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Rebecca Evans MS, Minister for Finance and Local Government
Vaughan Gething MS, Minister for the Economy

First published:
14 July 2021
Last updated:

This Written Statement updates Senedd Members on the UK Government’s approach to subsidies now that the UK is outside the EU as set out in the UK Subsidy Control Bill 2021 laid before Parliament on 30 June.

We have analysed the details of the Bill and have serious concerns about the UK Government’s approach as it does not reflect any of the issues previously identified by Welsh Ministers during the policy development process. Despite suggestions from the UK Government that detailed engagement has been undertaken, the Bill only reflects the narrow interests of the UK Government.

The Minister for Finance and Local Government, Rebecca Evans MS, wrote to UK Minister for Small Business, Consumers & Labour Markets, Paul Scully MP, outlining our concerns listed below.

The Subsidy Control Bill has been developed on an unnecessarily tight timetable, resulting in a lack of any meaningful engagement on the details of the Bill, as well as minimal opportunity for devolved government Ministers to influence its content before laying. This process should have been undertaken in a more considered and collegiate manner to enable a more pan-UK approach to be developed.

The result is that, despite our efforts to proactively engage with the policy development process throughout, this Bill merely reflects the narrow political interests of the UK Government rather than the wider needs of the whole of the UK.

We are concerned the Bill contains no defined pathway to allow disadvantaged regions of the UK to compete on a level playing field with more prosperous regions of the UK, either through additional avenues for support or guaranteed use of streamlined subsidy routes. We have called for this to be clarified and brought into law in order to underpin the actions we are taking in supporting disadvantaged parts of Wales and building a more equitable UK.

The Bill provides for new powers for the Secretary of State for Business and Industrial Strategy to “call-in” subsidies issues by awarding bodies in Wales for independent review by the Competitions and Markets authority. The call-in powers with which the Bill empowers the Secretary of State for Business, Enterprise and Industrial Strategy serve as an unacceptable imposition upon areas of devolved policy by providing the UK Government with powers to constrain decision-making on areas of devolved policy. The Subsidy Control Bill should not impact upon the devolved powers of Welsh Ministers or act as a tool to reverse devolution through the back door.

The Bill brings Agricultural and Fisheries subsidies within scope of the UK subsidy regime despite concerns repeatedly raised by Welsh Ministers and the other devolved governments about the difficulty in evidencing the compliance of subsidies with the regime’s principles for compatible subsidies, as well as the lack of detailed guidance. Whilst it should be acknowledged that the Bill provides generous carve-outs for 'legacy and withdrawal agreement subsidies' the value of these will diminish over time and serve to support our argument that Agricultural and Fisheries subsidies should remain out of scope of the UK subsidy regime.

A Legislative Consent Memorandum for this Bill has today been laid: