The UK introduced the new Subsidy Control Bill into UK Parliament on 30 June last. This proposed law will govern how the UK (including the devolved governments) subsidises businesses. Under the Trade and Cooperation Agreement, the UK committed to agree a new subsidy control regime.

UK Business Secretary Kwasi Kwarteng said the UK is “seizing the opportunities of being an independent trading nation to back new and emerging British industries, create more jobs and make the UK. the best possible place to start and grow a business.”

State subsidies and the concept of a level playing field was a major sticking point during the Brexit negotiations as the UK sought to break away from the EU’s rules.

The Business Secretary called the Bill “a clear departure from the EU state aid regime” and also said that the Government would not use the system to bail out unsustainable companies.

The Bill establishes the Subsidy Advice Unit, located within the Competition and Markets Authority, to provide monitoring and oversight of the new regime. The Subsidy Advice Unit will also advise public authorities on specific subsidies in a limited number of cases and the Competition Appeal Tribunal will hear subsidy control cases under the law.

Subsidies that are subject to the Protocol on Northern Ireland/Ireland where EU State aid rules continue to apply are carved out of the scope of the regime.

The Bill will now make its way through Parliament, and it is expected that the new regime will come into effect in 2022 if approved by the UK Parliament.