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UK Regains Control of Business Subsidy Regime


A new system to regulate the award of subsidies to business came into force last week, providing a boost to businesses across the country and empowering public authorities to deliver support to businesses in a quicker, fairer, and simpler way. 

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 are the most significant changes 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 regularly would block elected devolved administrations and local authorities from delivering funds to businesses that most needed it in their communities.

Business Minister Kevin Hollinrake said: 

“Our new subsidy control regime is another example of us making the most of our opportunities to be free of Europe’s bureaucracy and forge a future tailor-made for the UK.

“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 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.