AN alleged post-Brexit “power grab” on the devolved administrations has cleared its first hurdle in the House of Commons.

The UK Government plans to replace EU state aid rules, outlined in the Subsidy Control Bill, were passed in a second reading by 287 votes to 50, majority 237, thereby paving the way for it to undergo further scrutiny at a later date.

But the SNP warned the Bill allows Westminster to reserve control over subsidies at the expense of the devolved authorities in Wales and Scotland.

The Bill sets out how central government, devolved administrations, local authorities and other public bodies should make decisions to award subsidies.

The new regime replaces EU state aid rules – which applied until the Brexit transition period ended on December 31 2020 – and the interim measures which followed.

Subsidies – usually cash payments or tax reductions from public resources – can be used to help an industry or business keep prices low, but the expectation is that they will not distort trade.

Business Secretary Kwasi Kwarteng commented: “This Government is determined to seize the opportunities arising from Brexit.

“Now that the UK has left the European Union and we are no longer bound by the EU’s regime, we have the freedom to develop a new bespoke system of subsidy control for the UK that delivers on our national priorities.

“This is a Bill that promotes autonomy, transparency and accountability. The Bill will empower hundreds of local authorities, the devolved administrations as well, and other public authorities, to take control as well, allowing them to design subsidies to meet local needs as well as to meet national policy objectives.”

Kwarteng (below) insisted the Bill will “make it clear which subsidies are permitted and prohibited, and under what circumstances”.

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He continued: “Public authorities will be empowered to make their own assessment of whether a new subsidy meets the requirements of the regime and in the vast majority of cases to proceed directly to granting that subsidy. For the first time, the decision on whether to grant a subsidy will always fall to the granting authority itself.”

Comparing it to the EU’s process, the Tory minister said: “Instead of a year, this whole process as I’ve described will take only a few weeks. It’s a much quicker process. It will allow public authorities to act with far greater agility than before.

“The devolved governments will have more control over subsidies than they have ever had before.”

But SNP business spokesman Stephen Flynn replied: “What we have here in front of us in no uncertain terms is a Bill that undermines devolution, following on from the Internal Market Bill, following on from the Shared Prosperity Bill. If they want to protect their union, they are doing a damned well job of destroying it.”

SNP MP Kirsty Blackman also warned: “This is going to do the opposite of levelling up, in fact it’s going to entrench the inequality that we already have.”

She added: “If the devolved administrations are broadly happy, why has the Welsh Government said that out of the six parts of the Bill, it objects to five of them … I can’t imagine the Scottish Government will be terribly happy with the power grab that is occurring as a result of this Bill.

DUP MP Sammy Wilson said “in principle we welcome this Bill”, but went on to warn of potential disadvantages for Northern Ireland.

He warned that under the current agreements with the EU, the UK could offer higher and faster subsidies for which Northern Ireland would not be eligible.

The Unionist MP said he hopes that Northern Ireland will be covered by a new UK regime and not the European Union’s, but said if the issue of Article 10 of the Northern Ireland Protocol is not addressed then “this Bill would still leave a significant foothold in the United Kingdom for Brussels and for the European Court of Justice in making the final decisions about subsidies which apply in Northern Ireland”.

Labour’s shadow business minister Seema Malhotra said her party will not oppose the Bill but has insisted there are significant gaps of concern that need to be addressed.

She said: “There is no clear plan as to how the new subsidy control regime will be used to support national priorities such as net zero.”

Scottish Greens MSP Maggie Chapman said: “After the disgraceful power grab of the Internal Market Bill, the Subsidy Control Bill is yet another attempt to undermine democracy and the powers of the Scottish Parliament.

“Given the priorities of this reckless UK Government are to subsidise planet-wrecking infrastructure like aviation, major road expansion and new oil and gas, giving them more control over subsidy is alarming and the last thing Scotland needs.

“When the Business Secretary talks of the ‘national priorities’ that subsidy will focus on, he means the priorities of this right-wing government and its ideological free-market race to the bottom. Scotland must be able to choose a different path.”