Overview

This bill makes amendments to the Subsidy Control Bill, primarily clarifying rules around subsidy schemes, government spending, and transparency requirements. It adjusts thresholds for reporting and notification of subsidies, introduces time limits for parliamentary review of schemes, and refines the definition of what constitutes a subsidy.

Description

Parliamentary Scrutiny of Subsidy Schemes:

The amendments introduce a 40-day period for both Houses of Parliament to review subsidy schemes. If either House rejects a scheme within this period, it is deemed not to have been made, although subsidies already granted remain valid. The calculation of the 40-day period excludes parliamentary recesses.

Subsidy Valuation:

The bill clarifies that subsidy value can be determined by either gross cash amount or gross cash equivalent.

Marketable Risk Countries:

Amendments streamline the process for designating countries as "marketable risk countries," shifting the decision-making process from directions to regulations made by the Secretary of State.

Subsidies for Socially and Economically Disadvantaged Areas:

The bill adds conditions for permitting subsidies that aim to reduce social or economic disadvantages in specific areas, requiring such subsidies to lead to an overall reduction in national disadvantages and a demonstrable change in existing economic activities.

Transparency and Reporting:

Amendments reduce the reporting threshold for subsidies from £500,000 to £100,000. Time limits for reporting are also reduced to three months for tax measures and three months for other forms of subsidies. The subsidy database will be kept under regular review by the Secretary of State.

Government Spending

The amendments are not expected to significantly alter overall government spending, but the changes in reporting thresholds could lead to increased administrative costs associated with reporting a larger number of smaller subsidies.

Groups Affected

Groups potentially affected include:

• Businesses receiving subsidies: Changes to reporting thresholds and eligibility criteria may affect their access to subsidies.
• Government departments: They will need to adapt their procedures for designing, implementing and reporting on subsidy schemes.
• Parliament: The 40-day review period increases the parliament's role in overseeing subsidy schemes.
• The Competition and Markets Authority (CMA): Their role in reviewing certain subsidies may be affected by the amendments.

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