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Cash injection for EU fisheries raises competition concerns

9 November 2021

Declining competitiveness of UK businesses ‘cannot be ruled out’ as a ramification of a €5.4 billion fund to help EU nations adjust to Brexit, a new analysis by the European Scrutiny Committee has warned. Particular concerns are highlighted around fishing as it has been targeted by the EU as one of the industries to receive most cash from the fund. Under the Trade and Cooperation Agreement with the EU, the Government also has limited power to challenge EU subsidies in that area.

The fund was set up to help EU-based firms adjust to increased friction in trading with the UK. It allocates over €650 million specifically to support European fishing operations in UK waters, with France alone receiving over €130 million for this.

Although yet to be distributed, a significant amount of the fund is expected to be used to grant subsidies to private EU fishing businesses, which could result in them gaining an unfair competitive advantage. Concerns about the impact on UK business and the Government’s limited power to challenge EU fishing subsidies were previously highlighted by the Committee in a July 2021 report. The Committee’s concerns received the attention of Brexit Minister Lord Frost and the issue was placed on the agenda at the inaugural meeting of the UK/EU Trade Specialised Committee on the ‘Level Playing Field’ in October. The Chair of the European Scrutiny Committee, Sir William Cash, has now called on Lord Frost to share the outcome of those talks with the EU and whether the Government still has concerns.


The €5.4 billion Brexit Adjustment Reserve was set up by the EU to help European businesses adjust to new processes and increased friction in trading with the UK. The lion’s share will go to the UK’s closest neighbours, with Ireland being given the most at €1.1bn, followed by the Netherlands (€886m) and France (€735m). EU countries can use the pot to grant subsidies to private businesses that compete with British businesses, potentially tilting the so-called ‘level playing field’—created by the new UK/EU trade deal—in the EU’s favour. This is particularly where British businesses do not have access to similar levels of financial support from the Government. The UK has opted for sectoral Brexit-related support schemes rather than an overarching fund. Northern Ireland will be particularly exposed given its close economic links with Ireland and the amount of funding Ireland is getting.

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Image: PA/Maurice McDonald