ANNOUNCEMENT 25 Aug 2010

In August 2010, the British government announced a change in private-sector financial support.

NUMBER OF INTERVENTIONS

1

  • 1 harmful
  • 0 neutral
  • 0 liberalising

SOURCE



the letter from the EC to the UK - Brussels, 29.7.2011 C(2011) 5462 final - http://ec.europa.eu/competition/state_aid/cases/241549/241549_1242196_25_3.pdf


Inception date: 25 Aug 2010 | Removal date: open ended
Still in force

Bailout (capital injection or equity participation)

On 10 June 2011, the United Kingdom of Great Britain and Northern Irelandsubmitted a notification to the Commission which includes a package of state measures in favour of the Royal Mail Group Limited ("Royal Mail Group" or "RMG").
 
The Postal Services Act envisages that the UK will assume responsibility for certain of the accrued liabilities under the Royal Mail Pension Plan (RMPP). The proposed measure will relieve RMG of the obligation to make good the deficit that has arisen under that scheme, thus relieving RMG of a significant financial burden.
 
 
The Commission gave the following assessment:
"The aid measures will allow RMG to reinforce its strong position on the UK postal market. Given that that market was opened to competition in 2006, while already being competitive even before that date in certain market segments (e.g. delivery of parcels and delivery of bulk mail in case of postings above 4,000 items), it follows that, by favouring RMG, the aid in question distorts or threatens to distort competition on that market. Furthermore, given that the business of letters and parcels is an international one with many important players active in a number of Member States, as evidenced in particular by RMG's ownership of GLS, the Commission believes that the aid in question affects trade between Member States." (par. 103 of the letter from the EC to the UK - Brussels, 29.7.2011 C(2011) 5462 final)
 
"On the basis of the information currently available, the Commission has doubts on the compatibility of the notified aid measures under either of the bases for assessment which it has considered. As the measures are designed to fundamentally restructure the business of RMG, the Commission is particularly interested to give third parties the opportunity to comment. Furthermore, at this stage, the Commission also has doubts concerning the quantification of the aid amount that would result from the pension relief." (par. 153 of the letter)
 
A state measure in the GTA database is assessed solely in terms of the extent to which its implementation affects the extent of discrimination against foreign commercial interests. On this metric, the state aid proposed here is discriminatory.
 

AFFECTED SECTORS

 

AFFECTED PRODUCTS

 
N/A