Department for Business and Trade, Subsidy to British Business Bank

The Department for Business and Trade subsidy to British Business Bank aims to increase the beneficiary’s total financial capacity by two-thirds to £25.6b. The beneficiary is wholly owned by the UK government, and this amount will be provided as a loan which converts annually into new equity.

Our key takeaways from the Subsidy Advice Unit (SAU) report are:

• Assessments should explicitly identify the specific policy objective at the outset so that it is evident what policy objectives apply when assessing the subsidy control principles.
• An assessment should be made as to whether the energy and environmental principles are applicable, with the decision being stated in the assessment.
• Detail should be provided on the beneficiaries tests for additionality within its individual programmes.
• Assessments should examine the implication of the beneficiaries overall funding position, relative to other operators in the market and the impact from private lenders/investment funds.
• A systematic approach should be taken to proportionality and any arguments in this regard should be fully explored.

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