The design of enforcement institutions: Lessons from the UK’s new state aid control regime

Now that the UK is no longer a member of the European Union it has to substitute the EU system of State aid control with its own system for the control of subsidies. Brexiters have argued that this presents a unique opportunity to the UK to design a system that is less cumbersome and more effective than that of the EU. This article examines how the draft Subsidy Control Bill intends to address the three problems of the design of institutions responsible for the control of State aid or subsidies; ie the problems of discovery, assessment and enforcement. If finds that, by comparison to the EU system, the proposed UK system seems to grant more leeway to public authorities and to impose fewer formal requirements but also to require assessment of most subsidies by the Competition and Markets Authority (CMA). At the same time, the greater leeway creates more uncertainty about the conformity of subsidies with the various principles laid down in the Subsidy Control Bill. The Bill also leaves several issues unclear, especially with regard to the status of subsidies which are not referred to the CMA or subsidies which are granted contrary to CMA recommendations. The powers of the CMA are certainly more limited than those of the Commission.