Increases subsidy? That's denied! (8)
I believe the answer is:
gainsaid
'denied' is the definition.
(I've seen this before)
'increases subsidy?' is the wordplay.
'increases' becomes 'gains' (gain is a kind of increase).
'subsidy?' becomes 'aid' (subsidy is a kind of aid).
'gains'+'aid'='GAINSAID'
'that's' acts as a link.
(Other definitions for gainsaid that I've seen before include "Challenged" , "Formally denied or contradicted" .)