Question
To ask the Secretary of State for Business, Energy and Industrial Strategy, pursuant to the First Delegated Legislation Committee of Wednesday 10 April 2019 and the oral contribution of the member for Sefton Central, when he plans to respond to the request of the Welsh Government for an explanation of the government's legal position that State Aid is a reserved matter; and if he will confirm whether the government has previously given the commitment not to amend domestic legislation in devolved areas without the agreement of the devolved administrations.
Answer
Ken Skates, Minister for Economy and Transport at the Welsh Government, wrote to the Secretary of State on 25 January 2019. Whilst noting that the regime established by the State aid regulation was an important step in ensuring alignment between the UK and EU on state aid, the letter queried the position on reservation.
My rt. hon. Friend the Secretary of State explained that there is no difference of opinion between the administrations on the current policy adopted in relation to State aid and explained the UK Government’s intention to work closely with them (and the other devolved administrations) on the development of State aid policy.
I understand this correspondence enabled Jeremy Miles, Counsel General and Brexit Minister for the Welsh Government, to update the National Assembly for Wales’ Constitutional and Legislative Affairs Committee by letter dated 20 March 2019, noting that he was, “reassured that there is still scope to resolve the ongoing dispute between our administrations to reflect devolution in the medium to longer term, and will continue working with the UK Government towards that end.”
Under the EU Withdrawal Act 2018, the UK Government can amend deficiencies in retained EU law where this would fail to operate effectively otherwise. Where EU law falls within an area of devolved competence, the Memorandum on the EU Withdrawal Bill and the Establishment of Common Frameworks (April 2018) clarifies that the Government will not normally seek to use these powers without the agreement of the devolved administrations.
The UK Government remains fully committed to this position. However, given that we consider that the regulation of State aid is reserved, we did not consider that this commitment was engaged in respect of the draft State aid regulations. I am nevertheless still committed to working closely with the Welsh Government and the other devolved administrations on the development of State aid policy.