However what’s omitted is significant. The views of the recipients of subsidies, their competitors & their advisers are ignored. If we want a world class Subsidy Control regime there needs to be a gear change - starting by incorporating ideas from across the subsidy ecosystem.
The 3 main messages are: • there were teething difficulties when the regime started; • most public authorities “did not experience difficulty with the award process” (a statement that is repeated 30 times in 57 pages); and • DBT thinks it should be given an enhanced role.
The Department for Business & Trade has published an evaluation of the early Subsidy Control regime. However it’s selective, only factoring in the views of public authorities and the Department (which happens to give out the most subsidies in the UK). lnkd.in/e2ar3aWb
The first automotive manufacturing grant has been referred to the CMA. The Subsidy Advice Unit will report on the proposal to award £75m to BMW to build 2 electric Minis at its Oxford plant. The risk of relocation is cited in the Subsidy Control reasoning.
3. Referral by Lancashire County Council of a subsidy for Eden Project Morecambe This ambitious project will see Council funds alongside Levelling Up Fund investment used to build a visitor attraction on Morecambe’s seafront. Report due 24 Jan 2024. 3/3
2. Referral by the UK Space Agency for the £93.75m ‘Low Earth Orbit Programme’ subsidy scheme. This will allow grants of up to £25m, with the aid intensity based upon the size and nature of the organisations involved. Subsidy Advice Unit report due on 19th January 2024. 2/3
A short 🧵covering Subsidy Advice Unit reports & referrals published this week. 1. A report into a £122.7m grant to improve Post Office IT systems. The Department for Business & Trade proposal was largely supported, but some concerns as to whether the sum is proportionate. 1/3
The UK was once a frugal outlier when it came to state aid spending just 0.35% of GDP on supporting businesses. This figured lagged far behind Germany’s 1.35%. UK levels have tripled to 1.13%, bringing into question the logic of lighter touch Subsidy Control laws. www.economist.com/britain/2023...
New figures show that Britain has become more European