Big boost for UK economy as subsidy control system comes into force from January
The new regulatory system for business grants will come into force from January 4, Business Minister Dean Russell announced today (Thursday October 20), giving businesses a big boost and fresh impetus to plans for the government to stimulate economic growth.
Under the new rules, devolved administrations and local authorities will be able to award grants tailored to local needs, with the new scheme providing the flexibility to ensure that aid gets to where it is most needed quickly.
Public authorities will be able to support viable businesses in their area quickly and simply, providing good value for the UK taxpayer while ensuring that UK businesses can contribute to economic growth.
The introduction of the new rules from January marks a major departure from the EU’s prescriptive aid scheme which could prevent elected governments in Belfast, Cardiff and Edinburgh from providing funds to businesses in need.
Business Minister Dean Russell said:
Our grant control regime is designed to meet the needs of modern Britain, freeing UK authorities from the restrictive shackles of European bureaucracy and lengthy approval processes.
Our new rules are robust yet flexible, allowing public authorities to deliver money quickly, fairly and simply to businesses that need it most.
Under the EU scheme, all grants except those falling under a “block exemption regulation” had to undergo a lengthy bureaucratic process of notification and prior approval by the European Commission. , delaying the timely flow of vital funds to viable businesses.
The implementation of this scheme comes after full and thorough consultation on the proposed approach, with views gathered from stakeholders across the UK.
The new rules will help bolster the government’s plans to stimulate a vibrant free-market economy, by banning unlimited government guarantees to companies as well as subsidies to ‘distressed or insolvent’ companies in the absence of a credible restructuring plan. .
The UK’s new regime will also help meet the UK’s international commitments to control subsidies, including its international commitments to the World Trade Organization (WTO) and in free trade agreements.
BEIS organizes a series of events for public authorities to explain the main features and principles of the new regime.
Source: Department for Business, Energy and Industrial Strategy and Dean Russell MP