Consultation on designing a new subsidy approach for the UK

BEIS has published a consultation – closing 31 March – on its proposed approach for establishing a UK-wide subsidy control regime. The Government aims to deliver a regime that:

  • Facilitates strategic interventions to support government priorities, including supporting the economy’s recovery from COVID-19
  • Takes account of the economic needs of the UK’s individual nations and strengthens the economic bonds of our Union
  • Protects the UK’s competitive and dynamic market economy
  • Ensures that subsidies in the UK are given in line with our international commitments, including those in the UK-EU Trade and Cooperation Agreement (TCA)

The questions in the consultation, are as follows.

  • Question 1: What type of subsidies are beneficial to the UK economy?
  • Question 2: What type of subsidies are potentially most harmful and distortive?
  • Question 3: Do you agree with the Government’s objectives for a future subsidy control regime? Are there any other objectives that the Government should consider?
  • Question 4: We invite respondents’ thoughts on further sources of evidence that would help to strengthen our analysis of policy impacts. In particular:
    • Additional datasets (other than the European Commission’s Transparency Award Module) on local or regional subsidy awards (e.g. by value, sector or category)
    • Research and evaluation projects that have been conducted on the impacts of different types of subsidy awards on domestic competition and trade (e.g. by value, sector or category)
  • Question 5: We invite respondents’ views on whether our proposed subsidy control regime, including the way it functions, may have any potential impact on people who share a protected characteristic (age, disability, gender re-assignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief, sex (gender) or sexual orientation), in different ways from people who don’t share them. Please provide any evidence that may be useful to assist with our analysis of policy impacts.
  • Question 6: Do you agree with the four key characteristics used to describe a support measure that would be considered a subsidy? If not, why?
  • Question 7: Should there be a designated list of bodies that are subject to the new subsidy control regime. If so, how could that list be constructed to ensure that it covers all financial assistance originating from public resources?
  • Question 8: Do you think agricultural subsidies in scope of the AoA and fisheries subsidies should be subject to the proposed domestic arrangements? If so, what obligations should apply?
  • Question 9: Do you think audio-visual subsidies should be subject to the domestic regime? Please provide a rationale for your answer.
    Question 10: Do you agree with the inclusion of an additional principle focused on protecting the UK internal market by minimising the distortive effects on competition?
  • Question 11: Do you think there should be any additional principles?
  • Question 12: What level of guidance or information would be helpful for public authorities to assist with their compliance with the principles?
  • Question 13: Should the threshold for the exemption for small amounts of financial assistance to a single recipient replicate the threshold in the UK-EU Trade and Cooperation Agreement at 325,000 Special Drawing Rights over a three-year period? If not, what lower threshold would you suggest and why?
  • Question 14: If you consider the small amounts of financial assistance threshold should replicate the UK-EU Trade and Cooperation Agreement, should it be fixed at an amount of pound sterling (GBP)?
  • Question 15: Do you agree that subsidies under the proposed small amounts of financial assistance threshold be exempt from all obligations under the domestic regime, except for the WTO prohibitions? If not, why?
  • Question 16: Should relief for exceptional occurrences be exempted from obligations regarding principles, prohibitions and conditions in the subsidy control regime?
  • Question 17: Should subsidies granted temporarily to address a national or global economic emergency be exempted from the rules on prohibited subsidies and any additional rules set out below?
  • Question 18: Should the threshold for the exemptions for Services of Public Economic Interest replicate the relevant thresholds in the UK-EU Trade and Cooperation Agreement at 750,000 Special Drawing Rights over a three-year period, and for transparency obligations at 15 million Special Drawing Rights per task? If not, what lower threshold would you suggest and why?
  • Question 19: If you consider the SPEI thresholds should replicate the UK-EU Trade and Cooperation Agreement, should they be fixed at an amount of pound sterling (GBP)?
  • Question 20: Do you agree with the Government’s approach to prohibitions and conditions? Should any types of subsidy be added to either category? If so, why?
  • Question 21: Would more detailed definitions of any of the terms set out in this section, including the definition of “ailing or insolvent enterprises” be useful to ensure a consistent and proportionate? approach to compliance? If so, what should these be?
  • Question 22: Should the Government consider any additional ways to protect the UK internal market, over and above the inclusion of a specific principle to minimise negative impacts? If so, what?
  • Question 23: Would an additional process for subsidies considered at high-risk of causing harmful distortion to the UK internal market add value to the proposed principles? If so, how should it be designed and what criteria should be used to determine if the subsidy is at high-risk of causing distortion?
  • Question 24: Should public authorities be obliged to make competition impact reviews public? If not, why?
  • Question 25: Should public authorities be permitted to override competition impact review e.g. in the case of emergencies? If so, why?
  • Question 26: Should there be additional measures to prevent subsidies that encourage uneconomic migration of jobs between the four nations?
  • Question 27: Could additional measures help ensure that lower risk subsidies are able to proceed with maximum legal certainty and minimum bureaucracy? What should be included within the definition of ‘low-risk’ subsidies?
  • Question 28: What guidance or information would be helpful for public authorities to assist on lower risk subsidies?
  • Question 29: Should the specific rules on energy and environment subsidies apply only in so far as they are necessary to comply with trade agreements? Or should they apply under the domestic regime more generally?
  • Question 30: Which sectors or particular categories of subsidy (such as for disadvantaged areas, R&D, transport, skills etc) would benefit from tailored provisions or specific guidance on subsidy control? If so, why, and what should the nature, extent and form of the provisions be?
  • Question 31: Do you agree with the proposed rules on transparency? If not, why?
  • Question 32: Do you agree that the thresholds for the obligation on public authorities to submit information on the transparency database should replicate the thresholds set for small amounts of financial assistance given to a single enterprise over a three-year period and for transparency for SPEI?
  • Question 33: If not, should the threshold be lowered to £175,000 over a three-year period to cover all reporting obligations for Free Trade Agreements, enabling all of the UK’s international subsidy transparency obligations to be met through one database?
  • Question 34: Should there be a minimum threshold of £50,000 below which no subsidies have to be reported?
  • Question 35: Do you agree that the obligation should be to upload information within six months of the commitment to award a subsidy?
  • Question 36: What should the functions of the independent body be? Should it be responsible for any of the following: information and enquiries;
    • review and evaluations;
    • subsidy development advice;
    • post-award review; and/or,
    • enforcement.
  • Question 37: Should any review of a subsidy by the independent body consider all the principles, and the interaction between them, or only some principles, and if so which ones?
  • Question 38: What role, if any, should the independent body play in advising public authorities and reviewing subsidies before they have been awarded?
  • Question 39: If the independent body is responsible for post-award review, what types of complaints should it be able to receive and from whom?
  • Question 40: Which, if any, enforcement powers should the independent be given? In what circumstances could the body deploy them? What would be the routes of appeal and the interaction with judicial enforcement?
  • Question 41: How should the independent body be established in order to best guarantee its independence and impartiality when exercising its operational functions?
  • Question 42: In addition to the application of time limits, are there any other considerations for implementation of the recovery power?
  • Question 43: Should a specialist judicial forum such as the Competition Appeals Tribunal hear challenges to subsidy schemes and awards? If not, why?