Subscribe to our Beyond Brexit weekly newsletter and follow us @Brexit.The U.K. government has announced its post-Brexit system to oversee subsidies to companies. It promised to take quicker decisions than when Britain was part of the European Union.The U.K.'s Department for Business, Energy and Industrial Strategy stated Wednesday that subsidies will be allowed if they adhere to certain principles, such as benefiting local communities and providing tax relief. Kwasi Kwasi Kwarteng, Business Secretary, stated that the system will be more flexible and agile than it was before Brexit. Before Brexit, the U.K. had to follow the EU's state aid scheme and large subsidies required approval from the European Commission.Kwarteng stated that we want to make use of our independence as a sovereign, independent country to allow public authorities in the U.K. financial support. He stated that the new system will support new and emerging British industries and create more jobs, making the U.K. the best place to start or grow a company.In its trade negotiations with EU, the UK was concerned about how it would regulate subsidiaries after Brexit. The EU was concerned that the U.K. might become an aggressive competitor in its trade negotiations with the EU and demanded that Britain adopt a strong system to regulate domestic subsidies. This would be managed by an independent body.The U.K.-EU trade agreement was signed on Christmas Eve. It included provisions prohibiting certain subsidies, such as those to insolvent or ailing businesses without a credible restructuring plan. Additionally, it established an independent body to oversee the subvention control system.New UnitAccording to the U.K.'s plan, a new subsidy advice unit would be established within the Competition and Markets Authority. This independent regulator would oversee the regime, but not have enforcement powers, BEIS stated. According to BEIS, the U.K.'s courts and tribunal system would enforce the system.Boris Johnson, Prime Minister of Britain, is keen to show the upsides to Britain's exit from the EU. This comes after a five-year period in which trade and investment from Britain's largest market have been severely affected. The government stated that the new subsidy system would help him achieve his political promise to spread wealth and opportunity throughout Britain.The British government could grant subsidies to EU companies if they were less than 200,000 euro ($238,000) in three years. This was also true if the subsidy fell within an exempt category, such as public infrastructure spending, or environmental aid. The European Commission had to approve larger amounts and notify them.
