- The UK Government has introduced a new Subsidy Control Bill which, if passed, would lay down the new legislative framework for the control of public subsidies provided to businesses, following the UK’s exit from the EU.
A state subsidy (aka state aid) is a benefit provided from public resources to a private enterprise. Prior to leaving the EU, the control of subsidies in the UK sat squarely within the competency of the European Union. While the UK has left the EU, it has given the EU certain commitments to control subsidies, as explained further below.
Businesses receiving public subsidies have an immediate advantage over competitors, which can have a distortive effect. The subsidy may cover the beneficiary’s production costs, enabling them to lower the price of goods or services below those of rivals. The EU is concerned with maintaining a level playing field across the single market and, post-Brexit, not to grant market access to UK firms benefiting from unfair subsidies.
On 30 June, the UK Government introduced its
