EC approves regional aid map 2014-2020 for UK
22 May 2014 04:28 PM
The European Commission
has approved the UK's map for granting state aid between 2014 and 2020
within the framework of the new regional aid guidelines adopted by the
Commission in June 2013. The new guidelines set out the conditions under
which Member States can grant state aid to businesses for regional development
purposes.
ommission Vice President in
charge of competition policy Joaquín Almunia said: “The
UK's new regional aid map supports the EU's cohesion policy and is in
line with the principles of our ongoing state aid modernisation agenda. On the
basis of the map approved today, the UK will now be able to implement its
regional development strategy for 2014-2020.''
The UK's regional aid map
defines the regions eligible under EU state aid rules for regional investment
aid and establishes the maximum aid levels (so-called "aid
intensities") for companies in the eligible regions. The map will be in
force between 1 July 2014 and 31 December 2020.
The designated areas have a
total population of 17.09 million or 27.05 % of the UK's population. The
maximum levels of aid that can be granted to regional investment projects
carried out by large enterprises in the assisted areas are between 10% and 25%
of total investment costs, depending on the area concerned. For investments
carried out by SMEs, these percentages can be increased.
Under the regional guidelines,
areas which have a GDP per capital below 75% of the EU average are eligible in
priority for regional investment aid, as the main purpose of regional aid is to
foster the development of the less advantaged regions of Europe. Under the new
map, regions accounting for 3.91% of the UK's population fall under
this category and will continue to be eligible for regional investment aid at
maximum intensities of 25% of the eligible costs of the relevant investment
projects.
In order to allow Member States
to tackle their own regional disparities, the guidelines allow aid in other
regions, provided that they comply with an overall population coverage ceiling.
As these regions are less disadvantaged from a European perspective than areas
with a GDP per capita below 75% of the EU average, both the geographical scope
and the aid intensity are limited. 23.14% of the UK's population will be
eligible for aid under this category, at maximum aid intensities varying
between 10% and 15%.
The maximum aid intensities have
slightly decreased as compared to the previous aid map (up to 5 percentage
points as compared to the situation in the period 1.1.2011-30.06.2014,
depending on the region).
Background
The regional aid guidelines set
out the rules under which Member States can grant state aid to companies to
support investments in new production facilities in the less advantaged regions
of Europe, or to extend or modernise existing facilities. The ultimate purpose
of regional state aid is to support economic development and employment. The
regional aid guidelines contain rules on the basis of which Member States can
draw up regional aid maps valid throughout the guidelines' period of
validity. The maps identify in which geographical areas companies can receive
regional state aid and at what proportion of the eligible investment costs (aid
intensity). Eligible costs are the part of the total investment costs that may
be taken into account for the calculation of the aid.
Article 107(3)(a) of the Treaty
on the Functioning of the European Union (TFEU) allows Member States to grant
state aid to promote the economic development of areas where the standard of
living is abnormally low or where there is serious underemployment. The
regional aid guidelines define these areas as regions with a GDP per capita
below 75 % of the EU average and outermost Regions. Moreover, in order to
ensure a smooth transition, regions that were previously below the threshold of
75% of EU GDP will continue to be pre-defined at EU level as eligible for
regional aid.
Article 107(3)(c) TFEU allows
regional state aid to facilitate the development of certain economic activities
or of certain economic areas where it does not adversely affect trading
conditions to an extent contrary to the common interest. The regional aid
guidelines define these as areas of a Member State which are disadvantaged
either in relation to the EU average, or in relation to the national average.
The population coverage is distributed between Member States according to
socioeconomic criteria which take into account regional disparities, including
unemployment, at both EU and national levels. It is then for each Member State
to decide in its regional map how to best use this room for manoeuvre to define
more eligible areas in order to address its internal regional
disparities.
The non-confidential version of
the decision will be made available under the case number SA.38113 in the State Aid Register on the competition website once any confidentiality issues have been
resolved. New publications of state aid decisions on the internet and in the
Official Journal are listed in the State Aid Weekly e-News