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16th April 2018

State aid post-Brexit: CMA to the fore

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The Government has confirmed that the Competition and Markets Authority (CMA) will take on the role of state aid regulator in the United Kingdom following its withdrawal from the European Union. This news is not surprising given that the CMA is the primary competition regulator in the UK.
In its report entitled “Brexit: competition and state aid” (published on 2 February 2018), the House of Lords’ EU Internal Market Sub-Committee had called for clarity, as soon as possible, as to the mechanisms for approval of state aid that would apply after Brexit and with regard to the Government’s position on the shape of the future UK state aid regime in order to provide certainty to local authorities and businesses.

In response, the announcement of the CMA as state aid regulator was made by Andrew Griffiths MP, Minister for Small Business, Consumers & Corporate Responsibility, in a letter dated 28 March 2018 to Lord Whitty, Chair of the Sub-Committee. He described the appointment as reflecting the CMA’s “experience and understanding of markets as the UK’s competition regulator and the independence of its decision-making from Government”.

Under the European Union (Withdrawal) Bill, all EU law is to be transcribed on to the UK statue book with effect from the UK’s withdrawal from the EU. The role of the European Commission in approving state aid measures and enforcing the rules in the UK will cease at that point. The CMA now stands primed to assume that role. The ultimate content of the UK rules on state aid post-Brexit is highly likely to be framed as part of any free trade agreement reached between the UK and the EU.

For more information please contact Stephen Cole on 01604 233233 or click here to email Stephen.