I thank noble Lords who have contributed to another admirably brief debate. We are making good progress this afternoon.
As I outlined in Committee, Clause 44 reserves to the UK Parliament the exclusive ability to legislate for a UK-wide subsidy control regime. I greatly enjoyed the many contributions on this matter. I particularly liked the suggestion of the noble Lord, Lord Purvis, that I should take defeats as a silver lining, which prompts the obvious response that the Liberal Democrats have been defeated in the last three general elections and therefore have some experience of that.
Our debate in Committee on this clause served to highlight that, while some noble Lords might disagree on the approach taken, we all recognise the importance of ensuring that the UK continues to take a clear and consistent approach to subsidy control as we move away from EU state aid rules. The Government have always been clear in their view that the regulation of state aid—the EU’s approach to subsidy control—is a reserved matter. The Government are clear that they want to maximise the economic opportunities available to us when we are no longer bound by EU state aid rules. To achieve this economic ambition, it is important that, as now, we take a coherent approach to the system that governs how public authorities subsidise businesses across the United Kingdom. Reserving subsidy control is the best way in which to guarantee that a single, unified subsidy control regime could be legislated for in future.
In previous debates, there has sometimes been a misplaced conflation between the devolved spending powers and the systems that regulate the potentially harmful and distortive effects of this spending. To be clear, these are two distinct and separate responsibilities. Although the devolved Administrations can and should make spending decisions on subsidies, the wider rules in which they operate are, and should continue to be, consistent across the whole nation. In response to the intervention from the noble Baroness, Lady Randerson, I reiterate that the reservation does not change the devolved Administrations’ position in practice. They have never previously been able to set their own subsidy control regime, as this was covered by the EU state aid framework, but they will continue to make their own spending decisions on subsidies as they do currently.
The effect of the amendment would be to create unacceptable uncertainty regarding the extent to which subsidy control is a reserved or devolved competence. That would potentially give rise to inconsistency if
there were different regimes to regulate subsidies across the UK. Ultimately, it could undermine fair and open competition across our internal market and inevitably discourage investment in the United Kingdom, bringing additional costs to supply chains and consumers.
The reservation will enable the UK to design a bespoke subsidy control regime that meets the needs of the UK economy. The Government have been clear that any future domestic regime will operate in a way that works best for all UK businesses, workers and consumers. In the coming months, as I said in Committee, we intend to publish a consultation on whether we should go further than our World Trade Organization and international commitments, including whether further legislation on this subject is necessary.
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The noble and learned Lord, Lord Thomas, referred to the statutory instrument that will remove redundant EU state aid rules from the domestic statute book at the end of the transition period. We have laid that to provide legal certainty for businesses, going forward.
I reassure noble Lords that we will continue to listen closely to views in this important policy area. During these past few weeks of debate, issues about specific elements of the UK’s future approach have been raised, including, but not limited to, the precise definition of subsidies and the enforcement of any future subsidy regime. These are all important points that must be considered carefully and properly through the consultation process that we will have. Although we are reserving subsidy control, I make it clear that we will continue to work closely with the devolved Administrations on the shape of any future domestic subsidy regime. UK Government officials will continue to meet with their devolved Administration counterparts on a regular basis. We recognise the importance of working constructively and co-operatively in this policy area, and it is in all our interests that a new regime works for the whole of the UK.
The noble and learned Lord, Lord Thomas, and the noble Lord, Lord German, referred to the letter that we received this morning from Jeremy Miles. As far as I am aware, having checked furiously with the Bill team in my office and various teams in my department, we have not received a similar letter from the Scottish Government. We welcome the Welsh Government’s support for maintaining a unified approach to subsidy control across the UK. We agree that the UK Government and devolved Administrations should work constructively and co-operatively in this policy area, to design an approach to subsidy control that meets the needs of the UK economy. We have always been clear that it is a reserved matter, and that the reservation of subsidy control is necessary to ensure that we continue to take a uniform approach. State aid is not included in the common frameworks programme, so we do not believe that would be an appropriate way forward either. However, we are grateful for the Welsh Government’s constructive engagement with this issue, and for their offer to find a practical way through. We are keen to continue discussions in this spirit. Going forward, we have committed to consulting the DAs on the design and scope of any future control regime.
For the reasons that I have set out, I am unable to accept this amendment. I hope that noble Lords can withdraw it.