Policy background
A subsidy is where a public authority – for example central, regional or local government – provides support to a business, or other organisation, that gives them an advantage over competitors.
	This can take the form of a grant, a tax break, a loan or guarantee on favourable terms, or the use of facilities below market price.
	Having left the European Union, the UK is no longer subject to EU State aid rules (the EU’s particular approach to subsidy control). In September 2020, the Government announced its intent to design a new domestic subsidy control regime that best suited the needs of the UK, representing value for money to the UK taxpayer, and complying with international obligations.
	The Government ran a consultation between 3 February and 31 March 2021, inviting views from a wide range of stakeholders on how best to design a domestic approach to subsidy control. The Government launched a second consultation on 25 March 2022 , inviting views on proposed regulations under the Subsidy Control Bill that define criteria for potentially distortive categories of subsidies, and views more generally on the categories. The consultation will close on 6 May 2022.
	The Government aims to deliver a regime that:
Empowers local authorities, public bodies, the UK Government and the devolved administrations to design subsidies that deliver strong benefits for the UK taxpayer.
Enables public authorities to deliver strategic interventions to support the UK’s economic recovery and deliver priorities such as levelling up and achieving net zero.
Provides certainty and confidence to businesses investing in the UK, by protecting against subsidies that risk causing distortive or harmful economic impacts, including to the UK internal market.
Contributes to meeting the UK’s international commitments on subsidy control, including its international commitments under the World Trade Organization Agreement on Subsidies and Countervailing Measures (ASCM), the Trade and Co-operation Agreement with the EU (TCA) and other free trade agreements.
	The key provisions of the Act involve:
Setting out the subsidy control requirements that public authorities are subject to when giving subsidies or making subsidy schemes:
The Act sets out seven principles that public authorities must assess their proposed subsidies or schemes against. The Act defines these as the subsidy control principles. Additional principles apply to subsidies in relation to energy and the environment.
The Act prohibits certain subsidies and requires that certain subsidies can only be granted where specified requirements are met.
The Act requires subsidies to be published on a database.
Exempting certain subsidies from some or all of these requirements.
The establishment of a new Subsidy Advice Unit in the Competition and Markets Authority (CMA), which will monitor and report on the regime and report on certain subsidies and schemes before and after they are given or made.
Making provision for the Competition Appeal Tribunal (CAT) to hear applications to review subsidy decisions and to impose relevant remedies, including recovery of the subsidy as appropriate; imposing a duty on public authorities to provide pre-action information at the request of an interested party; and conferring a right on public authorities to recover subsidies which are misused.
	The Act provides for measures which will support the UK to remain compliant with its international obligations under the ASCM, the TCA, and other free trade agreements.
	On 21 July 2021, the Government published a White Paper titled "Northern Ireland Protocol: the way forward", establishing its intent to renegotiate Article 10 of the Northern Ireland Protocol. The White Paper noted that the "UK’s Subsidy Control Bill … provide(s) a more than sufficient basis to guarantee that there will be no significant distortion to goods trade between the UK and EU, whether from Great Britain or Northern Ireland, thus making the existing provisions in Article 10 redundant in their current form." 1