A Westminster committee is set to probe the UK’s post-Brexit subsidies regime and the role of the competition watchdog post-Brexit.
The Business, Energy and Industrial Strategy (Beis) committee’s inquiry will look at “the main opportunities and challenges for businesses under the new UK state aid regime” and “whether competition policy in the UK has weakened over recent years”.
It comes after Downing Street’s “anti-corruption champion” John Penrose told MPs yesterday that there needed to be more transparency about the UK’s new subsidies regime.
The UK is no longer bound by the EU’s rules around business subsidies, meaning the government is able to give more money to private companies.
However, the UK also agreed as a part of the post-Brexit EU trade deal to stay within reasonable state aid limits.
EU companies are able to take the British government to court if they feel that too generous subsidies have been given out and are threatening competition.
Darren Jones, Beis Committee chair and Labour MP, said he is concerned about the prospect of competition standards post-Brexit.
Boris Johnson’s government has indicated a greater willingness than previous Conservative governments to economically intervene in the private sector.
“With the UK having left the EU, primary responsibility for enforcing competition policy now lies with the Competition & Markets Authority (CMA),” he said.
“In our inquiry we are keen to examine this expanded role for the CMA and what changes to competition law Ministers might bring forward following Brexit.”
He added: “The Subsidy Control Bill envisages a more permissive subsidy regime and, as a committee, we will want to examine how this legislation supports fair competition and whether it avoids the potential for damaging subsidy races within the UK internal market.”
The Subsidy Control Bill sees the government forced to publicly disclose subsidies given to businesses that are worth £500,000 or more.
Penrose, Conservative MP for Weston-super-Mare, argues that the the threshold should be just £500.
“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,” he said.
“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.”
A government spokesperson said: “It’s crucial Arm’s-Length Bodies provide value for money and deliver for the public. That’s why they have strict oversight and spending controls, and our reform programme will ensure they operate to the highest standards.
“All departments’ compliance with appointment rules are monitored independently.”