Leading Competition thinker and Anti-Corruption Tsar proposes more transparency in new UK subsidy regime

Leading Competition thinker and Government anti-corruption Tsar John Penrose MP is leading a coalition from across the political spectrum to call for greater transparency in the Government’s new post-Brexit subsidy regime. Uniting anti corruption and free-market groups, the coalition believes that the Bill must create a fully-transparent regime where subsidies are open to public scrutiny.

In a letter supported by the Transparency International, the Centre for Policy Studies, TaxPayers’ Alliance, the Adam Smith Institute, the Campaign for Freedom of Information, Centre for Public Data and Spotlight on Corruption, John Penrose MP proposes that the upcoming Subsidy Control Bill must include provide stronger transparency proposals to achieve the Government’s stated aim of making “the UK a world leader in subsidy transparency”.

At the moment, the Subsidy Control Bill only requires individual subsidies over £500,000 to be reported publicly – a higher threshold than the €500,000 inherited from the EU. The coalition warns that these changes could lead to more subsidies never being made public, distorting competition and making it harder to evaluate the successes and failures of subsidy spending.

Instead the coalition is proposing that all subsidies over £500 should be published within 30 days of being agreed, to create much stronger public oversight. John Penrose MP argues that this change would be simpler, cheaper, would cut red tape burdens on businesses, avoid creating consumer rip-offs, prevent damage to the efficiency and competitiveness of British businesses, and match already-existing transparency rules elsewhere in the UK.

Welcoming the support of groups, Mr Penrose said:

“Leaving the EU creates a golden opportunity to craft a simpler, faster and more agile subsidy regime that genuinely helps businesses, but which doesn’t create rip-offs or blunt Britain’s competitiveness either.

“But subsidies are a heady drug that can prove impossible for businesses and politicians to resist, so they need ironclad public oversight too. The Government is right to say that our new scheme needs to make us a world leader in subsidy transparency as well

“The simple solution is to publish all subsidies granted above £500 within 30 days, on an easily-searchable public database. It would be simpler, cheaper, would cut red tape burdens, wouldn’t harm the efficiency and competitiveness of British businesses, and would match already-existing transparency rules elsewhere in the UK.”

Anna Powell-Smith, director of the Centre for Public Data, said:

“Subsidies to businesses can create harms, such as rent-seeking. When subsidies aren’t made public, these harms are much harder to spot.

The Government is proposing big changes to the UK’s £8 billion annual subsidy regime, giving public bodies more freedom to award subsidies quickly and without central oversight.

To match this new flexibility, we need good public data on subsidies, so we can all see how they are being used.

This Government has committed to putting data and transparency at the heart of policymaking – now is its chance to prove it, with its flagship subsidy policy.”

Robert Colvile, Director of the Centre for Policy Studies said:

“As drafted, the Bill simply mirrors the rules inherited from the EU – albeit at an even higher threshold. This misses the opportunity to go further and really improve public trust in the system. Lowering the threshold would make the UK system among the most transparent in the world, make it easier for businesses to challenge unlawful subsidies and ensure hardworking taxpayers are able to see more clearly how their money is being spent.”

James Roberts, political director of the TaxPayers’ Alliance, said:

“When it comes to taxpayers’ money, accountability is all.

“Ministers shouldn’t start a stealth subsidy regime, which could see hidden cash handed over with no questions asked.

“The transparency requirements for these subsidies should be as similar as possible to those expected for other areas of government spending.”

Matthew Lesh, Head of Research at the Adam Smith Institute, said:

“Governments are far too quick to forget they are spending our money. We have every right to know when the state is transferring our money to private businesses. Transparency drives better policy making and shines the light on poor behaviour and corrupt dealings. It’s a no-brainer to require disclosure of all subsidies over £500.”