has answered some of the questions that noble Lords have asked on the operation of the UK shared prosperity fund. There will be more detail in the future, but I hope this is sufficient for the noble Lord to withdraw his amendment, while recognising and supporting his broader principles behind it.
I will now discuss Amendments 166 and 169. Amendment 166 would require, by law, all financial assistance given under this power to be
“consistent with the … climate and environmental goals and targets applicable in the relevant part or parts of the United Kingdom.”
Amendment 169 would require that any financial assistance provided be accompanied by the Minister’s assessment of the recipient’s climate and nature emergency impact assessment. I commend both noble Baronesses for their commitment to this agenda. It is shared by the Government, who have already committed to ambitious climate targets and will lead the world’s discussion at COP 26 next year. The Climate Change Act 2008 already requires the Government to set five-yearly carbon targets, covering the whole of the UK, to move toward meeting our net-zero greenhouse gas emissions by 2050.
This framework sets the overall level of ambition, with the Government determining how best to balance emissions reductions across the economy. As policies and proposals are developed and implemented, their contributions to emissions increases or reductions are quantified and published regularly. This enables the Government to monitor progress towards meeting the UK’s carbon budgets and inform policy decisions. Therefore, any net emissions increase from a particular policy or project is managed within the Government’s overall strategy for meeting carbon budgets and the net-zero target for 2050, as part of an economy-wide transition.
Through the Environment Bill, as introduced into the other place in January, the UK Government will have a power to set long-term legally binding environmental targets across the breadth of the natural environment. The Environment Bill will also protect the environment from future damage by embedding environmental principles at the heart of policy development across government. The environmental principles will be used by Ministers and policymakers to ensure that policy and legal frameworks help to minimise the impacts of human activity on the environment.
The Fisheries Bill also includes a climate change objective, requiring fisheries administrations to introduce legally binding policies to minimise adverse effects of the fishing and aquaculture sectors on climate change and adapt their activities.
The noble Baroness, Lady Jones, asked about the net-zero review, and I confirm that this will be published in spring 2021.
Given the Government’s strong commitment, already, to meet their ambitious climate targets and the frameworks established under the Climate Change Act and proposed under the Environment Bill and Fisheries Bill, I do not think it is necessary to add such a legislative requirement to this power.
This power—and the United Kingdom Internal Market Bill overall—presents a critical opportunity to level up our country, strengthen our union and drive
investment throughout the UK, which was previously determined by Brussels. Part 6 of this Bill will make sure that the UK Government meet their responsibility to support people, businesses and communities across the whole of our United Kingdom. This power will enable the UK Government to invest in our communities across the UK in a variety of ways, meaning that we can meet our manifesto commitments to deliver a UK shared prosperity fund that matches the value of EU structural funds. Above all, the Bill will deliver a thriving internal market, underpinned by the strength of the UK Government, which will provide opportunity and prosperity to citizens across the country.