State aid: not only about trade

State aid is currently a stumbling block in the EU-UK trade talks. The EU demands a Level Playing Field (LPF) preferring that the UK follows the models found in Association Agreements made between the EU and its neighbours with the UK adopting a dynamic alignment with the EU State aid rules. But the EU has further demands that the UK also works closely with the European Commission and that UK national courts continue to make preliminary references to the European Court of Justice. The UK government wants sovereignty in the area of State aid and prefers to adopt a more relaxed process for international trade based upon the rules in the WTO’s Agreement on Subsidies and Countervailing Measures (ASCM). There is evidence that the UK plans to adopt a different approach to the use of State aid in the future to promote the global economic role of the UK. Relying on WTO rules would not create a robust domestic system of State aid control. In addition to the need to have some form of State aid regulation in place to satisfy international trade concerns it is also necessary for a domestic process to be available to scrutinise and challenge domestic spending. To date, there is no clear proposal as to what a domestic State aid regime would look like.