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Some interesting state aid developments at the European Commission...
- In October, the European Commission gave state aid approval for the Community Investment Tax Relief scheme. This measure is designed to improve access to capital for small businesses, business start-ups and community projects in disadvantaged regions throughout the UK by giving tax benefits to investors who back businesses through Community Development Finance Institutions (CDFIs). Mark Hambly at DTI's Small Business Service can provide further information on 0114 259 7422.
- In January, a scheme providing exemption from stamp duty payments on non-residential properties in disadvantaged areas was approved. It is hoped that this scheme will contribute to the physical, economic and social regeneration of designated disadvantaged areas by reducing the cost of acquiring all non-residential properties in these areas.
- The Commission has opened investigation proceedings into the proposed Small Business Service Business Incubation Fund in England. This fund is to support the development and operation of office premises that meet the special needs of small firms. The Commission has opened proceedings in this case as it doubts that the proposed aid respects the relevant aid intensity ceilings (under both the regional aid guidelines and/or the SME block exemption regulation). The UK authorities argue that any aid to companies operating the incubator units would be the minimum necessary, and that any aid to the end users of the premises would be kept under de minimis levels. Watch this space for developments in this case
- Two fairly recent approvals give a useful insight into the Commission's view on the 'effect on trade between Member States' criterion of state aid. The Commission found that aid for a leisure pool in Dorsten, Germany, had no effect on trade between Member States (one of the 5 tests that must be met for aid to be a "state aid") as pool users would not travel more that 50km to use the facilities. The Commission also approved aid towards the restoration of Brighton West Pier, backing up this previous decision. In the Brighton case, the Commission states that the aid pursues a genuine cultural objective and would not, in any event, affect trade between Member States as no-one would come to the UK purely to visit a pier though the fact that the pier has now fallen into the sea may well deter even domestic visitors! But this is a tricky area and we suggest you contact the State Aid Unit should you require guidance...
- An investigation into various aspects of public funding towards Terra Mitica, a theme park in Benidorm, concluded that the funding of infrastructure - in this case roads - that can be used by the entire community does not constitute state aid.
- Are you involved in awarding investment aid based on the assisted areas map? And have ever wondered whether mobile assets are eligible for aid? The answer is 'yes' if the firm's headquarters are based in an Assisted Area and the economic benefit of the aid is being retained in the assisted area. This is based on the decision of a German case where the Commission determined that where mobile assets are concerned, it is where the economic benefit is being felt that should be considered If you want to know more about how to apply this, contact us.
- Lastly, the Commission proposes to introduce a block exemption regulation to speed up the implementation of certain agricultural state aids. Once in force, the new regulation will enable the granting of various types of aid without prior Commission clearance. Due to be implemented in January 2004, this measure will allow Member States to react more rapidly to the challenges faced by farmers. If you would like more information contact Mike Watson at the Scottish Executive Environment and Rural Affairs Department on 0131 244 6244.
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