BORIS Johnson’s has been accused of launching a “full-scale assault on devolution” over plans to keep the power to control state aid in London after Brexit.
The proposal is set to appear in new legislation laying the legal foundations for a new post-Brexit internal market which will be debated by MPs in the autumn.
The devolved administrations in Scotland and Wales have both said they want to remain closely aligned to the EU’s state aid rules, and have both called for the power to legislate to be passed onto Holyrood and the Senedd after Brexit.
State aid – the provision of support to businesses by public bodies – is tightly regulated by the EU. Effectively, it’s supposed to stop businesses being under-cut by other businesses who receive substantial government support.
When the UK leaves the EU at the end of this year, the state aid rules will no longer apply.
It’s possible Johnson’s Government could use the freedom from these regulations to pursue a more interventionist industrial strategy.
Details of the plans to keep the powers in London were reported in yesterday’s Financial Times.
Sharing a link to the story, Nicola Sturgeon tweeted: “Make no mistake, this would be a full-scale assault on devolution – a blatant move to erode the powers of the Scottish Parliament in key areas.
“If the Tories want to further boost support for independence, this is the way to do it.”
Downing Street said it has always considered the regulation of state aid to be a reserved matter for Westminster.
The Prime Minister’s official spokesman said: “We’ve always been clear we consider the regulation of state aid to be a reserved matter.
“We’ll continue to work with the devolved administrations to look to agree a modern system for supporting British business in a way that benefits all within the UK.”
Back in March 2018, the Cabinet Office published a list of 153 areas where EU laws impact on responsibilities governed by the Scottish Parliament. While there was and is agreement on what should happen with many of those, there was stalemate on a number of others – state aid was one of those powers.
Legal experts quoted in the Financial Times said the UK Government’s decision to legislate to make state aid policy a reserved power was an implicit recognition that ministers were not confident of winning the argument in court.
George Peretz QC, a lawyer at Monckton Chambers in London and an expert in EU law, told the paper that the UK Government had previously contended that its undisputed powers to rule over “anti-competitive practices” also extended to state aid.
“I think that that’s not really arguable. And in seeking to settle the matter through primary legislation – if that is what occurs – it looks as if the Government has now agreed that it isn’t arguable either,” he said.
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Yesterday in the Commons, the SNP’s Pete Wishart suggested the plans for an internal market bill were a result of polls showing majority support for independence.
He told MPs: “All [the Tories] can now try to do is to impose their will on a recalcitrant Scotland. The latest wheeze is to cut devolution, to attack the powers of the Scottish Parliament, to impose a UK single market on a Scotland wanting out of the UK.”
Michael Gove said that would not be the case. He told the Commons: “It is the case that there are more than 100 powers that return to the Scottish Parliament as a result of our leaving the European Union, far from being a power grab it is a power surge for all of the parliaments of the United Kingdom.”
Over the weekend, the Scottish Government’s Brexit minister Michael Russell said the Tories were trying to “chip away at the powers” of Holyrood “whilst dishonestly pretending that they respect them and those who wield them”.
Last week Russell said that the Scottish Government was prepared to fight in the courts over the proposed UK single market bill.
It would ultimately create powers to enable the UK Government to force Scotland and Wales to accept whatever new standards on food, environment and animal welfare were agreed in future trade agreements.
Russell said: “We will have no intention of implementing that and they would have to essentially go to court to force its implementation.”
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