Government confirms new subsidy control system to come into force from 4 January 2023

The new system to regulate subsidies to business will come into force from 4 January, Business Minister Dean Russell has announced.

The Department for Business, Energy and Industrial Strategy (BEIS) said: “Under the new rules, the devolved administrations and local authorities will be able to deliver subsidies that are tailored to local needs, with the new regime providing the flexibility needed to ensure that support quickly gets to where it is most needed. 

“Public authorities will be able to support viable businesses across their region quickly and simply, delivering good value for the British taxpayer while ensuring Britain’s businesses can help deliver economic growth.”

It claimed that the introduction of the new rules from January “marks a major move away from the prescriptive EU aid regime that could stymie elected governments in Belfast, Cardiff and Edinburgh from delivering funds to businesses that needed it”.

Business Minister Dean Russell said: “Our subsidy control regime is built to meet the needs of modern Britain, freeing UK authorities from the restrictive shackles of European bureaucracy and long-winded approval processes.

“Our new rules are robust yet flexible, empowering public authorities to deliver money quickly, fairly and simply, to businesses that need it the most.”

BEIS claimed that the new rules will help “bolster the Government’s plans to drive a vibrant free market economy, by banning unlimited government guarantees to businesses as well as subsidies granted to ‘ailing or insolvent’ enterprises where there is no credible restructuring plan”.

The UK’s new regime will also contribute to meeting the UK’s international commitments on subsidy control, including its international commitments at the World Trade Organization (WTO) and in Free Trade Agreements.

See also: Date confirmed for new subsidy control regime - The Department for Business, Energy and Industrial Strategy has announced that the full legal regime envisaged under the Subsidy Control Act 2022 will come into effect on 4 January 2023. This will require public bodies to adapt their processes for awarding financial assistance, including in some instances referring awards to the Competition and Markets Authority, write Jonathan Branton, Alexander Rose, Jay Mehta and Alex Eaton.

Apply today: The Government Legal Department is hiring a Subsidy Control Lawyer (£50,500 - London; £48,985 - Leeds). Closing: 9 November 2022.