Key Facts

• Roger Barker is the director of policy and governance for the Institute of Directors.
• The IoD seeks a subsidy regime that is easy to navigate, does not result in delays, and has predictable outcomes.
• Dr Barker believes the Bill could benefit from more clarity to prevent legal challenges related to regional policy.
• About 500 public bodies will be empowered to grant subsidies.
• There are concerns about whether the Competition and Markets Authority's subsidy advice unit has the necessary resources to handle consultations from hundreds of public bodies.
• The IoD believes that the proposed regime increases the scope for supporting start-ups compared to the previous EU regime.
• The US provides significant public subsidies for sectors such as AI and quantum computing.
• EU subsidises semiconductor manufacturing capability.
• IoD is concerned about the potential confusion between different levels of government in devolved nations like Wales.
• Dr Barker supports flexibility in the subsidy framework to permit necessary changes.
• George Peretz QC practices at Monckton Chambers.
• There is a concern about subsidies not being recognised by granting authorities as subsidies.
• The CMA could investigate on its own initiative cases where subsidies are contestable but not on the transparency database.
• Clauses 55 and 60 refer to the power of the Secretary of State to request a report on proposed subsidies or subsidy schemes.
• The provisions allow for post-award referrals and call-in directions by the Secretary of State but not necessarily by devolved Ministers.
• Clause 70(7) defines interested parties as those whose interests may be affected by the giving of the subsidy.
• The Bill does not explicitly address how grey-area measures will be dealt with.
• Private enforcement relies on commercial operators who may have conflicts of interest.
• Enforcement mechanisms depend on private litigation, which can discourage small companies from bringing challenges against larger competitors.
• Caroline Nokes chairs the Public Bill Committee meeting.
• The witnesses are Jonathan Branton (DWF Group), Alexander Rose (DWF Group), and Richard Warren (UK Steel).
• The session runs until 3:40 pm.
• EU system bans state aid except for listed exceptions.
• UK regime allows everything but lists what is banned.
• UK steel sector pays 80%-100% more for electricity than EU counterparts due to subsidies on renewables and carbon taxes.
• Theoretical framework aims to be transparent and provide light-touch approvals.
• The TCA has created flexibility in subsidy control but faces issues of incomplete data and insufficient transparency.
• There are only 501 entries on the national transparency register since December 2020, with 257 having a zero or nil value.
• Challenges to subsidies must be made within one month after entry into the register.
• Alexander Rose cited SC10261 Tees Valley Capital Grant Scheme with issues in posting dates.
• The website for the subsidy control database did not exist as of April 1, 2020.
• Schemes can currently only be challenged within a month after they are set up, which is seen as insufficient.
• The EU system was more prescriptive, limiting flexibility compared to the new UK regime.
• Historically, the UK has not invested heavily in regional development using state aid.
• The new subsidy control regime offers significant flexibility for regional development and levelling-up initiatives.
• Reporting threshold is set at £500,000 for schemes.
• Minimum financial assistance threshold is £315,000.
• The period to appeal an award should not exceed three months.
• Six-month reporting period may be halved without compromising transparency.
• Caroline Nokes introduces Daniel Greenberg as Counsel for Domestic Legislation at the House of Commons.
• The discussion focuses on the Subsidy Control Bill's technical aspects, particularly its relation to devolution interests.
• Daniel Greenberg provides analysis on how the Bill reflects macroeconomic policy and addresses economic competencies of devolved Administrations.
• The Subsidy Control Bill focuses on international obligations of Her Majesty’s Government.
• Clause 70 mentions the Secretary of State and persons whose interests may be affected.
• Explanatory notes are a source that courts will have regard to in determining doubts and questions about the law.
• Seema Malhotra asks about the compatibility of the Bill with the Northern Ireland protocol.
• Daniel Greenberg advises considering article 6 and article 10 of the protocol in relation to the Bill.
• Rachel Merelie introduces herself as the senior director for the Office for the Internal Market at the CMA and discusses her advisory role if the Bill passes.
• The CMA was given money in the 2021-22 settlement to take on new functions.
• Three new functions are the Office for the Internal Market, Digital Markets Unit, and potentially the subsidy advice unit.
• BEIS is responsible for setting up a database that contains subsidies information.
• There is no formal requirement in the Bill for representation from all four nations.
• £20 million allocated for three new functions in 2021-22.
• BEIS estimates between five to 20 references a year initially, with an upper estimate of 40 references annually for modelling purposes.
• A 30-day process is mandated for reviewing subsidies of particular interest.
• The Bill focuses on assessing subsidies against seven principles.
• Public authorities are expected to provide necessary evidence for assessment.
• Guidance from central Government is crucial in preparing public bodies for the new regime.
• There may be a need for iterative adjustments as the regime starts operating.
• Ivan McKee is the Scottish Minister for Business, Trade, Tourism and Enterprise.
• The Subsidy Control Bill has concerns over sweeping powers of the Secretary of State which ignore devolution settlement.
• Absence of formal regulatory and enforcement arrangements is a major concern.
• The Subsidy Control Bill is seen as lopsided, giving BEIS powers in devolved areas without equivalent power for Scottish Government Ministers.
• Concerns exist over agricultural subsidies being within the scope of the Bill.
• There have been 34 official-to-official meetings and 12 ministerial meetings across devolved administrations to develop the policy.
• Concerns are raised over the assault on the devolution settlement by UK Government.
• Scottish local authorities' powers under the Subsidy Control regime are a point of discussion.
• The Secretary of State has more wide-ranging powers than the devolved Administrations.
• Caroline Nokes addresses the Subsidy Control Bill in a Committee meeting.
• Mr McKee is thanked for giving evidence on devolved powers and trust issues related to UK Government regulations.
• The Committee is ordered to adjourn until Thursday, 28 October at half-past Eleven o'clock.