MSPs have refused to give legislative consent to the UK Government’s post-Brexit subsidy bill which would cause “further erosion of the devolution settlement”.
The Subsidy Control Bill is currently at the report stage in the House of Lords, before it moves on to a third reading, and has made its way to Holyrood for sign off from Scottish parliamentarians.
The legislation sets out how the UK will replace EU state aid rules and the framework to implement them, as well as covering subsidies which have or are capable of having an effect on competition or investment in the UK.
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However, the Scottish Parliament has now refused to back the bill, and the Welsh government has previously criticsed the plans as an “attack on devolution”.
Under EU rules, the Scottish government had more autonomy, much of which has now been transferred back to the UK government through the bill.
Minister for Business, Trade, Tourism and Enterprise Ivan McKee introduced the motion which stated that consent should not be given.
He stated that the UK internal market act, introduced in December 2020, “completely overrides the devolution settlement by reserving subsidy control and giving UK ministers powers to spend directly in devolved areas without the oversight and consent of this Scottish Parliament and Scottish ministers.”
McKee (above) added that the bill would undermine the abilities of the parliament and Scottish ministers in devolved areas such as agriculture, economic development, the environment and fisheries.
He added: “The bill if adopted brings further erosion of devolution through the sweeping powers of the Secretary of State which overrides the devolution settlement and risks UK ministers intervening without proper knowledge or consultation around local circumstances.”
McKee added that the Scottish Government has argued for devolved administrations to have “equivalent powers to refer subsidies made in other parts of the UK or even by public authorities in their own jurisdictions to the CMA.”
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He added; “The UK government have consistently rejected this proposal.”
McKee asked the parliament to back the motion refusing legislative consent as it stands and called for “appropriate amendments” to be made which “respects this parliament's role in devolved competencies”.
Claire Baker, Convenor of the Economy and Fair work committee, said that the Scottish Government’s legislative consent motion wasn’t launched in Holyrood until four months after it was introduced into the House of Commons last year.
The Scottish Labour MSP said that there had been “no clear explanation”, and the delay meant the committee was unable to scrutinise as it wished, adding that it was “unsatisfactory”.
However, Baker (above) added that the commitee shares concerns that the bill would give “considerable powers” to UK ministers and would impact on areas of devolved competence.
She added: “We share the concerns that this will potentially result in UK ministers having the ability to intervene in devolved areas without proper consultation or knowledge of local circumstances.
“Our witness panel highlighted the asymmetry of power between the UK and devolved governments created by the bill, which the majority of the committee agreed was a concern.
“I would stress the committee's concerns relate solely to the areas which are devolved.”
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Jamie Halcro Johnson, on behalf of Scottish Tories, admitted the Bill was “lacking in some detail” but added: “While acknowledging that the bill will not be the last word on subsidy control, there is a reasonable case that this lack of detail in primary legislation has made scrutiny more difficult, notwithstanding the late stage at which it came to this parliament.
“However, this is, and I hope the chamber recognises, a necessary Bill.
“One that ensures the integrity of the UK internal market, as well as meeting our international obligations.”
Daniel Johnson, (pictured above) speaking on behalf of Scottish Labour, said the party would support the motion and refuse consent for the bill.
He said that the bill does not “tackle regional inequality”, adding “that levelling up the UK Government says it cares so much about”.
He also said that the bill has a “lack of transparency” and shows the UK Government “either does not understand devolution or perhaps does not care about it”.
The motion passed by 86 votes for yes, and 28 votes for no.
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