Snap guide to this session’s Government legislation 11) Subsidy Control Bill

12 Sep

The Bills announced in each session’s Queen’s Speech are the fulcrum of the Parliamentary year.  But they are easily lost sight of, separately and wholly, as the political cycle moves – and a mass of other news and events crowd them out.

So during the coming months, ConservativeHome will run a brief guide, on most Sunday mornings, to each Bill from this year’s Speech: what it is, whether it’s new, its main strengths and weaknesses – and whether it’s expected sooner or later.

11. Subsidy Control Bill

This is the measure that sets out how subsidies will be controlled now that the UK has left the EU.  It is a wide-ranging piece of legislation that covers subsidies that have or could havw an effect on competition or investment within the UK.

The six-part Bill provides a framework for public subsidies, prohibitions on their use, and exemptions from these in specified circumstances.  It also establishes a requirement for public authorities to use the transparency database; a Subsidy Advice Unit located within the Competition and Markets Authority (CMA), and scope for judicial review and statutory guidance.

Responsible department

Business, Energy & Industrial Strategy – and so Kwasi Kwarteng is in the lead, while Paul Scully, whose duties specifically cover competition law, will presumably take the lead in committee.

However, the Bill which touch on the business of all the department’s Ministers – including Anne-Marie Trevelyan, Minister for Energy, because it has nine principles that apply to energy and environmental subsidies (in addition to seven which apply to all subsidies).  Nadhim Zahawi is responsible for security, and Amanda Solloway for industrial strategy.  The Bill will touch on both.

Carried over or a new Bill?


Expected when?

Currently under consideration – it received its First Reading in June.

Arguments for

The Bill is necessary both to implement our international commitments on subsidy control, now that Brexit has happened, and to cover subsidies that have or could have an effect on competition or investment within the UK.  The UK-EU Trade and Cooperation Agreement (TCA) gave the former some freedom to design its own system though with more conditions than would apply under WTO rules.

Many of the proposed principles are similar to those of the EU state aid rules.  The CMA will have an oversight role, but its assessments won’t be binding.  It will continue to be possible for private parties to challenge subsidy decisions in court.  EU state aid rules will still apply to subsidies covered by the Northern Ireland Protocol.  There will be exemptions for natural disasters, emergencies and national security.

Arguments against

The Scottish and Welsh governments are up in arms about the Bill.  The SNP have described it as “a full-scale assault on devolution”, while Plaid Cyrmu claim that it “only reflects the narrow interests of the UK Government”.  More broadly, this is one of those measures where the devil will lie in the detail.

The Opposition, plus interested Conservative backbench parties such as members of the BEIS Select Committee, could challenge the principles; what the Government will do with the subsidy freedoms that it has; the balance of the CMA’s powers; how the new exemption provisions (“streamlined subsidy schemes”) will work, plus the scope of proposed remedies and reviews.


Although the point about the detail and devil applies, Opposition parties will want to present a broad argument.  The Labour front bench will want to avoid this morphing into a general attack on Brexit, since it has been keen to curb these elsewhere.  Instead, it will want to paint a picture of power-crazed Ministers seeking to gain more power without adequate scrutiny.

That will dovetail with the specific grievance of the Scottish and Welsh nationalists.  Elsewhere, attention is likely to focus on the balance between government and the CMA (and the scope of compulsory referrals to it, since there will be some of these), plus the scope of private parties to issue challenges, the wording of the principles, and the workings of the proposed environmental regime.

Controversy rating: 7/10

There is much for Parliament and the public to get its teeth into – even were there no hardline Remainers to summon up the ghost of the referendum decision; angry Scottish and Welsh nationalists, and concerned Unionists to pointing the difference between the arrangements that will pertain in three parts of the UK, but not the fourth.  And a philosophical question: how statist should governments be?