Good Law Project challenge to regulations purporting to remove State aid rules

The Good Law Project – a non-profit membership organisation that brings public interest litigation – has sent a letter before claim to the Department for Business, Energy and Industrial Strategy challenging the Government’s decision to use secondary legislation under the EU Withdrawal Act 2018 to remove EU State aid rules from retained EU law (EU law that remains in force in the UK as domestic law after 1 January 2021). Their letter can be read here.

As I wrote here, there seems to me to be considerable force in the argument that the use of SIs under the 2018 Act to abolish a whole area of EU regulation, as opposed to modifying it so as to make sense, is outside the scope of the powers granted under that Act. And it is certainly contrary to the then Government’s assurance in its White Paper proposing that Act that “the [Bill] will not aim to make major changes in policy or to establish new legal frameworks in the UK beyond those that are necessary to ensure the law continues to function properly from day one.”

As explained here, the current Government has now committed in the Trade and Cooperation Agreement to an enforceable subsidy control regime for the UK (in addition to Article 10 of the Ireland/Northern Ireland Protocol) as from 1 January 2021. As further explained here, the way that it has chosen to implement that obligation – by merely providing that the parameters for such a regime set out in the TCA are law – has left the UK subsidy control regime in an incoherent mess: a mess that may well have the effect of chilling large projects involving state subsidy, because no one can be sure how the Administrative Court will approach its role of enforcing that regime.

Given where we now are, it is to be hoped that the current Government’s response to this litigation involves commitment to a swift timetable for the introduction of primary legislation – capable of proper scrutiny by Parliament and of being the subject of amendment – to put the new regime on a satisfactory legal basis and to establish the powers and functions of the independent regulator required by the TCA. The fact that the current government should have been getting on with that legislation since the December 2019 election – in which it promised such a regime – is not an argument for not doing it now.


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