UK should avoid state aid bailouts, Penrose report warns, MLex
- The UK should not seek to subsidize industries now that it has “regained full sovereign control” of its state aid regime, a senior lawmaker has warned. Subsidies create “huge opportunities” for “deep-pocketed legacy companies with good lawyers” to get special deals at the expense of everyone else, John Penrose cautioned in a report today.
- Penrose, a Conservative lawmaker, was commissioned last September to lead a review into the UK’s competition regime after Brexit and in the context of Covid-19. In a wide-ranging report published today (see here), Penrose floated recommendations which included bolstering the UK’s competition regulator’s consumer-law efforts and doing away with red tape to create a “Brexit dividend.”
- The Penrose report has urged the UK not to fall into the risk of bailing out failing companies via state subsidies now that it has increased control over its state aid regime.
- Penrose also stressed that the benefits of Brexit would be put “into reverse” in the event of increased state aid, “making Britain less attractive for investment in growth and jobs, and meaning investors need higher returns which raise costs and make our firms less productive as a result.
Calls for post-Brexit reforms of UK competition law, Guardian
- The government should launch sweeping reforms of competition laws to improve consumer confidence, lower costs for businesses and boost the UK economy after Brexit, according to John Penrose, a leading Tory MP.
- Calling for the changes in a report published on Tuesday, he said the Competition and Markets Authority (CMA) needed more power to be given tougher penalties to companies that do not cooperate fully in investigations. The watchdog should also work out a way that lets customers easily compare the “price” of free online services.
- In the 69-page report, the Tory MP said “the opportunities for post-Brexit Britain to cut red tape costs ought to be immense”. As part of the review, he said ministers should reintroduce a “one in, one out” rule used by David Cameron’s coalition government that forced ministers to scrap an old regulation if they wanted to launch a new one.
- Kwasi Kwarteng, the business secretary, said the government would consider the findings of the review. “The UK’s competition laws and institutions are highly regarded across the globe. However, as we build back better from the pandemic and start life as an independent trading nation, we have a golden opportunity to strengthen that reputation,” he said.
Ireland seeks ‘pragmatic’ approach to Brexit border protocol, FT
- Irish foreign minister Simon Coveney has called for “pragmatism and flexibility” in implementing the Northern Ireland Brexit protocol, saying rising tension over the arrangement has polarised politics there.
- Coveney backed steps to ease the operation of the protocol as Britain and the EU seek “workable solutions” to problems that have delayed goods shipments into Northern Ireland and led some companies to stop sales to the region. “Pragmatism and flexibility within the confines of the protocol actually strengthens the protocol. It doesn’t weaken it,” Coveney told the Financial Times in an interview.
- Solutions could be found to address problems that have created “real frustration”, but he warned the UK that some of its demands “cannot be met” by flexibility. He also insisted there was no scope to scrap the protocol, an option Johnson has refused to rule out by threatening to remove Irish Sea trade barriers.