Response to the Government's Subsidy Control Consultation

1 April 2021

The Department for Business, Energy and Industrial Strategy (BEIS) has asked for views on subsidy controls.

Executive Summary

RIA's key priorities for subsidy control include:

  • Overall subsidy control reforms: RIA welcomes this review, the Government commitment to a competitive market economy in which rail businesses can trade, and the development of a risk-based and proportionate regime. We recommend that the future UK subsidy control regime should continue to respect the unique position of rail and further seek to ensure appropriate levels of funding for rail research and development
  • Leadership on free trade: We recommend that the UK should use its influence in the World Trade Organisation, and other trade bodies and negotiations to remove harmful and distortive subsidies and protections such as disproportionate use of ‘buy local’ rules, such as Buy America.
  • Innovation: RIA recommends the development of an ambitious Government innovation strategy for rail and for construction, to support the new Government ‘Plan for Growth’; and we note that innovations developed and procured in the UK, by UK public bodies, can support global exports. We further note, in particular, France’s use of an Innovation Partnership Procedure, to enable the development of the next generation of high-speed trains and signalling.  We recommend the removal of the ‘undertakings in difficulty’ definition. 
  • Economic regulation and private investment: RIA supports an independent body having a role and recommends also retaining a role for sector regulators with specialist expertise. In the context of Government proposals for Infrastructure and Green Banks we would support the development of co-funding models for rail. The development of both these subsidy control proposals, and the Williams Rail Review, should seek to support this.  We note that the Channel Tunnel was built on a Build Own Operate Transfer Model with a 65-year operating concession and that other regulated sectors such as water and airspace (NATS) have benefitted from effective use of Government underwriting and public private partnership models. 

The Submission

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