Clause 59 - CMA report following mandatory or voluntary referral

Subsidy Control Bill – in a Public Bill Committee at 12:45 pm on 4th November 2021.

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Photo of Bill Esterson Bill Esterson Shadow Minister (International Trade) 12:45 pm, 4th November 2021

I beg to move amendment 53, in clause 59, page 33, line 13, leave out paragraph (a).

This amendment removes the power for the Secretary of State to amend this section by regulation.

Photo of Caroline Nokes Caroline Nokes Chair, Women and Equalities Committee, Chair, Women and Equalities Committee

With this it will be convenient to discuss amendment 54, in clause 59, page 33, line 17, leave out subsection (6).

This amendment is a consequential amendment linked to Amendment 53.

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

We have concerns about the way the clause allows the Secretary of State to use regulations to affect the content and form of CMA reports. This is a question of the CMA’s independence. On the Competition and Markets Authority website, it describes itself as

“an independent non-ministerial department”.

The CMA’s work

“is overseen by a Board, and led by the Chief Executive and senior team. Decisions in…investigations are made by independent members of a CMA panel.”

In contrast, the clause would empower the Secretary of State to amend, by using regulations, the content of the CMA’s reports. It is very hard to see how this is anything other than a direct contradiction of the principle of independence, baked into the CMA’s set-up.

The timing of the change, given the shameful proceedings in the Commons Chamber yesterday, leaves the suspicion that it is, again, about removing the principle of independence from the heart of the CMA’s role. We saw this with the Prime Minister’s own adviser on ministerial standards, Sir Alex Allan, resigning because of the breach of the ministerial code, and we saw it yesterday with members of the ruling party scrapping the rules or attempting to scrap the rules on MPs’ conduct because one of their own was found guilty of what the Standards Committee described as an “egregious” breach and then wanting to scrap the role of the independent standards commissioner.

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

Of course, they will all want to intervene—

Photo of Caroline Nokes Caroline Nokes Chair, Women and Equalities Committee, Chair, Women and Equalities Committee

Order. May I remind hon. Members to stay within the scope of the Subsidy Control Bill?

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

Thank you, Ms Nokes. On that basis, it will probably not be wise to take the interventions. I am using these things as an example of the ruling party’s attempts to remove independence. The CMA is also supposed to be independent. We have seen a desire to break the rules and then just remake the rules in the main Commons Chamber, and I fear that now we may be seeing something similar—we need to ensure that we do not see something similar—when it comes to the independence of the CMA in its role with regard to the subsidy control regime.

Without amendment, the clause will allow the Government to rewrite the contents of an independent report if there is any warning that it will say something that they do not like. That is not how independence works, and it is not good government. Our amendments would remove the power for the Secretary of State to do that. It would remove the power to edit reports published by the CMA, and it would ensure that the independence of the CMA stays as it is.

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

I have just a brief question. This clause lays out things that reports following mandatory or voluntary referrals “must” include and some things that the reports “may” include. Can the Minister confirm that the reports may also include things not mentioned here and that the additional things that would be included would be at the discretion of the CMA? If it can include only the musts and the mays in the clause, it will not be able to include anything else that the CMA considers would be relevant in the report. Given that the Minister has stressed the independence and expertise of the CMA, it would be sensible to confirm that it can include matters that it feels are relevant, whether or not they are explicitly mentioned in the Bill.

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

The CMA is independent and will use its expertise. I think that we have crossed wires here, because actually the clause allows the Secretary of State to talk about the content of the report but not to textually amend an independent report. That is not what we are talking about here, which is what is within scope of the report—to ensure that it can actually do it. This is to be able to give additional transparency and scrutiny in the regime itself. The clause allows him to make provision about the content and form of the report, but, as I said, not to change the text of an independent report.

Any changes to the content of the report must be made by the affirmative procedure. That is core to the subsidy control regime, because if the Government believe that the process needs to be refined, it is only right to have parliamentary scrutiny of it. By contrast, any specification as to the form of the report would be a technical regulation, for which the negative procedure is appropriate. Amendments 53 and 54 remove that possibility, except by future primary legislation.

As I say, removing the mechanism for amending or enhancing the baseline for SAU reporting that is set out in clause 59 would unnecessarily tie the hands of the SAU and future Governments seeking to improve the referral process based on the experience and expertise that is gathered over time through the functioning of the new regime. As set out in clause 67, the power to change the content of the report may be exercised only for a period of one year following the publication of SAU’s first report under clause 65.

As I have set out, however, changing the form of the report is a technical matter, so it is appropriate for the regulations to be subject to the negative procedure. I therefore request that the hon. Member for Sefton Central withdraws the amendments.

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

Clause 59(4)(a) uses the phrase

“amend subsection (1), (2) or (3) to make provision about the content of the CMA’s report”.

The Minister used the terms “text” and “content” interchangeably, which highlights our concern. Using secondary legislation, the Secretary of State is able to give himself the power to amend CMA reports. That is the problem—that is what overturns the power.

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

The Minister did not answer my question about additional information that the CMA may include in a report that is outwith the scope of the Bill. It does not fall under part 2; it falls under something else that the CMA thinks is relevant and should be in the report. Does the hon. Gentleman agree?

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

The Minister did not answer the hon. Lady’s question, so maybe he can do that after I finish my summing up, which will not take much longer.

We will push the amendment to a vote, because the Minister did not address our concerns about removing the independence of the CMA.

Question put, That the amendment be made.

Division number 17 Subsidy Control Bill — Clause 59 - CMA report following mandatory or voluntary referral

Aye: 4 MPs

No: 7 MPs

Ayes: A-Z by last name

Nos: A-Z by last name

The Committee divided: Ayes 4, Noes 7.

Question accordingly negatived.

Ordered, That further consideration be now adjourned.—(Michael Tomlinson.)

Adjourned till this day at Two o’clock.