MPs back post-Brexit subsidies aimed at unlocking potential across the UK – WalesOnline

Post-Brexit moves to replace EU state aid rules will help unlock potential across the UK, according to the Business Secretary.

Kwasi Kwarteng said measures contained within the Subsidy Control Bill will develop skills, infrastructure and new technologies.

But opposition MPs warned the Government lacks a plan on how to use the new powers and also claimed it represents another power grab from the devolved administrations in Scotland, Wales and Northern Ireland.

The Bill sets out how central government, devolved administrations, local authorities and other public bodies should make decisions to award subsidies.

The new regime replaces EU state aid rules, which applied until the Brexit transition period ended on December 31 2020, and the interim measures which followed.

Subsidies, usually cash payments or tax reductions from public resources, can be used to help an industry or business keep prices low, but the expectation is that they will not distort trade.

Speaking at third reading before the Bill cleared the Commons, Mr Kwarteng told MPs: It establishes a subsidy control system that has been designed by the UK and for the UK.

It demonstrates this Governments clear commitment to seize the opportunities arising from Brexit.

For the first time the decision on whether to grant a subsidy will fall to the granting authority itself. At the heart of the regime is a set of clear and proportionate principles which will be underpinned by guidance.

Local authorities, public bodies and the devolved administrations in Edinburgh, Cardiff and Belfast will be empowered to decide if they can issue taxpayer-funded subsidies by acting consistently with the principles outlined in this legislation.

This includes a principle specifically designed to minimise distortions to UK competition and investment.

The new regime will help unlock potential so all areas of the UK will feel the benefits of targeted subsidies in their areas.

This includes investment in skills, infrastructure and also in new technologies as well as research and development.

Shadow business secretary Jonathan Reynolds said it is an important Bill but warned: The current Governments economic record sadly combines the very worst of everything.

Our long-term growth forecasts are low, our taxes are high, our productivity is appalling, inflation is growing and our trade is shrinking. In short, this Conservative Government has created a high-tax, low-growth economy.

Mr Reynolds said real delivery is needed from the Government, but he noted MPs are none the wiser about its plans.

Earlier as the Commons debated amendments to the Bill, SNP economy spokeswoman Kirsty Blackman said not naming devolved administrations as interested parties in the new regime could prevent them from challenging subsidies overseen by the UK Government that have a bad impact in regions under their control.

She said: I dont think it is the intention of the Government to exclude the Scottish Government, and the Welsh Government, or the Northern Irish Assembly from making these challenges, but I do think the Bill is written in an unruly enough way that it potentially accidentally excludes them.

Plaid Cymrus Westminster leader Liz Saville Roberts added: This Bill is an assault on devolution, wilfully ignorant of the needs of the national economies of the UK, or the role of public bodies in advancing them.

She described it as yet another power grab that undermines not only devolution but also the levelling up project this Government is allegedly so keen on promoting.

MPs also voted 292 to 31, majority 261, against an SNP amendment which would have made agricultural subsidies exempt from the new rules in the Bill.

The proposed legislation will undergo further scrutiny in the House of Lords at a later date.

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MPs back post-Brexit subsidies aimed at unlocking potential across the UK - WalesOnline