Subsidy Control Act 2022 receives
Royal Assent
On 28 April 2022 the much
awaited Subsidy Control Bill (the Bill) received Royal Assent and became the
Subsidy Control Act 2022. The
new regime is expected to come into force in Autumn 2022.
The Bill was published on 30
June 2021 and is intended to create a legal framework for a UK subsidy control
regime that meets the UK's international commitments. These include the subsidies chapter of the
UK-EU Trade and Co-operation Agreement (TCA).
Since 1 January 2021 public authorities
have been subject to two parallel commitments in relation to subsidy control:
1)
The (limited) continued application of EU State
aid rules under the Northern Ireland Protocol to the UK-EU Withdrawal
Agreement: applies to aid measures which could affect trade in goods and
electricity between NI and the EU
2)
The new TCA rules on subsidy control: have
force of law within the UK by virtue of section 29 of the European Union
(Future Relationship) Act 2020
The new regime under the
Subsidy Control Act reflects the following elements:
1)
Public authorities will be responsible for
self-assessing that subsidies they intend to grant comply with the statutory
subsidy control principles and requirements
2)
Certain types of subsidy will be prohibited, or
only permitted subject to specified conditions.
3)
A Subsidy Advice Unit (SAU) will be set up
within the Competition and Markets Authority (CMA). Its functions include monitoring and
oversight, and providing pre-award and post-award advice.
4)
The Secretary of State will, in secondary
legislation, designate some types of subsidy as "subsidies of
interest" or "subsidies of particular interest". Public
authorities can ask the SAU to provide advice on subsidies of interest
(voluntary referral) and must ask the SAU to provide advice on subsidies of
particular interest (mandatory referral).
5)
There are transparency requirements relating to
the award of subsidies/ making a subsidy scheme.
6)
The Competition Appeal Tribunal will hear
appeals by interested parties (or the Secretary of State) against subsidy
decisions, using judicial review principles.
The government has announced
that it will be publishing guidance to support public authorities in advance of
the new rules coming in to force.
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