MSPS have slammed a UK bill that could create new "conflict" between Holyrood and Westminster, it has emerged.
They say moves to enact new post-Brexit laws governing controls over public sector subsidies is the latest example of UK ministers treading on devolved areas, and have hit out at what they call a lack of detail about what it will mean.
Labour's Claire Baker MSP, convener of the Economy and Fair Work Committee, said: "Our committee is deeply concerned by a number of aspects of this bill and its potential implications."
Brought forward by Tory ministers, the Subsidy Control Bill is already in the final stages of its passage through Westminster and being considered by members of the House of Lords.
A post-Brexit move, it seeks to establish a domestic subsidy control regime for the UK outwith the EU and away from its support funds, and aims to provide a legal framework for public authorities to make subsidy decisions.
In a report released today, the committee says it recognises the need for a subsidy control regime but the bill risks cutting across the devolution settlement, giving "considerable powers to UK ministers".
It presents the "risk" that they'll intervene in devolved areas "without proper consultation or knowledge of local circumstances", the committee said – all except Tory members Alexander Burnett and Jamie Halcro Johnston, who dissented.
Baker said: "The complete absence of detail on how this new subsidy control regime would work is not acceptable.
"In its current form, this new regime could see UK ministers cutting across the devolution settlement and intervening in devolved areas without consultation or knowledge of local circumstances.
"We find it wholly unsatisfactory that this bill would allow UK Government and UK ministers to legislate in a way which will have a direct impact on devolved areas of our economy, while bypassing scrutiny of the Scottish Parliament or Scottish ministers.
"But our concerns do not end with the impact on devolved matters. We have heard evidence that the proposed subsidy scheme could create an imbalance between communities at a local or regional level, who may not have the means or ability to compete for subsidy with larger businesses and orgs, and that will be the case across the UK.
"This may mean it unfairly disadvantages smaller organisations and community groups who previously had access to European support funds."
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Scotland spends proportionately more on enterprise and economic development than the rest of the UK.
The committee says that's one area in which conflict could arise and devolved administrations should be given equal powers to the UK Government by gaining the power to refer subsidies made elsewhere in the UK to the Competitions and Markets Authority.
Scottish ministers should also have the power to create a streamlined subsidy system for projects within devolved competencies, with the Scottish Parliament considering these in the same way Westminster works.
And its says "the lack of detail in the bill, the lack of statutory involvement of the devolved governments in the development of guidance and rules, and the lack of ability for the Scottish Parliament to scrutinise any of this is concerning".
The report reflects upon a legislative consent memorandum (LCM) introduced in response to the bill, something that was delayed. Baker, MSP for Mid-Scotland and Fife, says the panel is "deeply frustrated" at that delay, which "compromised the committee’s ability to scrutinise and influence the bill at an earlier stage".
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She went on: "Nevertheless, given the breadth of concerns about the potential impact of this bill, the committee felt it important to gather evidence and to publish our report."
The report comes after UK Business Secretary Kwasi Kwarteng said the bill will "help unlock potential" across the UK.
That was during the third reading in December before the bill cleared the Commons when he said the move "demonstrates this government's clear commitment to seize the opportunities arising from Brexit".
Kwarteng went on: "For the first time, the decision on whether to grant a subsidy will fall to the granting authority itself.
"At the heart of the regime is a set of clear and proportionate principles which will be underpinned by guidance.
"Local authorities, public bodies and the devolved administrations in Edinburgh, Cardiff and Belfast will be empowered to decide if they can issue taxpayer-funded subsidies by acting consistently with the principles outlined in this legislation."
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