Brexit: UK to set up new state aid rules for business

The UK will begin asking businesses and public authorities how it should construct a new subsidies system to replace the EU's rules on state aid.

Business Secretary Kwasi Kwarteng wants local authorities and regional governments to have more power.

The EU rules were there to stop governments from providing companies with unfair advantages through cheap loans, tax breaks or funding.

Now it has left the EU, the UK needs its own rules.

"Our new, more flexible system will empower public authorities and devolved administrations, and ensure fair competition for businesses across the UK," Mr Kwarteng said.

His department will put together proposals on how to keep any support to business transparent.

Any system will be built to ensure "big companies cannot play off the regions, nations, towns, and cities of the UK against each other in a competition to benefit from taxpayer subsidy - protecting the dynamic and competitive market economy across the UK," the department said.

As part of the Brexit deal with the EU, the UK must set up a system for regulating subsidies and that courts can review any decisions.

The UK and EU also agreed to set up a mechanism to make sure any help to business doesn't harm the industries of either market.

The UK can grant subsidies of up to about £340,000 before they are considered likely to have an effect on competition.