“Measures will be introduced to ensure that support for
businesses reflects the United Kingdom’s strategic interests and
drives economic growth.”
The purpose of the Bill is to:
● Implement a domestic UK subsidy control regime that reflects
our strategic interests and particular national circumstances,
providing a legal framework within which public authorities make
subsidy decisions.
The main benefits of the Bill would be:
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● Creating our own subsidy control system now that we are no
longer bound by the EU’s burdensome State Aid rules.
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● Enabling public authorities to deliver subsidies that are
tailored and bespoke for local needs to support the UK’s
economic recovery and deliver Government priorities, such as
increasing UK R&D investment and achieving net zero.
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● Empowering local authorities, public bodies, and central
and devolved governments to design subsidies that deliver
strong benefits for the UK taxpayer and local communities.
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● Providing certainty and confidence to businesses investing
in the UK, by protecting against subsidies that risk causing
distortive or harmful economic impacts, including to the UK’s
internal market.
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● Enabling the UK to meet its international commitments on
subsidy control, including its international commitments at
the World Trade Organisation and in Free Trade Agreements.
The main elements of the Bill are:
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● Creating a consistent set of UK-wide principles that public
authorities must follow when granting subsidies.
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● Exempting categories of subsidies from certain obligations
of the regime or leaving out of scope entirely.
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● Prohibiting and placing conditions on certain types of
subsidies which are at a particularly high risk of distorting
markets.
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● Obligating public authorities to upload information on
subsidies to a new UK-wide, publicly accessible transparency
database.
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● Establishing an independent subsidy control body to oversee
the UK’s bespoke, modern subsidy control system.
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● Providing for judicial oversight and enforcement of the
granting of subsidies. Territorial extent and application
● The Bill’s provisions will extend and apply to the whole of the
UK. Key facts
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● In 2018, the UK spent 0.34 per cent of GDP on subsidies. 93
per cent of this was spent in four main policy areas: 42 per
cent on ‘Environmental protection including energy savings’,
23 per cent for ‘Research and Development including
innovation’, 15 per cent for ‘SMEs including risk capital’
and 13 per cent for ‘Culture’.
-
● The UK has historically given a low level of subsidies
compared to other large European countries. The UK’s 0.34 per
cent of GDP spent on subsidies in 2018 was less than the EU
average of 0.76 per cent of GDP. France spent 0.79 per cent
of GDP and Germany spent 1.45 per cent per cent of GDP on
subsidies in 2018.
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● 94 per cent of the total value of subsidies granted in the
UK was by the UK Government, 5 per cent by devolved
administrations and 1 per cent by Local Authorities.
