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<p>Ken Skates, Minister for Economy and Transport at the Welsh Government, wrote to
the Secretary of State on 25 January 2019. Whilst noting that the regime established
by the State aid regulation was an important step in ensuring alignment between the
UK and EU on state aid, the letter queried the position on reservation.</p><p>My rt.
hon. Friend the Secretary of State explained that there is no difference of opinion
between the administrations on the current policy adopted in relation to State aid
and explained the UK Government’s intention to work closely with them (and the other
devolved administrations) on the development of State aid policy.</p><p> </p><p>I
understand this correspondence enabled Jeremy Miles, Counsel General and Brexit Minister
for the Welsh Government, to update the National Assembly for Wales’ Constitutional
and Legislative Affairs Committee by letter dated 20 March 2019, noting that he was,
“<em>reassured that there is still scope to resolve the ongoing dispute between our
administrations to reflect devolution in the medium to longer term, and will continue
working with the UK Government towards that end</em>.”</p><p> </p><p>Under the EU
Withdrawal Act 2018, the UK Government can amend deficiencies in retained EU law where
this would fail to operate effectively otherwise. Where EU law falls within an area
of devolved competence, the Memorandum on the EU Withdrawal Bill and the Establishment
of Common Frameworks (April 2018) clarifies that the Government will not normally
seek to use these powers without the agreement of the devolved administrations.</p><p>
</p><p>The UK Government remains fully committed to this position. However, given
that we consider that the regulation of State aid is reserved, we did not consider
that this commitment was engaged in respect of the draft State aid regulations. I
am nevertheless still committed to working closely with the Welsh Government and the
other devolved administrations on the development of State aid policy.</p>
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