While Ms Sturgeon is desperate to rejoin the EU, the Prime Minister is set to unveil the new Subsidy Control Bill surpassing the system used on the continent. In a move to provide greater flexibility to the devolved nations, Business Secretary Kwasi Kwarteng hailed the opportunity to use the country’s newfound independence. Although the new regime will channel taxpayer money towards levelling up the country, it is set to reignite a clash with the SNP as the new policy will be determined by the UK Parliament.
Due to this, one Government source revealed the SNP will once again reignite the battle for independence amid claims Holyrood will have less control over subsidies.
They told The Daily Telegraph: “Sturgeon would ultimately start the argument again, that it’s the people of Scotland, the Scottish Parliament, that should decide whether Scottish local councils or the Scottish Government should be able to award subsidies to different companies.”
However, unravelling the SNP’s potential argument, the source claimed the Scottish Parliament will have increased autonomy to decide state aid allocations.
The source added: “Our argument is you can do that, because this system is way more flexible than the European one.
“So you either have a British flexible system, which you don’t want, or you want to rejoin the EU.”
Due to this, the UK will be able to increase subsidy spending thus providing businesses the ability to compete with their European counterparts.
Mr Kwarteng added: “We want to use our newfound freedoms as an independent, sovereign country to empower public authorities across the UK to deliver financial support – without facing burdensome red tape.”
“We will not return to the failed 1970s approach of the Government trying to run the economy, picking winners or bailing out unsustainable companies.
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Within the Trade and Cooperation Agreement, the UK agreed to state aid rules far stronger than what is included with the EU’s separate agreement with Japan and Canada.
The UK will not fully align with EU rules but either side can intervene if there has been a breach of the level playing field.
Tariffs can be enforced if there has been a breach while the EU also included provisions which would allow it to suspend elements relating to fisheries if there has been a violation.
Matthew Fell, chief UK policy director for the Confederation of British Industry claimed the new system will help meet the ambitions of the Government’s plans for the economy.
He added: “Government support is a last resort for businesses, but at the right time and place, it can make an invaluable contribution to key players and industries.