Subsidy Control Bill (HL Bill 84)
Part 3 continued
Subsidy Control BillPage 20
(a)the “current financial year” is the financial year in which the minimal
financial assistance is given, and
(b)the “elapsed part” of that year is so much of it as has passed at the time
when it is given.
37 5Section 36: procedural requirements
(1)Before giving minimal financial assistance, a public authority must give to the
enterprise a minimal financial assistance notification.
(2)A “minimal financial assistance notification” means a written statement—
(a)explaining that the authority is proposing to give to the enterprise a
10subsidy by way of minimal financial assistance,
(b)specifying the gross value amount of the assistance, and
(c)requesting written confirmation from the enterprise that the total
amount specified in section 36(1) will not be exceeded by the enterprise
receiving the proposed assistance.
(3)15The public authority may proceed to give the assistance only after it has
received the confirmation referred to in subsection (2)(c).
(4)On giving the assistance, the public authority must provide to the enterprise a
minimal financial assistance confirmation.
(5)A “minimal financial assistance confirmation” means a written statement
20confirming—
(a)that the subsidy is given as minimal financial assistance,
(b)the date on which it is given, and
(c)the gross value amount of the assistance.
(6)The enterprise must keep a written record detailing—
(a)25that it has received a subsidy by way of minimal financial assistance,
(b)the date on which it was given, and
(c)the gross value amount of the assistance.
(7)The record required by subsection (6) must be kept for at least three years
beginning with the date mentioned in paragraph (b) of that subsection.
(8)30In this section—
-
“the enterprise” means the enterprise that receives, or would receive,
minimal financial assistance;
-
“gross value amount” of minimal financial assistance means the gross
cash amount (see subsection (4)(a) of section 36) or the gross cash
35equivalent (see subsection (4)(b) of that section).
Services of public economic interest assistance
38 Services of public economic interest assistance
(1)The subsidy control requirements do not apply to SPEI assistance given to an
enterprise if the total amount of minimal or SPEI financial assistance given to
40the enterprise within the applicable period does not exceed £725,000.
(2)The applicable period is the period comprising—
(a)the elapsed part of the current financial year, and
Subsidy Control BillPage 21
(b)the two financial years immediately preceding the current financial
year.
(3)“SPEI assistance” means a subsidy given under this section, and for this
purpose a subsidy is given under this section if—
(a)5it is given to a SPEI enterprise for the purposes of the provision of SPEI
services, and
(b)the authority giving the subsidy provides to the enterprise a SPEI
assistance confirmation (see section 39(5)).
(4)For the purposes of this section—
(a)10if SPEI assistance is provided in cash, the gross cash amount given is to
be used in determining the amount of assistance;
(b)if SPEI assistance is provided otherwise than in cash, the amount of
assistance given is to be determined by reference to the gross cash
equivalent of the assistance.
(5)15This section does not authorise the giving of a subsidy relating to goods that is
in contravention of section 16 (export performance) or 17 (use of domestic
goods or services).
(6)In subsection (2)—
(a)the “current financial year” is the financial year in which the SPEI
20assistance is given, and
(b)the “elapsed part” of that year is so much of it as has passed at the time
when it is given.
39 Section 38: procedural requirements
(1)Before giving SPEI assistance, a public authority must give to the enterprise a
25SPEI assistance notification.
(2)A “SPEI assistance notification” means a written statement—
(a)explaining that the authority is proposing to give to the enterprise a
subsidy by way of SPEI assistance,
(b)specifying the gross value amount of the assistance, and
(c)30requesting written confirmation from the enterprise that the total
amount specified in section 38(1) will not be exceeded by the enterprise
receiving the proposed assistance.
(3)The public authority may proceed to give the assistance only after it has
received the confirmation referred to in subsection (2)(c).
(4)35On giving the assistance, the public authority must provide to the enterprise a
SPEI assistance confirmation.
(5)A “SPEI assistance confirmation” means a written statement confirming—
(a)that the subsidy is given as SPEI assistance,
(b)the date on which it is given, and
(c)40the gross value amount of the assistance.
(6)The enterprise must keep a written record detailing—
(a)that it has received a subsidy by way of SPEI assistance,
(b)the date on which it was given, and
(c)the gross value amount of the assistance.
Subsidy Control BillPage 22
(7)The record required by subsection (6) must be kept for at least three years
beginning with the date mentioned in paragraph (b) of that subsection.
(8)In this section—
-
“the enterprise” means the enterprise that receives, or that would receive,
5SPEI assistance;
-
“gross value amount” of SPEI assistance means the gross cash amount
(see subsection (4)(a) of section 38) or the gross cash equivalent (see
subsection (4)(b) of that section).
General
40 10Mergers and acquisitions
(1)Subsection (2) applies where—
(a)all or part of the undertaking, property and liabilities of an enterprise
(enterprise A) are transferred to another existing enterprise (enterprise
B), and
(b)15minimal or SPEI financial assistance was given to enterprise A before
the transfer.
(2)In determining whether a relevant threshold is exceeded in respect of
enterprise B—
(a)in a case where all of the undertaking, property and liabilities of
20enterprise A is transferred, any minimal or SPEI financial assistance
given to enterprise A before the transfer is to be treated, on and after the
transfer, as if given to enterprise B;
(b)in a case where only part of the undertaking, property and liabilities of
enterprise A is transferred, the proportionate part of the minimal or
25SPEI financial assistance given to enterprise A before the transfer is to
be treated, on and after the transfer, as given to enterprise B.
(3)Subsection (4) applies where—
(a)all or part of the undertaking, property and liabilities of two or more
enterprises (the predecessor enterprises) are transferred to a new
30enterprise (the successor enterprise), and
(b)minimal or SPEI financial assistance was given to one or more of the
predecessor enterprises before the transfer.
(4)In determining whether a relevant threshold is exceeded in respect of the
successor enterprise—
(a)35in a case where all of the undertaking, property and liabilities of the
predecessor enterprises is transferred, any minimal or SPEI financial
assistance given to the predecessor enterprises before the transfer is to
be treated, on and after the transfer, as if given to the successor
enterprise;
(b)40in a case where only part of the undertaking, property and liabilities of
the predecessor enterprises is transferred, the proportionate part of the
minimal or SPEI financial assistance given to the predecessor
enterprises before the transfer is to be treated, on and after the transfer,
as if given to the successor enterprise.
(5)45The “proportionate part” of minimal or SPEI financial assistance is—
Subsidy Control BillPage 23
(a)such part of the assistance as is fairly attributable to the activities
carried on by the part of the undertaking that is transferred, or
(b)if it is not reasonably practicable to apply paragraph (a), such part of the
assistance that is proportionate to the value of the part of the
5undertaking that is transferred.
(6)Any minimal or SPEI financial assistance that is attributed to enterprise B, or
to a successor enterprise, by virtue of this section is to treated as such assistance
lawfully given to enterprise B, or the successor enterprise, in accordance with
this Chapter.
(7)10In this section “relevant threshold” means the total amount specified in section
36(1) or (as the case may be) section 38(1).
41 Exemption for certain subsidies given to SPEI enterprises
(1)The requirements in section 33 do not apply—
(a)to a subsidy given to a SPEI enterprise for the purpose of the provision
15of SPEI services that is less than £14,500,000;
(b)to a subsidy given to a SPEI enterprise for any of the following SPEI
services—
(i)hospital care, including research;
(ii)provision of long term care, childcare, access to the labour
20market, social housing and the social inclusion of vulnerable
groups;
(iii)air or maritime links to islands where the passenger numbers
average less than 300,000 passengers annually in the two years
preceding the giving of the subsidy;
(iv)25airports where the passenger numbers average less than 200,000
passengers annually in the two years preceding the giving of
the subsidy;
(v)ports where the passenger numbers average less than 300,000
passengers annually in the two years preceding the giving of
30the subsidy.
(2)For the purposes of subsection (1)(a)—
(a)if assistance is provided in cash, the gross cash amount given is to be
used in determining the amount of the assistance;
(b)if assistance is provided otherwise than in cash, the amount of
35assistance given is to be determined by reference to the gross cash
equivalent of the assistance.
42 Chapter 2: supplementary and interpretative provision
(1)The Secretary of State may by regulations—
(a)amend section 36(1), 38(1) or 41(1)(a) so as to substitute a different
40amount of total assistance for the amount for the time being specified;
(b)provide for a lower amount to apply, instead of an amount specified in
section 36(1), 38(1) or 41(1)(a), in the case of particular descriptions of
subsidy.
(2)The power to make regulations under subsection (1)(a) may be exercised so as
45to substitute a higher amount only for the purpose of securing that the amount
specified in sterling is equivalent to—
Subsidy Control BillPage 24
(a)325,000 special drawing rights, in the case of the amount specified in
section 36(1);
(b)750,000 special drawing rights, in the case of the amount specified in
section 38(1);
(c)515,000,000 special drawing rights, in the case of the amount specified in
section 41(1)(a).
The amount determined as a result of the currency conversion carried out for
this purpose may be rounded up or down to such convenient number as the
Secretary of State thinks appropriate.
(3)10For the purpose of determining the equivalent in sterling on a particular day of
a sum expressed in special drawing rights, one special drawing right is to be
treated as such sum in sterling as the International Monetary Fund have fixed
as being equivalent to one special drawing right—
(a)for that day, or
(b)15if no sum has been fixed for that day, the last day before that day for
which a sum has been so fixed.
(4)Regulations under subsection (1)(a) or (b) are subject to the affirmative
procedure.
(5)The following definitions apply for the purposes of this Chapter.
(6)20“Minimal or SPEI financial assistance” means a subsidy given—
(a)as minimal financial assistance,
(b)as SPEI assistance,
(c)before IP completion day under—
(i)Commission Regulation (EU) No 360/2012 of 25 April 2012 on
25the application of Articles 107 and 108 of the Treaty on the
Functioning of the European Union to de minimis aid granted to
undertakings providing services of general economic interest,
(ii)Commission Regulation (EU) No 1407/2013 of 18 December
2013 on the application of Articles 107 and 108 of the Treaty on
30the Functioning of the European Union to de minimis aid,
(iii)Commission Regulation (EU) No 1408/2013 of 18 December
2013 on the application of Articles 107 and 108 of the Treaty on
the Functioning of the European Union to de minimis aid in the
agriculture sector, or
(iv)35Commission Regulation (EU) No 717/2014 of 27 June 2014 on
the application of Articles 107 and 108 of the Treaty on the
Functioning of the European Union to de minimis aid in the
fishery and aquaculture sector,
(d)after IP completion day under any of the Regulations mentioned in
40paragraph (c) by virtue of the Northern Ireland Protocol, or
(e)after IP completion day and before the coming into force of this section
under Article 364(4) or 365(3) of the Trade and Cooperation Agreement.
(7)“Financial year” means a period of 12 months ending with 31 March.
(8)“Minimal financial assistance” has the meaning given by section 36(3).
(9)45“SPEI assistance” has the meaning given by section 38(3).
Subsidy Control BillPage 25
Chapter 3 Emergencies etc.
43 Natural disasters and other exceptional circumstances
(1)The subsidy control requirements do not apply to a subsidy given to
5compensate the damage caused by—
(a)natural disasters, or
(b)other exceptional occurrences.
(2)The reference in subsection (1)(b) to other exceptional occurrences does not
include occurrences having only an economic effect.
(3)10A subsidy may be given in respect of a natural disaster, or another exceptional
occurrence, in reliance on the exemption under this section only if—
(a)a notice is published by the Secretary of State for the purposes of this
section declaring that the exemption applies in respect of that natural
disaster or occurrence, and
(b)15that notice has not been withdrawn by the publication of a further
notice.
(4)A copy of a notice under this section must be laid before Parliament.
(5)In this section, the reference to the subsidy control requirements does not
include the requirements as to transparency in Chapter 3 of Part 2.
44 20National or global economic emergencies
(1)The prohibitions and restrictions imposed by sections 15 to 29 do not apply to
a subsidy given to respond to a national or global economic emergency.
(2)Subsection (1) applies only if the subsidy is given on a temporary basis.
(3)A subsidy may be given in respect of a national or global economic emergency
25in reliance on the exemption under this section only if—
(a)a notice is published by the Secretary of State for the purposes of this
section declaring that the exemption applies in respect of that
emergency, and
(b)that notice has not been withdrawn by the publication of a further
30notice.
(4)A copy of a notice under this section must be laid before Parliament.
Chapter 4 Other miscellaneous exemptions
45 National security
35The subsidy control requirements do not apply to the giving of a subsidy for
the purpose of safeguarding national security.
Subsidy Control BillPage 26
46 Bank of England monetary policy
The subsidy control requirements do not apply to the giving of a subsidy by or
on behalf of the Bank of England in pursuit of monetary policy.
47 Financial stability
(1)5The subsidy control requirements do not apply to the giving of a subsidy, or
the making of a subsidy scheme, so far as a financial stability direction so
provides.
(2)“Financial stability direction” means a direction given by the Treasury
providing for specified subsidy control requirements not to apply to—
(a)10the giving of a specified subsidy or making of a specified subsidy
scheme, or
(b)the giving of subsidies, or the making of subsidy schemes, of a specified
description.
(3)The Treasury may give a financial stability direction only if it considers it
15appropriate for prudential reasons, for example—
(a)the protection of investors, depositors, policy-holders or persons to
whom a fiduciary duty is owed by a financial service supplier, or
(b)ensuring the integrity and stability of the financial system of the United
Kingdom.
(4)20The Treasury must consult the Bank of England before giving a financial
stability direction.
(5)The Treasury may give a financial stability direction that relates only to a
subsidy given, or subsidy scheme made, by the Bank of England only if the
Bank of England has requested the Treasury to give the direction.
(6)25Subject to subsection (7), a financial stability direction must be published in
whatever manner the Treasury considers appropriate.
(7)The duty under subsection (6) does not apply if the Treasury considers that
publication of the direction would undermine the purpose for which it is given.
(8)In this section—
-
30“financial service supplier” has the meaning given by Article 183 of the
Trade and Cooperation Agreement;
-
“specified” means specified in a financial stability direction.
48 Legacy and withdrawal agreement subsidies
(1)The subsidy control requirements do not apply to the following legacy
35subsidies and schemes—
(a)a subsidy given on or after the day on which this section comes into
force, under a subsidy scheme made before that day;
(b)a subsidy given in accordance with Regulation (EC) No 1370/2007 of
the European Parliament and of the Council on public passenger
40transport services by rail and by road (and any such subsidy is to be
treated for the purposes of this Act as if it were given in accordance
with a subsidy scheme).
Subsidy Control BillPage 27
(2)In subsection (1), the reference to the subsidy control requirements, so far as it
relates to subsection (1)(a), does not include the requirements as to
transparency in Chapter 3 of Part 2, except in relation to—
(a)subsidies given that are subject to the provisions of Part IV or Annex 2
5of the Agreement on Agriculture;
(b)subsidies given in relation to trade in fish and fish products;
(c)subsidies given in relation to the audiovisual sector.
(3)The subsidy control requirements do not apply to the following withdrawal
agreement subsidies and schemes—
(a)10a subsidy given, or a subsidy scheme made, in accordance with Article
10 of the Northern Ireland Protocol;
(b)a subsidy or subsidy scheme to which Article 138 of the EU withdrawal
agreement applies.
(4)In Regulation (EC) No 1370/2007 of the European Parliament and of the
15Council on public passenger transport services by rail and by road, omit Article
9 (transport sector provisions).
(5)In this section “the Agreement on Agriculture” means the Agreement on
Agriculture, contained in Annex 1A to the Marrakesh Agreement Establishing
the World Trade Organization, done at Marrakesh on 15 April 1994 (read with
20any adjustments necessary for context).
49 Tax measures
The subsidy control requirements do not apply to the giving of a subsidy
where the giving of the subsidy is permissible by virtue of Article 413 of the
Trade and Cooperation Agreement (taxation).
50 25Large cross-border or international cooperation projects
(1)Section 12(1) does not apply to a subsidy if—
(a)it is given in the context of a large cross-border or international
cooperation project, and
(b)the public authority giving the subsidy is satisfied that the project
30meets the condition in subsection (3).
(2)Section 12(3) does not apply to a subsidy scheme if—
(a)the subsidies provided for by the scheme are to be given in the context
of a large cross-border or international cooperation project, and
(b)the public authority making the scheme is satisfied that the project
35meets the condition in subsection (3).
(3)A project meets the condition in this subsection if—
(a)the benefits of the project are not limited to the enterprise or to the
sector or the States participating, and
(b)the project has wider benefits and relevance through spillover effects
40that do not exclusively accrue to—
(i)the United Kingdom,
(ii)the relevant sector, and
(iii)the beneficiary of the subsidy or subsidies concerned.
Subsidy Control BillPage 28
(4)The projects that may be regarded as large cross-border or international
cooperation projects include—
(a)those for transport, energy, the environment or research and
development, and
(b)5first development projects to incentivise the emergence and
deployment of new technologies (excluding manufacturing
technologies).
51 Nuclear energy
(1)Section 13(1) does not apply to a subsidy in relation to nuclear energy.
(2)10Section 13(3) does not apply to a subsidy scheme that provides for subsidies in
relation to nuclear energy.
Part 4 CMA: referrals and functions
Chapter 1 15Functions on referrals of subsidies and schemes
Mandatory referrals
52 Mandatory referral to CMA
(1)A public authority must request a report from the CMA—
(a)before giving a subsidy, or making a subsidy scheme, of particular
20interest, or
(b)where directed to do so by the Secretary of State under section 55.
(2)The request must—
(a)include the information in relation to the subsidy or subsidy scheme
that would be required under section 34, if the subsidy or scheme were
25to be given or made,
(b)provide such other information as is specified in regulations under
subsection (3)(a),
(c)explain, in the case of a request under subsection (1)(a), why the public
authority considers that the subsidy or subsidy scheme would meet the
30criteria for being a subsidy, or subsidy scheme, of particular interest,
(d)include an assessment by the public authority as to whether the subsidy
or scheme would comply with the requirements of Chapters 1 and 2 of
Part 2, and the reasons for that conclusion, and
(e)include any evidence relevant to that assessment.
(3)35The Secretary of State may by regulations—
(a)specify further information that must be included in a request under
this section;
(b)make provision as to the form of a request under this section.
(4)Regulations under subsection (3)(a) and (b) are subject to the negative
40procedure.
Subsidy Control BillPage 29
53 CMA reporting period for mandatory referral
(1)The CMA must, before the end of five working days beginning with the day on
which a request is received under section 52(1), give a notice to the public
authority—
(a)5that the request complies with the requirements under section 52, or
(b)providing reasons as to why the request does not comply with those
requirements.
(2)Where the CMA gives a notice under subsection (1)(a), the CMA must—
(a)before the end of the reporting period, publish a report on the proposed
10subsidy or subsidy scheme, in such manner as the CMA considers
appropriate, and
(b)give a copy of the report to the public authority and the Secretary of
State as soon as reasonably practicable after it is published.
(3)Subject to subsections (4) and (6), “reporting period” means the period of 30
15working days beginning with the day on which the notice under subsection
(1)(a) is given to the public authority.
(4)The reporting period may be extended if an extension is agreed in writing
between the CMA and the public authority before the end of the reporting
period.
(5)20Where the reporting period is extended under subsection (4), the CMA must
publish, in such manner as the CMA considers appropriate, a notice stating
that the reporting period has been extended and by how much, and the reasons
for the extension.
(6)The Secretary of State may direct that the reporting period is extended, in
25response to a request from the CMA.
(7)A request under subsection (6)—
(a)may only be made if the CMA considers that there are exceptional
circumstances to justify an extension,
(b)must include the reasons for seeking an extension, and
(c)30must be published, with those reasons, in such manner as the CMA
considers appropriate.
(8)A direction under subsection (6)—
(a)may only be given if the Secretary of State is satisfied that there are
exceptional circumstances which justify an extension,
(b)35may not be given in relation to a subsidy or subsidy scheme given or
made by the Secretary of State, and
(c)may not be given so as to provide for an extension which exceeds 40
working days beginning with the day on which the reporting period
would otherwise end.
(9)40As soon as reasonably practicable after receiving a request under subsection
(6), the Secretary of State must—
(a)send a copy of a direction given under that subsection to the CMA and
to the public authority, or
(b)give notice to the CMA and the public authority that the request has
45been rejected and provide reasons for that decision.