Clause 43 - Natural disasters and other exceptional circumstances

Subsidy Control Bill – in a Public Bill Committee at 3:30 pm on 2nd November 2021.

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Photo of Bill Esterson Bill Esterson Shadow Minister (International Trade) 3:30 pm, 2nd November 2021

I beg to move amendment 46, in clause 43, page 25, line 16, at end insert—

“(3A) The Scottish Ministers, the Welsh Ministers, and a Northern Ireland department may request the Secretary of State to declare a natural disaster or another exceptional circumstance in Scotland, Wales, and Northern Ireland.

(3B) If the Secretary of State refuses a request made under section (3A), he must make a statement in the House of Commons outlining the reasons for his refusal.”

This amendment allows the devolved administrations to ask the Secretary of State to declare a natural disaster or exceptional circumstances, so that the exemptions listed in Clause 43(1) applying to Scotland, Wales, and Northern Ireland may apply. If the Secretary of State refuses a request for exemption, this amendment requires him to make a statement to the House of Commons.

Amendment 46 allows the devolved Administrations to ask the Secretary of State to declare a natural disaster or exceptional circumstances so that exemptions listed in clause 43(1) applying to Scotland, Wales and Northern Ireland may apply. If the Secretary of State refuses a request for exemption, the amendment requires them to make a statement to the House of Commons. To reiterate the point I made in the last debate, we are determined to ensure that the role for the devolved Administrations in the administration of their own nations is respected and considered. Of course, we agree that the subsidy regime sits with the Westminster Government, because it is a UK-wide system, but on matters as important as states of natural disaster, devolved Administrations should always be consulted.

Members will appreciate that natural disasters are not political by nature. A natural disaster does not discriminate who it targets and where it affects. By that logic, devolved Administrations, which are just as likely as anywhere else to experience natural disaster, should be granted powers to request that the Secretary of State declares a natural disaster or exceptional circumstance so that the exemptions listed in clause 43(1) may apply. We believe the amendment would respect the role of devolved Administrations in managing their response to disasters effectively, while still ensuring the Secretary of State has the final say.

Photo of Kirsty Blackman Kirsty Blackman Scottish National Party, Aberdeen North

The very nature of natural disasters is that they do not occur across the entirety of the UK in one go. Let us hope a natural disaster does not occur across the whole of the UK in one go! Generally, they are regionally specific; they will happen in a relatively confined geographical area. Whether it be flooding, an earthquake or something of that sort, not everywhere will be affected. Therefore, thinking about how this provision could apply, it makes a huge amount of sense for there to be an actual mechanism through which the devolved Administrations can request for the Secretary of State to declare a natural disaster. I would hope that the Secretary of State would be doing so anyway, and would recognise that a disaster in Wales—

Photo of Andrew Bowie Andrew Bowie Conservative, West Aberdeenshire and Kincardine

Surely that is exactly the point. If a natural disaster has occurred, it is almost certain that the Secretary of State would declare a natural disaster. There is nothing that I can see preventing any devolved Administration within the United Kingdom from requesting that the Secretary of State does that in law anyway. I do not think this amendment is required at all.

Photo of Kirsty Blackman Kirsty Blackman Scottish National Party, Aberdeen North

The hon. Gentleman said that it is almost certain—probable, at least—that the Secretary of State would do so, but it is not certain. The amendment allows an actual mechanism for the devolved Administrations to make that request. It also makes it clear that if the Secretary of State refuses a request of this nature, they have to explain why. That is very important for transparency. This transparency issue is also important—

Photo of Robin Millar Robin Millar Conservative, Aberconwy

What would the logic would be if the situation were reversed, so that the UK Government wished to declare a natural emergency, but the devolved Administration did not? Has the hon. Member given that any thought?

Photo of Kirsty Blackman Kirsty Blackman Scottish National Party, Aberdeen North

That is nothing to do with the subject of this amendment, which is specifically about the devolved Administrations being able to ask. If the Secretary of State wishes to declare a natural disaster, and Wales, Northern Ireland or Scotland does not want them to declare it, there is no mechanism for that—we do not have the powers to do that.

On the issue that was raised by the hon. Member for West Aberdeenshire and Kincardine, it is important that the devolved Administrations have this mechanism because, as has been stated earlier, trust is at an all-time low. We have been very clear that some of the relationships between the devolved Administrations and the UK Government are not in a particularly good place right now. Building this provision in means that there is an additional safeguard in place, so that those places that know their areas best and know the effect on those areas better than Westminster does, because they are closer, are able to make that request.

Photo of Paul Scully Paul Scully Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy), Minister of State (London)

Natural disasters such as floods, fires and other exceptional circumstances can arise that require subsidies to be given at pace, to compensate for the damages caused. The clause allows the Secretary of State to publish a notice to declare that exemptions from the subsidy control requirements apply in respect of a natural disaster or other exceptional occurrence. That will allow public authorities to give subsidies that compensate for the damage in a timely manner.

The hon. Member for Aberdeen North is right that not all such emergencies would apply across the whole of the United Kingdom. In many cases, the natural disaster in question would be localised to a specific place or region. Although it is the responsibility of the Secretary of State to declare that the exemption applies, subsidies using the exemption may be given by different public authorities, such as UK Government Departments, local authorities, agencies and, of course, the devolved Administrations. Public authorities are empowered to design subsidies in the most appropriate way to address the damage caused for their specific local needs. The Secretary of State does not need to approve the subsidies given under the exemption, once the natural disaster or other exceptional occurrence has been declared. The existing processes in the Bill already ensure that this type of subsidy can be given across the UK, by the devolved Administrations or other devolved authorities.

If a natural disaster or other exceptional circumstance occurred within the area of any of the devolved Administrations, it would of course be open to that Administration to request that the Secretary of State trigger the exemption, if the Secretary of State has not already done so. If the conditions for the exemption were fulfilled, the Secretary of State could then seek to publish a notice as soon as possible.

The clause is limited to very narrow circumstances to avoid creating an over-broad exemption to the domestic subsidy control regime that could damage UK competition and investment, and our ability to fulfil our international obligations. It is therefore appropriate that the Secretary of State has sole responsibility for determining when the criteria for triggering the exemption have been met. The Secretary of State must publish and lay in Parliament a notice to trigger the use of the exemption. That will ensure that the Secretary of State exercises the power in a transparent and accountable way. I request that the hon. Member for Sefton Central withdraws the amendment.

Photo of Bill Esterson Bill Esterson Shadow Minister (International Trade)

I should point out that the amendment does not seek to give the devolved Administrations the power to declare a state of emergency, which I think was implicit in the Minister’s remarks. They would ask the Secretary of State to use his or her power to do so, not have the power themselves. The hon. Member for Aberdeen North made the point about transparency well. I am satisfied that the point has been made satisfactorily and that the Minister has taken it on board, and I therefore beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Question proposed, That the clause stand part of the Bill.

Photo of Paul Scully Paul Scully Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy), Minister of State (London)

Clause 43 enables public authorities to award subsidies to compensate for the damage caused by a specified natural disaster or other exceptional occurrence without having to apply the majority of the subsidy control requirements. The subsidies awarded under the clause would be exempt from the principles, prohibitions and requirements, but the transparency requirements would still apply. Before the exemption can be used, the Secretary of State must publish a notice declaring that a natural disaster or other exceptional occurrence has happened and that this exemption applies, and that notice must be laid in Parliament.

Photo of Kirsty Blackman Kirsty Blackman Scottish National Party, Aberdeen North

It would be useful to know where the notice is likely to be published. Will the Minister commit to considering whether the notice could be on the subsidy control database in some way? Perhaps on the database people could see a wee link that says, “This is where natural disasters have been declared”—hopefully it will not happen very often. If would be helpful if people could see all that information.

Photo of Paul Scully Paul Scully Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy), Minister of State (London)

Clearly, the notice has to be laid in Parliament, and I hope that I explained in my letter to the hon. Member exactly what that means. Clearly, we will also publish that on the gov.uk website and in other areas. I have forgotten the second part of her question.

Photo of Kirsty Blackman Kirsty Blackman Scottish National Party, Aberdeen North

It was about whether that information would be on the subsidy control database website.

Photo of Paul Scully Paul Scully Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy), Minister of State (London)

Well, transparency is not within the exemption. It is very much about whether a public authority is allowed to give the subsidy in the first place, but the transparency rules still apply.

Question put and agreed to.

Clause 43 accordingly ordered to stand part of the Bill.