The EU State aid rules are designed to protect the free market between EU member states. They do this by ensuring that Governments do not distort companies and markets using public money, and favouring national champions. The UK has mostly been a keen protector of the EU State aid framework, and its continued compliance with the rules post‑Brexit has been looked at as a given for some time. What was not confirmed explicitly was which UK agency post Brexit would regulate and police the rules in the UK, as currently that role is reserved exclusively for the EU Commission.
On 28 March 2018, the Department for Business, Energy and & Industrial Strategy confirmed what many had suspected, that the UK’s Competition and Markets Authority (the ‘CMA’) would adopt this role. The news was confirmed by Andrew Griffins, the Minister for Small Business who stated in a letter in a response to a question from the House of Lords that: “the Government has concluded that at the point an independent UK State aid authority is required, the Competition and Markets Authority (CMA) would be best placed to take on the role of State aid regulator. This reflects its experience and understanding of markets as the UK’s competition regulator and the independence of its decision‑making from Government.”
As part of the UK’s transition to a post Brexit world: “the EU State aid rules will be transposed under the European Union (Withdrawal) Bill – as is the case for EU rules more broadly under this Bill. The transposition of the existing rules will apply to all sectors, including agriculture, fisheries and transport and will replicate any existing exemptions from State aid rules.”
The UK Prime Minister Mrs May confirmed in her speech of 2nd March that the UK wanted to follow and align its self closely with the EU on competition and state aid policy. As far as we are aware, the above announcement is the first official confirmation of that stance.. Following this confirmation the CMA will no doubt be looking for more additional funding to take on this role. This is likely to be in addition to the Government’s commitments already announced for extra funding to meet its additional competition law obligations post Brexit.
The above news signals that although the decision making authority will be the CMA rather than the European Commission, it is likely that there will continue to be a consistent interpretation of the rules post‑Brexit.
More detailed obligations to this effect are likely to be included in any EU/UK free trade deal.