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Subsidy Control Bill: Lords third reading

29 March 2022

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The Subsidy Control Bill had its third reading, a chance for members to make sure the eventual law is effective, workable and without loopholes, on Monday 28 March.

The Subsidy Control Bill seeks to implement a new domestic subsidy control regime which provides a legal framework within which public authorities make subsidy, ensures value for money to UK taxpayers and complies with international obligations.

Final checks  

Third reading is a chance for members to make sure the eventual law is effective, workable and without loopholes.

As no amendments (changes) were suggested ahead of third reading, members discussed the progress of the bill through the House at the conclusion of Lords stages.

How to follow

Explore further information

Read background on the bill in the House of Lords Library Subsidy Control Bill briefing.

Next steps

Following completion of third reading, the bill now passes to the Commons for consideration of Lords amendments.

What's happened so far?

Report stage: Tuesday 22 March

Report stage is an extra chance for members to closely scrutinise elements of the bill and make changes.   

Members considered changes relating to:

  • determination of the equity rationale for a subsidy

  • allowing subsidies that meet conditions on reducing social or economic disadvantage

  • reducing the threshold for the exemption from the requirement to upload to the subsidy database from £500,000 to £100,000

  • implementing a 3 month deadline for uploading tax schemes to the subsidy database

  • powers and role of the Competition and Markets Authority (CMA).

Lords divisions 

There were  two divisions (votes) on proposed changes to the bill.

Net zero strategy

The first vote was on amendment 3, which requires public authorities to consider whether proposed subsidies would have any negative effects on progress towards the UK’s legally binding net zero and environmental targets.

Members voted 133 in favour and 139 against, so the change was not made.

Agricultural subsidies

The second vote was on amendment 4, which requires agriculture subsidies to take particular account of areas of agriculture disadvantage and levels of marginality of land.

Members voted 110 in favour and 125 against, so the change was not made.

Catch up

Committee stage day four: Wednesday 9 March

Members discussed a range of topics including:

  • powers and role of the Competition and Markets Authority (CMA) and Subsidy Advice Unit (SAU)

  • including a review of the impact of the subsidy control regime on progress towards achieving net zero and environmental goals in the annual report prepared by the CMA

  • review of subsidy decisions

  • position of devolved governments in relation to the bill

  • extending the time limits for application to the tribunal from one month to three.

Catch up

Committee stage day three: Monday 7 February

Members discussed a range of topics including:

  • removing the declaration exemption for individual subsidies given under the scheme and entering them into the subsidy database

  • requiring subsidies or schemes to be entered in the database within three months of being made

  • understanding of the application of the state aid rules which will apply to Northern Ireland and those which will apply to rest of the United Kingdom as a result of the bill

  • exempting agricultural subsidies from the subsidy control requirements.

Catch up

Committee stage day two: Wednesday 2 February

Members discussed a range of topics including:

  • streamlined subsidy schemes to support areas of deprivation

  • requiring individual subsidies inside a scheme to be judged against the subsidy control or energy and environmental principles

  • additional powers of the Competition Markets Authority (CMA)

  • ensuring transparency and accountability so subsidies are free from political motivation or influence

  • requiring regular audits of the subsidy database to ensure its contents are of appropriate quality.

Catch up

Committee stage day one: Monday 31 January

Members discussed a range of topics including:

  • Welsh and Scottish Parliaments powers in relation to subsidy schemes

  • creating a clear subsidy strategy

  • considering climate change net zero targets when granting subsidies

  • streamlining subsidy schemes across the UK to support areas of relative economic deprivation.

Catch up

Second reading: Wednesday 19 January

Members discussed the main issues in the bill and highlighted any concerns or specific areas where they think amendments (changes) are needed during second reading

Topics under discussion included:

  • subsidy control principles
  • energy and environmental subsidies
  • subsidy control requirements for public authorities
  • withdrawal agreement subsidies (including Northern Ireland Protocol)

Members speaking

Lord Callanan (Conservative), Parliamentary Under-Secretary of State at the Department for Business, Energy and Industrial Strategy, opened the debate and responded on behalf of the government.

Members speaking included:

Find out more about the issues discussed: catch up on Parliament TV or read the Lords Hansard trasnscript.

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