EU state aid replacement model ‘intervening in devolved areas’, MSPs warn

The UK Government’s Subsidy Control Bill trespasses into devolved areas with no opportunity for the Scottish Government to scrutinise new guidance and rules, MSPs have warned.

The new bill, designed to replace the EU state aid scheme which sought to protect competition by limiting state interference in the market, is currently being scrutinised by the House of Lords having already made its way through the Commons.

As it covers some policy areas which are devolved, Holyrood’s economy committee has held an inquiry into the bill.

A majority of the committee concluded UK ministers risked “intervening in devolved areas without proper consultation or knowledge of local circumstances”.

MSPs also expressed concern that the “Scottish Parliament will not have the opportunity to consider secondary legislation made under the bill, despite the significance of its impact on devolved powers”.

Alexander Burnett and Jamie Halco Johnston, the two Conservative members of the committee, dissented from these conclusions.

Committee convener Claire Baker said: “The complete absence of detail on how this new subsidy control regime would work is not acceptable.

“In its current form, this new regime could see UK ministers cutting across the devolution settlement and intervening in devolved areas without consultation or knowledge of local circumstances.

“We find it wholly unsatisfactory that this bill would allow UK Government and UK ministers to legislate in a way which will have a direct impact on devolved areas of our economy, while bypassing scrutiny of the Scottish Parliament or Scottish ministers.”

Baker added the committee was also concerned about creating an imbalance between communities, particularly the potential to unfairly disadvantage smaller organisations.

The committee is calling the UK government to publish draft regulations and guidance to allow for consultation with devolved parliaments.

It also said devolved administrations should be given equal powers to the UK government by allowing them to refer subsidies made in other parts of the UK to the competitions regulator, the Competition and Markets Authority.