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Public Bill Committees

Debated on Thursday 28 October 2021

Subsidy Control Bill (Third sitting)

The Committee consisted of the following Members:

Chairs: Caroline Nokes, † Mr Virendra Sharma

† Baynes, Simon (Clwyd South) (Con)

† Benton, Scott (Blackpool South) (Con)

† Blackman, Kirsty (Aberdeen North) (SNP)

† Bowie, Andrew (West Aberdeenshire and Kincardine) (Con)

† Buchan, Felicity (Kensington) (Con)

† Esterson, Bill (Sefton Central) (Lab)

† Fletcher, Colleen (Coventry North East) (Lab)

† Flynn, Stephen (Aberdeen South) (SNP)

Hollinrake, Kevin (Thirsk and Malton) (Con)

Kinnock, Stephen (Aberavon) (Lab)

† Malhotra, Seema (Feltham and Heston) (Lab/Co-op)

† Millar, Robin (Aberconwy) (Con)

† Mortimer, Jill (Hartlepool) (Con)

† Scully, Paul (Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy)

† Stafford, Alexander (Rother Valley) (Con)

† Tomlinson, Michael (Lord Commissioner of Her Majesty's Treasury)

† Whitley, Mick (Birkenhead) (Lab)

Kevin Maddison, Bradley Albrow, Committee Clerks

† attended the Committee

Public Bill Committee

Thursday 28 October 2021

(Morning)

[Mr Virendra Sharma in the Chair]

Subsidy Control Bill

Before we begin, I have a few preliminary announcements. May I encourage Members to wear a face covering except when speaking or if they are exempt, in line with the House of Commons Commission’s recommendations? Hansard colleagues would be grateful if Members could email their speaking notes to hansardnotes@parliament.uk. Please switch electronic devices to silent. Tea and coffee are not allowed during sittings.

We now begin line-by-line consideration of the Bill. The selection list for today’s sitting is available in the room and shows how the selected amendments have been grouped together for debate. Amendments grouped together are generally on the same or a similar issue. Please note that decisions on amendments do not take place in the order they are debated, but in the order they appear on the amendment paper.

The selection and grouping list shows the order of debates. Decisions on each amendment are taken when we come to the clause to which the amendment relates. A Member who has put their name to the leading amendment in the group is called first. Other Members are then free to catch my eye to speak on all or any of the amendments in the group. A Member may speak more than once in a single debate.

At the end of a debate on a group of amendments, I shall call the Member who moved the leading amendment again. Before they sit down, they will need to indicate whether they wish to withdraw the amendment or seek a decision. If any Member wishes to press any other amendment in a group to a vote, they need to let me know. We will start with clause 1 stand part.

Clause 1

Overview and application of Act

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

It is a pleasure to serve under your chairmanship, Mr Sharma.

Clause 1 provides an overview of what each part of the Subsidy Control Bill will cover and establishes its application to other legislation. It sets out the definitions, the requirements, the exemptions, the functions of the Competition and Markets Authority and the enforcement of the control requirements. Subsections (7) and (8) specify that if a subsidy is granted or a scheme is created using powers contained in either primary or secondary legislation, the requirements will apply unless an Act of Parliament specifies otherwise. It is a straightforward, uncontroversial overview of the Bill and its application.

I thank the Minister for his opening remarks on clause 1 stand part. We support the clause, but I will make a few remarks on it. It provides an overview of the Bill. There are concerns that we will discuss further later, but that I want to mention in relation to the overview in clause 1.

As we said on Second Reading, we recognise the need for subsidy control legislation that establishes the framework for state aid post Brexit, but the new regime proposed in the Bill will work only if it provides transparency, oversight and scrutiny. While the Bill’s chapters reflect what the key issues are, there are areas where the Bill does not provide sufficient detail and clarity.

We are concerned about a number of areas. First, crucial aspects of the regime are yet to be defined. The Bill may establish a regulatory framework of subsidy control, but it fails to provide any real indication of how, where, and on what scale the Government plan to spend subsidies. As Alexander Rose said in his written evidence,

“there is currently no preferential system to incentivise investment into disadvantaged regions.”

The Bill also fails to provide a fair role for the devolved Administrations, and we are concerned that there is not enough balance between efficiency and oversight, particularly related to the CMA. We will debate some of these issues later, but it is important to note in our discussion of the overview why we will want further debate on the gaps in the Bill, and that we will seek to amend it in Committee.

Question put and agreed to.

Clause 1 accordingly ordered to stand part of the Bill.

Clause 2

“Subsidy”

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

Clause 2 is the cornerstone of the new subsidy control regime. It sets out the definition of a subsidy for the purposes of the Bill, and it is a fall-in test, so to be a subsidy, it must be given, directly or indirectly, by a public authority using public resources; it must confer an economic advantage on one or more enterprise; it must be specific, meaning it must benefit one or more enterprise over others by conferring an economic advantage; and finally, it must have, or be capable of having, an effect on competition or investment in the United Kingdom, or on trade or investment between the United Kingdom and other territories.

There is a non-exhaustive list of financial assistances that may count as subsidies in subsection (2). Subsections (3) and (4) establish that financial assistance provided by an intermediary will constitute a subsidy where the funds originated from public resources, or the nature of the relationship between the public authority and the intermediary is such that the decision is effectively that of the public authority. Subsection (5) establishes the point at which a subsidy is deemed to have been given.

I thank the Minister for his remarks on clause 2. We support the clause standing part of the Bill, but there are some areas that I would be grateful for the Minister’s comments on. He described the fall-in test: where the condition in each limb of subsection (1) is met, financial assistance is defined as a subsidy. That definition applies to goods and services. Subsection (2) outlines the means by which a subsidy is given. That effectively includes a direct and indirect transfer of funds. Could the Minister outline what that means for tax reliefs? Perhaps he could provide clarity on what the boundary is, and say what is and is not regarded as a subsidy.

Subsection (3) refers to a person who is not a public authority, but could be treated as one for the purposes of subsection (1). Will the Minister clarify who this is intended to refer to? Who could fall under the scope of subsection (3)? That is important, because it defines who has the authority to bring forward and grant subsidies. We would like greater clarity about what is intended by that; it was not very clear from the explanatory notes. That also relates, to some extent, to subsection (4).

We do not have an issue with subsection (6), but would like clarification on what is defined, and on why the subsection relates to “modification for air carriers”. We do not have a major problem with that; I just thought it would be helpful to clarify it, as it is the first time it comes up in the Bill.

Largely, the definition of subsidies in the clause has been designed to be consistent with international obligations, especially those arising from the trade and co-operation agreement with the EU, but it does lay the foundation for a bespoke domestic regime, hence the discussion about the UK internal market. A lot of the terminology included is based on domestic legal precedent, such as the definition of an enterprise and the like. On the question about the “person”, that is what I meant about the intermediary; should a public authority not have a direct payment, or if any subsidy comes through a third party, that third party is the person defined in the Bill. Largely, as is the case for tax and aviation, all these definitions sit within the framework of our international obligations under the TCA.

Question put and agreed to.

Clause 2 accordingly ordered to stand part of the Bill.

Clause 3

Financial assistance which confers an economic advantage

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

Clause 3 establishes that financial assistance should not be considered to confer an economic advantage if it could reasonably have been provided on market terms. It is a small but necessary addition to the core definition of a subsidy for the purposes of the new regime. One example is a loan; it would not be considered to confer an economic advantage if it might have been provided by a bank on the same terms. Similarly, a public authority purchasing goods and services at market rates would not be considered to confer an economic advantage as long as the public authority follows the appropriate procurement processes.

I thank the Minister for his remarks on clause 3. We have no general comments, but could clause 3(2) be brought in as a challenge if, for example, a cheaper loan could arguably have been obtained in the market? To avoid challenge, would that be something that the public authority needed to verify when granting the subsidy, and when a subsidy is posted, would there need to be some sort of confirmation that such a check had been made?

The domestic subsidy control regime in its entirety is a bare-bones framework. It empowers public authorities in the UK to design subsidies and other policy interventions, including loans, without facing excessive bureaucracy or lengthy pre-approval processes. It does not have an EU-style regulator that acts as the gatekeeper and provides the definitive decisions on specific cases. However, we will provide guidance in due course that will help public authorities and recipients understand the practical applications of the definitions, and what authorities will need to do to comply with the subsidy control regime, including in the example that the hon. Member mentions.

I hope, from what the Minister says, that there will be tighter guidance on how a public authority ensures that the subsidy it is giving is compliant, and on whether it will need to verify or confirm that—saying, “I confirm that,” or “All this complies with x”—in any entry it needs to make. During the evidence session, it was highlighted that there is a gap in auditing the quality of the checks a public authority makes; if there is no process for that to be recorded, it is not transparent.

Clearly, anybody giving a subsidy, be they the UK Government, the devolved Administrations or a public authority, would need to keep their own internal audits in case of challenge. However, the guidance that we will develop—with full consultation and discussion with interested parties, including the devolved Administrations, businesses and public authorities, to make sure we are answering the right questions—will have that level of detail.

Question put and agreed to.

Clause 3 accordingly ordered to stand part of the Bill.

Clause 4

Financial assistance which is specific

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

The purpose of clause 4 is to elaborate on the circumstances in which financial assistance is not considered to be specific where it benefits one or more enterprises over others for the purpose of the new regime. Subsection (2) confirms that financial assistance is not specific if different enterprises are treated differently in a way that can be inherently justified by the nature of the financial assistance. For example, in the case of a special levy for environmental purposes, treating certain goods or services differently can be justified by the effect that the levy aims to achieve.

Subsections (3) to (7) set out further considerations that are relevant to whether a tax measure should be considered specific, as the hon. Member for Feltham and Heston mentioned. Subsection (4) sets out the situations in which tax measures may treat enterprises differently without being considered specific by reference to the normal taxation regime. One example is that a tax relief measure by a local authority that advantages one or more local enterprises over another is likely to be considered specific, but it will not be specific if all enterprises in the local area benefit. Subsection (5) makes provision for identifying what the normal taxation regime is by reference to its overall objective, its features and the level of autonomy that the public authority has in the design of the taxation regime.

Subsection (6) confirms that a levy with a non-economic public policy objective would not be specific if treating enterprises differently can be justified by objective criteria—for example, the criterion of limiting negative impacts on public health or the environment. Subsection (7) confirms that any carve-out from the levy will also not be considered specific if the same conditions as those in subsection (6) are met. I recommend that the clause stand part of the Bill.

I thank the Minister for his remarks on the clause. Will he clarify what guidance sits behind it? This is a similar issue to that raised on clause 3(2). A concern was raised by some of our witnesses about potential tax reliefs not being defined as a subsidy, but having the same outcome as a subsidy for all intents and purposes. We obviously want to ensure that there is integrity in the implementation of the regime, so that it does not give rise to concern that there are subsidies being made through the back door that are not subject to the regime’s transparency and control measures. Will the Minister confirm that guidance will be developed around this, to make it very clear what the delineations are, and will that guidance be given and explained to local authorities?

Another issue that came up in evidence was that local or other public authorities that have not been involved in granting subsidies before want to be sure that they are making the right decisions, and want to understand the regime and the intentions of the Government.

Absolutely. First of all, the guidance will give advice on the application of provisions, including the duty to consider and act consistently with the subsidy control principles. We will develop that guidance with full consultation and discussions with other parties, so that we can all look at all the measures, including the tax-specific measures. The guidance will be published in good time to allow public authorities and other stakeholders to understand the key requirements of the new regime before it commences. It is so important that we get the transparency correct and that, as the hon. Lady rightly says, we ensure the integrity of the system.

Question put and agreed to.

Clause 4 accordingly ordered to stand part of the Bill.

Clause 5

Section 2: modification for air carriers

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

The clause establishes a more specific competition test to determine whether financial assistance for air carriers providing air transport services is a subsidy for the purposes of the Bill. Specifically, the clause will require that public authorities assess whether that financial assistance has an effect on competition between air carriers in the provision of air transport services, either within the UK or between air carriers of the UK and those of another country, or could have such an effect. An assessment of that kind more precisely reflects the specific characteristics of the market for air transport services provided by air carriers, as well as meeting our relevant international obligations.

I have no comments or questions on clause 5.

Question put and agreed to.

Clause 5 accordingly ordered to stand part of the Bill.

Clause 6

“Public authority”

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

Clause 6 establishes the definition of the term “public authority” for the purposes of the Bill. It sets out the standard definition of a public authority, denoting a person who exercises functions of a public nature. It is consistent with UK legislative precedent. It does not include either House of Parliament, the Scottish Parliament, the Welsh Senedd or the Northern Ireland Assembly. Provisions relating to the subsidies and schemes in primary legislation are included under clause 78 and schedule 3.

It is a pleasure to be part of this Committee. I wonder whether the Minister could explain a little more the logic behind the exclusions. I have read the explanatory notes, and the intention is still not entirely clear to me. I do not think that I have a problem with it—I think it makes sense— but if he could explain it a little more that would be really helpful.

I am very happy to respond. The provisions for subsidies given by Parliament, the Scottish Parliament, the Welsh Senedd and the Northern Ireland Assembly are set out in clause 78 and schedule 3, which provide for the giving of subsidies by means of primary legislation. They are covered separately to reflect the unique legal and constitutional position of Acts of Parliament. The legislature is considered to have given a subsidy when it is given under a duty imposed by primary legislation. Those subsidies are captured by schedule 3, but if a subsidy is given under a power in primary legislation, the relevant public authority will be the Minister exercising that power.

Just to clarify, is the logic that the devolved Administrations and the Houses of Parliament can continue to give subsidies in primary legislation, and that is why an exclusion, or a separate provision, is in place relating to them? Is it partly to do with not being able to bind future Parliaments, or is that totally separate from what we are discussing?

It is more to do with the fact that public authorities have been added as an extra, whereas state aid did not go down that far. The public authority definition at the beginning widens the definition of who can give subsidy control, whereas it is established that the UK Government and the devolved Administrations, including the Scottish Parliament, can continue to give as they do now.

This is a helpful discussion. Further to that point, is it to differentiate—I think the Minister alluded to this—who has the power to grant the subsidy? For example, the Houses of Parliament may not but the Secretary of State or Ministers may. Is that the distinction that we should read here, or am I confusing things?

Essentially, the things that tend to be given will usually be given with the agreement of the Houses of Parliament. Although it may be the UK Government that award the subsidy, it will clearly be on the back of parliamentary powers that they do so. That is where we are coming from.

Question put and agreed to.

Clause 6 accordingly ordered to stand part of the Bill.

Clause 7

“Enterprise”

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

The clause establishes the definition of “enterprise” for the purposes of the Bill. Under the new regime, an enterprise is any person or group of persons under common ownership or common control offering goods or services in a market. Importantly, the definition applies only to the extent that the person is engaged in such activity. It is purposely broad, it is consistent with our international obligations and other UK legal precedents, and it will ensure that the new subsidy control rules apply widely to protect UK competition and investment.

Will the Minister clarify whether that definition extends to social enterprises and co-operatives for the purposes of organisations that may be involved in economic activity? Will those organisations be within scope to potentially receive subsidies from public authorities?

If a person is not engaged in economic activity, they will not be defined as an enterprise. Generally speaking, a charity or community group is unlikely to carry out economic activity. However, we are not explicitly excluding anyone from the definition of enterprise just because of their legal form. The hon. Lady talks about social enterprises, which are obviously different from charities, because some can be normal companies but do not make profits or have shareholders. However, that is economic activity, so those would be included within the definition.

The test looks at the activity that is proposed to be subsidised, rather than the legal form of the subsidy recipient. One organisation may be considered an enterprise in some contexts and for some activities but not others. One example might be a medical research charity that has a retail arm. Support given to the medical research activity is not a subsidy, because the research is not economic activity, even though the charity’s retail operation may be considered an enterprise.

I have a couple of questions. I am aware of social enterprises in Aberdeen that make and sell frames or make bread and run cafés and things like that. It sounds as if that would be included within the definition of economic activity, because they are selling things to the general public, even though their main purpose is to ensure that people who are disadvantaged in society are given the opportunity to get work experience and things like that. It would be helpful if the Minister could say whether he intends the clause to cover all economic activity, regardless of who is doing it, but that the subsidy relates only to the arms of those organisations that are undertaking the economic activity; and that the clause applies across the board to charitable organisations and social enterprises as well as normal businesses, so long as the thing they are doing is classed as economic activity. Have I got that right?

The hon. Lady has got that right. Some charities have a commercial retail arm that are taxed and approached in different ways. For example, Help for Heroes has a retail arm as well as the main fundraising arm. There is clearly no intention for subsidies of cake sales or anything like that—money may be handed over, but that is fundraising—whereas retail involves the selling of things. I am not saying that that specific example will involve in any subsidy, but such an example, where a separate business is aligned to the charity, is where the enterprise comes in that covers the economic activity that we are describing.

Question put and agreed to.

Clause 7 accordingly ordered to stand part of the Bill.

Clause 8

Persons under common control

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

The clause elaborates on what is meant by common control for the purpose of identifying an enterprise. It sets out the circumstances where common control arises: where one or more corporate bodies is controlled by one person or a group of persons, or where there are interconnected corporate bodies. An interconnected corporate body is where a subsidiary or subsidiaries exist.

A person, or a group of persons, is treated as having common control when, directly or indirectly, they can control or materially influence the economic activity of another corporate body, which also applies where there is no controlling interest over the corporate body. Interconnected corporate bodies or a group of persons under common control are considered to be a single enterprise for the purpose of the subsidy control regime. The clause will ensure that the rules under the regime are applied fairly, regardless of corporate structures.

I thank the Minister for his comments on clause 8. For the purposes of clarity around where public resources may go, will he explain what the clause means if, in a group of companies, one of them is granted a subsidy? Could that subsidy be shared with others in the group? I am not fully clear what the clause means.

Secondly, what if one of the other companies in the group has interests abroad? Is there something in the legislation that prevents public subsidies in the UK going through company structures within the same group to then subsidise activities abroad? I would be grateful if the Minister could clarify that—it is genuinely not very clear.

The hon. Lady gives an interesting example, which I may need to clarify afterwards. However, the essential drive behind the clause is to provide effective definitions so that public authorities can identify the characteristics of an enterprise receiving a subsidy to make sure it complies with the requirements in the first place.

A public authority should not give a subsidy to a business that is a subsidiary of a large parent company without considering that large enterprise as a whole. A subsidy designed to support a microbusiness, for example, would be inappropriate in that kind of situation. The whole group has to be considered to assess the incentives of the recipient and whether the subsidy is an appropriate and proportionate way to address that market failure.

Another example might be the minimal financial assistance exemption. Two companies under common control should not both receive subsidies of £200,000, for example, as minimal financial assistance. That would exceed the threshold of £315,000 for a single enterprise.

The measures must apply regardless of the way an enterprise is structured. The clause gives public authorities the clarity to identify where the subsidy actually ends up and whether it is being used for its intended purpose—rather than, as the hon. Lady says, the possibility of it being moved abroad or to another part of the group, which would not achieve the aims for which the subsidy was given.

I thank the Minister for those points. However, there could be an unintended difference between what the Government intend and what the law and guidance, if not clear, could result in. I would be grateful if the Minister could come back in writing to explain, specifically, what the Government’s intentions are for the guidance that may be given to an enterprise receiving a subsidy as to whether, once it has been given, there are controls on where the subsidy could be passed on to. I know that somewhere else in the Bill, it says that if a company’s ownership changes, the subsidy can pass through, but this is a point about clarity and guidance regarding what controls exist once that subsidy is given.

Secondly, on this point about potential ownership of a group or the enterprise, are there any constraints or guidance—or is there an intention of producing any guidance—in relation to companies that may be, for example, foreign-owned but trading here, where some subsidies could end up going into other countries? Is there clarity about how that is potentially going to receive guidance or be regulated to ensure it does not happen, if that is the Government’s intention?

I thank the hon. Lady for her questions, and I appreciate that clarity is required on this issue. I will give her a fuller answer in writing. What I will not be able to do, though, is pre-empt the guidance, which as I say we will be developing through discussion as we progress after the framework Bill has been approved. However, the definition of a wholly owned subsidiary can already be found in section 1159 of the Companies Act 2006, so again, this is taken from legal precedent.

I thank the Minister for that. He is referring to subsection (5), but it would be of benefit to the Committee to receive a response in writing on those broader points.

I should add, as I said in my original response, that when public authorities are giving the subsidy, it is important to ensure that that subsidy is going to the enterprises for the purposes of the market failure that they are trying to correct.

Question put and agreed to.

Clause 8 accordingly ordered to stand part of the Bill.

Clause 9

The subsidy control principles and the energy and environment principles

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

Clause 9 establishes that the subsidy control principles are set out in schedule 1 to the Bill, and that the further principles for public authorities awarding energy and environment subsidies are set out in schedule 2 to the Bill. Those common-sense principles, requiring that subsidies are an appropriate, proportionate means of addressing a specific policy programme, are set out in clear terms in the relevant schedules. I commend the clause to the Committee.

I thank the Minister for his comments. Labour has no further issues with this clause.

Question put and agreed to.

Clause 9 accordingly ordered to stand part of the Bill.

Schedule 1

The subsidy control principles

I beg to move amendment 6, in schedule 1, page 51, line 8, after “concerns” insert “and areas of deprivation”.

This amendment includes areas of deprivation as an example of the equity rationales that subsidies should address.

Under EU state aid rules, subsidies could be, and indeed were, targeted at areas of economic deprivation, significantly aiding struggling regions. Labour recognises the ongoing debate about assisted areas or other ways in which there could be a successor scheme to those rules, in order to support better and more effective targeting and transparency about where public resources are going, and indeed to support the levelling up agenda. We are concerned that this is not explicit in the Bill; it is merely alluded to in guidance. This important principle needs to be explicitly in the Bill for those who might be interpreting legislation in the near future or who want it to be a regime that stands the test of time and has the confidence of all four nations.

As Professor Fothergill highlighted, as the Bill currently stands we could be treating investment in a wealthy part of Guildford on the same basis as a potential investment in a less prosperous part of Grimsby. That seems counterintuitive to the oft-quoted term “levelling up”, which highlights a policy priority for Governments of all persuasions and is a new term for what we have all talked about: increasing equality and making sure there is prosperity in all parts of our country. It is important that we all agree on the need to make sure that public resources are being used to the best effect and to achieve the best outcomes for those areas of greatest need.

Professor Fothergill went on to say:

“You would not be attempting to incentivise the levelling up of the United Kingdom. In certain places, if we really are serious about levelling up, we have to put more resources into that effort, and we have to use state aid as one of the tools for delivering new jobs.”––[Official Report, Subsidy Control Public Bill Committee, 26 October 2021; c. 11, Q7.]

I would be grateful for the Minister’s response on that. Does he agree that the Bill should include a stronger mandate for reducing economic inequality? The notes on the Bill’s intention allude to levelling up, and the Government created a specific Department for levelling up. Given how much the Government have been talking about levelling up, I must say it was surprising not to see it more explicitly in the wording of the Bill. Could the Minister respond to that?

We are concerned about the overall principles. I understand that they are derived from agreements within the TCA, but they can be amended. It is not that we do not have the authority to do that. Where, if not here, do the Government intend to include and support the equity rationale that subsidies are supposed to be addressing? We believe that the amendment would make it clear that the new subsidy regime can and should play a role in reducing regional and sub-regional inequality. It is a simple way of addressing the issue within the Bill.

As we have heard, amendment 6 seeks to include areas of deprivation as an example of the equity rationale that may be addressed through subsidies. Firstly, I would like to use this opportunity to welcome the hon. Lady’s commitment to the levelling-up agenda. The Government are clearly committed to ensuring that prosperity and opportunity is shared across all parts of the UK. The domestic subsidy control regime will facilitate this. It will allow public authorities to deliver investment in skills, local infrastructure and new technologies.

Principle A within schedule 1, as well as the wider subsidy control system, has been designed to allow public authorities to address inequality and disadvantage through the use of subsidies. The principle specifies that subsidies should pursue a policy objective that either remedies a market failure or addresses, to quote from schedule 1,

“an equity rationale (such as social difficulties or distributional concerns).”

As currently drafted, schedule 1 clearly covers investment in disadvantaged or deprived areas; as such, the amendment is unnecessary. Through guidance, we can come up with more specific clarity to public authorities, but I do not believe it is helpful to list in the Bill every policy objective that a subsidy may address. As I say, the specific examples will be covered and elaborated on in guidance, which is a more appropriate place to address the practical application of the subsidy control principles. I therefore suggest that the hon. Member for Feltham and Heston withdraws the amendment.

May I ask the Minister for some clarity on that? He says that he expects that more information about principle A will come out in guidance. Does he expect that that will encourage granting bodies to look at reducing inequality in some of the subsidies that they make?

It will set that out in guidance. The hon. Member for Feltham and Heston talked about the evidence session, and Guildford got quite a bad rap, having come up a couple of times as the example. None the less, we want to ensure that we directly address issues of inequality and disparity through the levelling-up agenda. That will come out through guidance and ensure that we address exactly what the hon. Member for Aberdeen North was saying.

One more try on this. Does the Minister expect that the Government’s levelling-up agenda will be part of the direction of travel in the guidance, so that the guidance will encourage granting authorities to line up with the Government’s levelling-up agenda?

In terms of levelling up, it has been designed to provide a bespoke and dynamic framework. It allows public authorities to deliver bespoke subsidies that are tailored to their local needs, which will indeed address the UK Government’s priorities, such as levelling up, but within their own areas. Public authorities are best placed to work out how to address the inequality and disadvantage within regions, as well as between regions, so we have developed an approach that ensures that disadvantaged areas have the maximum freedom and reassurance to receive the levelling-up subsidies and best meet the characteristics of the area.

I will make a few remarks and then clarify whether I will push the amendment to a vote. I will respond to some of the points raised, and I thank the hon. Member for Aberdeen North for her comments. It is important to ensure that a more explicit intention is incorporated in the wording of the Bill, but I worry that that will not be achieved as explicitly as it ought to be, if it is so squarely in line with the Government’s intentions.

I want to come back on one of the points that the Minister made. We have spoken about the evidence in relation to Guildford and Grimsby, but he makes an important point. Every area has better-off, prosperous parts and others that are worse off, which is why it is important to think about levelling up not just between regions but within them, as he said. Indeed, I know that some wards in my constituency have some of the worst records in the country for children going to university. Some of them have improved, but some London wards can be as poverty stricken as other parts of the country, which is why we need to have a more mature debate about levelling up that looks at some of those issues. What is important is that this will be an ongoing discussion throughout the course of the Committee. We have not fully closed off whether, and how, there should be a successor to the assisted areas map. We take the point about the boundaries not always being clear if we do try and have a map, and I have concerns about that having unintended consequences, such as excluding areas further down the line that may have good reason to be considered for subsides. However, there is an important principle here, and I do not want us to lose it. I will not be pushing this amendment to a vote today, but I do think that it is one that with further discussion and clarity—reviewing some of the evidence—we may want to come back to at a later stage.

I agree with many of the hon. Member’s remarks, as I am the Minister for London as well. We are talking about addressing areas of inequality within regions, as well as between regions. By having a blunt tool, we can sometimes miss out on those pockets of deprivation, as well as the wider issues—both need to be covered.

I beg to move amendment 7, in schedule 1, page 52, line 6, at end insert—

“(c) the United Kingdom reaching its net-zero commitments.”

This amendment adds the impact on the UK’s net-zero commitments as a particular consideration for public authorities before deciding whether to give a subsidy.

With this it will be convenient to discuss amendment 8, in schedule 2, page 52, line 15, at end insert—

“(c) delivering the UK’s net-zero commitments.”

This amendment would ensure that subsidies related to energy and the environment incentivise the beneficiary to help deliver the UK’s net-zero targets.

Thank you for allowing me to speak to the amendment, Mr Sharma. I want to speak about why I think this is so important. The reason for this amendment is that the Bill should prevent subsidies that unnecessarily harm or impede the UK’s work towards net zero. In the Bill as it currently stands, subsidies not related to energy or the environment can meet all of the subsidy control principles, but could work against the Government’s overall goal of moving towards net zero.

To prevent this the Government are seeking to amend principle G of the schedule, in order to state that the subsidy’s beneficial effects must outweigh any negative consequences they may have on the UK’s net zero commitment. This was supported in evidence by Alexander Rose from DWF Group, who noted that all civil servants would be mandated to take account of net zero. Why not extend that thinking to other public authorities and to every single subsidy? Similarly, subsidies related to energy and the environment should not impede the UK’s work towards net zero. More than that, they should actively work towards the UK reaching its targets. We are having this debate and seeing the Bill pass through Committee during COP26; in fact, we are leading into COP26 and we will pick up after it. Does the Minister agree that if the Government want to show they are serious about this, we should be thinking about how to ensure that when public money could be used to support policy objectives, we include the United Kingdom reaching its net zero commitments as part of that?

I find nothing objectionable in what the hon. Lady is saying or indeed the amendments. However, possibly due to what she has said about the Government’s amendment and what is already in the Bill, I do not know whether what she is proposing is entirely required. Directly underneath where her proposed sub-paragraph (c) would be inserted, principle A in schedule 2, on the aim of subsidies in relation to energy and environment, refers to the aim to deliver

“a secure, affordable and sustainable energy system”,

and, in sub-paragraph (b), the aim to increase

“the level of environmental protection compared to the level that would be achieved in the absence of the subsidy.”

Both are very much in line with, and compatible with, our aim to reach net zero.

I thank the hon. Gentleman for his comments. My understanding is that the energy and environment principles would apply to subsidies in relation to energy and the environment. We are talking about a slightly broader principle here, which is that any subsidy granted under the regime should not have a harmful impact on achieving our net zero outcomes. That would seem to be a slightly perverse use of public money when net zero is such an explicit goal and when civil servants will need to be working towards it. Indeed, as Dr Barker outlined on Tuesday,

“the green industrial revolution that we are all seeking to work towards in order to achieve net zero is also something that will require…partnership between business and Government”,

and

“an effective subsidy system can be part of that.”––[Official Report, Subsidy Control Public Bill Committee, 26 October 2021; c. 39, Q52.]

These amendments are simply saying that if we are serious about what achieving net zero will mean, we should not allow a system to be established, at the same time as COP26, that could work against that, and do so using public money.

For the avoidance of doubt, my colleague and I support amendments 7 and 8, which are both incredibly sensible. As is quite often the case in Bill Committees, I wish I had thought of them earlier and tabled them first.

I agree with the hon. Member for Feltham and Heston about COP26. This is happening now, and it is a moment that we can take advantage of to get towards net zero commitments. COP is coming up and there is a groundswell of public support for trying to make a difference. This is something on which my colleague and I also moved amendments during proceedings on the Advanced Research and Invention Agency Bill. We wanted ARIA’s No. 1 priority to be a focus on net zero. We also wanted a commitment from the Government that ARIA would itself operate on a net zero basis, because we are beyond the time for talking about this. In order to meet the UK Government and the Scottish Government’s commitments, we need to be taking action on this, rather than just talking about it.

It is all well and good to have in place the stuff that my neighbouring MP, the hon. Member for West Aberdeenshire and Kincardine, talked about for energy and environment subsidies, but we need that for all subsidies, whether they relate to energy and the environment or anything else. This should run through everything that the Government are doing. For every decision in the Budget, which is being discussed in the main Chamber, we should be asking, “How does this get us towards net zero and reducing our carbon output?”

I just do not think we are there yet. It does not feel like the Government are taking this seriously enough, and it is not just this Government. Governments around the world are not taking this seriously enough. We need to be there now and making that commitment. If the subsidy control regime is intended to work and to stand the test of time, and if we are looking towards those net zero targets, we need that to be in this Bill. At the very least, we need a strong commitment from the Minister that subsidies in relation to not just energy and the environment but other areas will be more favourably looked on, or less likely to be rejected out of hand, if they specifically work towards reaching the UK’s net zero targets, and particularly if they work towards something that is carbon negative. We are not doing enough of those things, so if more of the new policies that come through were carbon negative, it would be much easier for us to get to our net zero target. If the Minister could make some strong commitments on that, it would be hugely welcome, but I will be happy to support the amendments tabled in the name of the Opposition.

It is a pleasure to see you in the Chair for these sittings, Mr Sharma.

I completely agree with everything the hon. Member for Aberdeen North says and with what my hon. Friend the Member for Feltham and Heston said in moving the amendment. What is needed from Government is the commitment to hit net zero and the mechanisms to do so. That needs to go right across Government, in everything we do.

I take on board the point the Minister has already made in today’s deliberations that not everything is in the Bill; I understand that and I accept it. However, as the hon. Member for Aberdeen North argued extremely well, there is a strong—we would say an essential—case for net zero to be at the heart of the regime put in place by this legislation.

Schedule 2 does not mention transport, agriculture or housing insulation, to name just three examples, so it is not comprehensive as currently drafted. That is why we need to go much further to meet the scale of the challenge in the subsidy control regime that we are debating putting in place. The Budget yesterday did not address net zero, and it is frankly extremely worrying that it did not, especially in the run-up to COP26.

I am afraid the announcements last week did not constitute a plan and were nowhere near meeting the requirement to hit the net zero targets this country is committed to in the timely fashion that is needed, especially in terms of the front-loading we all now understand is essential in all areas except the energy industry. It is needed in transport, in building insulation and in agriculture; it is needed across industry. Unless this is in the Bill, setting out the requirement for net zero to be at the heart of the subsidy regime, I am afraid we as a country, and this Government as a Government, will not be doing what is needed.

Do we need to put net zero down on the subsidy as it is? If the hon. Gentleman remembers our Paris agreement only a few years ago, he knows we agreed to get to net zero by later this century. Now we have moved it forward to 2050, and I hope—I am sure the Government hope—that we will move our net zero agreement even further forward as time progresses. Will this proposal not make the Bill a bit out of date in a few decades’ time, when it should stand for longer?

The amendment, because of the way it is phrased, envisages those changes and the increasing urgency. Let us remind ourselves that, on our present track, we are looking at a temperature rise of more than 1.5 °C through the existing commitments and policy decisions not just of this country but of Governments around the world. It is important to acknowledge that we cannot do it on our own, as we are responsible for only 1% of emissions, but when we are trying to show world leadership with the presidency of COP26, it is incumbent on us to show that leadership in everything we do, and we, as Members on this Committee, have an opportunity right here, right now to support making that commitment and putting it into legislation.

Given the way the amendment is crafted, the wording,

“the United Kingdom reaching its net-zero commitments”,

does stand the test of time as and when things change. The challenge the hon. Member for Rother Valley makes is another reminder that we need to bring things further forward and that it has become important to do that over time. At the moment, we have interim dates to hit, with ambitions in 2030, and the Government have made some progress there, but by no means enough to do what is necessary to keep us to 1.5°.

The hon. Gentleman is making some salient points in response to the hon. Member for Rother Valley. However, once the Government eventually hit their net zero targets, will they not want to maintain those targets and not reverse that journey? In such case, the remarks of the hon. Member for Rother Valley would be completely irrelevant.

That is a good point. The hon. Gentleman is right that this does not end when we reach net zero—that is the first point. The second point is that if we need a change, we can amend the legislation later. Right now, however, this is the crucial change that the country and the world need to make. I reiterate that we as Members of the UK House of Commons—those of us here today—have an opportunity to make a statement and a commitment and to put this change on the face of the Bill.

I got so carried away with my attempts to convince the Government to get to net zero as soon as possible that I forgot to ask questions when I stood up previously. It would be useful if the Minister could clarify why there are two schedules. Why does the treatment differ between the two areas? There is a difference in the treatment of subsidies in relation to energy and the environment compared with subsidies relating to any other area, and I do not quite understand the logic of having two different things. One set of principles could have covered everything, including moving toward net zero. If the Minister will explain why there are two separate schedules and why the two areas are being treated differently, that would be incredibly helpful.

Let me answer that point before I speak to amendment 7. The two schedules and the additional principles are there literally just to adhere to our international obligations.

Hon. Members can rest assured that our new subsidy control regime will support the UK in meeting our net zero target by 2050, first by facilitating strategic and appropriate subsidy interventions with minimal bureaucracy and delay and secondly by ensuring that energy and environment subsidies are assessed against additional principles that promote carbon neutrality and sustainability.

The hon. Member for Sefton Central said that he could not see net zero in the Budget, but the spending review backs up the net zero strategy published the week before. The Budget will fund our strategy, which will then leverage private money and create jobs and opportunities in markets that will drive towards net zero.

Turning to amendment 7 itself, it is unnecessary explicitly to require public authorities on the face of the Bill to consider the negative effects of subsidies on the UK’s net zero commitment as part of their compliance with principle G. Public authorities will clearly need to consider the effects of subsidies in the round before awarding them, but the amendment would give undue prominence to net zero considerations with respect to subsidies that may have entirely unrelated objectives, such as high street regeneration or providing training opportunities for young people.

Does the Minister agree that this is the most important thing for every single one of us? Whether people are regenerating high streets or doing anything else, they should be ensuring that they are also moving towards net zero.

I agree that we should be doing so, but what I am saying is that we do not need to do it in a process-driven way. It should be done, in the first place, in the devising and implementation of policy. I do not want to create two separate processes, because that might lead to public authority having to make assessments for every single subsidy that is awarded or made, even when there is no meaningful impact—just look at that bureaucracy. What we need to do is ensure that we enmesh net zero thinking in our policy development at every layer of government, rather than just listening for signals. Clearly, we need to take that leadership at COP26. We realise that this is the time to lead and to act, for all international Governments.

Unfortunately, the Bill will not have completed its parliamentary process by the time everyone leaves Glasgow. None the less, we need to ensure that we set out the strong work that we are doing. We have already announced policies that involve subsidies in some sectors, such as the clean heat grant and the contracts for difference scheme, announced by the Chancellor in the March 2020 Budget, providing up-front capital grants for the installation of low-carbon heat pumps and, in limited circumstances, biomass boilers. Those schemes will help consumers to overcome the higher up-front costs of low-carbon heat and will build the supply chains for it ahead of the introduction of regulations for existing buildings off the gas grid later in the decade. Those schemes—all schemes—will have to meet the terms of the domestic principles, which should also ensure that the money is well targeted and achieves good value for the taxpayer.

We have established the green jobs taskforce, which advises on how Government, industry and the education sector can work alongside other stakeholders to realise the opportunities of a green industrial revolution, supporting green jobs and skills, and ensuring that those opportunities are open to all. The evidence collected by that taskforce and its recommendations are being considered by Government as part of the development of the ongoing net zero strategy, which was published last week. We will develop that.

Those are the clear leadership principles that we should be promoting and pushing out to international colleagues from Governments around the world, who are coming to Glasgow this week and next, ahead of COP26. However, we do not need just this one principle, understandable as it is, in the Bill. Principle G already singles out negative effects on competition or investment within the UK and on international trade and investment. That is appropriate, as such distortions go to the very heart of what the subsidy control regime is for. By definition, a subsidy must have effect on competition, investment and trade, and distortion is common to all subsidies, regardless of what they seek to achieve.

Net zero considerations, however, are not inherent to all subsidies. Some subsidies will of course help businesses to reduce their emissions, but a great number will not have any meaningful or, importantly, measurable impact on the UK’s greenhouse gas emissions.

Amendment 8 would add to schedule 2 a requirement for energy and environment subsidies and subsidy schemes to deliver, or to incentivise the beneficiary in delivering, the UK’s net zero commitments. The intended effect is that a public authority planning to grant an energy or environment subsidy or scheme would not be able to proceed unless it was satisfied that that subsidy or scheme contributed towards net zero commitments.

It may be useful to recap that energy and environment subsidies must be assessed against a number of additional principles, which are set out in schedule 2. Those common-sense principles are designed to ensure, for example, that public authorities consider the need for energy and environmental subsidies to achieve reductions in emissions or otherwise increase the environmental protection relative to the level achieved without subsidy. They also ensure compliance with the UK’s international obligations under the trade and co-operation agreement with the European Union.

We share the commitment to the net zero agenda, as I expressed. We believe that subsidies correctly designed and targeted can be a powerful means to achieve that.

The Minister is doing a good job of explaining what is intended by some of this, putting some meat on it, which is helpful. Will he explain what environmental protection means?

There is a wide definition of environmental protection beyond net zero, as big and important as that is. The principles in schedule 2 fully support the UK’s priorities on net zero and the wider protection of the environment. The additional requirement to assess the subsidy or scheme against the net zero priorities is therefore unnecessary and may actually discourage public authorities from granting energy and environmental subsidies designed to achieve other valuable aims, such as an affordable energy system or increasing biodiversity. I humbly ask the hon. Member for Feltham and Heston to withdraw the amendment.

I thank the Minister for his remarks and all hon. Members who have contributed, including the hon. Members for Aberdeen North and for Aberdeen South. I will push amendment 7 to a vote, and will do the same with amendment 8 later. The wording has been quite carefully constructed. Schedule 1 states:

“Subsidies’ beneficial effects (in terms of achieving their specific policy objective) should outweigh any negative effects, including in particular negative effects on—(a) competition or investment within the United Kingdom; (b) international trade or investment.”

Amendment 7 would add:

“(c) the United Kingdom reaching its net-zero commitments.”

I have not heard from the Minister a strong argument as to why we would not want public authorities granting subsidies using public resources to ensure that beneficial effects outweighed any negative effects on the UK’s achieving its net zero commitments. That principle is significant, and it should be in the Bill, so I will push the amendment to a vote.

Question put, That the amendment be made.

Question proposed, That the schedule be the First schedule to the Bill.

The schedule sets out the seven general subsidy controls, including how public authorities should consider and assess a policy objective, and make sure a subsidy is proportionate and that it incentivises and leads to a change of behaviour in a beneficiary that would not have happened had they not had the subsidy. It does not include normal business expenses. It provides that alternative policy levers that are likely to cause less distortion should be considered before a subsidy, and that subsidies should be designed in a way that meets the policy objective and minimises the impact on competition and investment within the UK’s internal market.

Finally, principle G requires public authorities to conduct a balancing test to assess the effects on competition and investment in the UK and on international trade or investment, and to determine whether the benefits of a subsidy are greater than the negative effects of providing it. I commend schedule 1 to the Committee.

I thank the Minister for his remarks. Notwithstanding the debate that we have just had and our ongoing concerns, which we want to return to later in the consideration of the Bill, we support schedule 1.

I would like to ask a few questions, particularly about principle F in schedule 1, which says:

“Subsidies should be designed to achieve their specific policy objective while minimising any negative effects on competition or investment within the United Kingdom.”

If someone was looking to invest in the United Kingdom, create jobs, start a business or bring a specific arm of a business to a certain place, and Aberdeen were to subsidise that, which would therefore have a negative effect on Cardiff, because Cardiff was not getting the jobs and Aberdeen was, is that excluded as a result of principle F? It concerns me that pretty much every subsidy that could be given will have a potential negative effect on another part of the UK because it would be incentivising investment, or whatever, in one part of the UK.

I am concerned that principle F can be read either as not meaning anything or as something that is too restrictive for what the Government are trying to achieve with what they are doing. I am thinking about what the Government are trying to achieve because a number of Government Back Benchers stood up on Second Reading and said, “This is great, because it means we will be able to get lots more investment and put lots of subsidies into our area.” If that is the Government’s intention, which I think it probably is, I worry that the risk-averse nature of granting authorities means that they will be concerned about doing that, in case they fall foul of the principle. If the Minister gave us a bit more clarity on how the principle is intended to work, that would help granting authorities to make the right decisions in order to subsidise economic development in their areas.

I thank the hon. Lady for that important question. The answer to her first question is no. It is more about fitting in with the levelling-up agenda, which is what hon. Members talked about on Second Reading—attracting subsidies to an area. For example, we have seen a lot of renewables investment, including offshore wind and the manufacture of equipment, in Teesside and Humber. We have seen the setting up of gigafactories in the north-east and other areas, and such inward investments provide stimulus in those areas. There are natural clusters of businesses in those areas, but it is more in this regard—the distortive effects of, say, moving companies from one area of the UK to another, and adhering to the United Kingdom Internal Market Bill, which we debated last year. It is about ensuring that that works, rather than being in some sort of race between the devolved Administrations of the nations, or between regions, to attract inward investment.

If, for example, an offshore wind farm is built off the coast of Teesside, rather than off the coast of Aberdeenshire, because of the subsidy regime that is in place, that is, by its very nature, disadvantageous to Aberdeenshire. That is what I am trying to work out here.

I think I get what the Government are intending: they are trying to stop a subsidy race. That is the intention behind the schedule, but I feel that the schedule does not achieve it. I am concerned about how the provision is worded, because any subsidy will be advantageous to one region and not to another, which is the intention behind subsidies. There could be more clarity on that principle so that it achieves what the Government want and does not preclude local authorities, or any other granting authority, from making decisions that will advantage their areas.

Essentially, the framework and the clause minimise, but cannot eliminate, distortion. That is the purpose of the Bill.

This is relevant to principle G, which says:

“beneficial effects…should outweigh any negative effects, including…competition or investment within the United Kingdom”.

I cannot see where the hon. Member for Aberdeen North is coming from when she says that more clarity might be good for local authorities and other granting bodies. That is quite clearly addressed in the Bill, so the Government are clearly trying to stop the negative effects she has described.

My hon. Friend makes a good point. The Bill weighs up the benefits versus the disadvantages, and minimises rather than eliminates distortion—we cannot eliminate distortion. We have talked about this a number of times, and we will continue to, but the upcoming guidance will start to flesh out some of the specifics, which it is probably not appropriate to get into now.

Principle G absolutely does help, but it does not fix the problem. Ensuring that the positive effects outweigh the negative effects is good and grand, but comparing a windfarm in Teesside and a windfarm in Aberdeenshire relates to balance rather than the positive effects outweighing the negative. That just encourages the same investment and the same number of jobs in one place in the United Kingdom rather than in another. That is why I am concerned that G does not exactly fix that issue.

Question put and agreed to.

Schedule 1 accordingly agreed to.

Schedule 2

The energy and environment principles

Amendment proposed: 8, in schedule 2, page 52, line 15, at end insert—

“(c) delivering the UK’s net-zero commitments.”—(Seema Malhotra.)

This amendment would ensure that subsidies related to energy and the environment incentivise the beneficiary to help deliver the UK’s net-zero targets.

Question put, That the amendment be made.

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

Adjourned till this day at Two o’clock.

Nationality and Borders Bill (Eleventh sitting)

The Committee consisted of the following Members:

Chairs: † Sir Roger Gale, Siobhain McDonagh

† Anderson, Stuart (Wolverhampton South West) (Con)

† Baker, Duncan (North Norfolk) (Con)

† Blomfield, Paul (Sheffield Central) (Lab)

† Charalambous, Bambos (Enfield, Southgate) (Lab)

† Coyle, Neil (Bermondsey and Old Southwark) (Lab)

Goodwill, Mr Robert (Scarborough and Whitby) (Con)

† Gullis, Jonathan (Stoke-on-Trent North) (Con)

† Holmes, Paul (Eastleigh) (Con)

Howell, Paul (Sedgefield) (Con)

† Lynch, Holly (Halifax) (Lab)

† McLaughlin, Anne (Glasgow North East) (SNP)

† McDonald, Stuart C. (Cumbernauld, Kilsyth and Kirkintilloch East) (SNP)

† Owatemi, Taiwo (Coventry North West) (Lab)

† Pursglove, Tom (Parliamentary Under-Secretary of State for the Home Department)

† Richards, Nicola (West Bromwich East) (Con)

† Whittaker, Craig (Lord Commissioner of Her Majesty’s Treasury)

† Wood, Mike (Dudley South) (Con)

Rob Page, Sarah Thatcher, Committee Clerks

† attended the Committee

Public Bill Committee

Thursday 28 October 2021

(Morning)

[Sir Roger Gale in the Chair]

Nationality and Borders Bill

The usual housekeeping notes: switch off your electronic devices, please, or put them on silent; and no food or drink is allowed in Committee—I do not think there is any, so that is good. Members are encouraged to wear masks, and I remind colleagues that they are worn not for your own protection, but for the protection of others, as a courtesy. Those who have speaking notes, will you please make them available to Hansard at the appropriate time, together with any documents that you are quoting from?

Clause 37

Illegal entry and similar offences

I beg to move amendment 110, in clause 37, page 36, line 4, at end insert—

“(C1A) A person who—

(a) is required under immigration rules not to travel to the United Kingdom without an ETA that is valid for the person’s journey to the United Kingdom, and

(b) knowingly arrives in the United Kingdom without such an ETA,

commits an offence.”

This amendment inserts a new offence into the Immigration Act 1971 of a person knowingly arriving in the United Kingdom without a valid electronic travel authorisation (ETA) in circumstances where they require such an ETA.

With this it will be convenient to discuss the following:

Government amendments 111 to 117.

Amendment 188, in clause 37, page 37, line 17, at end insert—

“(10) Before this section comes into force, the Secretary of State must lay before Parliament a report on the implications of this section for devolved criminal justice functions and bodies in Northern Ireland and Scotland, including but not restricted to those of—

(a) the Director of Public Prosecutions in Northern Ireland;

(b) the Lord Advocate;

(c) the Police Service of Northern Ireland;

(d) Police Scotland;

(e) the Northern Ireland Prison Service;

(f) the Scottish Prison Service;

(g) the Northern Ireland Courts and Tribunals Service; and

(h) the Scottish Courts and Tribunals Service.

(11) A report under subsection (10) must include the following information—

(a) an assessment of the how the functions and bodies listed in (10) will be affected by this section;

(b) the financial implications for those bodies;

(c) the implications for existing devolved criminal justice and related policies;

(d) details of any consultation and engagement with those bodies; and

(e) the Secretary of State’s findings, conclusions and proposed actions.”

This amendment would require the Government to report on the implications of clause 36 for bodies involved in devolved criminal justice functions and to obtain Parliamentary approval for such a report, before the clause enters into force.

Clause stand part.

Government amendment 125.

Clause 60 stand part.

Government amendment 120.

Government new clause 21—Electronic travel authorisations.

Government new clause 22—Liability of carriers.

Amendment 110 will add to the other offences in the clause the additional offence of knowingly arriving in the UK without an electronic travel authorisation where that is required. The current offence of knowingly entering the UK in breach of a deportation order or without leave dates back to the Immigration Act 1971, and is no longer considered entirely apt, given the changes in ways that people seek to come to the UK through irregular routes, and in particular the use of small boats.

Many of the individuals involved are intercepted in UK territorial seas and brought to the UK. They arrive in, but may not technically enter, the UK. However, we need to deter migrants from risking their lives and those of their families by taking such dangerous routes to the UK, and to take back control of our borders. We are committed to strengthening our border security by ensuring that everyone wishing to travel to the UK, except British and Irish citizens, seeks permission to do so before travelling.

The clause introduces new arrival offences to deal with the issue. I reassure the Committee that we do not seek to criminalise genuine refugees who come to the UK to seek asylum, but safe and legal routes can be used for that purpose, without risking lives.

Government amendments 111 to 117 and 125 are consequential amendments; they ensure that where the clause and schedule 5 cross-reference to the offence of arrival in the UK without the required entry clearance, they also refer to the new offence.

The Minister has slightly skirted over the most fundamental point in all this, which is that lots of refugees who come to seek asylum in this country will be criminalised by the provision—a good 60% or 70%, even according to the Home Office’s explanatory memorandum. How can he possibly feel comfortable about criminalising them through an offence that could see them imprisoned for up to four years?

Clearly, any such cases would be referred to the Crown Prosecution Service or the relevant prosecuting authorities. They must make a judgment as to whether it is in the public interest to pursue such a prosecution. I will say more about that in due course, but it is important to highlight that point.

I am grateful to the Minister for giving way, but he may want to reflect on this now, although he might have been about to do so in due course. He referred to the CPS, but in July the CPS confirmed that, following an agreement made by prosecutors, police, Border Force, the National Crime Agency and the Home Office, it will no longer prosecute illegal entry.

As I said—I will come on to this in more detail—it is for the prosecuting authorities to decide whether it is in the public interest to pursue a particular case.

On amendment 188, I reassure the hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East that consideration of the issues he has listed is already taking place. I fully recognise that, while immigration offences are a reserved matter, the devolved Administrations in Scotland and Northern Ireland have responsibility for their criminal justice systems, and decisions on prosecutions are independently taken by the Crown Office and Procurator Fiscal Service in Scotland and the Public Prosecution Service in Northern Ireland.

My officials have been in contact with the Scottish Government criminal justice division, the Crown Office and Procurator Fiscal Service and the Department of Justice Northern Ireland, and have shared information about potential impacts and costings. The amendment would add an extra and unnecessary layer of parliamentary scrutiny to a process that is under way at official level. It would also have a critical impact on the commencement of the clause; it would add delay, but we need the measures in place to respond to the expected surge in dangerous small boat crossings when the weather improves in spring next year. I urge the hon. Member not to press his amendment.

On clause 37, the UK is experiencing a very serious problem of small boat arrivals; illegal migrants are crossing from the continent in small craft that are often equipped with only an outboard motor. They are unseaworthy and wholly unsuitable for a crossing of a minimum of 21 miles across some of the busiest sea lanes in the world. Many of the vessels break down and are intercepted by UK personnel on the grounds of safety of life at sea. The rescued migrants, including pregnant women and children, are generally brought to Dover.

The maximum sentence of six months does not reflect the seriousness of the offence of entering in breach of a deportation order. Increasing the maximum sentence to five years will disrupt the activities of foreign national offenders involved in criminal networks, including organised immigration crime.

The current offence of knowingly entering the UK without leave is ineffective and does not provide a sufficient deterrent to those wishing to enter the UK illegally by small boat. We accordingly propose increasing the maximum sentence from six months’ to four years’ imprisonment.

We also intend to create a new offence of arriving in the UK without an entry clearance where that is required. While some migrants seek to evade immigration control, for example by landing on a deserted beach, many more now arrive in the UK after being rescued at sea. It would not be right, and would be perverse, to have to let migrants take the risk of completing their journey without assistance, and of landing at a small beach, rather than rescuing them at sea, just because under current legislation, the act of intercepting them and bringing them to the UK could cast doubt on whether the migrants entered unlawfully.

It is worth repeating that we are not seeking to criminalise those who come to the UK genuinely to seek asylum, and who use safe and legal routes to do so. We will be targeting for prosecution those migrants in cases where there are aggravating factors—where they caused danger to themselves or others, including rescuers; where they caused severe disruption to services such as shipping routes, or the closure of the channel tunnel; or where they are criminals who have previously been deported from the UK or persons who have been repeatedly removed as failed asylum seekers. The increased prison penalty will allow appropriate sentences to be given to reflect the seriousness of this behaviour.

The Minister is at his most reassuring when he tells us, basically, “Don’t worry; we are not really going to apply the full provisions of the clause.” The key point is that none of this is in the Bill. I want to remove these measures altogether, but could we at least put some of the restrictions in the Bill? Otherwise, we are putting in statute a law that criminalises the overwhelming majority of asylum seekers coming into the United Kingdom.

I hope I will be able to provide the hon. Member with further reassurance by going on to say that, of course, the decision on whether prosecution is in the public interest rests with the Crown Prosecution Service in England and Wales, the Crown Office and Procurator Fiscal Service in Scotland and the Public Prosecution Service in Northern Ireland. In many cases, we will continue to seek the illegal migrant’s removal, rather than their prosecution.

The amended and new offences will apply to all types of unlawful entry and arrival, rather than being limited to entry via small boats. We should not limit our response to the evasion of proper immigration procedures and controls depending on the method of entry employed. Doing that would risk causing displacement to another, potentially equally dangerous, route. The offences will therefore also apply equally to other means of evasion, such as concealment in a lorry.

We are also amending the offence of assisting unlawful immigration to the UK in breach of immigration law, known as facilitation, to include arrival in the UK. That will ensure that the offence of facilitation also applies to those assisting the new offence of arriving without a valid entry clearance.

Clause 60 is one of the six clauses drafted as marker clauses at introduction. As indicated in the explanatory notes and memorandum for the Delegated Powers and Regulatory Reform Committee, it was drafted as such in the interest of transparency—to make clear our intention of bringing forward substantive provisions on electronic travel authorisations. New clauses 21 and 22 are intended to replace clause 60.

Amendment 120 ensures the provisions in new clauses 21 and 22 can be extended to the Crown dependencies by Order in Council, should they wish to introduce their own electronic travel authorisation scheme by amending the Bill’s extent provisions in clause 69. As I noted earlier, the Government are committed to strengthening the security of our border by ensuring that everyone who wishes to travel to the UK—except British and Irish citizens—has permission to do so before they travel. The Government will introduce an electronic travel authorisation scheme—the ETA scheme—to close the current gap in advance permissions, and to enhance our ability to prevent the travel of those who pose a threat to the UK.

At present, non-visa nationals coming to the UK for up to six months as visitors, and in limited other categories, can travel to the UK solely on the basis of their nationality, evidenced by their passport or other travel document. That information is sent to the Government by the majority of carriers as advance passenger information shortly before the individual embarks on their journey. The ETA scheme will allow security checks to be conducted and more informed decisions to be taken at an earlier stage in advance of travel. The introduction of an ETA scheme is in line with the approach that many of our international partners have taken to border security, including the United States, Canada, New Zealand and Australia.

New clause 21 would insert proposed new section 11C into part 1 of the Immigration Act 1971, which will allow the Secretary of State to make immigration rules to administer an ETA scheme. Those rules will include, but are not limited to, who must apply for an ETA, what that application must contain, how long an ETA will be valid for, and when an ETA should be granted, refused, varied or cancelled.

Additionally, new clause 21 also inserts proposed new section 11D into part 1 of the 1971 Act, allowing the Secretary of State to administer an electronic travel authorisation scheme on behalf of a Crown dependency, if requested to do so, in the event that a Crown dependency chooses to operate its own ETA scheme. It also enables the Secretary of State to make regulations to recognise an electronic travel authorisation issued by a Crown dependency as valid for travel to the UK, in line with the UK’s commitment to maintaining the integrity and security of the common travel area.

To enforce the ETA scheme, new clause 22 builds on the existing carriers’ liability scheme by incentivising carriers to check prior to boarding that a traveller holds an ETA—or another form of permission, such as a visa in electronic form—or risk a civil penalty. Such checks are necessary to enforce our requirement for everyone, except British and Irish nationals, to get permission to come to the UK before they travel.

At present, carriers are incentivised to check for the presence of a valid immigration document that satisfactorily establishes identity and nationality or citizenship, and any visa required. New clause 22 incentivises carriers to check that all passengers have the appropriate permission— including by checking with the Home Office, if that permission may be held only in digital form—or risk a penalty. The new clause also provides a statutory excuse against the imposition of a penalty, to cater for circumstances where it has not been possible for the carrier to check for the presence of an ETA, or another form of permission, through no fault of their own.

I will call Mr McDonald first, because he has tabled an amendment that is in this group.

Thank you very much indeed, Sir Roger.

I will speak in support of amendment 188 and against the clause. To respond to what the Minister said, and to build on one of my interventions, the Committee has to debate the clause as it appears before us, not as the Minister envisages it being implemented. As it stands, the clause is one of the Bill’s low points, as it places in an already bleak Bill an extraordinarily broad criminal offence that will criminalise pretty much everyone who seeks asylum—many of whom are refugees—as well as survivors of trafficking. That will help to strengthen the control that traffickers have over their victims, rather than helping those victims.

It is unbelievable that should a Syrian, a Uyghur, a persecuted Christian convert, an Afghan interpreter, or a victim of the horrific crime of trafficking arrive seeking our protection, instead of being championed, they would be prosecuted and imprisoned by the regime put in place by the clause. Taken alongside the removal of the protections in the convention for asylum seekers in clause 34, this is a hugely retrograde step. It is also, again, utterly against the spirit and the letter of the refugee convention and the convention on trafficking, an issue that the Minister did not touch on.

Notwithstanding what I have already said about the prosecution services taking a case-by-case approach, the hon. Member inquired about aggravating factors not being added to the Bill. The factors for prosecution when someone comes to the UK may change depending on the circumstances. We need to be able to react flexibly, so putting the factors in primary legislation would be too restrictive. I return to the point that I would expect prosecution services to look carefully at individual cases and to take all factors into account, so I would not accept his depiction.

I take a small crumb of comfort from the fact that the Minister does seem to be evidencing some discomfort about how the clause is drafted. He is trying to reassure us by saying it will not be implemented as it is set out now, but that is not satisfactory. We parliamentarians are concerned with what is in the Bill. It is fine for the Minister to say that; I do not know how long he will be in office—hopefully many years—but there will be other Immigration Ministers to come, and they may take a completely different approach.

It may be challenging to put restrictions or a statutory defence in the Bill, but the Minister has to try. He must try much harder. We cannot leave such a broad criminal offence in the Bill simply on the basis of reassurances. I am absolutely of the view that the measures should be removed—for the reasons relating to the refugee convention, and that is even before we get to the ethical considerations and the impact the measures will have on asylum seekers and trafficking victims.

What the clause actually says will make it infinitely harder for refugees or trafficking survivors who eventually make it all the way through the horrendous new system to integrate, put down roots and rebuild their lives. There are questions about how the measures would operate in practice; they raise the spectre of families being separated on arrival if one member is accused of committing this criminal offence. How much harder will it be for somebody to get a job in due course if they have this criminal conviction and spend years in prison? UK citizenship will essentially be near impossible for them.

As we have heard repeatedly, particularly from the hon. Member for Sheffield Central, all of this will achieve absolutely nothing. As Tony Smith, the borders expert, told us in the Committee’s evidence sessions, use of the criminal justice system just has not worked. For smugglers and traffickers, it absolutely has, but not for their victims.

I have a question on scope. Will the Minister clarify whether someone who arrives with an entry clearance that is invalidated because it turns out that it was applied for on a false basis—for example, somebody who has secured a visit visa, when they are arriving to claim asylum—will have committed a criminal offence under the clause, because the leave to enter was obtained fraudulently? From the wording, I guess that they will, but it would be useful to hear the Minister’s clarification.

On amendment 110, we broadly support the ETA regime and encouraging carriers to ensure that the conditions are met, but we are still not absolutely convinced of the need for yet another criminal offence. Why can the remedy for turning up without an ETA not simply be to require that person to leave, or to send them back again? What group of people are being targeted here who are not already impacted by one of the other offences?

Even the wording on the state of knowledge of the person committing the offence raises questions. It says the person must “knowingly” arrive here without the ETA or entry clearance. The required knowledge seems to relate only to knowledge of arrival without the ETA or entry clearance, and not knowledge of whether he required that ETA or entry clearance. If we put that together with the fact that the measure will apply to people arriving in the UK rather than entering it, there is a danger that this will cover people who rock up in ignorance at airport border security, rather than anyone who is trying to do anything sinister. Simple ignorance and a mistake could lead to years in prison. I might be wrong about that; it would be useful to have clarity. Why is a criminal offence necessary?

Our amendment 188 was tabled to prompt discussion about consultation with the devolved criminal justice systems and the personnel in Scotland and Northern Ireland. Again, it gives me some comfort that the Minister has had some of these discussions—at least, the Home Office has—and there has been the important recognition that decisions about public interest will be for devolved prosecutors. It is important to acknowledge that, and it is welcome.

In short, as clause 37 stands, it sets out a framework for arresting, prosecuting and imprisoning several thousand asylum seekers, refugees and trafficking victims every year. Is there an estimate of what the cost will be, regardless of how it is implemented in practice? What will that do the backlogs in courts struggling to recover from covid, and what would be the impact on prison capacity? Putting all that to one side, the fundamental issue is the impact on asylum seekers, refugees and trafficking victims. The clause, as drafted, will compound the already slow and needlessly painful process of securing protection and add a criminal sanction. It is going to achieve absolutely nothing except more human misery.

It will not be a shock to hon. Members that I fully support clause 37, which has absolutely the right intention. Ultimately, as we have discussed—we have heard the evidence from His Excellency the Australian high commissioner—if we are to deter people from making this dangerous journey, we should be making sure that the deterrents are strong enough.

We have part of that already: if somebody enters this country illegally, that obviously counts against their asylum claim. Now we are saying that the right thing is that if someone chooses to enter this country illegally, that could lead to a criminal prosecution with a strong prison sentence. That is exactly what the people of Stoke-on-Trent North, Kidsgrove and Talke want to hear at the end of the day, because 73% voted to leave and wanted to make sure that we took back control of our borders. We are a part of the asylum dispersal scheme already, with over 1,000 currently within the city region. We are happy to welcome them, but we want to see a change.

For example, we would love other parts of Scotland, not just Glasgow, to take on asylum seekers as part of the asylum dispersal scheme. Obviously, Glasgow is fully supportive, but other places voluntarily choose not to take part. We would like Labour-run Islington Borough Council to participate: by the end of 2020, it had not taken a single refugee.

The city of Stoke-on-Trent is expected to bear the burden of a large load and is taken advantage of, because ultimately we are an area that has been forgotten. The Labour party is still checking its Ordnance Survey map to find where the city of Stoke-on-Trent actually is—Captain Hindsight sent out a search party, and it got stuck in North Islington having chai latte and avocado on toast. Meanwhile, Conservative Members are more interested in delivering on the people’s priorities. We are delivering on that in making sure that this provision is strong.

It is a wonderful image, but there is only one thing I cannot bear to eat and that is avocado—I just cannot bear it.

The hon. Member is talking about the good people of Stoke-on-Trent, but I remember that they voted for a manifesto, which got him elected, that included not cutting our armed forces and not cutting our aid. Can he explain to the people of Stoke-on-Trent why his party has done exactly that, which leads to more people making the crossing?

Order. No, I am afraid the hon. Gentleman cannot do so in the context of this Bill. It would not be in order.

Thank you, Sir Roger. I would love to find a way of answering that question, and by the way the people of Stoke-on-Trent would love to see the foreign aid budget cut entirely, and I fully support that as a long-term measure—

Order. The same admonition applies to the hon. Gentleman. Can he please stay within the confines of the Bill?

I appreciate your patience, Sir Roger, and of course I will.

I will wrap up quickly by saying that clause 37 tells people that if they enter this country illegally, it will count against them. That is exactly what we should be doing, and I look forward to seeing that progress. Ultimately, we have illegal economic migrants making the journey across the English channel from Calais. The French need to do more, and the threat from the Home Secretary of not sending the additional £54 million has clearly worked—suddenly, I have never seen so many videos and photographs of French activity on their shores to try to prevent the small boats from leaving. It is about time that the French stood up and did what was right, because it is British taxpayers’ money that is funding the additional support they need.

This is about stopping the illegal economic migrants who are funding criminality by putting money into the hands of criminal people-smuggling gangs. That is probably funding wider criminality in the United Kingdom, particularly drugs in our community, and therefore it is right that we stop them. Let us not forget that 70% of those making these illegal crossings are men aged between 18 and 35, whereas we want to be protecting women and children. We have done that in Afghanistan and with Syria: the safe and legal routes are the appropriate way of doing it.

Clause 37 is saying to those illegal economic migrants that we need to make sure they go through those safe and legal routes, or, as Baroness Scotland—the former Labour Minister, back in the years when the Labour party was electable—said, they should be claiming asylum in the first safe country they reach. There is nothing wrong with Greece, Italy or France. I am more than happy to holiday there, and I am sure anyone in mainland Europe would be more than happy to make such a place their home.

It is very interesting to follow the hon. Member for Stoke-on-Trent North, but I will not rise to the bait.

Clause 37 is one of the most controversial new provisions in part 3 of the Bill. It expands the existing offence of illegal entry so that it encompasses arrival in the UK without a valid entry clearance. It also increases the maximum penalty for those entering without leave or arriving without a valid entry clearance from six months to four years’ imprisonment. I have a question for the Minister. On Tuesday we debated clause 35, which reduced the penalty for a particularly serious offence from two years’ imprisonment to one year. Is it the Government’s intention to make entry a particularly serious offence for the purposes of the Bill? That is what the clause could do.

In effect, the Government’s proposals criminalise the act of seeking asylum in the UK. The Opposition wholeheartedly oppose the measures and urge the Government to consider the following facts. First, clause 37 breaches article 31 of the refugee convention, which prohibits penalisation for irregular entry or stay when people are seeking asylum. The new offence of unlawful arrival is designed to—and will in practice—penalise refugees based on their mode of travel. That goes against everything that the convention stands for.

Article 31 of the refugee convention says that states

“shall not impose penalties, on account of their illegal entry or presence, on refugees…where their life or freedom was threatened…provided they present themselves without delay…and show good cause for their illegal entry or presence.”

Clause 37 clearly violates the non-penalisation clause in the convention and is therefore in breach of the UK’s obligations under international law.

When taken in combination with clause 12, which excludes UK territorial seas from being considered a place of claim, clause 37 has significant implications for access to protection and the risk of refoulement. Under the proposed changes, those who arrive irregularly, including through a safe third country, could be prosecuted and imprisoned for between one and four years. That is because it is not possible to apply for entry clearance for the purpose of claiming asylum in the UK, and yet an asylum seeker must be physically in the UK to make a claim. Bearing that in mind, 90% of those granted asylum in the United Kingdom are from countries whose nationals must hold entry clearance to enter the UK.

This is more a point of order than an intervention, Sir Roger. I have been contacted with a correction to the record: Islington has actually taken refugees, contrary to what the hon. Member for Stoke-on-Trent North said. Does my hon. Friend congratulate Islington on its record in taking refugees and asylum seekers, contrary to the inaccurate—I was going to say “deceitful”, but I am not sure whether that is parliamentary language—and I am sure accidentally misleading comments from the hon. Gentleman?

I congratulate all local authorities that take asylum seekers. All local authorities should take their fair share—not just in Stoke-on-Trent or Islington, but those across the country.

In practice, someone with a well-founded fear of persecution arriving in the UK intending to claim asylum will be committing a criminal offence if clause 37 is implemented. Even if they have a visa, they will be committing an offence because their intention to claim asylum will be contrary to the intention for which the entry clearance or visa was issued. We have heard the example of students: if a student entered on a student visa and claimed asylum in the UK, they would be in breach of that visa. The clause will impact tens of thousands of people, leading to people with legitimate cases serving time in prison for these new offences, followed by continued immigration detention under immigration powers. In this context, the Government are proposing to criminalise asylum-seekers based on their journey—which, in all likelihood, was the only viable route available to them.

Secondly, the proposals are unworkable. While criminalising those we should be seeking to protect, the Bill also fails to introduce safe and legal routes to claim asylum. Clause 37 comes amid a glaring lack of lawful routes for claiming asylum in the UK. Although we welcome things like the resettlement programmes, they are not a solution for those claiming asylum because they are so limited. They cover those who are already recognised as having the protection they need.

We strongly believe that those in need of international protection who reach the UK’s shores should not be criminalised. Under the Government’s proposals they will be because they have pursued the only viable route available to them. The fact that an individual is proved to be a genuine refugee and had no option but to arrive in the UK will provide them with no statutory defence.

However, it is “highly unlikely” that these provisions would be “enforced and prosecuted”. Those are not my words, but those of the Law Society. The Crown Prosecution Service has provided advice to prosecutors not to prosecute asylum seekers who are not involved in any criminal activity other than illegal entry, because they could

“usually be better dealt with by removal”.

It is therefore unclear whether these provisions are even enforceable. As the Law Society points out,

“Passing unenforceable laws undermines the rule of law and contributes to legal uncertainty, for no discernible gain.”

As I have explained, the proposals are inhumane, unenforceable and break international law. They must achieve something, surely. But no, they also fail to achieve the Government’s reported aims. The proposals in parts 2 and 3 of the Bill will push refugees into the hands of the trafficking gangs the Government say they want to stop. They will increase the number of journeys made by unsafe routes, allowing smugglers to charge more for yet more dangerous journeys.

The Bill will not, as the Government have claimed, break the business model of smuggling gangs; it may even help them. It is shocking that there is not a word in the legislation about increasing safe and legal routes—something that would break the business model of the smuggling gangs and prevent unsafe journeys.

Finally, criminalising people in this way is incredibly costly and resource intensive. The Refugee Council estimates that it could cost up to £400 million more per year than the current system, or up to £1.65 billion for four years of custody. The cost of imprisoning people who are seeking asylum in this way will cost a staggering five times more than accommodating them in the asylum support system. Instead of investing in making the asylum system fairer and more effective, the Government aim to waste taxpayers’ money punishing and detaining people who need help.

The Opposition oppose clause 37 in the strongest terms. The Government’s claim to be pursuing a firm and fair immigration policy is not borne out by the Bill. Many of its provisions are neither firm nor fair; they are flawed. If implemented, clause 37 will punish people based on how they arrive in the UK, criminalise those we should be seeking to protect and lead to vulnerable people with a right to protection in the UK being criminalised for pursuing the only option available to them. It will impact the most vulnerable—people who are desperately in need of international protection, from Syrians fleeing war to persecuted minority groups such as Uyghurs and Christians.

I note that there are currently 124 Hongkongers in our asylum system who are under 24 and do not qualify for the British national overseas visa. Will the Minister clarify whether those Hongkongers, depending on how they arrived, would also be criminalised for having pro-democracy views in China? That would be the effect of this legislation.

I have one other question for the Minister. Is it the Government’s intention to separate families at the border? If families arrive with children and the parents are detained, will the children be put into the UK care system?

I give notice that we will vote against clause 37.

I will pick up on a few points in concluding our deliberations on the clause.

The hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East spoke about costs. We are working with the various UK criminal justice systems and we have shared estimates of costs at official level as part of operationalising the plan. He sought further clarity about that and I hope that has provided reassurance. He also asked about entry clearance invalidation. If the leave is valid on arrival and is subsequently cancelled, no offence would have been committed, but if it is invalidated prior to arrival and the person knows that, the offence would have been committed.

Finally, I reiterate the point about the application of offences in this area. It bears repeating that we are targeting for prosecution those migrants for whom aggravating factors are involved—for example, those causing danger to themselves or others, including rescuers; those causing severe disruption to services such as shipping routes or closure of the channel tunnel; or those who have previously been removed from the UK as failed asylum seekers. The increased prison penalty will allow appropriate sentences to be given to reflect the seriousness of this behaviour.

Has the Minister done an analysis of whether there are already criminal offences that cover the scenarios he has just outlined?

We believe that this measure is required so that we can take appropriate action to deal with the sorts of circumstances I have just set out. I have made that clear on several occasions, and Members will have heard what I have said. I fully expect that that will continue to be the case, and that will be made clear at every opportunity.

I go back to the point that prosecuting services must judge cases on a case-by-case basis. They must of course take all the factors relevant to the individual case into account in deciding whether to proceed with it. They must also decide whether that is in the public interest. That is a very clear and established position, and will continue to be the case.

I am comfortable that the proposed approach is the right one to take in addressing the issues I have set out, which are particularly egregious and concerning and which require further action.

Amendment 110 agreed to.

Amendments made: 111, in clause 37, page 36, line 5, leave out “or (C1)” and insert “, (C1) or (C1A)”.

This amendment is consequential on Amendment 110.

Amendment 112, in clause 37, page 36, line 19, leave out “or (C1)” and insert “, (C1) or (C1A)”.

This amendment is consequential on Amendment 110.

Amendment 113, in clause 37, page 36, line 29, after “(C1)” insert “, (C1A)”.

This amendment is consequential on Amendment 110.

Amendment 114, in clause 37, page 37, line 2, after “(C1)” insert “, (C1A)”.

This amendment is consequential on Amendment 110.

Amendment 115, in clause 37, page 37, line 4, after “(C1)” insert “, (C1A)”.

This amendment is consequential on Amendment 110.

Amendment 116, in clause 37, page 37, line 12, after “(C1)” insert “, (C1A)”.

This amendment is consequential on Amendment 110.

Amendment 117, in clause 37, page 37, line 15, after “(C1)” insert “, (C1A)”. —(Tom Pursglove.)

This amendment is consequential on Amendment 110.

Question put, That clause 37, as amended, stand part of the Bill.

Clause 37, as amended, ordered to stand part of the Bill.

Clause 38

Assisting unlawful immigration or asylum seeker

I beg to move amendment 33, in clause 38, page 37, line 22, leave out subsection (2).

This amendment deletes the subsection which removes “and for gain” from section 25A(1)(a) of the Immigration Act 1971. Currently, under section 25A(1)(a), a person commits an offence if the person knowingly “and for gain” facilitates the arrival in the UK of an individual who the person knows, or has reasonable cause to believe, is an asylum seeker. This amendment preserves the status quo.

Following on from clause 37, clause 38 proposes to remove the words “and for gain” from section 25A of the Immigration Act 1971. Presently, under section 25A(1), it is an offence for a person knowingly and for gain to facilitate the arrival or entry, or attempted arrival or entry, of an asylum seeker into the UK. Clause 38 therefore seeks to broaden the section 25A offence to allow the Home Office to charge more people for facilitating the arrival of asylum seekers to the UK. Under the clause, someone acting purely altruistically to help an asylum seeker would be committing a criminal offence. It extends who could be convicted of the offence of knowingly facilitating the entry to the UK of an asylum seeker to individuals acting out of compassion for other people for no financial benefit.

As the Committee will know, the clause has received widespread criticism, and rightly so. I am not, for example, the first to observe that clause 38 would almost certainly have criminalised and prosecuted the likes of Sir Nicholas Winton for his life-saving actions in rescuing hundreds of children on the Kindertransport in 1939. Indeed, in July, when the Bill passed its Second Reading, many highlighted that clause 38 is so draconian that it could criminalise the Royal National Lifeboat Institution and its volunteers for helping those in danger at sea. If they were deemed to be facilitating asylum seekers’ arrival in the UK, they could face life imprisonment—life in prison for saving lives! I ask the Minister and this Committee: when did saving lives become a criminal offence?

These measures will criminalise friends, family members and individuals with humanitarian motives. The Minister’s predecessor, the hon. Member for Croydon South (Chris Philp), attempted to provide reassurance on Second Reading by claiming that the Government have

“no intention in this Bill to criminalise bona fide, genuine rescue operations”.—[Official Report, 20 July 2021; Vol. 699, c. 915.]

However, the Bill as it is currently written does not provide any similarly explicit reassurances.

The Refugee and Migrant Children’s Consortium is especially concerned about the clause and its impact on people who provide assistance to vulnerable young people seeking asylum. It is concerned that such measures must in no way serve to deter people from saving the lives of babies and children at sea, with tragic examples demonstrating the cost of there being no safe and legal routes to the UK for families fleeing persecution. The Opposition have repeatedly drawn attention to that in Committee.

For asylum seekers who assist each other in coming to the UK to claim asylum, the implications of this measure are incredibly serious. Clause 38 increases the penalty for this offence to life imprisonment. These increased sentences, as raised by Zoe Gardner of the Joint Council for the Welfare of Immigrants in one of the Committee’s evidence sessions, risk being used to prosecute asylum seekers themselves, not the smuggling gangs and members of international criminal gangs they are intended for.

For example, according to the National Crime Agency, there is evidence that asylum seekers can often be forced to carry out work without pay for smuggling gangs. In an investigation by The Independent newspaper, migrants reported traffickers taking their money for crossings to the UK, only to then demand that they work for free in order to make the journey, and that work includes being forced to steer vessels during dangerous crossings.

In The Independent investigation, one Yemeni man demonstrated how traffickers are aware that they can criminalise asylum seekers and refugees in this way. He described the power this gives them, in that a smuggler

“told me, ‘I can kill you here, no one will identify me and I will escape.’ He took videos of me and of my friends while we were preparing boats for other journeys. He said, ‘I could now accuse you of being a smuggler, you could be in jail.’ ”

This proves how the persecuted can be coerced and controlled by these criminals, and will in turn in effect become criminals themselves under the punitive policy making of the Home Office.

Of course, the prosecution of victims for the crimes of their perpetrators is something that the refugee convention, drafted 70 years ago, considers. Article 31 of the convention is intended to protect refugees from prosecution for irregular entry because refugees are, by definition, forced into dangerous and risky situations during their flight. This is something the Government are deliberately trying to wash their hands of—and to do what? To pursue a reckless policy that will prosecute those who are demonstrably not criminals, but genuine asylum seekers and refugees.

It is worth considering whether clause 38 is indeed workable. As we know, clause 37 is likely to be unenforceable and clause 38 is equally, if not more, outrageous. In relation to our international law obligations, there does not appear to be any consideration of how this clause and the new expanded criminal offences in clauses 37 and 38 will be compatible with the duty of a ship to attempt to rescue persons in danger at sea. For example, article 98(1) of the United Nations convention of the law of the sea provides that every state shall require ships

“to render assistance to any person found at sea in danger of being lost”,

and

“to proceed with all possible speed to the rescue of persons in distress”.

More interestingly in relation to clause 38, paragraph 2.1.10 of the annex to the international convention on maritime search and rescue 1979—the SAR convention—explicitly obliges

“that assistance be provided to any person in distress at sea. They shall do so regardless of the nationality or status of such a person or the circumstances in which that person is found.”

With these rules in mind, it appears that the UK cannot legally prohibit vessels from rescuing asylum seekers at sea, and I urge the Minister to consider the Opposition’s amendment 33, which will preserve the status quo.

Our amendment will delete the subsection that removes “and for gain” from section 25A(1)(a) of the Immigration Act 1971. This will ensure that those who assist persons for gain will be prosecuted, while genuine asylum seekers and refugees are protected. It will bring the Bill in line with the advice provided by the Crown Prosecution Service in July, which confirmed that

“in cases involving the use of a boat where the sole intention is to be intercepted by BF at sea and brought into port for asylum claims to be made, no breach of immigration law will take place…The same applies where the intention is to sail the boat to a designated port of entry in order to claim asylum.”

In 2019, the Home Secretary vowed to make dangerous channel crossings unviable, but numbers have only increased since then. To distract from the Government’s failure, the Bill and measures in parts 2 and 3 have been introduced under the entirely baseless premise that people seeking asylum can be deterred from doing so. In reality, the Bill will not deter people from seeking asylum. It will, however, line the pockets of people-smugglers and push genuine asylum seekers and refugees into their hands and into increasingly dangerous journeys and complicated routes.

The Opposition are worried that, if measures in clauses 37 and 38 are enforced, the Government will let vulnerable people with a genuine need for protection be punished, rather than the traffickers, people-smugglers and organised criminal gangs who push them into these dangerous crossings. Targeting them takes international co-operation, not washing our hands of our international obligations under international human rights and maritime law.

I wish briefly to associate myself with everything the shadow Minister just said; he covered pretty much all the ground that I would have covered. This ridiculous clause tramples all over our international obligations. I suspect what will happen today, as happened on Second Reading, is that we will be reassured that the clause will be used in a certain way so that the RNLI and others will not be targeted. Maybe I am wrong, which would be good, but the scope of the clause is extraordinary.

If the defence, as it was on Second Reading, is, “We’re not going to go after these people,” that is not good enough. You have to put that on the face of the Bill. We cannot create criminal offences and ask folk to go about breaching those laws and committing crimes in the hope that the Government keep their promise that they will not be prosecuted. It is a fundamental rule of legal principle—[Interruption.] The Minister is shaking his head: if that is not the defence, I look forward to hearing what is.

I am grateful to the hon. Members for Enfield, Southgate and for Halifax for providing the opportunity to explain the difficulties involved in securing convictions for an odious crime that targets and exploits vulnerable people and allows organised criminals to thrive.

Gain can be obtained in many ways, but cannot always be proved to the evidential standard required for a successful prosecution: for example, money transfers made by other family members abroad or made cash in hand, promises of servitude by the asylum seeker or others, or the provision of assistance in the facilitation act, such as by avoiding paying a fee by agreeing to steer a small boat. It is right that all available evidence should be considered and all relevant behaviour taken into account in investigating a serious offence. We are, at present, limited by what is an unrealistic evidential requirement that does not take account of the reality of how international organised crime operates.

In amending the offence, we are mindful of the excellent work of those acting from humanitarian motives both now and in the past. I understand fully hon. Members’ concerns that the wrong people will be drawn into the investigative and judicial process. We are therefore retaining the defence available to organisations whose aim is to assist asylum seekers and who do not charge for their services. I also recognise the bravery of volunteers working for the RNLI and lifeboat crews who undertake vital work in protecting lives at sea.

I will set out my intention to amend this clause on Report to ensure that organisations such as the RNLI, those directed by Her Majesty’s Coastguard, and individuals who fulfil their obligations in rescuing those in distress at sea may continue as they do now. We also intend to ensure that this provision does not prevent those responsible for vessels from complying with their obligations if they discover stowaways on board as they journey to the UK. I understand that some members of the Committee would prefer to have those amendments ready to debate now, but the issues are complex and we must ensure that we do not inadvertently provide loopholes to be exploited by criminal gangs who will look for any means to avoid prosecution.

The effect of amendment 33 is that, by retaining the constraint and having to prove the offence was committed again, we will only rarely be able to respond to and deter those committing the offence and will continue to place an unrealistic burden on our law enforcement officers and prosecutors. I therefore ask the hon. Gentleman to withdraw the amendment, although I hope he will be reassured that I intend to table on Report an amendment to address the crux of the issues that he raised. I hope that hon. Members across the House will feel able to support the amendment that I intend to table.

I heard what the Minister said, but Second Reading was back in July and there has been plenty of time to table an amendment. What could be achieved by his amendment can easily be achieved by voting for this one, so I wish to press our amendment.

Question put, That the amendment be made.

I beg to move amendment 162, in clause 38, page 37, line 23, at end insert—

‘(3) In section 25A(3) of the Immigration Act 1971 (helping asylum seeker to enter United Kingdom), for paragraph (a) substitute—

“(a) aims to—

(i) protect lives at sea, or

(ii) assist asylum-seekers; and””

This amendment would add people working on behalf of organisations that aim to protect lives at sea to those who are exempt for prosecution for helping someone seeking asylum to enter the UK, as long as those organisations do not charge for their services.

In moving this amendment, I remind colleagues of my registered interest in respect of the excellent support that I get from RAMP––the Refugee, Asylum and Migration Policy Project––and especially from Heather Staff. I also thank the British Red Cross for its work, with a personal thank you to John Featonby for his advice and support to me and my team.

I guess that the amendment tries to help the Government, because the Minister says that he wants to table an amendment on Report. If he accepts this one, he may not need to. He called me a crafty parliamentarian last week, but there is nothing crafty about this. This is a genuine offer of a ready-made amendment that he can accept. It is a humanitarian exemption that would add people working on behalf of organisations that aim to protect life at sea to those exempt from prosecution for helping someone avoid drowning, as long as those organisations do not charge for their services and are not profit-making. It is exactly along the lines he has just outlined.

Sadly, as things stand, my amendment is necessary because this clause is deeply un-British. It denies our traditions and our heritage––our Christian heritage––of not walking on by. We have touched on Islington, which I believe has 137 asylum-seeking refugees and is a borough sanctuary. My own borough of Southwark had 1,022 in June according to Home Office figures. That number has since escalated massively because of the humiliation of our withdrawal from Afghanistan. But we do not whinge in Southwark. We do not whine about our Christian commitment and moral duty to the people we are supporting. We do not mind our international obligations being upheld. We are proud to be supportive of those in need.

It is extraordinary that the Bill, and this clause in particular, seeks to make UK citizens bad Samaritans. Without my amendment, the clause requires turning a blind eye. It requires people to watch other people die. It is a sickening extension of the culture war. It is in breach of our international obligations and law. The proposed changes risk UK-flagged vessels being pushed into a Kafkaesque Catch-22: assist those in distress and risk criminal liability or do not assist, breach duties of international law and witness the deaths of other people. This risks criminalising voluntary assistance while failing to provide for a humanitarian exemption.

My amendment presses the Government for such an exemption, along the lines that the Minister outlined and says that he wants. Not least, it would honour our international commitments and protect the RNLI and its amazing work across our country. From this Room, we can see the Thames. The busiest RNLI station in the country is here in London. Since 2002, the RNLI has saved more than 300 lives in the Thames, including in my constituency.

The RNLI saved 372 people from drowning in our waters in 2019, and more than 143,000 people since its creation in 1824. That is an astonishing achievement that we should be proud of and support. It is also astonishing that in its 200-year history, it has never been so attacked or vilified, including by the far right, and inflamed by Government narrative and rhetoric. It is with some regret that we seek to amend clause 38, to spell out that those who do their duty and protect lives at sea and in our waters, including when they need to rescue asylum seekers, are not penalised and do not face prison sentences.

The Government say that they want to stop smuggling and penalise smugglers, but if that was the case there would be no need to remove the words “for gain”. Instead, with one swipe, the Government have intentionally—or perhaps not, if anyone wants to be more generous than I—endangered the commitment to save life at sea, here and at other points, putting legislation at odds with our national maritime commitments. It is also deeply dehumanising, in a way that no UK Government have ever systematically attempted in the past. We have only ever seen such things abroad—I do not think I need to list all the countries involved—with catastrophic consequences, in time, for those involved.

To emphasise the humanitarian issues, I want to quote some of those frontline RNLI crew members in the English channel, who put it like this:

“I think what you realise when you get to the migrant boats, when you get to these dinghies, I think what hits you more than anything, irrespective of your own thoughts on this situation is the desperation that they must be in to put themselves in this situation and then you look at them as human beings irrespective of where they have come from, human beings that are in a state of distress that need rescuing, so every other thought goes out of your mind.”

Another said:

“While there are people in small boats in the channel, there is danger. My motivation is to stop anyone drowning and washing up on the beaches. I don’t care what time of day or night it is, a life is a life, and I will continue to give my best to the RNLI to protect as many as we can. I’d like to think that the crew all feel the same. You have to put the politics of it to one side; they are human beings in distress, and they need us. I am grateful that the RNLI support us and that we don’t discriminate against anyone. I am proud of the work that we do and the lives that we have saved. I want us to shout about what we do and the care and empathy that we show.”

He goes on:

“This country is having a crisis of empathy and I love that the RNLI are standing up for our morals and showing what I truly believe is the Britain we should all be proud of.”

That is the Britain that I am also proud of. I believe that the Government have stoked a filthy culture war, and it has got filthy in our waters—due not just to the sewage that they are dumping in it, but the hate that they provoke and the consequences it has had.

Let me talk about the situation as it stands before we get to the amendment that tries to protect the humanitarian organisations involved. Another crew member put it like this:

“Our inshore lifeboat was called to a small inflatable with seven people on board…four adults and three children…They’d broken down…Everybody on the boat [was]…sick, we thought they all needed medical attention...we needed to get them ashore, [and] some of the paramedics…were there to take care of them [and] were able to establish that they had exposure. But when we got there, some members of the public who saw us coming in with two families, little children, four or five years old in this boat, were standing there on the beach”

—I apologise in advance, Sir Roger—

“shouting, ‘Fuck off back to France’ at us as we tried to bring them in”.

This crew member said they had never been met by an angry mob like that before, and it was one of the most upsetting things they had ever seen. That situation is happening right now as a direct result of irresponsible rhetoric and policies.

Another crew member said:

“We’ve had some vile abuse thrown at us. We’ve been accused of all sorts of things. I’ve personally had personal phone calls at the lifeboat station people telling me what they think of me by bringing migrants in, but at the end of the day we are here to save lives at sea and all the time we are here that is what we will carry on doing.”

I pay tribute to the heroism and courage in the face of irresponsibility from this Administration.

Removing the words “for gain” has caused unnecessary distress already, in an already tough job and situation. I urge the Government to reconsider their communications on the Bill—specifically the clause and in relation to my amendment—and on the issue more widely, especially the language used when talking about asylum seekers. It has already led to such horrendous abuse of the RNLI and others, as well as the degrading language around people in need of sanctuary.

The Government are responsible for the hate that asylum seekers and volunteers and professionals at RNLI face. There are also further unintended victims of the childishness on the issue. I speak as a proud member of Her Majesty’s loyal Opposition. I am fearful that, should my amendment not be accepted, this grubby politics risks a course of action that will drag Her Majesty into the mess that the Government are creating. Without my amendment, if people continue to film and to seek action against the volunteers and the crew, and organisations such as the RNLI, which save lives, the chances of prosecution and prison will increasingly grow, both on an individual basis and with respect to attacks on the organisation itself.

There is a reason for the “R” in RNLI: the president is His Royal Highness the Duke of Kent. He is the Queen’s first cousin, and he succeeded both his father and his mother to become RNLI president in 1969. If the Committee does not agree to the amendment, we risk the astonishing situation—created entirely by the Government—of the Queen facing calls to lock up her own cousin. Those more attuned to British history will know that that would have been more likely under the first Queen Elizabeth than under the current monarch. It is a genuinely ridiculous situation.

The Duke of Kent is not the only royal with proud RNLI connections, as Prince Philip was a proud supporter, too. The Duke of Edinburgh became a member of its council in 1972—well before I was born—and the state-of-the-art Shannon class boat will be called Duke of Edinburgh in his memory. By not accepting the amendment to protect the work of the volunteers and crew of the RNLI, the Government are not just putting at risk the great work of the RNLI, but insulting the Duke of Edinburgh’s memory.

The royal connection does not end there. One last but very significant royal connection is through Her Majesty the Queen, who has been patron of the RNLI since 1952, giving seven decades of service to the organisation. The Government’s proposals are nothing short of an attack on the monarch. We should thank and honour her for her service to our country, including the RNLI, which is a British institution that faces such an awful challenge as a result of this badly thought-through Bill.

The Minister says that he wants to amend the Bill later, but he has had months to draft such an amendment. I offer my amendment today to protect Her Majesty and the RNLI. Without my amendment, or the one the Minister says he will table, the ultimate sanction for Her Majesty would be an invitation to spend some time at her own pleasure.

In 70 years of connection with the RNLI, Her Majesty has named five classes of lifeboat that serve and save lives on our shores without discrimination: the Solent class, the Mersey class, the Waveney class and the two Severn classes. The Government simply claim that organisations such as the RNLI will not be criminalised, but that is not clear in the Bill, and it is not inconceivable that Her Majesty would be dragged into the unseemly row about the role of the RNLI. I urge the Government to meet royal representatives before they draft their amendment for consideration on Report, and I hope that they will not bring the royal family into disrepute by leaving the Bill as it is.

My amendment would make the humanitarian exemption crystal clear, and it could save the Government considerable embarrassment. The RNLI does not aim to assist asylum seekers, but it does aim to save lives and does not charge for the privilege. Will the Minister set that out clearly in the Bill? I am glad that he has mentioned drafting an amendment, and I look forward to seeing it. Those who share our concerns about the attacks on the RNLI, and about the position in which the Government are leaving it, can donate. I will not read out the full web address, but I will suggest that they search “donate RNLI” online.

The RNLI has implored Ministers not to politicise its work. In July, the RNLI said that it was “very proud” of its humanitarian work and that it would continue to respond to coastguard callouts to rescue at-risk channel migrants, in line with its legal duty. Mark Dowie, chief executive of the RNLI, said:

“Imagine being out of sight of land, running out of fuel, coming across incredibly busy shipping lanes when you’re frightened and you don’t know which direction you’re going in. That is by anyone’s standards distress. Our role in this is incredibly important: simply to respond to a need to save lives”.

Although the charity does not take a stance on political matters, he also said:

“These islands have the reputation for doing the right thing and being decent societies, and we should be very proud of the work we’re doing to bring these people home safe.”

I wholeheartedly support that sentiment.

In the light of the attacks and agitation by the far right, spread by irresponsible Ministers in the narrative used by the Government, including the Home Secretary yesterday, the RNLI put out another statement more recently. In July, it said very powerfully:

“Our charity exists to save lives at sea. Our mission is to save every one. Our lifesavers are compelled to help those in need without judgement of how they came to be in the water. They have done so since the RNLI was founded in 1824 and this will always be our ethos.”

I urge the Government to accept my amendment and end their attacks on the RNLI—an amazing and profoundly British institution—and, by association, on the royal family.

Of course, other parties that are affected by the Government’s plans could benefit from the amendment. The removal of “for gain” could still catch merchant, fishing and private vessels that are bound by international duties to rescue a person in distress at sea under maritime conventions. Significantly, for merchant vessels the change to the Immigration Act 1971 creates novel criminal liability for private vessels such as merchant, fishing or pleasure craft involved in rescues. Those not acting on behalf of an organisation and voluntarily providing assistance could now face criminal liability as a result of the legislation. While statistics on rescues by private vessels in UK territorial waters are not readily available, globally, of the 152,000 individuals rescued at sea in 2015, some 16,000 were aided by merchant ships. The Government said yesterday that they want to increase the use of the red ensign. Here is a means for them to do that, rather than risk criminalising the activity of those ships.

In light of the Bill, private pleasure craft have already been advised to avoid giving assistance to vessels in distress, because the Government have introduced legislation without an amendment. The cruising manager—I find that an interesting title—of the Royal Yachting Association is quoted as saying:

“People believe you must render assistance at sea but you don’t have to if it puts your boat in danger. It sounds very harsh, but you could have a massive bureaucratic problem. Our advice is stand off and report”.

That is a direct result of the Bill, without the amendment. The Minister says he wants to introduce one later, but as things stand, lives have been put at risk because private craft have been told not to intervene. Throughout the Committee, Government and Opposition Members have said that they do not want to put lives at risk, so the amendment would help them to meet their stated aim.

Before I conclude, let me touch on one or two other matters, such as direct discrimination and trying to distinguish who to help at sea. The Bill requires sailors, fisherman, merchants or anyone at sea to know the nationality of the person they are saving. It is unclear to me how people check someone’s passport, or their nationality, before bringing them aboard.

David Matyas, writing in the European Journal of International Law, has highlighted the fact that the Bill also risks discrimination against non-white UK nationals—people who might not “look British”. As he puts it, more delicately:

“Without the cover of the ‘and for gain’ condition, however, private seafarers may take overly broad impressions of who they ‘believe to not be a UK national’”.

So, they may pull out by virtue of their beliefs about who might be British. They may not help non-white UK nationals as a result of where the Government have put them.

The proposals are scandalous. We have a Government who seek to make the seas less safe for all—including through sewage, of course—and to criminalise charities and sailors if they stop people drowning. We have also seen reports that the Government want to give immunity for “pushbacks”. We will come to that matter when we debate clause 41, so I will not discuss it further today.

This is the UK Government seemingly suggesting that they could make themselves exempt from international law. There is no such immunity. My hon. Friend the Member for Enfield, Southgate has mentioned the UN convention on the law of the sea—the constitution of the oceans—under which the UK has a duty to render assistance at sea. We are a state party to UNCLOS, for the reasons my hon. Friend has given. Under international treaty law, the UK and its flagged vessels have duties to perform rescues at sea. Unlike in the Mediterranean, where the allocation of duties is obscured by territorial jurisdictions, the obligations in the Channel are much clearer—it is France or us.

Let me refer to two other legal treaties. The safety of life at sea convention, to which the UK is also a state party, states at regulation V that the

“master of a ship at sea which is in a position to be able to provide assistance, on receiving a signal from any source that persons are in distress at sea, is bound to proceed with all speed to their assistance.”

The salvage convention, also ratified by the UK, establishes a duty to render assistance, stating at article 10 that

“every master is bound, so far as he can do so without serious danger to his vessel and persons thereon, to render assistance to any person in danger of being lost at sea.”

We have international obligations. We need humanitarian means to intervene when people find themselves distressed, stranded or at risk of being lost—which means dying, nothing else. We need that protection. The obligation is clear, the morality is clear, the risk to lives is clear, and the risk of disgrace is clear if the Minister fails to accept the amendment.

The Minister might claim that the RNLI will be protected later, but why have the Government put the RNLI in this position in the first place? Why put merchant fishing vessels in an extremely difficult place or leave matters to discretion? Why be shy about these exemptions, and why were they not in the Bill to begin with? If this is about smugglers and people traffickers, why not make that abundantly clear by accepting amendment 162?

The explanatory notes to the Bill state that the removal of the “for gain” condition is driven by evidentiary difficulties, but that seems to have been contradicted by the Minister today, although if the goal of the change is to ease the evidentiary burden for prosecutors, that simply must not be done when lives are in danger at sea. Establishing a humanitarian exception is a solution to this situation. I hope my amendment is accepted today, or, in the fine traditions and spirit of parliamentary democracy, I look forward to its being stolen by the Government when we consider the Bill on Report.

I am grateful to the hon. Gentleman, of whom I am very fond, for tabling the amendment. When I referred to him in a previous sitting as a crafty parliamentarian, I meant that in the nicest of ways. I am very fond of him, and I know that he is a canny parliamentarian who is passionate about the issues he raises.

Let me touch on various points that the hon. Gentleman made. The RNLI does, rightly, have a proud royal connection, and long may that continue. Of course, the RNLI, Her Majesty’s Coastguard and others provide an invaluable service in saving lives at sea. We as a Government are conscious of that, and that tradition and that vital service must continue to be upheld. The hon. Gentleman mounted a passionate defence of the monarchy, and I think I speak for the whole Government when I say that we are proud monarchists. Perhaps he might have a word with some of his colleagues about the stance they have traditionally taken in relation to the monarchy over the years, but we have proud support for our monarchy in this country.

I also want to say that the behaviour the hon. Gentleman talked about as being exhibited towards members of the RNLI and volunteers is completely unacceptable and despicable. There is a responsibility on Members across the House to speak with one voice in saying that such behaviour is despicable, and we should condemn it in the strongest terms. I think the Committee is united in that, and I hope the hon. Gentleman will take that message back to the RNLI volunteers he is engaging with in his constituency, because we do speak with one voice in that regard.

On that note, I want to mention the incident off the coast of Harwich during the past few days. Two men were rescued, but, unfortunately, an extensive search and rescue operation had to be called off after a man was reported to have entered the water. That incident highlights yet again the extreme danger of crossing the channel in small boats and the callous disregard for life shown by the criminal gangs responsible for facilitating crossings. I want to place on record my thanks to all those who responded to the incident and who continue to work tirelessly to protect lives at sea while securing our border. Their work is invaluable—it is incredibly important—and I know all Members would wish thanks to be expressed to them for the work they do.

I appreciate that the hon. Gentleman’s amendment seeks to protect those who act to save lives at sea, but as I have already set out, it is the Government’s intention to amend the clause on Report to do just that. The only thing I would add—Members have rightly spoken passionately about the importance of the issue—is that I want to be confident that the amendment delivering that is as robust as it needs to be, and that it achieves properly and to the fullest extent the objective I think we all share.

I therefore ask the hon. Gentleman to let me take the matter away. What has been said in Committee has been heard. There are already efforts under way to develop this amendment for consideration on Report. I hope that gives the hon. Gentleman the confidence to withdraw his amendment. We will make sure that we table an appropriate amendment on Report, which I like to think Members from across the House will feel able to vote for, and that will deliver on the objective that we all share.

On clause 38, the offence under section 25 of the Immigration Act 1971 is our key control against those facilitating clandestine entry to the UK. Facilitation may include behaviour linked to recruiting, transporting, transferring, harbouring, receiving or exchanging control over another person. The related offence under section 25A of that Act relates to helping the arrival or entry, for gain, of an asylum seeker to the UK. The maximum penalties for these offences do not fully reflect the seriousness of the criminality that may be involved in facilitating the travel of illegal migrants to the UK, or that otherwise exploits them. People smugglers endanger lives and may cause public harm, including, for example, by arranging for transport in refrigerated lorries, or by returning to the UK an individual who was previously excluded or deported from the UK for national security reasons or because of serious criminal conduct.

The provision of a higher maximum sentence of life imprisonment demonstrates the gravity with which Parliament expects courts to treat the most serious offenders. The increase in the maximum sentence will also align facilitation sentencing with the sentences available to courts for human trafficking convictions under the Modern Slavery Act 2015. The measure will allow robust, visible action to combat illegal migration and activities associated with it, and with people smuggling.

The increasingly sophisticated methods employed by facilitators to hide facilitation gain not only frustrates crime investigations but hinders the Crown Prosecution Service in bringing successful prosecutions. As I have explained, gain can be obtained in many ways, and cannot always be proved to the standard required for a successful prosecution. For example, money transfers may be made by family members abroad, or made in cash, and there may be promises of servitude by the asylum seeker or others, or promises to assist in the facilitation act. To be clear, people smuggling has terrible consequences for asylum seekers, their families and others. We therefore propose removing the “for gain” element of the offence.

We intend to retain the defence available to persons acting on behalf of humanitarian and charitable organisations that aim to assist asylum seekers, and that do not charge for their services. I understand concerns raised in the House regarding the impact that removing the “for gain” element may have on individual acts of kindness. Historically, individuals have felt compelled to take compassionate action, albeit often working with the knowledge of the Home Office and charitable organisations, but this was in the absence of organisations such as the United Nations High Commissioner for Refugees. I reassure Committee members that those working openly and transparently in accordance with the published aims of an approved body and under its direction need not fear these measures. However, individuals taking maverick action that ignores lawful controls may well be liable to prosecution. We will carefully examine the circumstances of each case, and will work with the Crown Prosecution Service in England and Wales, the Crown Office and Procurator Fiscal Service in Scotland, and the Public Prosecution Service in Northern Ireland; they will determine whether a prosecution is proportionate and in the public interest.

The clause is directed at criminals who are acting to exploit and endanger people, not humanitarian charity workers. It is also directed at those who, by their attempt to evade regulations, deliberately and recklessly endanger themselves and others. We intend to deter illegal migration and create an effective sanction.

I have set out my intention to amend the clause on Report to ensure that organisations such as the RNLI, as well as those directed by Her Majesty’s Coastguard and individuals fulfilling their obligation to rescue those in distress at sea, may continue to act as they do now. We also intend to ensure that the provision does not prevent those responsible for vessels from complying with their obligations if they discover stowaways on board as they journey to the UK.

I have heard what the Committee has said, and the Committee has on record my undertaking to develop an amendment for Report. Also, I intend to write to the Committee to further put on record that we are working towards this aim strongly, and in a considered way; yet again, I want to put that beyond any doubt.

I note the Minister’s words and offer, but he has not explained why this amendment specifically does not do the job that he is seeking to do in the later stages. There is no explanation of what the Government would do differently from what is on the table today, so it is unclear why he will not accept the amendment. The Bill was published some months ago, and the Government have had about three months to suggest an amendment. I have already spoken about the current situation and the attacks on the RNLI: people throwing things, people spitting at crews. That will affect its recruitment and damage its reputation and, by association, all those who are patrons or otherwise involved. We need to offer better protection to the RNLI from today and send a clear signal that its work is invaluable and that we respect and honour what it does.

Question put, That the amendment be made.

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

Clause 38 ordered to stand part of the Bill.

Clause 39 ordered to stand part of the Bill.

Schedule 4 agreed to.

Clause 40 ordered to stand part of the Bill.

Clause 41

Maritime Enforcement

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

With this it will be convenient to discuss the following:

Government amendment 82.

Amendment 144, in schedule 5, page 74, line 30, at end insert—

“provided that the relevant officer may not do any of the things mentioned in sub-paragraph (2) where they would risk the welfare or safety of persons on board the ship.”

This amendment would require officers to assess welfare risk before stopping or boarding a ship, requiring it to be taken elsewhere or requiring it to leave UK waters, and not act if doing so would exacerbate these risks.

Government amendment 83.

Amendment 145, in schedule 5, page 75, line 8, at end insert—

“(7A) The Secretary of State must publish a list of States and relevant territories with which agreement has been reached for the purposes of sub-paragraph (7) within 30 days of the date of Royal Assent to this Act, and the Secretary of State must update that published list from time to time.”

This amendment would require the Secretary of State to publish which states or territories she has agreed arrangements with for returning or removing asylum seekers to, within 30 days of Royal Assent.

Amendment 146, in schedule 5, page 76, line 24, at end insert—

“(9) A relevant officer may only exercise powers under this paragraph if they have passed relevant training, including training on the requirement to exercise powers under this paragraph in accordance with the provisions of the Human Rights Act 1998.”

This amendment would require the relevant officer to have passed relevant training before acting under these powers, and only acts with regards to the Human Rights Act.

Amendment 148, in schedule 5, page 77, line 18, at end insert—

“(7) A relevant officer may only exercise powers under this paragraph if they have passed relevant training, including training on the requirement to exercise powers under this paragraph in accordance with the provisions of the Human Rights Act 1998.”

This amendment would require the relevant officer to have passed relevant training before acting under these powers, and only acts with regards to the Human Rights Act.

Amendment 147, in schedule 5, page 78, line 12, at end insert—

“(10) A relevant officer may only exercise powers under this paragraph if they have passed relevant training, including training on the requirement to exercise powers under this paragraph in accordance with the provisions of the Human Rights Act 1998.”

This amendment would require the relevant officer to have passed relevant training before acting under these powers, and only acts with regards to the Human Rights Act.

Amendment 149, in schedule 5, page 78, line 32, at end insert—

“(c) the act was carried out in accordance with the provisions of the Human Rights Act 1998.”

This amendment would require the relevant officer to only act with regards to the Human Rights Act.

That schedule 5 be the Fifth schedule to the Bill.

In response to numbers of migrants using dangerous maritime routes to enter the UK illegally, this Government are committed to providing Border Force with the tools and legislation they need to combat this illegal migration threat more effectively. We need to strengthen and broaden our current powers not only to improve the effectiveness and capability of Border Force’s current maritime interception tactics, but to better equip them for future operational developments, which may be enhanced through agreements with our near border partners.

The clause and schedule will also provide new powers allowing Border Force to return vessels and those on board, when appropriate, to non-UK locations. Finally, the Government will use this clause to provide bespoke seizure and disposal powers intended for Border Force use against the small boats threat specifically. It will provide far more flexible options for the seizure and disposal of the vast majority of unflagged, ownerless vessels that are being used to transport illegal migrants.

I turn to Government amendments 82 and 83. We are seeing an unacceptable rise in dangerous and unnecessary small boat crossings. Our primary focus is on preventing people from embarking on dangerous channel crossings to enter the UK illegally, tackling the criminal gangs responsible and protecting lives. We must send a powerful message that people should not leave the safety of countries such as France or Belgium to enter the UK illegally in an unseaworthy boat, and if they do, they could be taken back.

On the question of legality, Government amendment 82 is pretty extraordinary, because it seems to remove a restriction on the power of the Secretary of State so that she is unconstrained by the United Nations convention on the law of the sea; I am just looking at the explanatory note. Is that amendment designed to allow the Secretary of State to break the international law of the sea?

I thank the hon. Gentleman for raising that point, and I will come on to it imminently. To finish the point I was making, the Government amendments will remove text from the Bill that is now considered not to be essential to achieving the aim that I have set out.

The UK has ratified, and is therefore fully committed to upholding, the United Nations convention on the law of the sea. The Government are committed to utilising their maritime enforcement tactics in full compliance with international law. The re-statement of that in the clause is therefore unnecessary. It is also unnecessary to state in legislation, where it is already beyond doubt, that Border Force would seek permission from a foreign country before taking a migrant boat back to that country. That statement adds nothing to the powers being created in this part of the Bill.

We want to make it explicit that operating these maritime enforcement powers in UK waters or international waters to simply divert a migrant vessel from UK territorial seas does not require the permission of a foreign state where that vessel may then enter their waters. These amendments will not result in the UK failing to abide by its international obligations, whether that be in the context of the safety of lives at sea or when seeking permission if intending to return migrants to another country, such as France.

I thank the hon. Member for Sheffield Central for what he will no doubt say about amendments 144 to 149. I will start by addressing amendment 144, which proposes to add an additional requirement to the maritime powers where the options available to officers intercepting a vessel at sea are spelled out. In order for the tactics intended for use in the exercise of these powers to be safe and legal, officers will have to carry out risk assessments before and during any exercise of the powers. That requirement will be laid out in operating procedures to ensure we meet our international obligations on safety of life at sea.

As any deployment of the tactics under the powers will be carried out in full accordance with those obligations, the welfare and safety of those on board vessels will be the priority throughout. With international obligations in this context not being a matter for UK legislation, we do not consider it necessary to add the amendment. I also note that any deployment of maritime tactics will be carried out in full compliance with obligations under the European convention on human rights and the Human Rights Act.

I turn now to amendment 145. The schedule that it would amend deals with new powers allowing Border Force and others to require vessels to be taken to a non-UK port if necessary. There are a number of reasons why we may wish to have the capability to do this, and they are not all related to the return or removal of asylum seekers. For example, any potential future agreement with partners to patrol waters jointly may require rescued or intercepted migrants to be taken back to the country from which they embarked on their maritime journey. As such, we do not consider that the amendment is needed or appropriate in schedule 5, and we are not prepared to commit to providing a running commentary to update on the progress of sometimes sensitive international negotiations.

I understand that the intention of amendments 146 to 148 is to emphasise the need to ensure that account be taken of human rights obligations by appropriately trained officers exercising these maritime powers. However, the amendments are unnecessary and would have no practical impact on the operation of the powers by Border Force officers and others. All operational officers within Border Force receive, and must have passed, appropriate training in order to exercise their duties. In order to be appointed as an immigration officer, an official must successfully complete and pass a foundation course that includes understanding the European convention on human rights as it relates to the Human Rights Act 1998, and their resulting obligations in the context of exercising powers.

Additionally, those exercising maritime powers will have gone through further specialist training for the operation of their powers at sea and will be operating those powers within official guidance that explicitly outlines the requirement to take full account of the Human Rights Act, and therefore the European convention on human rights, when considering their use. The Government are clear that any exercise of maritime powers against migrant vessels at sea will be done in full compliance with all our international and domestic obligations, and thus these amendments are not required.

I turn finally to amendment 149. To a certain extent, I will return to arguments similar to those that I have just made. I begin by reiterating that no official can be appointed as an immigration officer and exercise their powers until they have received and passed training courses that include understanding the European convention on human rights as it relates to the Human Rights Act 1998. The liability protections afforded in proposed new section J1 of the Immigration Act 1971, which will be inserted by the Bill and which the hon. Member for Sheffield Central seeks to amend, explicitly state that officers need to be acting in good faith and within the functions of this part of the Act. In addition, all officers will have received training on relevant human rights implications as a prerequisite of being able to exercise their powers. I do not consider that there is any further necessity to restate that through an amendment.

Any exercise of maritime powers must take full account of our international obligations, including consideration of human rights issues, and will be undertaken only by relevant officers who have successfully passed their training in full. Thus, in my view, there is no additional requirement to have that stated in the Bill. For all the reasons I have outlined, I request that the hon. Gentleman not press his amendments to schedule 5.

Ordered, That the debate be now adjourned.—(Craig Whittaker.)

Adjourned till this day at Two o’clock.

Subsidy Control Bill (Fourth sitting)

The Committee consisted of the following Members:

Chairs: † Caroline Nokes, Mr Virendra Sharma

† Baynes, Simon (Clwyd South) (Con)

† Benton, Scott (Blackpool South) (Con)

† Blackman, Kirsty (Aberdeen North) (SNP)

† Bowie, Andrew (West Aberdeenshire and Kincardine) (Con)

† Buchan, Felicity (Kensington) (Con)

† Esterson, Bill (Sefton Central) (Lab)

† Fletcher, Colleen (Coventry North East) (Lab)

Flynn, Stephen (Aberdeen South) (SNP)

† Hollinrake, Kevin (Thirsk and Malton) (Con)

† Kinnock, Stephen (Aberavon) (Lab)

† Malhotra, Seema (Feltham and Heston) (Lab/Co-op)

† Millar, Robin (Aberconwy) (Con)

† Mortimer, Jill (Hartlepool) (Con)

† Scully, Paul (Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy)

† Stafford, Alexander (Rother Valley) (Con)

† Tomlinson, Michael (Lord Commissioner of Her Majesty's Treasury)

† Whitley, Mick (Birkenhead) (Lab)

Kevin Maddison, Bradley Albrow, Committee Clerks

† attended the Committee

Public Bill Committee

Thursday 28 October 2021

(Afternoon)

[Caroline Nokes in the Chair]

Subsidy Control Bill

Schedule 2

The energy and environment principles

Question proposed, That the schedule be the Second schedule to the Bill.

It is a pleasure to serve under your chairmanship, Ms Nokes. The schedule lists the additional energy and environmental principles that energy and environment subsidies must be evaluated against, in addition to the subsidy control principles in schedule 1. These common-sense additional principles are designed to ensure, for example, that public authorities consider the need for energy and environment subsidies to achieve reductions in emissions, or otherwise increase the level of environmental protection relative to the lower level achieved without the subsidy. There are also more specific principles in schedule 2, including, for instance, those regarding subsidies for electricity generation adequacy, renewable energy and cogeneration. This schedule is key to complying with our obligations under the trade and co-operation agreement with the European Union, and I commend it to the Committee.

It is a pleasure to serve under your chairship, Ms Nokes. I thank the Minister for his remarks on schedule 2. I have no further comments to add—we will be supporting this schedule stand part—other than to allude to the debate we had earlier about making more explicit within the schedule the need to deliver the UK’s net zero commitment, and that subsidies should contribute to that goal. That is an area that I am sure we will come back to when debating later parts of the Bill, but we will support this schedule stand part today.

Schedule 2 agreed to.

Clause 10

Subsidy schemes and streamlined subsidy schemes

I beg to move amendment 9, in clause 10, page 6, line 30, leave out paragraph (a) and insert—

“(a) is made by—

(i) a Minister of the Crown,

(ii) the Welsh Ministers,

(iii) the Scottish Ministers, or

(iv) a Northern Ireland department; and”

This amendment would extend the power to make streamlined subsidy schemes to the Devolved Administrations.

With this it will be convenient to discuss amendment 16, in clause 10, page 6, line 30, after “Crown” insert

“, or other primary public authority, as defined in subsection (3),”.

The purpose of this amendment is to allow the Scottish Ministers, Welsh Ministers and relevant Northern Ireland department, as well as other public authorities, to make streamlined subsidy schemes.

I am pleased to be able to move amendment 9 on behalf of myself and my hon. Friend the Member for Sefton Central. We have proposed the amendment because we recognise that the streamlined subsidy schemes play a significant role in this legislation. Clause 10 defines subsidy schemes and streamlined subsidy schemes: unlike subsidy schemes, streamlined subsidy schemes can be made only by a Minister of the Crown, but they do create a route for certain subsidies to be passed more easily and quickly, and on occasion have the potential to effectively contribute to key policy objectives and targets, which is their purpose.

The question is why the Government have allowed only the Secretary of State to create streamlined schemes. In our view, the restriction not only limits the potential of the Bill, but undermines the important role of the devolved Administrations. Those Administrations are more likely than the Secretary of State to understand what subsidies and schemes may be most beneficial for their respective nations or areas, and by preventing them from being able to create streamlined schemes, the Government are potentially hampering the effectiveness of subsidies in Scotland, Wales and Northern Ireland. As Daniel Greenberg explained in our evidence session on Tuesday,

“throughout the Bill, you see ‘Secretary of State, Secretary of State, Secretary of State’—all powers of HMG—and you think, “Hold on, the devolved institutions are also public authorities. They appear in the list of public authorities in clause 6, so why is it that they do not also share Secretary of State powers?”––[Official Report, Subsidy Control Public Bill Committee, 26 October 2021; c. 61, Q80.]

While Labour understand that power over UK subsidies should ultimately reside in Westminster, preventing the devolved Administrations from creating streamlined schemes undermines their important role in our democratic structure, as well as the responsibilities that they have in their respective nations. It should also be noted that any proposals for streamlined schemes must be laid before Parliament, as set out in subsection (5). Any streamlined subsidy schemes created by the devolved Administrations could be subject to ample parliamentary scrutiny. Labour is therefore seeking to amend the clause to allow Welsh Ministers, Scottish Ministers and Northern Ireland Departments to create streamlined subsidies. We believe that the amendment would help increase the effectiveness of subsidies across the UK while respecting the role of the devolved Administrations. We also support the SNP’s amendment, which I think would have a very similar effect.

It is a pleasure to take part in the Committee’s proceedings with you in the Chair, Ms Nokes. I want to say a couple of things. I agree with almost everything that the hon. Member for Feltham and Heston said, apart from the idea that the Secretary of State should have powers over what happens in Scotland, because obviously I believe that Scotland should be independent—but that is probably an argument for another day.

The powers of the Scottish Parliament were voted for democratically in a referendum that showed the Scottish people’s will that a Scottish Parliament should be created. Those powers have been discussed on many occasions, including in subsequent Scotland Acts. The powers of the Scottish Parliament, having been agreed democratically, are part of our democracy, whereas the powers that Westminster has do not seem to have ever been discussed or voted on democratically.

As regards what the Opposition spokesperson said about upholding the democratic nature of the United Kingdom and the democratic powers of the Scottish Parliament, the Welsh Parliament and the Northern Ireland Assembly, I think it is really important that the ability to make streamlined subsidy schemes be included. If the Government are going to talk about levelling up, which I am sure they will—they generally do on such matters—they should consider that those devolved bodies, which are elected to represent those areas, have a huge amount of knowledge and are much closer to the places they represent. They should be able to make streamlined subsidy schemes too, because I believe, as many people do, that they would make them better than Westminster is likely to.

It is a pleasure to serve with you in the Chair, Ms Nokes. It is important to recognise what the constitution of the UK says, and that is very clearly that powers and competences are reserved to the United Kingdom Government. We do not have a system of equivalence; there is no equivalence between a devolved Government and the UK Government, because sovereignty rests here. I know that equivalence features in some of the contributions we are hearing, but there is no place for it in our constitution. The devolved powers and competences are very clearly defined, which is absolutely correct. The suggestion that the Secretary of State’s powers should be replicated elsewhere does not fit with our proper constitutional model.

In response to the comment from the hon. Member for Aberdeen North about powers being discussed and voted on, we do of course discuss and vote on powers in the UK Government every time there is a general election, and frequently through sittings like this too, so I am happy that there is extensive consideration of them.

On the point about streamlining, it is important to understand some of the limitations, which are themselves discussed within the devolved Administrations, in particular on the number of elected members. For example, there is currently a discussion within the Welsh Senedd about increasing the number of its Members, and one of the reasons is to improve its ability to scrutinise itself. For all those reasons, I hope that I have made a helpful contribution to the discussion.

Is the hon. Member’s concern about streamlined subsidy schemes that he does not believe the Welsh Senedd has enough Members to agree to such schemes?

No, I was observing that there is a discussion taking place within the Senedd about the number of Members, and one of the arguments for increasing that number is about improved scrutiny, because having more Members would allow for greater and more effective scrutiny of internal operation, and therefore any decision made, whether on a streamlined subsidy scheme, funding, grants or whatever, would benefit from that extra scrutiny.

Streamlined subsidy schemes have an important role to play in supporting public authorities to deliver well-designed subsidies: subsidies that address market failures but minimise the risk of excessive distortion to competition, investment and trade and that are not subject to mandatory or voluntary referral to the subsidy advice unit under the provisions of chapter 1 or part 4. The Government intend that streamlined subsidy schemes will be a pragmatic means of establishing schemes for commonly awarded subsidies, including in areas of UK strategic priority, that all public authorities in the UK would able to use if they wish. They will therefore function best when they apply across the entire UK. The Government will design them so that they are fit to be used in all parts of the UK. In addition, clause 10 sets out the procedural requirements when making a streamlined subsidy scheme, including the requirement that it is laid before Parliament.

The practical effect of the amendment would be to require devolved Administration Ministers to lay streamlined subsidy schemes before the UK Parliament, both when they are made and if they are modified. The appropriateness of that procedure is questionable, given that devolved Ministers are not directly accountable to the UK Parliament.

The streamlined subsidy schemes will be worked up as we come up to the commencement of the Bill, so I will not set out a list of streamlined moots as yet, but they are there for something that is common and not necessarily devolved in particular areas that needs to be rolled out at speed with minimum interruption to the public authorities. The obvious example––it is not necessarily a streamlined moot––in recent years is the grant scheme that we have had in covid, which came under a lot of pressure from having to ask for exemptions within the European Union to get the framework available there, which meant that we could not roll it out to the extent that we wanted to, as quickly as we wanted to.

Does the Minister think it possible that some of the streamlined subsidy schemes that will be made are likely to encroach on devolved areas, even though they are being made for the whole UK? If so, does he believe that when a streamlined subsidy scheme is laid before Parliament it should talk about the consultation that has been held with the devolved Administrations responsible and explain why, if they disagree with the scheme, the Government are going ahead anyway?

Rather than a streamlined scheme encroaching on the devolution settlement, it is important to stress that any public authority in the UK will be free under the Bill to create a subsidy scheme for its own purposes. Schemes have many of the same attributes that streamlined subsidy schemes have in that only the scheme, and not the individual subsidies awarded under it, needs to be assessed under those principles. Schemes offer a similar administratively light touch means of awarding many subsidies that are also open to any and all public authorities, including the devolved Administrations. What we are saying is that the streamlined subsidies are best used when they are available across the UK but schemes are available to the devolved Administrations, to the public authorities and indeed to the UK Government to award. They are more bespoke and tailored. Because of that, I ask the hon. Lady to withdraw the amendment.

I thank the Minister for his remarks. Perhaps it is something that I have not seen, but could he clarify where it is specified that streamlined subsidy schemes would need to be UK-wide? I could not see it in the legislation.

What I was saying was that streamlined subsidy schemes do not need to be UK-wide. We are not putting that on the face of the Bill. They work best and are more effective when they can be rolled out across the UK, because schemes effectively do a very similar thing. It could be more bespoke and more tailored to a local area, economy or whatever the subsidy relates to.

I thank the Minister for his comments. It feels as if this area is not sufficiently defined. I cannot see why we would not want to have better symmetry of powers between the devolved nation Administrations.

Is not a reason that this could distort competition between different parts of the United Kingdom? If an example of a streamlined subsidy scheme is the business rate grants for hospitality, whole parts of the UK—Scotland, for example—could provide a huge amount of support across the hospitality sector, which would unfairly disadvantage the rest of the UK. Is that not an example of how this might be a danger?

I am not sure I fully agree with that. Surely it would mean that it was incompatible with the principles in schedule 1. I think that the principles would preclude that. I come back to the point that at the moment we have an asymmetry of power. I cannot, in the circumstances of streamlined subsidy schemes as they are currently defined, see why that should not be a power that is there for the devolved Administrations. It is important to go further with the amendment, and I would like to put it to a vote.

Just to come back on what the hon. Member for Thirsk and Malton said, business rates are already devolved in Scotland. We already have a more generous system of allowances. People at the lower end of income, pay or value of properties pay less than they would in England anyway. So we already have that in place. It does not have to come in as part of a subsidy scheme or streamlined subsidy scheme, as far as I am aware.

The hon. Member for Feltham and Heston is correct. The Minister seems to be saying that the schemes will apply across the UK, but nothing in the Bill says that this will apply across the UK for any of the streamlined subsidy schemes that come through. The Government could create a streamlined subsidy scheme that applied only in Blackpool, for example. The fact that it is a streamlined subsidy scheme does not mean that it has to apply across the UK.

I did not get a straight answer from the Minister about devolved competencies. Is it intended that the UK Government will make streamlined subsidy schemes that trespass on areas of devolved competency and apply those across the UK? If that is the case, I am even more concerned about this than I already was. If they are going to do that only in reserved areas, that makes sense, but given the Government’s tendency to reduce the power of the Scottish Parliament and the other devolved Administrations, I am not sure that I have a huge amount of trust in the fact that the streamlined subsidy schemes will not trespass on the devolved areas.

The streamlined schemes are not effectively the most commonly used ones. They are few and far between. The schemes will be far more tailored. They do very similar things and provide similar freedoms in terms of ease of access. A scheme, whether streamlined or not, needs to be assessed against the principles. Every streamlined subsidy scheme will be laid in Parliament after it is made. Any streamlined subsidy scheme that is amended will be laid in Parliament. That will ensure transparency for those schemes. We will publish a number of schemes and lay them before Parliament before the regime is commenced. Public authorities will therefore have sufficient time to understand the parameters of streamlined subsidy schemes before the subsidy control regime commences.

Question put, That the amendment be made.

I beg to move amendment 10, in clause 10, page 6, line 32, at end insert—

“(4A) A streamlined subsidy scheme may be made, in particular, for the purposes of providing support to areas of deprivation.”.

This amendment would clarify that streamlined subsidy schemes may be made for the purposes of supporting areas of deprivation.

I will keep my remarks brief. As I stated earlier, the Bill provides an opportunity to target funding towards areas of deprivation. In our view, that is not made as explicit as it needs to be in the Bill. If we are looking at levelling up, tackling deprivation and equity of outcomes, we would want a streamlined subsidy scheme, in particular for the purposes of providing support to areas of deprivation. We have tabled a similar amendment to schedule 1, but are seeking here to amend subsection (4) of clause 10. The amendment would explicitly clarify that streamlined schemes can be used to support projects to tackle economic deprivation.

As we have heard, the Government intend streamlined subsidy schemes to be a pragmatic means of establishing schemes for commonly awarded subsidies. That includes subsidies in areas of UK strategic priority that all public authorities in the UK will be able to use if they so wish.

The Government are fully supportive of action to assist areas of deprivation and to facilitate the levelling-up agenda. The new domestic subsidy control regime will give authorities the flexibility to deliver subsidies where they are needed to support economic growth, without facing excessive bureaucracy or lengthy pre-approval processes. We will also publish guidance to make clear how the principles should be applied by public authorities when considering subsidies that advance the levelling-up agenda or promote the economic development of relatively disadvantaged areas.

We would not want to pre-empt work to develop the streamlined subsidy schemes by committing here and now to privilege one specific policy objective over all the others in the Bill. In any case, the Bill does not set limits on the policy objectives that a streamlined subsidy scheme can pursue. Seeking to specify particular objectives in the Bill may lead to the power to create streamlined subsidy schemes being interpreted in an unduly narrow way in the future. I therefore ask the hon. Member to withdraw the amendment.

I had wanted to press the amendment to a vote, but perhaps I can ask the Minister for further clarification. If, in the further guidance that may be coming on streamlined subsidy schemes, we can return to the question of the objectives and purposes for which those schemes are made, I am happy to withdraw the amendment today and come back to the point in future discussions.

I am grateful to the hon. Member. It is important that we continue to talk about this issue, so I am happy to discuss it further.

I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

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

As we have heard, the clause confirms that public authorities can create a subsidy scheme and that a Minister of the Crown can create a streamlined subsidy scheme. I have talked about the fact that they are a pragmatic means of establishing schemes for commonly awarded subsidies in areas of UK strategic priorities. All public authorities in the UK will be able to use them, if they so wish.

I thank the Minister for his comments. In relation to the discussions that we have had, and our concerns about some of the areas under clause 10, I will not be proposing that we vote against it standing part. However, there are concerns. If there were some mechanism or means by which we could abstain, we would seek to do so. There are some big gaps in clarity regarding some of the clause’s powers and what they can be used for, and we would like greater definition and scrutiny.

Question put and agreed to.

Clause 10 accordingly ordered to stand part of the Bill.

Clause 11

Subsidies and schemes of interest or particular interest

I beg to move amendment 11, in clause 11, page 6, line 40, at end insert—

“(1A) Regulations under this section must be made by no later than three months after this Act receives Royal Assent”.

This amendment would require the Secretary of State to make regulations giving the meaning of “subsidy, or subsidy scheme, of interest” and “subsidy, or subsidy scheme, of particular interest” no later than three months following Royal Assent.

I am grateful for the opportunity to move amendment 11. I mentioned earlier that this Bill has many issues when it comes to devolution. We want a four-nation settlement to be integral to how the regime is implemented. It has to have the confidence of the whole nation, and it must deliver sustainable outcomes across the whole of the UK, but Professor Fothergill summarised on Tuesday:

“From the point of the view of the devolved Administrations, for example, the passage of the Bill will still leave them pretty much in the dark as to what they can and cannot do.”––[Official Report, Subsidy Control Public Bill Committee, 26 October 2021; c. 12, Q8.]

Clause 11 highlights yet another devolution issue. It gives the Secretary of State the power to define schemes of interest, and of particular interest, after the Bill receives Royal Assent. How the Secretary of State chooses to define these areas will have a significant effect on the legislation and its implementation. Given the importance of these definitions, could the Minister explain why the Government have not gone further and included them in primary legislation, instead leaving them up to the Secretary of State? Does he not agree that Parliament should have the opportunity to properly scrutinise such significant definitions at this stage of the Bill?

Does the Minister also recognise that it would therefore be of concern to the devolved Administrations to be excluded from the making of these definitions? Daniel Greenberg expressed on Tuesday how the Bill falls short on

“explanation of some of the systems and mechanisms that will inevitably be required to go on underneath the surface in order to reflect the economic competencies of the devolved Administrations”.––[Official Report, Subsidy Control Public Bill Committee, 26 October 2021; c. 60, Q80.]

As I have said, the devolved Administrations have an important role to play in the creation and implementation of subsidies in their respective nations. As such, there is an important part for them to play in the process of defining and setting these significant terms.

As we have heard, amendment 11 would require the Government to make the regulations within three months. The Government fully recognise the importance of establishing clear definitions for the categories in a timely fashion, both to create certainty for public authorities and to set the parameters for the work of the subsidy advice unit.

Regulations under clause 11 are subject to the affirmative procedure. Therefore, a draft of the regulations will be laid for debate and approval by both Houses of Parliament in sufficient time to allow for the final regulations to be made for the commencement of the regime, and with a sufficient lead-in time for the public authorities. We expect commencement to be in autumn 2022, subject to the passage of the Bill and secondary legislation through Parliament. Therefore, there is plenty of time and I do not believe that the amendment is necessary.

Finally, the Government may need to lay additional regulations under clause 11 at some point in the future. For example, the global economic conditions may change, meaning that we need to amend the definitions. The amendment could prevent the Government from laying essential regulations after the period of three months following Royal Assent. The hon. Lady asked why the subsidies of interest criteria are not in the Bill. We want to ensure that we have the flexibility to develop them in a changing world, so they do sit better within regulations. I therefore ask her to withdraw the amendment.

To flip that on its head, if the Minister expects and hopes that the regime will be implemented in autumn 2022, will he confirm that he also expects and hopes that the regulations under this clause will be made in advance of the summer recess in 2022 to allow authorities the time to look at them properly and digest them in advance of the scheme coming in?

Clearly, we want to make sure that the regulations go through due parliamentary process and that colleagues have plenty of time to see them, discuss them and scrutinise them. That is absolutely appropriate. We also want to give businesses time to see what is on the horizon, and to give public authorities—those awarding authorities—time to adjust to the new framework.

I thank the Minister for his remarks. On the basis that we want to ensure that there is time for scrutiny—and I think he alluded to some assurances that things will move as quickly as possible—I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

I beg to move amendment 12, in clause 11, page 7, line 8, at end insert—

“(4) Before making regulations under this section, the Secretary of State must seek the consent of the Scottish Ministers, the Welsh Ministers and the Department for the Economy in Northern Ireland.

(5) If consent to the making of the regulations is not given by any of those authorities within the period of one month beginning with the day on which it is sought from that authority, the Secretary of State may make the regulations without that consent.

(6) If regulations are made in reliance on subsection (5), the Secretary of State must make a statement to the House of Commons explaining why the Secretary of State decided to make the regulations without the consent of the authority or authorities concerned.”

This amendment would require the Secretary of State to seek the consent of the Devolved Administrations before making regulations under this section. Where such consent is not given within one month, the Secretary of State may make the regulations without that consent, but must make a statement to the House of Commons explaining their decision.

It is my pleasure to speak to this amendment. It would require the Secretary of State to seek the consent of the devolved Administrations before making regulations under the clause. As the Minister just mentioned, the Government may wish to bring forward further regulations to make changes under clause 11. We propose that if such consent is not given within one month, the Secretary of State may make the regulations without that consent, in line with other principles here and in the United Kingdom Internal Market Act 2020, but must make a statement to the House of Commons explaining that decision.

As I have outlined, we are very concerned that there needs to be a fair and equitable four-nations solution in how this legislation is developed and implemented. That will be an important part of its success and the confidence that people have in it over time. As I have said, the devolved Administrations have an important role to play in the implementation of subsidies, and they should play their part in defining and setting the significant terms in the legislation.

If the Secretary of State is unable to gain the devolved Administrations’ consent—I hope that it will be forthcoming on the basis of there being constructive dialogue between the nations, and those mechanisms being set up in good faith—it is important that that has the scrutiny of the House of Commons, and that the Secretary of State makes a statement to the House explaining what the issues were and why agreement was not reached.

As I have said, the regulations will have an important effect on the subsidy regime. It is bad enough that they are not included in primary legislation, but it is important that dialogue happens to ensure that the best regulations are made under this clause. I hope that the Minister will agree that the definitions need to be set in partnership and in discussion with the devolved Administrations, and that it would be a sign of confidence in the regime to seek that consent.

I have a couple of points on this amendment, and I want to give it my wholehearted backing. I agree that the devolved Administrations should be consulted on these regulations. I would probably go further and have them not proceed if the devolved Administrations did not agree, but we are where we are.

I am a serving member of the Procedure Committee, and we have discussed this at huge length recently in our report and our look at how the territorial constitution works, and how the devolved Administrations relate. One thing that is brought up regularly is that if the UK Government proceed with something in the absence of legislative consent, there is no clear mechanism for the UK Government to explain to Parliament why the process has happened in advance of legislative consent. For me, it seems like the very least that the UK Government should do if something proceeds without consent.

That is important in relation to legislative consent motions for primary legislation where something trips over into devolved competencies, as we have seen a number of times in recent years. When it comes to these regulations, I think it is really important that the devolved Administrations are in agreement with what happens, because, in the main, they will be guaranteed authorities implementing subsidy schemes in the devolved areas. The Scottish Parliament has authority over the local authorities in Scotland so it will oversee some of their work, particularly when it comes to directing them how to best improve their local areas. If the UK Government are to proceed without the consent of the devolved Administrations, they must come and explain to us why.

I note that the UK Government and Scottish Government, as well as the other Administrations, have regular conversations about how things could go forward, but I feel there is a significant amount of disagreement at the moment in many areas. It would be very good if we could all come to an agreement about what “particular interest” means. If we cannot, I believe that this House should know why the UK Government think that agreement has not been reached, and why they intend to proceed anyway.

Obviously, the Government welcome the devolved Administrations’ ongoing interest in the Bill, and we continue to engage with them on a regular basis. In coming up with this framework, I think we have had at least 34 official-to-official engagements and 10 or so ministerial-to-ministerial engagements with the devolved Administrations. It is important that we continue that spirit of discussion, because we have to set the right definitions for the subsidies of schemes of interest or particular interest.

Having those appropriate definitions is really important to ensure that the subsidy advice unit is focused on the subsidies and schemes that are most likely significantly to distort competition and investment in the UK, or that may do the same to our trade with other countries. It also means, as we have heard, that regulations made under clause 11 may need to be amended quickly in the event that economic conditions change rapidly, for example. A requirement to seek the consent of the devolved Administrations each time the power is used risks introducing significant delays into the process.

I thank the Minister for his comments. As the Institute for Government has made clear in its commentary on the Bill,

“a successful system needs buy-in from all parts of the UK…any regulations should be made in consultation with the devolved administrations…government must take a collaborative approach to writing the regulations that will determine how the system will actually work.”

The Minister has made the argument himself, really. In his opening comments, he rightly praised the work that has already taken place, as well as all the conversations—the 34 official-to-official meetings and the 10 Minister-to-Minister meetings—that are happening. That precedent has already been set, and there is clearly a commitment on all sides for that to continue.

The Minister also made the point about urgency, but surely one month is a reasonable timeframe within which to check and consult that we are on the right course, and, if the Governments are still not in agreement, to proceed as the reasonable compromise in our amendment sets out.

The spirit is certainly there, but I do not want to bind future Administrations to a requirement to respond in emergency situations.

I concur with my hon. Friend. We have seen in the past few years—with British Steel, for example—that the Government have had to move incredibly quickly to get subsidies in place. Adding that one-month period could determine the success or failure of such subsidies in supporting a specific UK industry. Time is of the essence.

Absolutely. The Government have determined—as we did in debate on the United Kingdom Internal Market Act 2020—that subsidy control is a reserved matter, so it is right that subsidy control policy is made and voted on in Parliament. Clearly, we must ensure that those schemes are scrutinised, and we will continue to engage with the Scottish and Welsh Governments and the Northern Ireland Executive, as we have done in drafting the Bill and since its introduction. We are committed to engaging with them regularly and listening to their views during the Bill’s passage and beyond. That includes engagement on the definitions of “subsidy, or subsidy scheme, of interest” and “subsidy, or subsidy scheme, of particular interest”. I therefore ask the hon. Member for Feltham and Heston to withdraw the amendment.

I thank the Minister for his comments. I also thank other hon. Members who have contributed, particularly the hon. Member for Aberdeen North, who brought her expertise and experience from the Procedure Committee to the discussion. That was quite helpful as it highlighted a wider issue about better defining how the House can more effectively support the goals of our devolved Administrations and of Westminster in a more coherent way.

This quite measured amendment would

“require the Secretary of State to seek the consent of the devolved Administrations before making regulations under the clause. Where such consent is not given within one month, the Secretary of State”

can go ahead. The amendment deals with making regulations under the clause, and would ensure that the process was working properly.

Does the shadow Minister agree that because the clause deals specifically with schemes of interest and of particular interest, it is pretty unlikely that a situation will arise whereby an economic failure needs to be addressed in the space of a month, but cannot be addressed because the Government cannot change the definition of “interest” or “particular interest”?

I think the hon. Member is right on this—the definitions would not necessarily change in those circumstances, and some of that is more about the speed of being able to grant a subsidy—but I am not sure I followed the logic of the intervention, although I appreciate that there is a concern there and it is important that we iron out those scenarios. However, I am not sure the intervention is pertinent to the issue being debated now.

I will press the amendment to a vote.

Question put, That the amendment be made.

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

The clause will enable the Secretary of State to make secondary legislation to define subsidies or subsidy schemes of interest, or of particular interest. We know that some subsidies are more likely than others to pose a risk of distorting international trade or competition within the UK. International trade disputes, including at World Trade Organisation level, may have arisen in particular sectors. As we heard earlier, that is especially common in sectors of long-standing global over-capacity, such as steel. Subsidies to enterprises operating in sectors that have historically faced a higher proportion of disputes may therefore warrant a proportionately higher level of scrutiny before they are given.

The Bill will establish the mechanisms for the referral of those subsidies and schemes to the subsidy advice unit, but it is important that the Government have some flexibility to modify the criteria over time in response to market conditions or the periodic reviews that will be carried out by the SAU to ascertain how the domestic subsidy control regime is working. Both Houses will have the opportunity to debate any regulations in draft to ensure that the criteria for what constitutes “of interest” or “of particular interest” are robust and capture the right subsidies and schemes for additional scrutiny.

I will add nothing further to the comments made during our discussion of the amendments. There are areas that we continue to be concerned about, but we will not oppose the clause standing part.

Question put and agreed to.

Clause 11 accordingly ordered to stand part of the Bill.

Clause 12

Application of the subsidy control principles

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

The clause is central to the new subsidy control regime. It will impose a duty on public authorities to consider the subsidy control principles before deciding whether to give an individual subsidy or make a subsidy scheme. A public authority cannot go on to give the subsidy or make the scheme unless they are of the view that it is consistent with those principles. That duty does not apply when a subsidy is given under a scheme. That is because the terms of the scheme must be consistent with the principles themselves, and any subsidies must therefore comply with those terms.

I thank the Minister for his comments. This is an important clause, so we obviously support it standing part of the Bill. I seek his view on a couple of points that came up in relation to earlier clauses regarding how a public authority will confirm that the subsidy is in line with the principles—we talked about that in the debates on clauses 3 and 4 standing part of the Bill—and ensure that the quality of information that is then published reflects the consideration process that the public authority went through.

Earlier, the Minister talked about the expectation that public authorities will keep their own records of how they made assessments that the subsidy being provided would not distort competition, and that there were not ways in which it could have been available in the market on more favourable terms, and so on. It is important from a transparency and public confidence point of view that it be clearer how it would need to be demonstrated, or at least confirmed, by the public authority that it had considered the subsidy control principles and what records might need to be kept should there be a concern at a later date.

In the first instance, an interested party can request the public authority to provide information demonstrating how it has complied with the duty under clause 76. Under part 5 of the Bill—

I think there will be a further debate to have on the interested parties point. The important thing is what the public authority might be expected to do.

Absolutely. I was going to say that the interested party can, obviously, make a challenge—commence a judicial review of the decision. The duty to consider and act consistently with the principles does leave room for legitimate judgment by public authorities.

On the question of what standard will be applied when looking at that, should it be judicially reviewed, the Competition Appeal Tribunal will apply the judicial review standard when hearing challenges. None the less, the guidance that is going to be published will provide advice on the practical application of provisions, including the duty to consider and act consistently with the subsidy control principles. That guidance will be published in good time for public authorities and other stakeholders to understand the key requirements of the new regime before it commences.

Question put and agreed to.

Clause 12 accordingly ordered to stand part of the Bill.

Clause 13

Application of the energy and environment principles

I beg to move amendment 17, in clause 13, page 7, line 30, leave out

“in relation to energy and environment”.

This amendment would require public authorities to consider energy and environment principles when giving any subsidies, not just those related to energy and environment.

The reason I tabled the amendment is something that we covered earlier today in relation particularly to net zero and thinking about the obligations that we all have to ensure the protection of the environment. I think it is really important, as the Minister agreed earlier today, that in every policy decision that is being made by every authority, whether it is granting a subsidy or doing anything else, those authorities are considering the environmental principles of that decision.

This proposal would ensure that consideration was given to the energy and environment principles in schedule 2 in relation to every subsidy that was given. That is not too much for us to ask of granting authorities. They are giving subsidies, and we have to remember that the subsidies they are giving represent significant amounts of money. We are talking about hundreds of thousands of pounds; we are not talking about when a local authority gives a grant of 100 quid to a small community council to put up Christmas lights. As we are talking about big sums of money, it is totally reasonable that we expect these public authorities—which do anyway a huge amount of audit, and a huge amount of sense checking of any spend that they do and consideration of any spend that they do— to think about all that spend. They should do so not just in relation to subsidies, but in relation to the energy and environment principles.

I probably would have written schedule 2 slightly differently. I maybe would have had slightly different energy and environment principles, including the Opposition’s suggestions around net zero, but given that those are in the Bill and that schedule 2 is in the Bill, it is totally reasonable for us to say that those authorities should consider the energy and environment in everything they do. That is not explicit or even implicit in schedule 1, in terms of the concerns that authorities have to look at with regard to the principles there. This is hugely important.

Given that we did not accept the hon. Lady’s earlier amendment, does she not worry that this new proposal might weaken the Bill further with regard to what she is talking about—environmental protections?

I think that, actually, schedule 2 does provide some environmental protections; I am quite comfortable in saying that. It does not do everything I would have wanted it to do. It does not create a requirement to meet the carbon commitments and move towards net zero in the consideration of the principles. However, increasing the level of environmental protection is in there, and it is important that all authorities are thinking about increasing the level of environmental protection in whatever they are doing. Now is the time for the UK Government to make that explicit in relation to everything that everybody is doing, whether it is subsidies or something else. That is why the amendment has been tabled.

I thank the hon. Lady for her explanation of the amendment. We certainly recognise the intention behind it, which was something we looked at and gave thought to. We share the view that climate and environmental considerations should be taken into account in assessing all subsidies, and ensuring that all subsidies are assessed in the context of the UK’s net zero commitments is important. That is a real gap in the Bill—for example, transport subsidies might sit outside the scope of schedule 2, and therefore a public authority might not be required to consider the environmental questions and impact relating to those.

Labour believes that hardwiring the net zero considerations into all subsidy decisions would be better achieved by amending schedule 1, as our amendment would have done. I hope that as we proceed with our debates in the House and the period of COP26, which is just ahead of us, we can return to how we embed that principle in the legislation. These are principles of general relevance, so that is where we see a general requirement to consider net zero sitting a little more comfortably. That is why, while we support the intention behind the amendment, we would prefer to reconsider how we look at embedding the general principle of net zero more widely in the legislation.

I remind hon. Members that the principles in schedule 2 include general matters such as requiring energy and environmental subsidies to be aimed at, or to incentivise the beneficiary in, delivering a secure, affordable, sustainable energy system, or to increase the level of environmental protection relative to that which would have been achieved in the absence of the subsidy. The schedule also includes a number of more specific principles, covering for example the decarbonisation of emissions linked to industrial activities or subsidies to electricity-intensive users to compensate for rises in electricity costs.

While I recognise the commitment shown by the hon. Member for Aberdeen North to our transition to net zero—subsidies that are correctly devised, designed and targeted can be a powerful means to achieve that—public authorities grant subsidies for many reasons and in connection with many policy objectives.

The UK is pretty much a world leader in tackling climate change, second only to Sweden in the Climate Change Performance Index. We must look at this question in the context of what the United Kingdom does, rather than something so specific. Would not the amendment effectively open the door to a lot of judicial challenges on whether subsidies were always in the interest of energy and the environment? Is that not opening the door to a lot of problems in the granting of subsidies?

It might be. Whether there would be a slew of judicial reviews remains to be seen, but certainly, there is a question whether subsidies for other policy objectives would be awarded in the first place, because it would be too onerous to do so. Let me take the example of subsidies for training young people. There are some valuable economic and societal purposes there, but depending on what we are training the young people for, they do not always necessarily have much connection to the energy and environmental principles.

Expanding the principles in schedule 2 to include all subsidies may discourage public authorities from granting subsidies in pursuit of otherwise valuable aims. We do not want that to happen. The additional principles in schedule 2, which apply to energy and environmental subsidies and to subsidy schemes, fully support the UK’s priorities on both net zero and protecting the environment. I want to ensure, particularly given this morning’s discussion and the fact that we are in the lead up to COP26, that we are championing those priorities and continuing to lean in and show global leadership from the front. In this instance, owing to the reasons I have set out, I ask the hon. Lady to withdraw the amendment.