The United Kingdom’s vote to leave the EU has the potential to have a major impact on State aid law. We will explore those implications on this website and in future events (and please do blog on this website or send us thoughts and ideas for future events – use the contact page on the website).
For the moment, two initial points.
First, the EU State aid rules still have full effect in the United Kingdom and will do until the United Kingdom ceases to be party to the Treaties. The United Kingdom remains bound not to grant State aid unless it is exempt or notified. And UK courts remain bound to enforce the State aid rules, including granting injunctions and awarding damages.
Second, it is almost certain that compliance with State aid rules will be a condition of any extensive trading arrangement between the United Kingdom and the EU. That is, not least, because successive UK governments have accepted the basic principles of the State aid rules, and the UK government is not likely to want to see subsidy races between different local authorities and devolved governments. If the UK joins the EEA Agreement, that Agreement has the same rules on State aid as the EU Treaties, save that enforcement is carried out by the EFTA Surveillance Authority and EFTA Court rather than the Commission and ECJ. An alternative arrangement might be some form of national level enforcement by the CMA or some other authority.
We suspect that most UKSALA members regret the result of the referendum, as do we. It is also likely that, whatever arrangements for State aid eventually result, the United Kingdom’s considerable influence on the development of those rules across Europe will be very significantly reduced. However, we believe that all UK State aid practitioners will want to take part in developing new arrangements for the control of State aid in the United Kingdom, and we hope that UKSALA can play a prominent role in that, while maintaining personal and professional links with our State aid colleagues on the continent.
KELYN BACON QC
GEORGE PERETZ QC