IMPLEMENTATION LEVEL

National

AFFECTED FLOW

Inflow

ANNOUNCED AS TEMPORARY

Yes

NON-TRADE-RELATED RATIONALE

No

ELIGIBLE FIRMS

all

JUMBO

No

TARIFF PEAK

No
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Inception date: 01 Jan 2015 | Removal date: 31 Dec 2020
Still in force

Financial grant

According to the UK, "The main objective of the aid scheme is to stimulate economic growth through the support of innovative businesses, in particular, SMEs, across all sectors of the economy as well as research organisations. [...] The aid scheme has an annual budget of GBP 600 million [and is in force from 01/01/2015 until 31/12/2020]. Funding may be provided in the form of grants, loans and repayable advances" (para. 3, 6 and 11 letter from the EC to the UK, Brussels 24.11.2015)

For aid schemes of this magnitude to be extended, EC regulations require an approved evaluation plan in light of the potential effect on trade and competition within the European Union, a point made in the European Commission's letter to the UK government. Ultimately, the UK's evaluation scheme was approved and the scheme's duration extended to 2020. 

Based on the findings of the European Commission, "The evaluation plan also sets out the main methods that will be used in order to identify the direct impact of the aid, and explains why these methods are likely to be appropriate for the scheme in question. The proposed composition of the control group with non-selected applicants to the aid scheme appears an appropriate way to minimise the selection bias. The scheme's indirect impact will be analysed in a descriptive manner taking into account the competitive position of the beneficiaries and non-beneficiaries in relation to general trends of their market segments. Results regarding the scheme's proportionality and appropriateness will be obtained using the linear regression analysis. The aforementioned methods and practices are fully in line with the Commissions best practices." (para. 32 letter from the EC to the UK, Brussels 24.11.2015)

In the GTA database the determination of whether a policy instrument discriminates against foreign commercial interests turns on whether it creates or alters the relative treatment of domestic firms versus foreign commercial interests. On this metric, the state aid proposed here is discriminatory because the state aid is not available to competing firms outside of the implementing jurisdiction.

AFFECTED COUNTRIES

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