Subsidy Control Bill (HL Bill 84)

Part 4 continued    

(10)Any day falling within the period beginning with the day on which a request
is published by the CMA under subsection (7) and ending with the day on
which a direction is given under subsection (6), or a notice is given under
subsection (9), does not count for the purposes of calculating the reporting
5period.

(11)The Secretary of State must publish, in such manner as the Secretary of State
considers appropriate, a direction given under subsection (6) or a notice given
under subsection (9).

(12)The Secretary of State may by regulations amend the periods of time specified
10in subsections (1) and (3).

(13)Regulations under subsection (12) are subject to the affirmative procedure.

54 Cooling off period following mandatory referral

(1)A public authority may not give a subsidy or make a subsidy scheme, in
relation to which the CMA has provided a report, before the end of the cooling
15off period.

(2)“Cooling off period” means the period of five working days beginning with the
day after the day on which the CMA publishes the report under section 53(2).

(3)If the CMA does not publish a report before the end of the reporting period, the
public authority may give the subsidy or make the subsidy scheme after the
20day on which the reporting period expires.

(4)The Secretary of State may direct that the cooling off period is extended where
the Secretary of State considers that the CMA’s report has identified that there
are serious deficiencies in the public authority’s assessment under section
52(2)(d).

(5)25The Secretary of State—

(a)must send a copy of a direction given under subsection (4) to the public
authority, and

(b)must publish the direction in such manner as the Secretary of State
considers appropriate.

(6)30The power in subsection (4) may not be exercised so as to provide for an
extension which exceeds 30 working days beginning with the day on which the
cooling off period would otherwise end under subsection (2).

(7)The Secretary of State may by regulations—

(a)amend the period of time specified in subsection (2);

(b)35amend subsection (4) to reflect any changes made to the content of the
CMA’s report by regulations made under section 59.

(8)Regulations under subsection (7)(a) or (b) are subject to the affirmative
procedure.

55 Call-in direction

(1)40The Secretary of State may direct a public authority to request a report from the
CMA in relation to a proposed subsidy or subsidy scheme.

(2)A direction under this section may be given in relation to—

(a)a subsidy or subsidy scheme of interest, or

(b)any subsidy or subsidy scheme in respect of which the Secretary of
State considers—

(i)there is a risk of failure to comply with the requirements of
Chapters 1 and 2 of Part 2, or

(ii)5there is a risk of negative effects on competition or investment
within the United Kingdom.

(3)The Secretary of State—

(a)must send a copy of a direction given under this section to the public
authority and to the CMA, and

(b)10must publish the direction in such manner as the Secretary of State
considers appropriate.

Voluntary referrals

56 Voluntary referral to CMA

(1)A public authority may request a report from the CMA before giving a subsidy,
15or making a subsidy scheme, of interest.

(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
to be given or made,

(b)20provide such other information as is specified in regulations under
subsection (3)(a),

(c)explain why the public authority considers that the subsidy or subsidy
scheme would meet the criteria for being a subsidy, or subsidy scheme,
of interest,

(d)25include 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)The Secretary of State may by regulations—

(a)30specify 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
procedure.

57 35CMA reporting period for voluntary referral

(1)Where the CMA receives from a public authority a request under section 56(1)
that complies with the requirements under section 56(2), the CMA must decide
whether to prepare a report in response to the request.

(2)The CMA must, before the end of five working days beginning with the day on
40which a request is received under section 56(1), give notice to the public
authority—

(a)that a report will be prepared in response to the request, or

(b)providing reasons as to why the CMA has decided not to prepare a
report.

(3)Subject to subsection (4), where the CMA gives a notice under subsection (2)(a),
the CMA must—

(a)before the end of the reporting period, publish a report on the proposed
subsidy or subsidy scheme, in such manner as the CMA considers
5appropriate, 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.

(4)If the proposed subsidy is given, or scheme is made, before the CMA has
prepared or published its report, the CMA may decide whether or not to
10prepare or publish the report.

(5)Subject to subsection (6), “reporting period” means—

(a)the period of 30 working days beginning with the day on which the
notice under subsection (2)(a) is given to the public authority, or

(b)such other period as is agreed in writing between the CMA and the
15public authority.

(6)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.

(7)Where the reporting period is agreed under subsection (5)(b) or extended
20under subsection (6), the CMA must publish a notice setting out the agreement
or extension, and the reasons for it, in such manner as the CMA considers
appropriate.

(8)The Secretary of State may by regulations amend the periods of time specified
in subsections (2) and (5)(a).

(9)25Regulations under subsection (8) are subject to the affirmative procedure.

58 Call-in direction following voluntary referral

(1)This section applies where—

(a)the CMA has given a notice under section 57(2)(a) that it will prepare a
report in response to a voluntary referral request made in relation to a
30subsidy or subsidy scheme, and

(b)the Secretary of State has given a call-in direction under section 55 in
relation to that subsidy or scheme.

(2)The voluntary referral request is treated as if it was a mandatory referral
request (and sections 53 and 54 apply accordingly) where—

(a)35the report in response to the voluntary referral request has not been
published, and

(b)the reporting period for that report has not expired.

(3)The voluntary referral request is treated as if it was a mandatory referral
request (and sections 53 and 54 apply accordingly) where—

(a)40the report in response to the voluntary referral request has not been
published, and

(b)the reporting period for that report has expired,

but the reporting period under section 53(3) is to be read as a period of 10
working days.

(4)Where the report in response to the voluntary referral request has been
published, but the subsidy has not been given, or the subsidy scheme has not
been made, section 54 applies, and the references in that section to the CMA’s
report are to be read as references to the report published in response to the
5voluntary referral request.

(5)In this section—

• “mandatory referral request” means a request made under section 52;

• “voluntary referral request” means a request made under section 56.

Mandatory and voluntary referrals: contents of CMA report

59 10CMA report following mandatory or voluntary referral

(1)The CMA’s report under section 53 or 57 must include an evaluation of the
public authority’s assessment under section 52(2)(d) or 56(2)(d).

(2)The evaluation must take into account any effects of the proposed subsidy or
scheme on competition or investment within the United Kingdom.

(3)15The report may also include—

(a)advice about how the public authority’s assessment under section
52(2)(d) or 56(2)(d) might be improved, and

(b)advice about how the proposed subsidy or scheme may be modified to
ensure compliance with the requirements of Chapters 1 and 2 of Part 2.

(4)20The Secretary of State may by regulations—

(a)amend subsection (1), (2) or (3) to make provision about the content of
the CMA’s report;

(b)make provision as to the form of the report.

(5)Regulations under subsection (4)(a) are subject to the affirmative procedure.

(6)25Regulations under subsection (4)(b) are subject to the negative procedure.

Post-award referrals

60 Post-award referrals

(1)The Secretary of State may refer a subsidy or subsidy scheme to the CMA after
the subsidy has been given or the subsidy scheme has been made.

(2)30A referral under subsection (1) may be made in relation to any subsidy or
subsidy scheme in respect of which the Secretary of State considers—

(a)that there has or may have been a failure to comply with the
requirements of Chapters 1 and 2 of Part 2, or

(b)that there is a risk of negative effects on competition or investment
35within the United Kingdom.

(3)The Secretary of State must, at the same time as making a referral under
subsection (1), direct the public authority to provide to the CMA—

(a)any assessment carried out by the public authority, before the subsidy
was given or the scheme was made, as to whether the subsidy or
40scheme would comply with the requirements of Chapters 1 and 2 of
Part 2, and the reasons for that conclusion,

(b)any evidence relevant to that assessment,

(c)in a case where such an assessment is not provided, the reasons for that,

(d)any information that the public authority failed to enter in the subsidy
database in accordance with Chapter 3 of Part 2, and

(e)5such other information as is specified in regulations under subsection
(8)(a).

(4)Where the Secretary of State decides to make a referral under subsection (1),
the referral, together with a direction given under subsection (3), must be made
before the end of 20 working days beginning with—

(a)10the day on which the entry in respect of the subsidy or scheme is
entered into the subsidy database, or

(b)the day on which the subsidy is given or the scheme is made, in the case
of a subsidy or scheme to which section 41 applies.

(5)The Secretary of State—

(a)15must publish a referral made under subsection (1) in such manner as
the Secretary of State considers appropriate, and

(b)must send a copy of a direction given under subsection (3) to the public
authority and the CMA.

(6)The public authority must provide to the CMA the information required under
20subsection (3) before the end of the information period.

(7)“Information period” means the period of 20 working days beginning with the
day on which the direction is given.

(8)The Secretary of State may by regulations—

(a)specify further information that must be provided under subsection (3);

(b)25prescribe the form in which the information required under subsection
(3) is to be provided;

(c)amend the periods of time specified in subsections (4) and (7).

(9)Regulations under subsection (8)(a) or (b) are subject to the negative
procedure.

(10)30Regulations under subsection (8)(c) are subject to the affirmative procedure.

61 CMA reporting period for post-award referrals

(1)Where the CMA receives from the Secretary of State a referral under section 60,
the CMA must—

(a)before the end of the reporting period, publish a report on the subsidy
35or subsidy scheme to which the referral relates, 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.

(2)Subject to subsection (3) and (5), “reporting period” means the period of 30
40working days beginning with the earlier of—

(a)the day on which the information required under section 60(3) is
provided to the CMA by the public authority, and

(b)the day after the information period in section 60(7) ends.

(3)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.

(4)Where the reporting period is extended under subsection (3), the CMA must
5publish, in such manner as the CMA considers appropriate, a notice that the
reporting period has been extended and by how much, and the reasons for the
extension.

(5)The Secretary of State may direct that the reporting period is extended, in
response to a request from the CMA.

(6)10A request under subsection (5)—

(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)must be published, with those reasons, in such manner as the CMA
15considers appropriate.

(7)A direction under subsection (5)—

(a)may only be given if the Secretary of State is satisfied that there are
exceptional circumstances to justify an extension,

(b)may not be given in relation to a subsidy or subsidy scheme given or
20made 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.

(8)As soon as reasonably practicable after receiving a request under subsection (5)
25the Secretary of State must—

(a)send a copy of a direction given under subsection (5) to the CMA and
to the public authority, or

(b)give notice to the CMA and the public authority that the request has
been rejected and provide reasons for that decision.

(9)30Any day falling within the period beginning with the day on which a request
is published by the CMA under subsection (6) and ending with the day on
which a direction is given under subsection (5), or a notice is given under
section (8), does not count for the purposes of calculating the reporting period.

(10)The Secretary of State must publish, in such manner as the Secretary of State
35considers appropriate, a direction given under subsection (5) or a notice given
under subsection (8).

(11)The Secretary of State may by regulations amend the period of time specified
in subsection (2).

(12)Regulations under subsection (11) are subject to the affirmative procedure.

62 40CMA report following post-award referral

(1)The CMA’s report under section 61 must include an evaluation of the public
authority’s assessment under section 60(3)(a).

(2)The evaluation must take into account any effects of the proposed subsidy or
scheme on competition or investment within the United Kingdom.

(3)If an assessment was not provided under section 60(3)(a), that fact should be
stated in the report, along with any reasons provided under section 60(3)(c).

(4)If the subsidy or subsidy scheme is ongoing, the report may also include advice
about how the subsidy or scheme may be modified to ensure compliance with
5the requirements of Chapters 1 and 2 of Part 2.

(5)The Secretary of State may by regulations—

(a)amend subsection (1), (2), (3) or (4) to make provision about the content
of the CMA’s report under section 61;

(b)make provision as to the form of that report.

(6)10Regulations under subsection (5)(a) are subject to the affirmative procedure.

(7)Regulations under subsection (5)(b) are subject to the negative procedure.

Exemptions

63 Referrals in relation to subsidy schemes

The preceding provisions of this Chapter relating to subsidies do not apply to
15a subsidy given under a subsidy scheme.

64 Other exemptions

(1)This Chapter does not apply in relation to subsidies, or subsidy schemes that
provide only for the giving of such subsidies, as described in the following
sections—

(a)20section 10 (streamlined subsidy schemes);

(b)section 36 (minimal financial assistance);

(c)section 38 (SPEI assistance);

(d)section 43 (natural disasters and other exceptional circumstances);

(e)section 44 (national or global economic emergencies);

(f)25section 45 (national security);

(g)section 46 (Bank of England monetary policy);

(h)section 48 (legacy and withdrawal agreement subsidies);

(i)section 49 (tax measures);

(j)section 50 (large cross-border or international cooperation projects).

(2)30This Chapter does not apply in relation to a subsidy, or subsidy scheme—

(a)to which a financial stability direction given under section 47 (financial
stability) applies, or

(b)which is otherwise given or made by the Treasury or the Bank of
England (or by both acting jointly) only for the reasons mentioned in
35subsection (3) of that section (prudential reasons).

(3)The Secretary of State may direct that sections 52, 53, 54 and 55 (mandatory
referral requirements) do not apply, or cease to apply, in relation to a specified
subsidy or subsidy scheme.

(4)A direction under subsection (3) may only be given where the Secretary of State
40is satisfied that there are urgent and exceptional circumstances that justify the
direction being given in the public interest.

(5)A direction given under subsection (3) must be laid before Parliament.

(6)The Secretary of State—

(a)must send a direction given under this section to the public authority
giving the subsidy or making the subsidy scheme, and

(b)must publish the direction in such manner as the Secretary of State
5considers appropriate.

Chapter 2 General functions

65 Monitoring and reporting on subsidy control

(1)The CMA must, in relation to each relevant period, undertake a review of—

(a)10the effectiveness of the operation of this Act, and

(b)the impact of the operation of this Act on competition and investment
within the United Kingdom.

(2)The CMA must prepare a report on the outcome of the review in relation to
each relevant period.

(3)15Subject to subsection (5), “relevant period” means—

(a)the period beginning with the commencement date and ending with 31
March in the fifth year after the year in which the commencement date
falls, and

(b)each subsequent period of five years.

(4)20The Secretary of State may direct the CMA to prepare a report in relation to a
specified period.

(5)Where the CMA prepares a report in relation to a specified period, “relevant
period” means—

(a)the period beginning with the day after the last day of the specified
25period and ending with the 31 March in the fifth year after the year in
which the day after the last day of the specified period falls, and

(b)each subsequent period of five years.

(6)The CMA must publish a report under this section as soon as practicable after
the end of the period to which it relates and in such manner as the CMA
30considers appropriate.

(7)The CMA must arrange for a copy of a report prepared under this section to be
laid before Parliament.

(8)In this section, “commencement date” means the day on which this section
comes into force.

66 35CMA annual report

The annual report prepared by the CMA under section 25(4) of, and paragraph
14 of Schedule 4 to, the Enterprise and Regulatory Reform Act 2013 must
include details of—

(a)the subsidies, and subsidy schemes, in respect of which the CMA
40prepared reports following mandatory referrals under section 52,

(b)the subsidies, and subsidy schemes, of interest in respect of which the
CMA prepared reports following voluntary referrals under section 56,
and

(c)the subsidies and subsidy schemes in respect of which the CMA
5prepared reports following post-award referrals under section 60.

67 Information-gathering powers

(1)Sections 41 to 43 of the United Kingdom Internal Market Act 2020 (which make
provision about information-gathering powers, enforcement and penalties)
apply for the purpose of assisting the CMA in carrying out any of its functions
10under section 65 of this Act as they apply for the purpose mentioned in section
41(1) of that Act.

(2)In the application of sections 41 to 43 of that Act by virtue of subsection (1)—

(a)section 42 has effect as if, in subsection (4), after paragraph (e) there
were inserted “, or

(f)15where the penalty is imposed in connection with the
exercise of the CMA’s functions under section 65 of the
Subsidy Control Act 2021 in relation to the preparation
of a report under that section, the day on which the
report is published or is laid before Parliament
20(whichever is the later).”;

(b)section 43 has effect as if, in subsection (10)(b), for “or (e)” there were
substituted “, (e) or (f)”.

(3)The Secretary of State may by regulations make such further modifications as
the Secretary of State thinks necessary to sections 41 to 43 of the United
25Kingdom Internal Market Act 2020 in the application of those sections by
virtue of subsection (1).

(4)But regulations under subsection (3) may not modify the amounts specified in
section 43(6) of that Act.

(5)Regulations under subsection (3) are subject to the negative procedure.

30Chapter 3 Subsidy Advice Unit

68 Subsidy Advice Unit

(1)The CMA must establish a committee of the CMA Board to be known as the
Subsidy Advice Unit.

(2)35The CMA Board may authorise the Subsidy Advice Unit under paragraph
29(1) of Schedule 4 to ERRA 2013 to carry out its subsidy control functions
(which are exercisable by the CMA Board on behalf of the CMA under
paragraph 28 of that Schedule).

(3)A subsidy control function that the Subsidy Advice Unit is authorised to carry
40out under subsection (2) may, so far as that Unit authorises (whether generally
or specifically), be carried out by—

(a)a member or sub-committee of that Unit,

(b)a member of the CMA Board, or

(c)a member of staff of the CMA.

(4)The Subsidy Advice Unit may consist only of persons who are members of the
CMA or its staff.

(5)References in this section to the CMA Board are to the Board constituted under
5Part 2 of Schedule 4 to ERRA 2013.

(6)In this Chapter—

• “ERRA 2013” means the Enterprise and Regulatory Reform Act 2013;

• “subsidy control functions” means—

  (a)

  the functions of the CMA under Chapters 1 and 2, and

  (b)

  10any other functions that the CMA is required or authorised to
  carry out under or by virtue of this Act.

69 References to subsidy control groups

(1)The Subsidy Advice Unit may make a reference to the CMA chair for the
constitution of a CMA group under Schedule 4 to ERRA 2013.

(2)15A reference under this section must specify—

(a)the subsidy control functions in respect of which the reference is made
(“the referred functions”), and

(b)if the reference is made in respect of a particular subsidy or subsidy
scheme, details of that subsidy or subsidy scheme (“the referred case”).

(3)20A CMA group constituted for the purposes of a reference under this section
must carry out, on behalf of the Subsidy Advice Unit, the referred functions.

(4)Where the reference is made in relation to a referred case, the reference in
subsection (3) to the referred functions is a reference to those functions so far
as relating to the referred case.

(5)25Paragraph 33 of Schedule 4 to ERRA 2013 does not apply in relation to a
reference under this section.

(6)In this section “CMA chair” means the person appointed under paragraph
1(1)(a) of Schedule 4 to ERRA 2013.

Part 5 30Enforcement

Appeals to the Competition Appeal Tribunal

70 Review of subsidy decisions

(1)An interested party who is aggrieved by the making of a subsidy decision may
apply to the Competition Appeal Tribunal for a review of the decision.

(2)35Where an application for a review of a subsidy decision relates to a subsidy
given under a subsidy scheme, the application must be made for a review of
the decision to make the subsidy scheme (and may not be made in respect of a
decision to give a subsidy under that scheme).

(3)The means of making an application is by sending the Tribunal a notice of
40appeal in accordance with Tribunal Procedure Rules.