Readers of this blog may remember that we have commented previously on the UK Government's consultation on subsidy control and regulation. The need for new rules on subsidies granted by public bodies to private enterprises or other economic actors has arisen due to the UK's departure from the European Union. While the UK was a member of the EU, public subsidy (known as state aid) was subject to EU law. Now that the UK has left the EU, the UK Government wants to establish its own regime for control of public subsidy.
The Department for Business, Energy and Industrial Strategy has now published a draft bill. The draft Subsidy Control Bill will, if enacted, establish a UK-wide subsidy control regime which applies to all UK public authorities. That includes devolved administrations and Scottish local authorities – but does not include the devolved legislatures.
The Government's stated aim is to establish a framework for public authorities to provide subsidies in order to deliver Government priorities, such as supporting economic recovery following the COVID-19 pandemic, "levelling up" and achieving net zero carbon. Amongst other provisions, the bill sets out a number of subsidy control principles, which public authorities will be required to consider. They will be able to award a subsidy only if consistent with these principles.
The bill has received its first reading in the House of Commons. A date for a second reading has not yet been set, and no parliamentary debate on the provisions of the bill has taken place – meaning that the bill could be amended, either in the Commons or the House of Lords.
We will be blogging further on the bill in due course so watch this space. Please contact Jamie Dunne if you have any questions or would like to discuss.