Goodbye, State Aid, Hello Subsidy Control

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Goodbye, State Aid, Hello Subsidy Control

Author: Barry Sankey

“State Aid” has been the bane of many publicly funded or supported projects for many years, and indeed it proved a major stumbling block for the deal between the UK and the EU that was settled only days before the transition period ended on 31 December 2020.

For those hoping that in the brave new world we could finally say farewell to “State Aid” and its bedfellows, General Block Exemption Regulation’s (GBER) “de minimis” and so on, we’re sorry to disillusion you, but the UK-EU Trade and Co-operation Agreement (UK-EU TCA) doesn’t abandon the need to deal with the impact of public sector support for business and services in the UK, there’s merely a change of name and the opportunity to re-jig the rules in the UK and establish a dispute process between the UK and the EU, should there be complaints about unfair competition.

The UK-EU TCA dealt very briefly with future State Aid (EU) and Subsidies (UK – moving to WTO parlance) and an indication that each party would look towards establishing a tribunal to manage disputes between the EU and the UK.

The future of UK Subsidy Control

Here in the UK the newly appointed Secretary of State for Business, Energy and Industrial Strategy, Kwasi Kwarteng, has presented a consultation paper on the future of UK Subsidy Control, and how subsidies might be managed and regulated in the future within the UK.

It’s over fifty pages of detail, and poses forty-three specific questions, as well as posing many more for UK business and those looking to support projects from the public purse, with responses due by 31 March 2021.  It also looks towards future free trade agreements with others, and Northern Ireland, of course, remains subject to EU State Aid regulations, in any event, thanks to the special arrangements to keep the Irish border open.

We will be reviewing the issues raised – and those omitted – over the next few weeks and we will post further comments as our own and our clients’ reviews progress.

The BEIS consultation can be downloaded from https://www.gov.uk/government/consultations/subsidy-control-designing-a-new-approach-for-the-uk

if you would like to get in touch with us regarding any of the points raised please contact Barry Sankey.

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