UK regains control of business subsidy regime

Subsidies will be tailored to local needs, with public authorities and devolved administrations having added flexibility to ensure they can get support to where it’s most needed as quickly as possible.

The introduction of these new rules is the most significant change in subsidy administration in over 40 years and marks a landmark transition away from the restrictive aid scheme the UK was subject to as part of the EU, which would regularly block elected devolved administrations and local authorities from delivering funds to businesses that most needed it in their communities.

Business Minister, Kevin Hollinrake, said the new rules mean UK authorities will be free to deliver money to businesses in a quicker, fairer, and simpler way, without longwinded and unnecessary approval processes to bog us down.

Under the previous EU system, all subsidies except for a select few under a ‘Block Exemption Regulation’ would be required to undergo a time-consuming bureaucratic process, subject to European laws and the European Commission.

Subsidies would require notification to and approval from the European Commission well in advance, therefore delaying vital funds from reaching businesses in good and efficient time. The new regime is tailor-made for businesses and public authorities in the UK, with views gathered from stakeholders across the country in an extensive consultation.

The new regime will also give public authorities the ability to award subsidies through streamlined routes, schemes that are pre-assessed by the government, and provide public authorities with an even easier and quicker way to award subsidies to businesses. The government is currently developing three of these schemes, which will cover research, development and innovation, energy usage, and local growth.

The new regime also contributes to the UK meeting international commitments on subsidy control, including its international commitments at the World Trade Organization (WTO) and in free trade agreements.