A new UK-wide system for providing more flexible and tailored financial support to businesses has been set out under plans by the Business Secretary.

The new system will replace EU state aid rules and allow the UK to be more dynamic in providing support to businesses, including in innovative, R&D-focused industries, to encourage job creation and growth across all parts of the UK.

Local authorities, public bodies and the devolved administrations will be able to decide if they can issue subsidies to businesses, following UK-wide principles, under the plans.

The new system will be designed to be more flexible, agile and tailored to support business growth and innovation as well as maintain a competitive market economy and protect the UK internal market.

Business Secretary Kwasi Kwarteng said:

‘Our new, more flexible system will empower public authorities and devolved administrations, and ensure fair competition for businesses across the UK’

The Department for Business, Energy and Industrial Strategy said these principles will ensure subsidies are designed in such a way that they deliver strong benefits and good value for money for the UK taxpayer.

The system will ensure the UK honours its international obligations under World Trade Organisation (WTO) rules, the UK-EU Trade and Cooperation Agreement and other free trade agreements.

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