The UK’s new domestic subsidy control regime comes into force on 4 January 2023, introducing a new way in which subsidies are determined and regulated.
This article is the first in a series of briefings which seek to explore the nuances and features of the new regime.
The new regime replaces the EU State aid regime and is set out in the Subsidy Control Act 2022 (Act) together with the following Regulations:
The Act and Regulations are accompanied by over 200 pages of Statutory Guidance. Public authorities must have regard to this guidance when given a subsidy or making a subsidy scheme.
The new regime has been designed to comply with the UK’s obligations under the EU-UK Trade and Cooperation Agreement (TCA) along with the UK’s other international commitments. However, the new regime does not apply to:
Key features of the new regime include:
The new regime was intended by the UK Government to be more flexible, less complex and less constrained than the EU State aid regime. There are certain parts to the regime where this could be seen to be the case, however, the new regime also has many similar features to the EU State aid regime. This is, to a certain extent, due to the deal that was arrived at with the EU post Brexit.
But there are other elements to the new regime which were not prescribed by the TCA and which feel like State aid under a new guise. For example, the new “Streamlined Routes” (the drafts of which were published on 13 December 2022), look very like certain exemptions found in the General Block Exemption Regulation (GBER) – right down to prescribing specific aid intensities.
If the 200 page guidance document is anything to go by, the new regime looks to be anything but simple to apply. As the regime becomes embedded after 4 January 2023, it will be interesting to see how the new regime is perceived and applied. In the meantime, all public authorities should familiarise themselves with the legislation and guidance and amend their processes and procedures to align with the requirements of the new regime.
If you have any further or specific queries in relation to the Subsidy Control regime, please do get in touch with our Government and Public Services Team.
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