The UK government has said that the Competition and Markets Authority will be given State aid powers following the UK’s withdrawal from the European Union.
The minister for small businesses, consumers and corporate responsibility stated in a letter of 28 March 2018 to Lord Whitty, the Chair of the, EU Internal Market Sub-Committee that the Government’s view is that the UK should be prepared to establish a “full, UK-wide subsidy control framework, with a single UK body for enforcement and supervision”. Further, the Government has concluded that at the point an independent UK State aid authority is required, the CMA would be “best placed” to take on the role of State aid regulator.
The European Commission has stated that state aid provisions would be a condition of any trade deal between the EU and the UK.
At first sight, it is understandable that the CMA might seem well-positioned to take on this role in view of its experience of markets. But it would need to have the resources to take on this expanded mandate. While the CMA is independent from government, the EU would need to be convinced that it was genuinely free from political capture to take on this role. State aid differs from mainstream competition law. The application of State aid law is a politically sensitive issue. This is a clear area of controversy.
There are some examples of member state authorities taking on a similar role in pre-accession situations, but obviously Brexit is the converse situation and without precedent.
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