London, Feb 4 The UK has opened consultation on its proposed approach for establishing a bespoke nation-wide subsidy control regime to replace the state aid regime of the European Union (EU), the government said.
The new subsidy control system will provide "more flexible and tailored financial support to businesses" and will be "the long-term replacement for the EU's prescriptive state aid regime", Xinhua news agency quoted the Department for Business, Energy & Industrial Strategy as saying in a statement on Wednesday.
Under the fresh system, local authorities, public bodies and the devolved administrations "will be empowered to decide if they can issue taxpayer subsidies by following a set of UK-wide principles", said the Department.
The system will ensure Britain to comply with its international obligations "under World Trade Organization (WTO) rules, the UK-EU Trade and Cooperation Agreement and other free trade agreements", according to the statement.
The system "will ensure that subsidies do not unduly distort competition within the UK's internal market", said the statement.
The state aid has been one of the sticking points in the Brexit negotiations between London and Brussels before they reached a trade deal late last month.
The clashes over the issue were resolved in the EU-UK trade deal, with Britain agreeing to set up an "independent authority" to monitor subsidy decisions, the Financial Times said in a report.
The consultation, being run by the business department, will consist of 42 questions and seek opinions on whether to have a minimum threshold for subsidy deals before they face scrutiny as well as the timing of disclosure of deals.
The consultation will close on March 31, 2021, according to the Department.
The EU and the UK announced on December 24, 2020, that they had reached an agreement that will govern bilateral trade and security relationship starting from January 1, after the end of the Brexit transition period.
The deal, which came after nine months of arduous negotiations between the UK and the EU, is the biggest bilateral trade deal signed by either side, covering trade worth around 668 billion pounds ($912 billion).
The EU is the UK's largest trading partner.
The UK is the EU's third largest trading partner in goods, following China and the US.
( With inputs from IANS )
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