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This Written Statement updates Members on the development of regulations relating to the Subsidy Control Act 2022\.


On 17 October 2022 the Department of Business, Energy and Industrial Strategy (BEIS) shared an update on the four Statutory Instruments accompanying the Subsidy Control Act 2022 yet to be laid before Parliament, including ‘The Subsidy Control (Subsidies and Schemes of Interest or Particular Interest) Regulations 2022’.


This final draft has not changed from the most recent draft regulations shared with Welsh Government on 22 July 2022 following the consultation process. During the consultation period I wrote to the then Parliamentary Under Secretary of State at the Department for Business, Energy and Industrial Strategy, Paul Scully MP, outlining the Welsh Government’s concerns around the lack of legal certainty arising from the process, the low value of the economic thresholds switching on the requirements and concerns around many of the characteristics of the process. None of the comments or recommendations I made have been accepted or reflected in the final regulations.


These regulations will significantly impact on the ability of public authorities in Wales to award effective and timely subsidies. The lack of clear, legally certain definitions risks the new regime becoming hindered by bureaucracy and legal challenge. The standardisation of the Subsidies of Interest and of Particular Interest thresholds (£5 million and £10 million respectively) risk an oversimplified twin\-track approach that is inadequate to reflect the complexities of the UK’s economy. The £5m and £10m thresholds also compare unfavourably with the previous EU regime, and the additional scrutiny on subsidies in sensitive sectors such as the production of metals, vehicles or energy, that are not present in the current regime, will impact significantly on Wales’ economic development.


I have considered the need to lay a statutory instrument consent memorandum and have determined that this draft regulation does not engage either Standing Orders 30A or 30B. Nevertheless, I consider that the regulations, as drafted, will have a significant negative impact upon the devolved competence of economic development and areas of importance to the Welsh Economy. I therefore felt it appropriate to bring this matter to the attention of the Senedd.







Translation:


 
Mae’r Datganiad Ysgrifenedig hwn yn rhoi’r wybodaeth ddiweddaraf i’r Aelodau am ddatblygiad rheoliadau yn ymwneud â Deddf Rheoli Cymorthdaliadau 2022\.


Ar 17 Hydref 2022 rhannodd yr Adran Busnes, Ynni a Strategaeth Ddiwydiannol yr wybodaeth ddiweddaraf am y pedwar Offeryn Statudol cysylltiedig â Deddf Rheoli Cymorthdaliadau 2022 nad ydynt eto wedi’u gosod gerbron Senedd y DU, gan gynnwys ‘Rheoliadau Rheoli Cymorthdaliadau (Cymorthdaliadau a Chynlluniau o Ddiddordeb neu Ddiddordeb Penodol) 2022’.


Nid yw’r drafft terfynol hwn wedi newid o’r rheoliadau drafft diweddaraf a rannwyd â Llywodraeth Cymru ar 22 Gorffennaf 2022 yn dilyn y broses ymgynghori. Yn ystod y cyfnod ymgynghori ysgrifennais at yr Is\-ysgrifennydd Gwladol Seneddol ar y pryd yn yr Adran Busnes, Ynni a Strategaeth Ddiwydiannol, Paul Scully AS, i fynegi pryderon Llywodraeth Cymru ynghylch y diffyg sicrwydd cyfreithiol sy’n deillio o’r broses, gwerth isel y trothwyon economaidd sy’n sbarduno’r gofynion a phryderon ynghylch llawer o nodweddion y broses. Nid oes yr un o’r sylwadau na’r argymhellion a wnes i wedi’u derbyn na’u hadlewyrchu yn y rheoliadau terfynol.


Bydd y rheoliadau hyn yn effeithio’n sylweddol ar allu awdurdodau cyhoeddus yng Nghymru i ddyfarnu cymorthdaliadau effeithiol ac amserol. Yn sgil y diffyg diffiniadau clir, cyfreithiol benodol, mae perygl y bydd y gyfundrefn newydd yn cael ei llesteirio gan fiwrocratiaeth a her gyfreithiol. Mae safoni’r trothwyon ar gyfer Cymorthdaliadau o Ddiddordeb neu Ddiddordeb Penodol (£5 miliwn a £10 miliwn yn y drefn honno) yn golygu bod perygl o greu dull deublyg gorsyml sy’n annigonol i adlewyrchu cymhlethdodau economi’r DU. Mae’r trothwyon £5 miliwn a £10 miliwn hefyd yn cymharu’n anffafriol â’r gyfundrefn UE flaenorol. Bydd y craffu ychwanegol ar gymorthdaliadau mewn sectorau sensitif megis cynhyrchu metelau, cerbydau neu ynni, nad ydynt yn bresennol yn y gyfundrefn gyfredol, yn effeithio’n sylweddol ar ddatblygiad economaidd Cymru.


Rwyf wedi ystyried yr angen i osod memorandwm cydsyniad offeryn statudol ac wedi dod i’r casgliad nad yw’r rheoliad drafft hwn yn ymgysylltu â Rheol Sefydlog 30A na Rheol Sefydlog 30B. Serch hynny, credaf y bydd y rheoliadau, fel y maent wedi’u drafftio, yn cael effaith negyddol sylweddol ar faes cymhwysedd datganoledig datblygu economaidd, ac ar feysydd o bwys i Economi Cymru. Roeddwn felly’n teimlo ei bod yn briodol tynnu sylw’r Senedd at y mater hwn.