WORLD TRADE  
ORGANIZATION   
G/SCM/N/220/EEC/Add.27 
18 November 2011 
 (11-5992) 
Committee on Subsidies and 
Countervailing Measures Original:   English 
 
 
  
SUBSIDIES 
 
New and Full Notification Pursuant to Article XVI:1 
of the GATT 1994 and Article 25 of the Agreement 
on Subsidies and Countervailing Measures 
 
EUROPEAN UNION 
 
Addendum 
 
  The following addendum to the notification of  the European Union relates to subsidy 
programmes of the United Kingdom . 
 
_______________ 
 G/SCM/N/220/EEC/Add.27 
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UNITED KINGDOM 
 
TABLE OF CONTENTS 
 
Page 
 
I.  BUSINESS SUPPORT TO SMES IN  THE WEST MIDLANDS ......................................... 5  
II.  CARBON TRUST APPLIED RE SEARCH OPEN CALL ................................................... 7  
III. CCL (CLIMATE CHANGE LEVY) - EXEMPTION FOR ELECTRICITY 
EXPORTS FROM GOOD QUALITY COMBINED HEAT AND POWER ...................... 9  
IV.  CDC GROUP PLC .................................................................................................................  10 
V.  DIRECT RESEARCH IN LOW CARBON TECHNOLOGY ........................................... 11  
VI.  ENGLISH PROPERTY SUPPORT SC HEME IN WEST MIDLANDS ........................... 12  
VII. EXCISE DUTY TO BIO ETHANOL USED AS ROAD FUEL ......................................... 13  
VIII. GRANT FOR BUSINESS INVESTMENT ........................................................................... 14  
IX.  GRANT FOR R&D WITHIN AN INDIVIDUAL BUSINESS ........................................... 15  
X.  GREEN FUEL CHALLENGE PILOT PROJECT – BIOGAS .......................................... 16  
XI.  INVEST NI – BUYING TIME  ASSISTANCE SCHEME .................................................. 17  
XII. INVEST NI – GRANT FO R R&D&I SCHEME ................................................................. 18  
XIII. INVEST NI – MANAGEMENT INFORMATION SYSTEMS EBUSINESS 
PROGRAMME ..................................................................................................................... .. 19 
XIV. INVEST NI – NI SPIN-OUTS (NISPO) RISK CAPITAL .................................................. 19  
XV. INVEST NI – NISPO THE YOUNG INNOVATIVE ENTERPRISE (YIE) 
SCHEME ........................................................................................................................ ......... 20 
XVI. INVEST NI – PROPERTY DEVELOPMENT SCHEME .................................................. 21  
XVII. INVEST NI – R&D CHALLENGE FUND ........................................................................... 22  
XVIII. INVEST NI – RESTRUCTURING AID ............................................................................... 22  
XIX. INVEST NI – SELECTIVE FINANCIAL ASSISTANCE SCHEME ............................... 23  
XX. LANDLORD'S ENERGY S AVING ALLOWANCE .......................................................... 24  
XXI. LOW CARBON AND RESEARCH DE VELOPMENT PROGRAMME ......................... 25  
XXII. NI - ACUMEN ................................................................................................................... ...... 27 
XXIII. NI – ALL ISLAND COLLABORATIV E R&D SCHEME – INNOVA ............................. 28  
XXIV. NI - ASSURED SKILLS ......................................................................................................... 2 9 
XXV. NI – BROADBAND FUND .................................................................................................... 30  
XXVI. NI - DARD – RESEARCH CHALLENGE FUND .............................................................. 31  
XXVII. NI – DIRECT INTERNATIONAL COMMUNICATIONS LINKS INTO NW 
OF IRELAND .................................................................................................................... ..... 33  G/SCM/N/220/EEC/Add.27 
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  XXVIII. NI – FUSION ................................................................................................................... . 34 
XXIX. NI – NEXT GENERATION BROADBAND ........................................................................ 35  
XXX. NI – PROVISION OF REMOTE BROADBAND SERVICES........................................... 36  
XXXI. NI – SCREEN FUND ..............................................................................................................  38 
XXXII. NI – URBAN DEVELOPMENT GRANT (UDG) ................................................................ 39  
XXXIII. ONE – AID FOR RESEARCH AND DEVELOPMENT ............................................. 40  
XXXIV. PROLONGATION OF THE PREMIUMS VEHICLES CENTRE OF 
EXCELLENCE PROJECTS ................................................................................................. 41  
XXXV. REDUCED RATE OF EXCISE DUTY ON BIODIESEL .................................................. 42  
XXXVI. REDUCED RATE OF EXCISE DUTY ON BIODIESEL PRODUCED 
FROM WASTE COOKING OIL .......................................................................................... 43  
XXXVII.  R&D TAX CREDIT......................................................................................................... 44  
XXXVIII.  RENEWABLES OBLIGATION ORDER 2009 ........................................................ 46  
XXXIX. RURAL BROADBAND ACCESS PROJECT - AWM ................................................ 48  
XL. SE – ATLAS BROADBAND INFRASTRUCTURE SCHEME FOR RETAIL 
PARKS ......................................................................................................................... ............ 49  
XLI. SE – BIO-ENERGY INFRASTRUCTURE SCHEME ....................................................... 50  
XLII. SE – BROADBAND FOR SCOTLAND ............................................................................... 51  
XLIII. SE – HIE GENERAL BLOCK EXEMPTION SCHEME .................................................. 52  
XLIV. SE – HIGHLAND OPPORTUNITY ..................................................................................... 53  
XLV. SE – REGIONAL SELECTIVE ASSISTANCE SCOTLAND ........................................... 54  
XLVI. SE – RESEARCH AND DEVELOPMENT INNOVATION SCHEME FOR 
SMES .......................................................................................................................... .............. 55  
XLVII. SE – SCOTTISH ENTERPRISE BUSI NESS SUPPORT SCHEME 2009-2013 .............. 56  
XLVIII. SE – SCOTTISH ENTERPRISE TRAINING SCHEME 2009-13 .............................. 57  
XLIX. SE – SCOTTISH INVESTMENT FUND ............................................................................. 58  
L.  SE – SCOTTISH LOCAL AUTHORITIES - SUPPORT FOR REGIONAL, 
SME INVESTMENT AND EMPLOYMENT AID .............................................................. 59  
LI.  SE – SCOTTISH PROPERTY SUPPORT SCHEME 2009-2013 ...................................... 60  
LII. SE – SCOTTISH RESEARCH, DEVELOPMENT AND INNOVATION 
SCHEME ........................................................................................................................ ......... 61 
LIII. SE – TOWN CENTRE REGENERATION FUND ............................................................. 62  
LIV. SE – WAVE AND TIDAL ENERGY SUPPORT ................................................................ 63  
LV. SE – WESTERN ISLES BUSI NESS SUPPORT SCHEME ............................................... 64  
LVI. THE ENERGY TECHNOLOGIES  INSTITUTE (ETI) ..................................................... 65  
LVII. VACCINES RESEARCH RELIEF ....................................................................................... 66  
LVIII. WASTE RESEARCH AND INNOVATION PROGRAMME AND WASTE 
DEMONSTRATOR PROGRAMME ................................................................................... 69  G/SCM/N/220/EEC/Add.27 
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  LIX. WAG – CAPITAL INVESTMENT AID AND EMPLOYMENT AID .............................. 71  
LX. WAG – FINANCE WALES JEREMIE FUND .................................................................... 72  
LXI. WAG – RESEARCH, DEVELOPMENT AND INNOVATION SCHEME ...................... 73  
LXII. WAG – SUPPORT FOR T RAINING SCHEME ................................................................. 74  
LXIII. WELSH LOCAL GOVERNMENT - CAPITAL INVESTMENT AND 
EMPLOYMENT AID ............................................................................................................. 76  
LXIV. WELSH LOCAL GOVERNMENT  - SME DEVELOPMENT SCHEME ....................... 78  
LXV. YORKSHIRE AND HUMBER - PROLONGATION OF YH R&D SCHEME 
FOR LARGE COMPANIES ................................................................................................. 79  
  G/SCM/N/220/EEC/Add.27 
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  I. BUSINESS SUPPORT TO SMES IN THE WEST MIDLANDS 
1. Period covered by the notification 
 
 2009 and 2010.  
2. Policy objectives 
 
 Improving business performance 
 
 The West Midlands GVA per head is below the UK average, and is predicted to grow at a 
slower rate over the coming years. The socio-economi c analysis also reports a serious relative fall in 
the West Midlands share of exports (Figure 3. 2) and shows an overreliance on just two sectors, 
machinery and transport equipment, and on speci fic markets. This area of the Programme will 
concentrate on stimulating and improving the co mpetitiveness and performance of businesses within 
the ten clusters, through actions which improve productivity and support diversification into new 
products and markets. 
 
 Three particular types of activity were envisaged:  
 firstly, the programme will make available expert help to companies in the ten 
clusters offering in depth tailored busin ess support to improve overall competitiveness 
and performance, drawing on the successful experiences and lessons learnt from 
previous EU funded projects such as Acceler ate and Diversification. This will include 
support to businesses wishing to diversify in to activity covered by the ten clusters; 
 secondly, the programme will include trade development schemes designed to stem 
the decline in regional export share and en courage a diversification of the region's 
export base. It will concentrate on three activities; 
 informing regional companies of the opportunities, business culture and best routes to 
market in the emerging markets of Brazil, China, India, Indonesia, Mexico, Russia, 
South Africa and Turkey; 
 seeking to develop new and 'niche' mark ets for each cluster thus extending the 
international trade element of the region's 10 cluster plans; 
 developing support programmes for all aspect s of business exchange and particularly 
exploring the potential for trade activity in  the service sector of the regional economy 
in order to respond to the ch anging business environment;  and 
 thirdly, the programme will establish a Tran sition Fund to help companies modernise 
and diversify their operations. This fund w ill specifically target established businesses 
who wish to implement diversification pl ans that show the potential for long term 
growth but are constrained from doing so as they do not have sufficient unused security to access bank finance, and are not ab le to provide the high returns required 
by Venture Capital. 
Developing Applied Innovation Activity  and Improving Resource Efficiency: 
 
 The socio-economic analysis indicates that a lo w innovation rate amongst SMEs is acting to 
limit productivity and export performance. Climate cha nge and the rising cost of fossil fuels place an 
imperative on business to reduce carbon consumption a nd improve efficiency. This strand of activity G/SCM/N/220/EEC/Add.27 
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  will embed the principles of innovation and sustainabilit y across the ten clusters through two fields of 
activity:  
 firstly, it will support mentoring to enhance awareness and education of the economic 
benefits of investing in innovation within  the 10 clusters, working with businesses to 
identify and take up opportunities for innovation; 
 secondly, it will seek to support specific actions which assist businesses to become 
more profitable through resource efficiency  savings, waste management, the uptake of 
eco innovation and processes with reduced environmental impact.   
 Developing a Stronger Entrepreneurial Culture: 
  Traditional sectors of industry are declining, and efforts are required to generate new business 
in those areas of the regional economy that show the greatest potential for growth and higher value 
added. The socio-economic analysis shows that levels  of enterprise activity within the West Midlands 
are broadly in the mid-range of UK experience but  clearly the overall productive capacity of the 
region in terms of GVA is lagging. In addition, it is evident that female entrepreneurial activity in the 
West Midlands is relatively weak compared to other parts of the country (Figure 4.3.part b);  that the 
region is not maximising the enterprise potentia l of some of its minority ethnic communities 
(Table 4.5);  and that low rates of new firm form ation are geographically concentrated in the region's 
two major conurbations (Table 10.1), although spar sely populated rural communities also encounter 
similar difficulties. In light of these findings, the Programme intends to focus its support for 
entrepreneurial activity in the following three areas: 
 
 firstly, the Programme will focus on encouraging high growth start ups within the 
10 clusters.  This will draw upon the experience of the successful Mustard and Connect Midlands/InvoRed models within the 2000-2006 Objective 2 Programme and 
give important impetus to companies showing the potential for fast business and 
employment growth.  This activity will combine a mixture of business support measures and access to an adequate and c onsistent supply of venture capital during 
their start up phase and initial stages of development, to ensure they have access to the resources they need to  reach their potential. 
 secondly, the Programme will provide dedicat ed support, advice and mentoring to 
those groups that face barriers to creati ng sustainable businesses, such as women, 
certain BME groups, and the disabled. In  particular, it will target additional 
'investment readiness' support to help these pa rticular social groups to raise finance. 
This activity will be across all sectors of  economic activity throughout the region;  
and 
 thirdly, the Programme will seek to address the low rate of business formation 
prevalent in areas of multiple depriva tion which are concentrated within the 
two major conurbations, neighbouring districts and the more isolated and remote rural 
areas.  Access to micro finance and business support activity will be available for start 
up and early stage businesses in these areas, including social and community enterprises.  Support will be available to progress LEGI type initiatives. Packages 
operating under the Sustainable Urban Development Priority will be encouraged to 
access funds for enterprise support activities under this element of the priority. 
3. Background and authority for the scheme 
 
Regional Development Agency West Midlands.    G/SCM/N/220/EEC/Add.27 
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  Legal basis:  Regional Development Agencies Act 1998. 
4. Form of the subsidy 
 
Grant. 
 
5. To whom and how the subsidy is provided 
 
 Through primarily, Business Link West Midlands, Manufacturing Advisory Service –West Midlands and UKTI regional International trad e teams, SME's within th e West Midlands have 
been supported.  SME's have received in tensive support from advisers based at these 
three organisations. 
 
 Additionally growth orientated businesses have  been helped with subsidised consultancy 
support to help them overcome specific barriers to growth. 
 
 Smes supported fell within the 10 cluste rs identified in the objectives above. 
 
 Through Business Link, business start ups have  been supported through a range of Enterprise 
Providers across the West Midlands, with clients receiving a mixture of workshops and one to one 
support.  
6. Total amount budgete d (in millions of £) 
 
 2009 £4.87  2010 £0.687  
7. Duration of programme 
 
 The duration of the programme was from 2009 and will continue in a limited form until 
early 2012.  8. Assessment of trade effects 
  Within the region, businesses supported have eith er been safeguarded or have grown in size 
and turnover. Greater numbers have started to, or increased their export activity to Europe and across 
the world. Full evaluation has not been carried out  so it is difficult to quantify the full economic 
impact. 
 
 Significant numbers of sustainable new business st arts have been established, with a greater 
preponderance to survive beyond 12 months , helping to grow the WM business base.  
 
II. CARBON TRUST APPLIED RESEARCH OPEN CALL 
1. Period covered by the notification 
 
 2009 and 2010.  2. Policy objectives 
 
 The purpose of the Carbon Trust Applied Res earch Open Call is the reduction of greenhouse 
gas emissions with particular emphasis on reductio n of emissions from UK sources.  By supporting 
the development of low-carbon technology, the Carbon Trust aims to bridge the funding gap in the G/SCM/N/220/EEC/Add.27 
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  market caused by the presently exis ting lack of internalization of carbon costs.  Carbon Trust funding 
will help to secure the funding continuum that is vital to the successful delivery to market of low 
carbon technologies.  The purpose of the scheme is to support the United Kingdom and the European 
Community in meeting, as a minimum, their international commitments under the Kyoto Protocol. 
 
 The development of low-carbon technologies will lead  to clear horizontal benefits.  It will in 
particular lead to environmental benefits and simultaneously to increased levels of energy (carbon) 
efficiency for energy users.  UK Energy use is  evenly divided between buildings, industry and 
transport.  Positive benefits fl owing from the development and use of new low-carbon technology will 
therefore not be sector specific but accrue acro ss all sectors.  The development of low carbon 
technology will benefit a wide range of industries as well as society as a whole. 
 3. Background and authority for the subsidy 
  The Carbon Trust Applied Research Open Call is administered by The Carbon Trust ("the 
Trust"), an independent not for profit company formed  to invest public and eventually private finance 
in low-carbon technology and innovation. 
 
 The operation of the scheme by the Trust will be supervised by the UK Department of Energy 
and Climate Change ("DECC") and where appropria te the Devolved Administrations of Scotland, 
Wales and Northern Ireland. 
 
 The Trust will operate Carbon Trust Applied Research Open Call on the basis of its Grant 
Offer letters from DECC and the Devolved Administrati ons of Scotland, Wales and Northern Ireland.  
The legal bases for providing money to the Carbon Trust for its programmes in England, Wales and Scotland, including Carbon Trust Applied Research Open Call, are the Science and Technology Act 
1965 and the Environmental Protection Act 1990.  In  Northern Ireland, the legal bases are the 
Industrial Development (Northern Ireland) Order 1982 (NI 15) and the Energy Efficiency (Northern 
Ireland) Order 1999 (NI 3) as amended by the Indu strial Development Act (Northern Ireland) 2002. 
 4 Form of the subsidy 
 
 The form of the subsidy takes the shape of research and development grants. 
 5. To whom and how the subsidy is provided 
  Universities and SMEs (small scale technology de velopers) are the main beneficiaries of the 
R&D grant funding of the Carbon Trust Applied Research Open Call. 
 6. Total amount paid (in millions of £) 
  2009   £2,048  2010 £11,279 
 
Note:  This is the amount of state aid funding paid out in the above calendar years, not the amount budgeted during this time. 
 7. Duration of the programme 
  The programme has been running from 2002-2010 for UK.  It is no longer funded by the Government in England, however from the Devolve d Administrations, only Wales is providing grant 
funding for the development of any low carbon technology for 2011/12. 
  G/SCM/N/220/EEC/Add.27 
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  8. Assessment of trade effects 
 
 No material trade effects given the small size of individual R&D grants and the types of organizations that receive the aid.  These are ve ry small companies in the technology development 
stage and do not have material export capacity. 
 
III. CCL (CLIMATE CHANGE LEVY) - EXEM PTION FOR ELECTRICITY EXPORTS 
FROM GOOD QUALITY COMBINED HEAT AND POWER 
1. Period covered by the notification 
 
 2009 and 2010. 
 2. Policy objectives 
  Combined heat and power (CHP) is a low- carbon technology, which can be between 25 and 
30 per cent more efficient in primary energy usag e than more traditional forms of secondary energy 
generation. The aim of the scheme is to encourage mo re usage of this type of  power generation, which 
is currently at a competitive disadvantage due to th e fact that it is significantly more expensive to 
produce power from CHP than from conventional power plants.   The EU Cogeneration Directive (2004/8/EC) ca me into force on 21 February 2004, allowing 
Member States until 21 February 2006 to transp ose it into national law. The Directive places an 
obligation on Member States to ensure that s upport for CHP is based on useful heat demand and 
primary energy savings. It sets out a methodology fo r assessing the energy efficiency of CHP schemes 
based on harmonized efficiency reference values for the separate production of heat and power. 
 
3. Background and authority for the subsidy 
 
 In 2001, the Commission approved the exem ption of non-commercial CHP from the UK's 
climate change levy (CCL). This exemption was specific to electricity produced for industrial 
purposes, i.e. used on-site.  
 The UK authorities decided to extend this ex emption to CHP plants that "export" the 
electricity, i.e. that distribute electricity via local  networks for supply to the public. The Commission 
approved this further exemption as allowable State aid in 2003.   The exemptions for CHP apply only to "good quality CHP", as defined by the UK's CHP 
Quality Assurance (CHPQA) Standard.  CHPQA pr ovides the methods and procedures needed to 
assess and certify the efficiency of the full range of CHP schemes in the UK,  ensuring that incentives 
are targeted fairly and only benefit those schemes whose output is certified as good quality i.e. output that meets certain electrical and power efficienci es. After good quality CHP electricity output has 
been identified through CHPQA, any additional pow er output is treated as conventional power 
generation, and so does not qualify for CCL exempt ion. The CHPQA Standard has been amended so 
it is fully consistent with the definition in Article 12(2) of the Cogeneration Directive. 
  Basic legislation for the climate change levy is contained in Schedule 6 of the Finance Act 
2000, which provides for the exemption from the levy of electricity outputs from good quality CHP that is sold direct from the producer to end u sers. Section 123 of the Finance Act 2002 inserted 
paragraph 20A into Schedule 6 of the Finance Ac t 2000. This paragraph provides the mechanism to 
exempt from the levy supplies of electricity produ ced in good quality CHP sold by electricity utilities 
to end users.  G/SCM/N/220/EEC/Add.27 
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  4. Form of the subsidy 
 
 Tax relief:  exemption from the climate change levy.  5. To whom and how the subsidy is provided 
  This scheme exempts from climate change levy good quality CHP electricity supplied by 
electricity utilities to consumers. This benef its CHP operators wishi ng to sell good quality CHP 
electricity to electricity utilities by helping to make up the shortfall between the market price 
obtainable for CHP electricity and its cost of production. 
 
 The Office of the Gas and Electricity Market s (OFGEM), as the UK's main energy regulator, 
has the lead role in ensuring that any units of el ectricity sold as having been produced from good 
quality CHP do in fact originate from this source. Th ey use a mechanism similar to the system of levy 
exemption certificates already used for tracking re newable electricity, using information derived from 
the CHPQA programme, which already monitors and certifies good quality CHP electricity outputs on 
an annual basis. In this way, HM Revenue and Cust oms are able to audit sales of levy-free electricity 
through their normal assurance procedures.  6. Total subsidy per y ear (in millions of £) 
 
 2009 £50 
 2010 £50  7. Duration of the programme 
 
 The Commission considered a ten-year exemption of the levy to be appropriate in order to 
guarantee the effectiveness of this measure, th ereby running from 1 April 2003-31 March 2013. 
 8. Assessment of trade effects 
  This measure helps enhance the economics of  CHP and therefore helps to stimulate the 
growth of CHP capacity or, when market conditions  are poor such as in the last few years, helps 
maintain installed capacity in the UK. It does not affect any one particular sector of the UK economy. While we have no data that can provide statistical ev idence of the impact of this measure, it is clear 
that its value (currently c. £4.85 per MWh) has helped.  IV. CDC GROUP PLC 
1. Period covered by the notification 
 
 2009 and 2010.  2. Policy objectives 
  The objective is to increase the amount of cap ital available to CDC Group plc (an investment 
company wholly owned by the UK government) by exem pting it from UK corporation tax, in order to 
maximise the impact of its mission.  
 CDC's mission is "to invest its capital so as to  maximize the creation and long term growth of 
viable businesses in poorer developing countries th rough responsible investment and mobilizing 
private finance".   G/SCM/N/220/EEC/Add.27 
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   The tax exemption enables CDC to  re-invest all the returns on its capital for the benefit of the 
poorer developing countries.  3. Background and authority for the subsidy 
 
 Legislative authority for the Secretary of St ate for International Development to issue an 
order making CDC Group plc exempt from UK co rporation tax was provided under section 20 
(Schedule 3) of the Commonwealth De velopment Corporation Act of 1999. 
  It has been approved, for a duration of 20 years (commencing on 1 May 2003), under 
Article 87(3)(c) of the Treaty establishing the Eur opean Union, by the European Commission in their 
decision "State Aid number C 46/2002 (ex No. 56/2OOl) - United Kingdom" dated 5 March 2003. 
 4. Form of the subsidy 
 
 An exemption from UK Corporation tax operating with effect from 1 May 2003. 
 5. To whom and how the subsidy is provided 
 
 To CDC Group plc. 
 By means of a statutory order making the company exempt from UK corporation tax. 
 
6. Total amount budgete d (in millions of £) 
 
 2009   £ 8.2   2010  £ 66.3  7. Duration of the programme 
  The tax exemption has no set term under the Commonwealth Development Corporation Act 
of 1999, but is only valid as long as the UK government holds a special share in CDC Group plc as defined in the Articles of Association of the company.  
 The European Commission have set a maximum duration of 20 years as a condition of their 
approval.  8. Assessment of trade effects 
  The nature of CDC's mission to invest in the private sector in the poorer developing countries 
is the provision of capital to enterprises unable othe rwise to gain access existing capital markets, and 
to stimulate further private investment flows.  We  do not therefore consider CDC to be in competition 
with other investors or that there are any discernible trade effects.  
V. DIRECT RESEARCH IN LOW CARBON TECHNOLOGY 
1. Period covered by the notification 
 
2009 and 2010. 
 G/SCM/N/220/EEC/Add.27 
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  2. Policy objectives 
 
This programme addresses impor tant "innovation gaps" and reduces the risks for the private 
sector involvement in early-stage technology deve lopment with the ultimate aim of accelerating 
low-carbon products to market. 
 
3. Background and authority for the scheme 
 
This is a new scheme which complements the existing "Applied Research Open Call" scheme 
for R&D project grant funding administered by the Carbon Trust.  The new scheme is intended to 
support larger projects (>£500,000) and will use qu asi-commercial mechanisms such as equity 
investment and convertible debt.  4. Form of the subsidy 
 
The scheme covers four aid measures: 
 
 Aid for R&D projects through equity, quasi-equity, convertible loans and direct 
non-repayable grants 
 Aid for IPR costs for SMEs through non-repayable grants 
 Aid for Young Innovative Enterprises through non-repayable grants 
 Aid for the loan of highly-qualified personnel non-repayable through grants 
 5. To whom and how the subsidy is provided 
 
The scheme is open to businesses of all sizes and research organisations involved in the 
development of low carbon technologies.  The subsi dy is provided as equity investments, quasi-equity 
investments, convertible loans and grants.  6. Total amount budgete d (in millions of £) 
 
The total amount budgeted over the six years of the programme is £43m. 
 
7. Duration of programme 
 
July 2008-March 2014. 
 
8. Assessment of trade effects 
 
The European Commission has found that the schem e does constitute State aid and it is in line 
with the guidelines provided in the R&D&I Framewor k and therefore passes the balancing test.  Due 
to the knowledge spill over market failure for invest ment in early-stage R&D and the relatively small 
amounts being provided the scheme is not expected to have a significant effect on international trade. 
 
VI. ENGLISH PROPERTY SUPPORT SCHEME IN WEST MIDLANDS 
1. Period covered by the notification 
 
 2009 and 2010. 
  G/SCM/N/220/EEC/Add.27 
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  2. Policy objectives 
 
 support the development of premises and buildings fo r industrial and commercial 
purposes by the private sector, including tho se elements in mixed use projects. Such 
development can involve the construction of  new buildings and/or the renovation and 
conversion of existing ones. 
 
 In doing so to:   
 provide environmentally sustainable buildin gs that make efficient use of natural 
resources and are energy efficient;  and 
 
 create new employment within 3 years of completion of the above investment;  lead 
to a net increase in the number of employ ees compared to the previous 12 months;  
and the employment to be maintained for a minimum of 3 years for SMEs or 5 years 
for large enterprises.  
 3. Background and authority for the scheme 
  Regional Development Agency Advantage West  Midlands – Scheme done under the general 
block exemption (aid X371/2009). 
 
4. Form of the subsidy 
  Grant.  
5. To whom and how the subsidy is provided 
 
 To property developers.  6. Total amount budgete d (in millions of £) 
 
 2009 £0.82 
 2010 £3.4  7. Duration of programme 
 
 March 2009 to December 2013. 
 8. Assessment of trade effects 
  The trade affects relate only to property deve lopment within the United Kingdom.  The grant 
is related to the location of the s ite not the origin of the developer which may be based in another state 
and therefore the scheme has limited distortive affects. 
 
VII. EXCISE DUTY TO BIO ETHANOL USED AS ROAD FUEL 
1. Period covered by the notification 
 
 2009 and 2010. 
 G/SCM/N/220/EEC/Add.27 
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  2. Policy objectives 
 
 The Government is keen to support alternativ e fuels that produce environmental benefits, and 
recognises that bioethanol can offer environmental advantages compared with conventional fuels, in 
terms of both greenhouse gas emissions and local air quality. 
 
 The purpose of the incentive is to help offset  the higher production costs of bioethanol and 
enable it to compete more effectively with mineral based petrol.  3. Background and authority for the subsidy 
  The duty incentive announced by the Chancellor in Budget 2003.  Legislation on the duty incentive was included in Finance Act 2004 and th e incentive was introduced  with effect from 
1 January 2005.  
4. Form of the subsidy 
 
 The form of aid is a tax concession.  The duty ra te for bioethanol used as road fuel is 20 pence 
per litre below the rate for ultra-low sulphur petrol.  5. To whom and how the subsidy is provided 
  Producers of bioethanol set aside for use as road fuel.  6. Total amount budgete d (in millions of £) 
 
 2009 £65 
 2010 £35  7. Duration of the programme 
  The duty differential ceased on 31 March 2010. 
 
8. Assessment of trade effects 
  The introduction of the duty incentive has led to an  increase in the use of road fuel bioethanol.  
By the end of 2009, 320 million litres were releas ed for use and in 2010, this figure increased to 
631 million litres.  This is over 7 times higher than the 85 million litres that were released in 2005.  
 
VIII.  GRANT FOR BUSINESS INVESTMENT 
1. Period covered by the notification 
 
 2008/09 and 2009/10. 
 
2. Policy objectives 
  To assist economic development in area s of special hardship in England. 
 
3. Background and authority for the scheme 
 
 The Industrial Development Act 1982.   G/SCM/N/220/EEC/Add.27 
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  4. Form of the subsidy 
 
 Grant/Loan.  5. To whom and how the subsidy is provided 
  The scheme is available to eligible projects in the manufacturing and service sector and encourages companies to invest in the Assisted Areas. Th e scheme also offers support for SMEs that 
are based in non-assisted areas in England.  
 Financial assistance is on a discretionary b asis, in the form of a grant phased against 
achievement of progress on the project (jobs & capital costs).  6. Total amount budgete d (in millions of £) 
 
 2008/09   £8.5  
 2009/10 £75.2   7. Duration of programme 
  The GBI scheme opened to new applicati ons on 23 October 2008 and closed to new 
application from 1 February 2011, except for large exceptional projects and applications to the 
Department DECC from offshore wind equipment manufacturers.  8. Assessment of trade effects 
 
 This scheme is designed to help areas of special difficulty to compete on level terms with 
more advantaged regions.  
IX. GRANT FOR R&D WITHIN AN INDIVIDUAL BUSINESS 
1. Period covered by the notification 
 
 2009 and 2010. 
 2. Policy objectives 
  To improve the overall innovation performan ce of the UK economy by helping business to 
successfully exploit new ideas. 
 3. Background and authority for the subsidy 
  Section 5 of Science and Technology Act 1965.  
4. Form of the subsidy 
 
 Assistance is provided in the form of discreti onary grants paid direct to the recipient. 
 5. To whom and how the subsidy is provided 
  Aid is restricted to individuals or enterpri ses falling within the definition in the "Community 
guidelines on state aid for small and medium-si zed enterprises" (OJ L 107, 30.4.1996, p.4). 
 G/SCM/N/220/EEC/Add.27 
Page 16  
 
   Offers of aid are made via a formal undertaki ng between the awarding body and the recipients 
concerning the conditions of the scheme and the decision to offer aid.  6. Total amount budgete d (in millions of £) 
 
 2009 £24.1 
 2010 £23.2  7. Duration of the programme 
 
 Grant for R&D came into operation on 1 June  2003.  The scheme will be amended if 
necessary to comply with the terms of any new Co mmunity Framework for State aid for Research and 
Development.  8. Assessment of trade effects 
  A 2009 Impact Evaluation of the Grant for R&D scheme found that each £1million of expenditure led to an increase in GVA of £9.5million.   96 per cent of grant recipients also identified 
the scheme as crucial in supporting R&D projects that  they would not otherwise have been able to 
pursue.  X. GREEN FUEL CHALLENGE PI LOT PROJECT – BIOGAS 
1. Period covered by the notification 
 
 2009 and 2010.  
2. Policy objectives 
 
 Environmental.  3. Background and authority for the subsidy 
 
 Pre Budget Report (PBR) 2000 announced a Green Fuel Challenge.  PBR 2001 announced 
that this project was one of the successful applican ts.  A Statutory Instrument allowing biogas used in 
the project to be used duty free was introduced in  2006 and lasts for a period of five years. 
 4. Form of the subsidy 
  The form of aid is a tax concession.  No dut y is charged on the biogas used in the project. 
 5. To whom and how the subsidy is provided 
  The producer of biogas running the pilot project. 
 
6. Total amount budgete d (in millions of £) 
 
 2009 £0.05  2010 £0.09 
 
7. Duration of the programme 
  The project is expected to end in 2011.  G/SCM/N/220/EEC/Add.27 
 Page 17 
 
 
  8. Assessment of trade effects 
 
 The project, which aims to test the environmental impact of biogas obtained from landfill sites and used in vehicles and to test the emissions characteristics and performance of the vehicles, was delayed owing to a number of technical difficu lties.  However, these have been overcome and the 
project is gradually getting under wa y.  As the work is still in the developmental phase, there are no 
trade effects to report.  
XI. INVEST NI – BUYING TIME ASSISTANCE SCHEME 
1. Period covered by the notification 
 
 2009 and 2010.  2. Policy objectives 
 
 The scheme is intended to provide short-term support to enable companies in difficulty to 
present a restructuring plan on a timescale enabling a decision to be made on the viability of such a 
plan.    3.  Background and authority for the scheme 
 
 Buying Time forms one part of Invest NI's  support under the European Commission's Rescue 
and Restructuring Guidelines.   
 Authority for the scheme:   Industrial Development Act (NI) 2002 
   Industrial Development Order (NI) 1982.   
 
4. Form of the subsidy 
  Loan.    5. To whom and how the subsidy is provided 
  The loan is provided to manufacturing and internationally traded service companies in 
Northern Ireland who are experiencing trading difficulties.    6. Total amount budgeted 
  2009 £0   2010 £0.042m    7. Duration of Programme 
 
 Indefinite. 
 8.  Assessment of Trade effects 
  Low.   
 G/SCM/N/220/EEC/Add.27 
Page 18  
 
  XII. INVEST NI – GRANT FOR R&D&I SCHEME  
1. Period covered by the notification 
 
 2009 and 2010.  
2. Policy objectives  
 
- to support research, development and innova tion (R&D&I) activities undertaken within 
companies,  
- to encourage collaboration and effective co-operation between companies and higher 
and education institutions including research organisations to raise both the level and 
the quality of commercially relevant R&D activity, 
- to stimulate R&D and innovation and encourage best practice throughout business, 
foster the creation and development of inn ovative business starts, help firms develop 
innovative products, processes and internationa lly tradable services with commercial 
potential, boost the scale relevancy of R&D& I in Northern Ireland through increased 
business as well as higher education expenditure in R&D. 
3. Background and authority for the scheme 
 
 The objectives of the scheme are also fo cused on the increase both of the number of 
companies performing effective R&D&I and the numb er of companies participating in R&D&I for 
the first time. 
 
Authority: The Industrial Development Act (NI) 2002. 
  The Industrial Development Order (NI) 1982. 
 4. Form of the subsidy  
  Grants, loans and equity investments. 
 
5. To whom and how the subsidy is provided 
  SMEs and large companies in Northern Ireland.  
6. Total amount budgete d (in millions of £) 
 
 2009 £12.7m   2010 £25.1m  
7. Duration of programme 
 
 To 31 December 2013.  8. Assessment of trade effects 
 
Low.  The scheme is designed to address the hi storically low levels of Business Expenditure 
on R&D undertaken in Northern Ireland.   G/SCM/N/220/EEC/Add.27 
 Page 19 
 
 
  XIII.  INVEST NI – MANAGEMENT INFORMATION SYSTEMS EBUSINESS 
PROGRAMME 
1. Period covered by the notification 
 
 2009 and 2010. 
 
2. Policy objectives 
  To assist SME's to become more competitive by encouraging them to in crease their usage of 
Information and Communication Technology to im prove productivity and increase competitiveness. 
 
3. Background and authority for the scheme 
  The Industrial Development Act (NI) 2002.    The Industrial Development Order (NI) 1982.   
 
4. Form of the subsidy 
  Grant.  5. To whom and how the subsidy is provided 
  SMEs in Northern Ireland.  6. Total amount budgete d (in millions of £) 
 
 2009 £2.2m 
 2010 £1.7m  7. Duration of programme 
  To December 2013. 
 
8. Assessment of trade effects 
  Low – limited to SMEs and £50,000 per project. 
 
XIV.  INVEST NI – NI SPIN-OUTS (NISPO) RISK CAPITAL 
1. Period covered by the notification 
 
 2009 and 2010.  2. Policy objectives  
 
To encourage growth of early-stage young innova tive enterprises in Northern Ireland and 
facilitate the commercialisation of research a nd development by universities and companies. 
 3. Background and authority for the scheme 
  The scheme forms part of Invest NI's on-going strategy to develop the venture capital / risk 
capital sector in Northern Ireland. G/SCM/N/220/EEC/Add.27 
Page 20  
 
   Authority: The Industrial Development (NI) Order 1982. 
   The Industrial Development (NI) Act 2002.   4.  Form of the subsidy  
 
 Government participation in funds venture capital, disbursed to young innovative enterprises 
principally in the form of equity but also repayable advances or soft loans. 
 5. To whom and how the subsidy is provided 
 
 The subsidy is provided to a fund manager to invest as above. 
 6.  Total amount budgete d (in millions of £) 
 
 2009 £1.084  
 2010 £2.652 
 7.  Duration of programme 
  To 1 October 2017.  
8.  Assessment of trade effects 
 
 Not possible this early in the fund's operational life.  
XV. INVEST NI – NISPO THE YOUNG INNOVATIVE ENTERPRISE (YIE) SCHEME 
1. Period covered by the notification 
 
 2009 and 2010.  2. Policy objectives 
 
 To encourage growth of early-stage Young I nnovative Enterprises in Northern Ireland and to 
facilitate the commercialisation of research a nd development by universities and enterprises. 
 3. Background and authority for the scheme 
 
The Industrial Development (Northern Irela nd) Order 1982 as amended by the Industrial 
Development (Northern Ireland) Act 2002.  4. Form of the subsidy 
  Equity, repayable advances and quasi equity (soft loans). 
 
5. To whom and how the subsidy is provided 
 
Small enterprises in Northern Ireland which have b een of existence for less than 6 years at the 
time when the aid is granted.  G/SCM/N/220/EEC/Add.27 
 Page 21 
 
 
  6. Total amount budgete d (in millions of £) 
 
 2009 £0  2010 £0 
7. Duration of programme 
 
 31 October 2017.  8. Assessment of trade effects 
 
 Not possible to assess yet. 
 
XVI.  INVEST NI – PROPERTY DEVELOPMENT SCHEME 
1. Period covered by the notification 
 
 2009 and 2010. 
 2. Policy objectives 
  To encourage the private sector to develop property for occupation by Invest NI assisted 
projects.   
 
3. Background and authority for the scheme 
  Industrial Development Order (NI) 1982.    Industrial Development Act (NI) 2002.   
 
4. Form of the subsidy 
  Grant.    5. To whom and how the subsidy is provided 
  The subsidy is paid to companies undertaking the development of industrial & commercial property usually as a lump sum on satisfactory completion of the works.    6. Total amount budgeted 
  2009 £0.547 million    2010 £0.735 million    7. Duration of programme 
 
 Indefinite.   
 8. Assessment of trade effects 
  Minimal. 
 G/SCM/N/220/EEC/Add.27 
Page 22  
 
   The aid provided through this scheme falls w ithin the thresholds detailed in the European 
Commission's Regional Aid Block Exemption Regulation and therefore will not result in trade effects 
that are contrary to the common interest.  
XVII.  INVEST NI – R&D CHALLENGE FUND 
1. Period covered by the notification 
 
 2009 and 2010.  2. Policy objectives 
 
To encourage R&D activities of spin-outs a nd start-ups from research and to encourage 
research within already existing SMEs.  3. Background and authority for the scheme 
 
The Industrial Development (Northern Irela nd) Order 1982 as amended by the Industrial 
Development (Northern Ireland) Act 2002.  4. Form of the subsidy 
 
Companies benefit from investments by the Fund in  return for equity invested under a formal, 
legal contract with the SME which links the investment made by the Fund to a clear programme of precompetitive or industrial R&D. 
 Support may also, but rarely, be given in the form  of grants to individual researcher(s), teams 
of researchers and to university departments to deve lop and test ideas prior to the formation of a 
company.  5. To whom and how the subsidy is provided 
 
- companies 
- individual researcher(s), teams of re searchers and university departments. 
 6. Total amount budgete d (in millions of £) 
 
 2009 £0.08 
 2010 £0.08 
 7. Duration of programme 
  31 December 2008.  
8. Assessment of trade effects 
 
 Low.  The fund no longer invests.  
XVIII.  INVEST NI – RESTRUCTURING AID 
1. Period covered by the notification 
 
 2009 and 2010.  G/SCM/N/220/EEC/Add.27 
 Page 23 
 
 
  2. Policy objectives 
 
 To provide short-term support to enable comp anies in difficulty to implement a restructuring 
plan on an appropriate timescale enabling them  to return to long term viability.   
 
3. Background and authority for the subsidy  
 
 Restructuring Support forms one part of Invest NI's support under the European Commission's Rescue and Restructuring Guidelines.   
 
Authority for the scheme: The Industrial Development Act (NI) 2002.   
     The Industrial Development Order (NI) 2002.    4. Form of the subsidy  
 
 Grant, Equity, Loan.   
 5. To whom and how the subsidy is provided 
  The supported is provided to manufacturing and internationally traded service companies in 
Northern Ireland who are experiencing trading difficulties.   
 
6. Total amount budgeted 
  2009 £0.075  2010 £0 
 
7. Duration of the programme 
  Indefinite    8.  Assessment of trade effects 
  Low.    
XIX.  INVEST NI – SELECTIVE FINANCIAL ASSISTANCE SCHEME 
1.  Period covered by the notification 
 
 2009 and 2010.  2.  Policy objectives 
  This is the principle scheme of assistance used  in Northern Ireland to attract new inward 
investment and encourage existing companies to de velop their international competitiveness leading 
to growth and greater employment opportunities.     The SFA Scheme relates to the setting up of a new establishment, the extension of an existing 
establishment or the starting up of an activity involving a fundamental change in the product or 
production process of an existing establishment.     
 G/SCM/N/220/EEC/Add.27 
Page 24  
 
  3.  Background and authority for the scheme 
 
 The Industrial Development Act (NI) 2002.    The Industrial Development Order (NI) 1982.    
4.  Form of the subsidy 
 
Capital grant, revenue grant, loan or  loan guarantees or share capital.   
 5.  To whom and how the subsidy is provided 
  Companies in the manufacturing and internati onal traded service sectors (in line with EU 
restrictions on shipbuilding, coal and steel, synthetic fibres, vehicles, textiles and clothing, and agriculture and food processing).    
6. Total amount pledged 
 
 2009 £56.5m    2010 £47.2m    7.  Duration of Programme 
  Notified to the European Commission until 31 December 2013.    8. Assessment of Trade effects 
 
 The aid provided through this scheme falls w ithin the thresholds detailed in the European 
Commission's Regional Aid Block Exemption Regulation and therefore will not result in trade effects 
that are contrary to the common interest. 
 
 It is subject to periodic evaluation and the scheme was most recently evaluated as part of a 
wider review of Regional Aid in the United Ki ngdom.  The scheme has contributed to business 
growth in Northern Ireland and fo cuses on productivity improvements. 
 
 Due to economic conditions over the last th ree years, employment creation will be an 
increasing priority. 
 
XX. LANDLORD'S ENERGY SAVING ALLOWANCE 
1. Period covered by the notification 
 
 2009 and 2010.  2. Policy objectives 
  Increasing energy efficiency in residential pr operty can make a significant contribution to 
reducing carbon emissions.  There is a particular need  for action targeted at the rented residential 
sector, since such properties produce more emissions th an other homes.  This reflects a market failure 
in the residential rented property sector, whic h discourages landlords from improving the energy 
efficiency of the properties that they let.  Ther e is a real incentive for a homeowner to improve the 
energy efficiency of their home, which does not exis t for landlords.  This is because the benefits of 
such improvements, in the form of increased comfor t and lower utility bills, are enjoyed by the tenant  G/SCM/N/220/EEC/Add.27 
 Page 25 
 
 
  and not to the landlord.  It is this market failure  that the Landlords Energy Saving Allowance seeks to 
address. 
3. Background and authority for the scheme 
 
 The 2006 Pre-Budget Report announced the schem e would apply to corporate landlords of 
residential property, subject to State aid a pproval from the European Commission.  Primary 
legislation was laid in 2007 and following receipt  of State aid approval in May 2008, secondary 
legislation was laid in June 2008.   Primary Legislation:  Finance Act 2007, section 17. 
 Secondary legislation:  The Energy-Savi ng Items (Corporation Tax) Regulations 2008. 
 4. Form of the subsidy 
  LESA allows landlords to deduct from their taxable profits the costs of acquiring and 
installing certain energy saving items in the prope rties they rent, thus reducing their liability to 
corporation tax.   The allowance is capped at £1,500 per dwelling a year and the qualifying materials are:  loft 
insulation, cavity wall insulation, solid wall insulation, hot water system insulation, draught proofing and floor insulation. 
 
5. To whom and how the subsidy is provided 
  The allowance is available to corporate landlor ds of residential properties.  The allowance 
enables the beneficiary to deduct the costs of acqui ring and installing specified energy-saving items in 
the residential properties they let when computing th e taxable profits of their property business.  Such 
costs are not deductible under normal tax rules.  6. Total amount budgete d (in millions of £) 
 
 2009 Est. £5M (2009/2010 – 6/4/2009 to 5/4/2010) 
 2010 Est. £5M (2010/2011 – 6/4/2010 to 5/4/2011) 
 7. Duration of programme 
  8 July 2008-31 March 2015. 
 
8. Assessment of trade effects 
  No assessment has been made as no such effects are anticipated. 
 
XXI.  LOW CARBON AND RESEARCH DEVELOPMENT PROGRAMME  
1. Period covered by the notification 
 
 2009 and 2010.  2. Policy objectives 
  The objectives of the Low Carbon Research a nd Development Programme are the following: 
 G/SCM/N/220/EEC/Add.27 
Page 26  
 
   (a) To provide an incentive to motor vehi cle manufacturers and technology providers to 
research and develop new innovative low C o2 emission technologies, and to build 
prototype vehicles. 
  (b) To build confidence in the viability of  new low Co2 emission technologies with the 
motor vehicles manufacturing industry as a w hole and with the general public and, 
ultimately, to encourage all manufactu rers to develop commercial low carbon 
vehicles. 
  (c) The acquisition of new technological know ledge and innovation that may be useful in 
developing new products, or to bring about a significant improvement in an existing 
product. 
  The projects to be funded will cover a range of technologies that reduce Co2 emissions from vehicles, including hybrid vehicle technologies, advanced internal combustion engine technologies, 
and technologies using alternative fuels. 
 3. Background and authority for the scheme 
  The national legal basis for the scheme is Section 153(1) of the Environmental Protection 
Act 1990.  
 
 The scheme is managed on behalf of the UK G overnment's Department for Transport by the 
Energy Saving Trust.  4. Form of the subsidy 
  Direct grant.  5. To whom and how the subsidy is provided 
  The beneficiaries of the scheme are large firms and small to medium enterprises operating in 
the motor vehicle sector. The grant is provided to  eligible applicants on the following basis: 
 
a) the need to award grants to a diverse range of technologies to ensure that a range of 
possibilities for low carbon technologies are explored;    
b) the likelihood of a project's completion and success, i.e. the robustness of the 
technical and business plans;  
c) the availability of funding in the budget, the number of other applicants for funding 
and the amount of funding applied for;  and  
d) the potential for acceleration or innovation in the development of low carbon vehicle 
technologies against the cost of the project. 
 6. Total amount budgete d (in millions of £) 
 
 2009 £1.5m 
 2010 £<0.5m   G/SCM/N/220/EEC/Add.27 
 Page 27 
 
 
  7. Duration of programme 
 
 4 years. 
8. Assessment of trade effects 
 
 The subsidy provides the potential to accelerat e the development of low carbon technology.  
If these projects are successful, further substantial in vestment for the private sector will be required to 
have any level of impact on trade.   Projects initiated under the Low Carbon R&D programme are of a typical duration of 
18-24 months.  Furthermore, the technology being developed is 1-3 years from new product market 
launch.  Therefore, with no projects being completed it is difficult to provide data at this stage on the 
trade effects.   The programme has raised awareness for th e need of low carbon vehicle technology and 
interest continues with growing awarene ss of climate change and global warning. 
 
XXII.  NI - ACUMEN 
1. Period covered by the notification 
 
 2009 and 2010. 
 
2. Policy objectives  
 
The Acumen programme aims to help SMEs to grow their business on the island of Ireland.  
 
 Benefits to companies as a result of the programme include: 
 
 Access to new markets and increased cross-border sales 
 Better knowledge of the cross-border market 
 New business opportunities identified 
 Improvements to their sales and marketing strategy 
 Increased business contacts and prospects across the island 
 3. Background and authority for the scheme 
 
 The legal basis for the scheme is the British/ Irish Agreement Act 1999, which authorises the 
awarding body (InterTradeIreland:  a non-department al body) to administer and fund projects under 
the proposed scheme.  4. Form of the subsidy  
 
 Assistance will be provided in th e form of non-repayable grants. 
 
5. To whom and how the subsidy is provided 
 
 The scheme is targeted solely at SMEs in  manufacturing and tradable services sectors. 
 G/SCM/N/220/EEC/Add.27 
Page 28  
 
  6. Total amount budgeted  
 
 2009:  £0.042  2010   £0.060 
 
7. Duration of programme 
 
 To 31 December 2013.  8. Assessment of trade effects 
 
 An independent interim evaluation was carried  out in 2010.  This concluded that the 
InterTradeIreland Acumen programme was an importan t aspect of InterTradeIreland's suite of trade 
interventions and that despite a challenging market  place it has delivered results and continues to 
perform very well. 
 
 The aid provided through this scheme falls w ithin the thresholds detailed in the European 
Commission's General Block Exemption Regulati on (Commission Regulation (EC) No 800/2008) and 
therefore will not result in trade effects that are contrary to the common interest.  
 
XXIII.  NI – ALL ISLAND COLLABORATIVE R&D SCHEME – INNOVA  
1.  Period covered by the notification 
 
 2009 and 2010.  2. Policy objectives  
 
 Northern Ireland and the Republic of Ireland sp end approximately 1.5 per cent of the GDP on 
R&D initiatives, whereas the EU average largely ex ceeds 2 per cent of the GDP.  Ireland ranks for 
12th lowest country in terms of GPD spend on R&D among developed economies.  Therefore there is 
a need to invest on R&D in order to boost economic  growth in Northern Ireland and the Republic of 
Ireland and also to target 3 per cent of GDP for overall R&D spending as agreed at the Barcelona 
European Council. 
  The aim of the scheme is to address this we akness by encouraging and supporting enterprises 
to undertake collaborative cross-border research and technological development with commercial 
potential in order to stimulate growth, strengthe n competitiveness and encourage flow of technology 
among network of companies, particularly SMEs in  Northern Ireland and the Republic of Ireland. 
  The scheme is mainly targeted at R&D in the Life Sciences, ICT, Agri-food & advanced 
engineering sectors.  Thus, it will support companie s that are developing their R&D activity in the 
wider life and health technologies sectors, acting in cr oss-border collaboration with other companies.   
 
3. Background and authority for the scheme 
 
 The legal basis for the scheme is the British/ Irish Agreement Act 1999, which authorises the 
awarding body (InterTradeIreland:  a non-department al body) to administer and fund projects under 
the proposed scheme. 
 
4. Form of the subsidy  
 
 Assistance will be provided in th e form of non-repayable grants.  G/SCM/N/220/EEC/Add.27 
 Page 29 
 
 
  5. To whom and how the subsidy is provided 
 
 The scheme is targeted at SME's, although large companies will be eligible to apply.  The 
estimated number of recipients is up to 35.   
 
6. Total amount budgete d (in millions of £) 
 
2009 £0.133 
 2010 £1.519  
7. Duration of programme 
 
The pilot scheme will operate to 31 December 2013 as per the Commission's approval.   
 8. Assessment of trade effects 
 
 An independent interim evaluation was carried out  in 2010.  This concluded that the Innova 
programme was an important aspect of InterTradeIre land's suite of business interventions and that 
despite a challenging market place, had performed very well.  
XXIV.  NI - ASSURED SKILLS 
1. Period covered by the notification 
 
 2009-2010.  2. Policy objectives 
  The aim of the programme is to attract high value, highly paid jobs to Northern Ireland and 
achieve the Executive's targets on pr oductivity and wealth generation. 
 
3. Background and authority for the scheme 
 
 Assured Skills is a joint Department for Empl oyment and Learning (DEL) and Invest NI (INI) 
programme to deliver a range of activities and in terventions guaranteeing companies that Northern 
Ireland has the ability to satisfy their future skills  and experience needs.  All aid awarded under the 
Scheme will be transparent and in line with criteri a set out in Articles 38 and 39 of the General Block 
Exemption Regulation. 
 
4. Form of the subsidy 
 
 Aid is awarded by way of a grant.  INI consid er that they will be able to identify, as a 
minimum, three large projects and eight small project s to participate in the Assured Skills programme 
each year.  The Assured Skills funding will be a key se lling point used by INI in their offer of support 
to potential inward investment companies and w ill give NI a significant competitive advantage over 
other areas in which companies may locate.  Training  aid will be provided to companies to train staff 
for any new jobs created up to a maximum of €2m and will be based on a percentage of the overall 
costs in line with set European Commission criteria.  G/SCM/N/220/EEC/Add.27 
Page 30  
 
  5. To whom and how the subsidy is provided 
 
 Assured Skills is open to INI Client compani es that have committed to expand, as well as new 
inward investors who have committed to establish a fa cility in Northern Ireland.  A key element of the 
Programme is the delivery of bespoke training programmes tailored to meet the needs of the 
company.  The intention is to have staff trained in  whatever the client requires and "job ready" for day 
one of the company's operation in NI. Subject to state aid rules, DEL will fund up to 60 per cent of the costs of training.   6. Total amount budgete d (in millions of £) 
 
 2009 - £0  2010 - £0.024  
7. Duration of programme 
 
 2010-2015. 
 8. Assessment of trade effects 
  The skills gained in the Assured Skills pilots have all been at a high level (NVQ Level 3 and 
above) or in highly paid jobs, and have demonstrat ed that Northern Ireland can deliver high quality, 
appropriately skilled people at a competitive cost to inward investment companies. 
 It is estimated that this level of investment  will create over 2,000 add itional high quality jobs 
in the NI economy over the first two years, and 1,100 per year thereafter.  
XXV.  NI – BROADBAND FUND  
1. Period covered by the notification 
 
 2009 and 2010.  2. Policy objectives 
 
 The Fund aims to support trials which demons trate how a range of technologies can be used 
to deliver next generation broadband services;  a nd deploying "in-fill" solutions into a number of 
priority rural areas in Northern Ireland where distan ce from the nearest telephone exchange prevents a 
line-based broadband service.  
 
3. Background and authority for the scheme 
 
The Broadband Fund arose primarily as a result of:  a) gaps in ADSL broadband coverage in NI  and an increasing digital divide;  and 
 
b) the fact that no commercial company had, at that time, invested in devising solutions 
for rural areas due to the significant investme nt required and the lack of return within 
the investment timescales that businesses normally require. 
 
In the UK, the legal basis is the "Communications Act 2003". 
  G/SCM/N/220/EEC/Add.27 
 Page 31 
 
 
  4. Form of the subsidy 
 
The aid takes the form of a direct grant. 
 5. To whom and how the subsidy is provided 
  Telecoms operators – direct grant.  6. Total amount budgete d (in millions of £) 
 
 2009 £0.144 
 2010 £0.165  7. Duration of programme 
 
2008-2013. 
 8. Assessment of trade effects 
  Insofar as the intervention is liable to affect providers of electronic communications services 
from other Member States, the measure has an effect on trade.  
 
XXVI.  NI - DARD – RESEARCH CHALLENGE FUND 
1. Period covered by the notification 
 
2009 and 2010. 
 
2. Policy objectives 
 
 To improve the competitiveness of rural enterprises and create wealth from the 
research base;  
 To increase the number of agricultural and rural enterprises engaging in effective 
research and development and innovation (R&D &I) - including those participating for 
the first time - and the level of private sector expenditure on R&D&I;  
 To increase the level of collaboration between  Northern Ireland's rural enterprises and 
the local, national and international research base;  and 
 
 To increase collaboration and effective co-operation between rural enterprises. 
 3. Background and authority for the scheme 
 
 The Scheme is designed to provide funding to consortia of industry and research providers to 
carry out innovative, high quality, pre-commercia l research and technological development projects 
which have the potential to further the sustaina bility of Northern Ireland's agri-food and rural 
enterprises.   
 The legal base for the Scheme is Section 5 of  the Agriculture Act (Northern Ireland) 1949 
(Chapter 2) (as amended).  
The legislation which gives effect to  EC law in Northern Ireland is  G/SCM/N/220/EEC/Add.27 
Page 32  
 
   European Communities Act (1972) (section 2(1));  and  
 Northern Ireland Act (1998) (c. 47, p.II, s7 (1(a))). 
 
EC legal basis 
 
Section 2(1) of the European Communities Act 1972  
Section 7 (1)(a) of the Northern Ireland Act 1998  All State aid provided under this Scheme will be within the limits set out in Articles 30 
and 31 of Commission Regulation (EC) 800/200 8 (General Block Exemption Regulation). 
 
4. Form of the subsidy 
  All aid awarded under the Scheme will be tran sparent and in line with criteria set out in 
Article 5 of the General Block Exemption Regulation.  Aid will take the form of a grant of 50 per cent 
of eligible costs up to a threshold of £250,000 of public funding derived from any source. 
 5. To whom and how the subsidy is provided 
  Industry partners must be from the agri-food and rural sector. Large enterprises, SMEs and 
SME representative or levy bodies can apply .  All must be operating in Northern Ireland.  Large 
enterprises must collaborate with at least one SME.  Applications from single SMEs will not be 
accepted.   Only public sector research organisations are elig ible.  They do not have to be operating in 
Northern Ireland, providing their industry partne r(s) are doing so and the outcome of the funded 
project clearly benefits the region.  
 
 Aid takes the form of financ ial remuneration paid quarterly in arrears and can be awarded 
either:  
 directly to an enterprise to fund its element of a collaborative project;  or 
 indirectly via a research organisation. 
 6. Total amount budgete d (in millions of £) 
 
2009 £0 
2010 £0.17 
 A further £0.207 is budgeted for expenditure in 2011.  
7. Duration of programme 
 
 31 March 2013. 
 8. Assessment of trade effects 
  The aid provided through this scheme falls w ithin the thresholds detailed in the European 
Commission's General Block Exemption Regulati on (Commission Regulati on (EC) No 800/2008) and 
therefore will not result in trade effects that are contrary to the common interest.   G/SCM/N/220/EEC/Add.27 
 Page 33 
 
 
  XXVII.  NI – DIRECT INTERNATIONAL COMMUNICATIONS LINKS INTO NW OF 
IRELAND 
 
1. Period covered by the notification 
 
 2009 and 2010. 
 2. Policy objectives  
  The objectives of Project Kelvin are:  (i) to bring a direct  international telecommunications 
link into the North West region of the island of Irela nd, (ii) to increase competition in the North West 
telecommunications market especially for the provi sion of international telecommunication services, 
(iii) to make the cost of international telecomm unication services within the region the same as in 
main urban areas in the United Kingdom and the Republic  of Ireland, (iv) to provide access to direct 
international communication services to businesses, particularly to Small and Medium Enterprises 
(SMEs) located within the region,  (v) to reduce latency between the North West and North America 
and mainland Europe, and (vi) to increase the re silience and diversity of the telecommunications 
infrastructure in the North West region. 
 
3. Background and authority for the scheme 
  Project Kelvin is a joint project by the De partment of Enterprise,  Trade and Investment 
Northern Ireland (DETI-United Kingdom) and the De partment of Communications, Energy and 
Natural Resources (DCENR-Republic of Ireland) under the Northern Ireland, Border Region and 
Western Scotland INTERREG IVA 2007-2013 progra mme. The overall aim of the INTERREG IVA 
programme is to 'support strategic cross border co-o peration for a more pros perous and sustainable 
region'.  In the UK, the legal basis is the "Communications Act 2003". 
 4. Form of the subsidy  
  Grant payments.  
5. To whom and how the subsidy is provided 
 
 Hibernia Atlantic Cable Systems Ltd - grant payments  6. Total amount budgete d (in millions of €) 
 
 2009 €11.8  
 2010 €14.75  7. Duration of programme 
 
 2008-2018. 
 8. Assessment of trade effects 
  Insofar as the intervention is liable to affect providers of electronic communications services 
from other Member States, the measure has an effect on trade.  The markets for electronic 
communications services are open to competition between operators and service providers, which generally engage in activities that are subject to trad e between Member States.  There is also an effect 
on trade between the businesses that require intern ational or cross-border connectivity and their 
competitors in other Member States. G/SCM/N/220/EEC/Add.27 
Page 34  
 
  XXVIII.  NI – FUSION 
 
1. Period covered by the notification 
 
2009 and 2010. 
 
2. Policy objectives 
  Through developing and facilitating three way cross-border partnerships (company, 
academics and graduates) the FUSION programme aims to: 
 
 Support the development of businesses on the island of Ireland by transferring and 
embedding knowledge on a cross-border basis between industry and academia; 
 
 Improve the flow of and access to knowledge  capital across the island of Ireland; 
 
 Increase process and/or product development within businesses; 
 
 Increase industry R&D capability and thereby improve business innovation;  and 
 
 Improve industry-academic linkages and th ereby improve the knowledge and skills 
base within SMEs and larger companies. 
  3. Background and authority for the scheme 
  The legal basis for the scheme is the British/ Irish Agreement Act 1999, which authorises the 
awarding body (InterTradeIreland:  a non-department al body) to administer and fund projects under 
the proposed scheme  4. Form of the subsidy 
  Assistance will be provided in th e form of non-repayable grants. 
 
5. To whom and how the subsidy is provided 
  The scheme is targeted at SMEs, although large companies are eligible to apply.  It is 
anticipated that on average 60 projects will be supported per annum. 
 
6. Total amount budgete d (in millions of £) 
 
2009 £2.247 M 
2010 £1.944 M 
 
7. Duration of Programme 
 
 To 31 December 2013.  8.  Assessment of Trade effects 
  Recent evaluations on both Phase 2 and Phase 3 have shown 'the importance of  FUSION in stimulating innovation and competitiveness within th e small business  community on the island of 
Ireland and have recommended its continuation.'  G/SCM/N/220/EEC/Add.27 
 Page 35 
 
 
   The aid provided through this scheme falls w ithin the thresholds detailed in the European 
Commission's General Block Exemption Regulati on (Commission Regulation (EC) No 800/2008) and 
therefore will not result in trade effects that are contrary to the common interest.   
XXIX.  NI – NEXT GENERATION BROADBAND 
 
1. Period covered by the notification 
  2009 and 2010.  
2. Policy objectives 
 
 The project's aim is delivery of high-speed broadband services to 85 per cent of NI businesses by 2011, focusing on both rural and urban areas in  Northern Ireland where these services are not 
available, or are unlikely to be av ailable in the foreseeable future.   
 
3. Background and authority for the subsidy 
  In 2008 and 2009 the NI Government started a consultation exercise to find out whether 
industry would on its own upgrade the existing broadband infrastructure within the next three years to increase the average speed from 512 kbps to a minimum of 2 and 10 Mbps respectively in areas of NI 
with a minimum business density of 10 per km2. While the market research showed that by 
March 2009 BT had upgraded a small number (13) of  its 191 exchanges to ADSL2+ and that it was 
planning to upgrade 21 more exchanges within th e next three years, there was no evidence of any 
planned investment to generally improve the existi ng level of provision in rural areas where average 
bandwidth speeds are currently below 10 Mbps.  
 
 Following competitive dialogue tender, contract for delivery of the project was awarded in 
December 2009. 
 In the UK, the legal basis is the "Communications Act 2003". 
 
4. Form of the subsidy 
 
The aid takes the form of a direct grant. 
 5. To whom and how the subsidy is provided 
  The direct beneficiaries of the aid will be  electronic communications operators offering 
broadband services.  Indirect beneficiaries will be third party provide rs of telecommunication services 
and local SMEs in the targeted areas.  
 6. Total amount budgete d (in millions of £) 
 
 2009 £0  2010 £9.693  7. Duration of the programme 
  2009-2016.  G/SCM/N/220/EEC/Add.27 
Page 36  
 
  8. Assessment of trade effects 
 
 Insofar as the intervention is liable to affect providers of electronic communications services 
from other Member States, the measure has an effect on trade.  The markets for electronic 
communications services are open to competition between operators and service providers, which 
generally engage in activities that are subject to trade between Member States. Moreover, the measure 
has the potential to distort competition between end users located in Northern Ireland and elsewhere 
in Europe.  
XXX.  NI – PROVISION OF REMOTE BROADBAND SERVICES 
 
1. Period covered by the notification 
  2009 and 2010.  
2. Policy objectives 
 
 To maintain access to an affordable broadba nd service for all citizens in Northern Ireland, 
ensuring continuity of service for those customers using a satellite product and protecting the competitiveness of the Northern Ireland economy (by ensuring that all bu sinesses can access basic 
broadband services anywhere in Northern Ireland).  
 
3. Background and authority for the subsidy 
  In March 2004 the NI Government awarded a contract ("the Local Access Broadband Contract) to BT for the delivery of the required infrastructure upgrade to support 100 per cent 
broadband access across all of Northern Ireland.  As  a result of this contract, in December 2005, 
Northern Ireland became the first region in the UK (and Europe) to have 100 per cent broadband 
coverage.   The Contract, which comes to an end on 31
st March 2009, is service driven and technology 
neutral and includes price caps for the various household and business product offerings.  For over 
99 per cent of the population of Northern Ireland, broadband is delivered via telephone lines.  For the 
remainder (approximately 800 out of a total of 375, 000 broadband accounts), the service is delivered 
via satellite.  This mainly affects those in remote  rural areas where distance from the nearest telephone 
exchange means that a fixed-line broadband solution is not possible.  
 The NI Government has been advised that at 31 March 2009, for commercial reasons, BT's 
satellite broadband product will no longer be available.   
  Recognising the impact that the loss of 100 per cent equitable access to broadband in Northern Ireland would have in terms of the emerge nce of a digital divide between urban and rural 
homes and business and, the subsequent impact on the largely SME-based economy in the region, the 
NI Government conducted market research to iden tify the location of the satellite customers and to 
examine whether any alternative suppliers would offer a product for these consumers that would be 
comparable to those currently on offer through BT.  The research confirmed that satellite customers are located in rural, widely dispersed and remote  areas with no obvious clustering and that, if there 
were alternative market-based offerings for these customers, the cost of basic broadband services 
would be regarded as prohibitive – leading to ta ke up levels for broadband services in these areas 
significantly lagging behind those in urban areas within the region.    To mitigate therefore, the NI Government issu ed an open, competitive tender valued at £1.1m 
on 26 September seeking a supplier to provide re mote broadband services across all of Northern  G/SCM/N/220/EEC/Add.27 
 Page 37 
 
 
  Ireland for the period 2009/10-2011/12. This tende r was written from a strictly technology and 
supplier neutral stance, allowing the market to deliver the most appropriate solution.     
 
 The tender resulted in two bids (both of wh ich offered a satellite solution) which were 
evaluated according to published criteria leadi ng to the contract being awarded to Avanti 
Communications on 6 January and ensuring that th ose living and working in remote, rural areas – 
particularly rural SMEs – continue to ha ve affordable access to broadband services.   
 
 The contract has been awarded under Chapter 29, Section 149 (Grants by the Department of 
Enterprise, Trade and Investment ) of the Communications Act 2003. 
 
4. Form of the subsidy 
  The subsidy takes the form of direct grant to the service provider.  
5. To whom and how the subsidy is provided 
 
 The subsidy is paid to the service provider on the basis of set fees payable for the provision of 
service to specific customers.  These fees will be payable on the presentation of invoices accompanied by appropriate supporting documentatio n.  The NI Government will ca rry out apposite audit activities, 
including reviews of the technology solution, to veri fy that payment is authorised.  The fees payable 
were determined as part of the bidding process.  
 6. Total amount budgete d (in millions of £) 
 
2009 £0.279 
2010 £0.631 
 7. Duration of the programme 
  The Remote Broadband Services Contract was awarded on 6 January 2009 for a period of 
three years and will therefore conclude on 5 January 2012. 
 
8. Assessment of trade effects 
 
The NI Government believe that the effects on competition and trade are likely to occur on 
two levels.  The first will be the impact that the availability of broadband services will have on 
businesses located in those parts of Northern Ireland where no wire-line broadband services are 
available.  The second impact will be on the s uppliers of the broadband services to these areas. 
 
Many studies have attempted to quantify the economic impacts, particularly increases in 
employment and economic activity that can be directly  or indirectly linked to increased deployment of 
broadband.  Broadband, when used with business app lications, provides new ways to cut costs, win 
new business and keep ahead of the competition. Take n in the context of Northern Ireland's small and 
micro business economy, it is noted that the region' s locally focused (and invariably micro) businesses 
expect turnover and profits to peak at €70k a nd €18.5k respectively (Source:  Northern Ireland 
Chamber of Commerce Business Monitor).  In comp arison average turnover for SMEs elsewhere in 
the UK is circa €375k pa.  Research suggests that broadband can increase profits by more than 10 per 
cent depending on the size of the business.  The Northe rn Ireland Government believe that this will 
have a positive effect on trade in these areas.  However,  the project is aimed at continuing to maintain 
access to basic broadband services to users in rural and remote areas, at a price comparable to that in 
urban areas.  These measures, with the purpose of ensuring equitable access to broadband rather than G/SCM/N/220/EEC/Add.27 
Page 38  
 
  giving rural and remote businesses a competitive adva ntage, will ensure that any distortions of 
competition are minimised.  
For the suppliers of broadband services to th ese areas the Northern Ireland Government 
believe that, at present, there is only one provider with customers operating despite the availability of 
a wholesale offering. This aid is unlikely to have  any negative effect on competition in the area.  
Moreover, and as stated above, they believe that  the project may strengthen competition through, 
insistence on wholesale access to other operators a nd, by acting as an incentive to companies who 
supply broadband service via satellite technology or ot her technology by indicating there is a market 
in Northern Ireland.  
 
XXXI.  NI – SCREEN FUND 
 
1. Period covered by the notification 
 
 2009 and 2010. 
 2. Policy objectives 
  The primary objective is to provide financ ial assistance for the development and production 
of moving image or audiovisual product.  Funds will be  provided to help deliver  a consistent flow of 
high quality and culturally significant programmi ng including Irish Language programming with the 
ultimate aim of ensuring that the culture and cr eative potential of Northern Ireland is expressed 
through moving image.  The Fund is in line with the Communication on certain legal aspects relating 
to cinematographic and other audio-visual guidelines (2002/C 43/04).  
3. Background and authority for the subsidy 
 
 Education and Library Services Etc Grants Re gulation (Northern Ireland) 1994 & Industrial 
Development Act (Northern Ireland) 2002 (replacing  The Industrial Development (Northern Ireland) 
Order 1982.  
4. Form of the subsidy 
 
 Loan.  5. To whom and how the subsidy is provided 
 
The Scheme is limited to film a nd television production companies.  
 6. Total amount budgete d (in millions of £) 
 
 2009 £4.939M   
 2010 £6.644M 
 7. Duration of the programme 
 
3 years to 31 March 2012. 
 
 This fund is an amendment of the original 5 year notification Northern Ireland Screen Fund 
(N 593/2006). 
  G/SCM/N/220/EEC/Add.27 
 Page 39 
 
 
  8. Assessment of trade effects 
 
 Not relevant.  
XXXII.  NI – URBAN DEVELOPMENT GRANT (UDG) 
 
1. Period covered by the notification 
  2009 and 2010.  
2. Policy objectives 
 
 Urban Development Grant is a discretionary grant with the objective of promoting job creation, inward investment and environmental improvement by the stimulation of development of 
vacant, derelict or underused land or buildings. 
 
3. Background and authority for the subsidy 
  The Department for Social Development (D SD) administers the Urban Development Grant 
scheme under the provisions of the Social Need (Northern Ireland) Order 1986.  Projects should fit within a wider strategic context, complementing other initiatives or strategies.  Projects should be 
consistent with policy on tackling poverty and so cial exclusion and the Department's Statutory 
Equality Obligations.  The scheme operates unde r the European Commission's General Block 
Exemption Regulation (GBER) and the sch eme reference number is X20/2009. 
 4. Form of the subsidy 
  The subsidy takes the form of a cash grant.  5. To whom and how the subsidy is provided 
  UDG is currently available for speculative developments, owner-occ upier new-build and 
refurbishment schemes, in specific priority urban ar eas designated by DSD.  The grant is available for 
a range of physical development projects in sector s such as inner/middle city housing, commercial, 
retail and light industrial.  The amount of grant offe red is the minimum necessary to trigger a project.  
  For speculative developments, the grant is based  on the shortfall between the projected total 
development cost of a project and its value  on completion (following appraisals carried out by Central 
Procurement Directorate Quantity Surveyors and La nd and Property Services valuers respectively). 
Grants offered to owner-occupier projects are based on eligible costs only.  6. Total amount budgete d (in millions of £) 
 
2009 £2.945M 
(across 35 schemes, giving an average subsidy per unit of £84,000) 
 
 2010 £1.794M 
(across 28 schemes, giving an average subsidy per unit of £64,000) 
 G/SCM/N/220/EEC/Add.27 
Page 40  
 
  7. Duration of the programme 
 
 UDG was first introduced in 1982 under the Soci al Need (Grants) Act (NI) 1970, which was 
subsequently replaced by the Social Need (NI) Orde r 1986. The form and focus of the UDG scheme is 
reviewed periodically and policy is kept under continuous review. 
8. Assessment of trade effects 
 
 The leverage ratio of public investment to pr ivate sector investment is as follows for each 
year from 2007.  The scheme was amended in 2008 and the reference number changed from XR7/2007 to X20/2009.  
Table 1:  Leverage (ratio of public to private expenditure on projects) 
 
 Belfast North West of NI Other NI urban areas 
2007  5.00 6.96 - 
2008  6.77 4.82 4.0 
2009  2.92 4.96 4.0 
2010  3.09 8.95 4.0 
 
 
Table 2:  Number of additional jobs  created (where figures available*) 
 
 Belfast North West of NI Other NI urban areas 
2007  39.23   48 - 
2008    6.77   27 12 
2009    2.58 232 12 
2010  0   24 24 
 
*Figures for 'jobs created' are based on confirma tion received from the project promoter once the 
scheme is completed and the final UDG payment ha s issued.  Therefore, fo r projects which are still 
running, and for some projects for which the final payment has not been made, there is no figure 
included.  This means that figures for 2009 and 2010 are subject to change.  
The aid provided through this scheme falls within the thresholds detailed in the European 
Commission's General Block Exemption Regulation (Commission Regulation (EC) No 800/2008) and therefore will not result in tr ade effects that are contra ry to the common interest. 
 
XXXIII.  ONE – AID FOR RESEARCH AND DEVELOPMENT 
 
1. Period covered by the notification 
  2009 and 2010.  2. Policy objectives 
 
The aim of the scheme is to enc ourage businesses to invest in R&D. 
  G/SCM/N/220/EEC/Add.27 
 Page 41 
 
 
  3. Background and authority for the scheme 
 
 The scheme is operated by One North East with EC approval.  It was created to encourage new R&D Investment by businesses in the North East.  
4. Form of the subsidy 
 
Grant. 
 5. To whom and how the subsidy is provided 
  The scheme allows support to all sizes of businesses  in the North East (at levels prescribed by 
EC legislation).  6. Total amount budgete d (in millions of £) 
 
 No defined budget allocated but the maximum aid that can be awarded under the scheme is 
£200m per annum.  7. Duration of programme 
 
Until 31 December 2013. 
 8. Assessment of trade effects 
 
To be evaluated.  Expect to be low. 
 
XXXIV.  PROLONGATION OF THE PREMIUMS VEHICLES CENTRE OF 
EXCELLENCE PROJECTS 
 
1. Period covered by the notification 
 
 2009 and 2010. 
 2. Policy objectives 
  The objective is to stimulate innovation I key growth sectors to wide innovation capability ad 
technology adoption across these sectors ad  related supply chai ns and networks. 
 3. Background and authority for the scheme 
 
Regional Development Agencies Action 1998 http://www.opsi.gov.uk/acts/acts 1998/ukpga_199800 45_en_1.htm  
 
European Communities (Finance) Act 2008 http://www.opsi.gov.uk/acts/act s2008/ukpga_2 0080001_en_1  
 
Industrial Training Act 1982 
http://www.opsi.gov.uk/acts/acts 1982/pdf/ukpga_19820010_en.pdf  
 
Science and Technology Act 1965 http://www.opsi.gov.uk/RevisedStatutes/ Acts/ukpga/1965/cuk pga_19650004_en_4  
 G/SCM/N/220/EEC/Add.27 
Page 42  
 
  4. Form of the subsidy 
 
 Grant.  5. To whom and how the subsidy is provided 
  Grant in the form of provision time and purchase of relevant equipment and materials for collaborative research.   Support is provided to companies in the automotive supply chain trying to develop new 
environmentally friendly vehicles. The support does not subsidise the production of vehicles.  
 6. Total amount budgete d (in millions of £) 
 
 2009 £2.66 
 2010 £2.4 
 7. Duration of programme 
  To March 2012.  
8. Assessment of trade effects 
 
 These projects will accelerate the development of additional transferrable Research and 
Development knowledge in these key low carbon areas, a nd will increase the capacity of the sector to 
respond to market and legislative challenges. 
 
XXXV.  REDUCED RATE OF EXCISE DUTY ON BIODIESEL 
 
1. Period covered by the notification 
  2009 and 2010. 
 
2. Policy objectives 
  The Government is keen to support alternativ e fuels that produce environmental benefits, and 
recognises that biodiesel can offer environmental ad vantages compared with conventional fuels, in 
terms of both greenhouse gas emissions and local air quality. 
  The purpose of the incentive is to help off set the higher production costs of biodiesel and 
enable it to compete more effectively with mineral based diesel.  3. Background and authority for the subsidy 
  The duty incentive was announced by the Chancellor in Budget 2001.  Legislation on the duty incentive was included in Finance Act 2002 and the in centive was introduced in July of that year. 
 4. Form of the subsidy 
  The form of aid is a tax concession.  The duty ra te for biodiesel is 20 pence per litre below the 
rate for ultra-low sulphur diesel.   G/SCM/N/220/EEC/Add.27 
 Page 43 
 
 
  5. To whom and how the subsidy is provided 
 
 Producers of biodiesel  6. Total amount budgete d (in millions of £) 
 
 2009 £210  2010   £50  7. Duration of the programme 
  The duty differential ceased on 31 March 2010.  8. Assessment of trade effects 
 
 The introduction of the duty incentive has led to increased use of road fuel biodiesel.  
1044 million litres of biodiesel were released for use in 2009, and 1045 million litres were released in 2010.  Prior to the introduction of the duty differential, no biodiesel was used in the UK.  
XXXVI.  REDUCED RATE OF EXCISE DUTY ON BIODIESEL PRODUCED FROM 
WASTE COOKING OIL 
 
1. Period covered by the notification 
  2009 and 2010.  
2. Policy objectives 
 
 To support alternative fuels that produce e nvironmental benefits, and recognises that biodiesel 
from waste cooking oil is a highly sustainable bi ofuel, converting a waste product that would 
otherwise go to landfill.  To support producers usi ng waste/used cooking oil who were likely to be 
most seriously affected by the withdrawal of the duty incentive which ceased on 31 March. 
 
3. Background and authority for the subsidy 
  The duty relief was announced at Pre Budget Report 2009 and legislation was introduced with 
effect from 1 April 2010.   
 
4. Form of the subsidy 
  The form of aid is a duty relief of 20 pence per litre which is  off-set against duty that is payable.   
5. To whom and how the subsidy is provided 
 
 Producers of biodiesel from waste cooking oil who are liable to pay biofuel duty are permitted to off-set an allowance of 20 pence per litre against duty that is payable.  
6. Total amount budgete d (in millions of £) 
 
 2009 £nil  2010 £55  G/SCM/N/220/EEC/Add.27 
Page 44  
 
  7. Duration of the programme 
 
 The relief scheme is time limited for a pe riod of 2 years and will cease on 31 March 2012. 
 8. Assessment of trade effects 
  The introduction of a duty relief has led to in creased use of used cooking oil in the production 
of biodiesel.  
XXXVII.  R&D TAX CREDIT 
 
1. Period covered by the notification 
  2009 and 2010.  
2. Policy objectives 
 
 The aim of the R&D Tax Credit Scheme is to  encourage innovation by companies which are 
small or medium-sized enterprises (SMEs).  It gives an incentive to companies including high risk 
start-ups to take up R&D activities and also encourages companies already carrying out R&D to increase their level of spend. 
 
3. Background and authority for the scheme 
  The R&D Tax Credit Scheme was introduced in 2000 after extensive consultation both on the 
details of the scheme (Inland Revenue Technical  Note "Research and Development:  New tax 
incentives for small and medium-sized companies" - March 1999) and on the definition of research 
and development (Inland Revenue technical note "Research and Development:  Definition and 
Appeals" – January 1999).   It was notified to the European Commission as a State aid and approved by them under reference N802/99.  Amendments have been notified and approved unde r references N245/2003 
(on 4 September 2003), N293/2004 (on 6 Decemb er 2004) N816/2006 (on 4 December 2006) 
and N33/2007 (on 15 January 2007).   Legislation governing the scheme was introduced in the Finance Act 2000 (Schedules 20 and 21) and subsequently amended in the Fina nce Act 2002 (Schedule 15), the Finance Act 2003 
(Schedule 31), the Finance Act 2004 (section 141), the Finance Act 2006 (Sections 28 and 29 and 
Schedules 2 and 3), the Finance Act 2007 (Sections 49 and 50) and the Finance Act 2008 (Sections 26 
to 29 and Schedules 8 and 9).  The legislation was rewritten in clearer language, but not amended in 
substance, in the Corporation Tax Act 2009 (CTA 2009).  It is now in Chapter 2 of Part 13 of 
CTA 2009.  
 The R&D Tax Credit Scheme applies to "larger SMEs" – companies that meet the normal 
conditions for an SME, except that they may have up to 500 staff, turnove r up to €100m and balance 
sheet total up to €86m – in relation to ex penditure incurred on or after 1 August 2008. 
 4. Form of the subsidy 
  Tax relief (see below).   G/SCM/N/220/EEC/Add.27 
 Page 45 
 
 
  5. To whom and how the subsidy is provided 
 
 The incentive is given as an increased tax relie f for spending on qualifying R&D.  Small or 
medium-sized companies, including 'larger SMEs', are able to claim relief equal to 175 per cent of 
their qualifying R&D expenditure (on or after 1 Augus t 2008;  previously 150 per cent), comprising a 
general deduction available to all companies unde rtaking R&D of 100 per cent and the enhanced 
R&D tax relief of a further 75 per cent.  A comp any paying tax at the 2011 small companies' rate 
(20 per cent), therefore saves in tax a total of 35 per cent of the cost of the qualifying R&D, 
comprising a deduction available to all companies of 20 per cent and the subsidy of 15 per cent. 
 
 A company not yet in profit may surrender the relief to the Government in return for a 
payment representing 24.5 per cent of the cost of the R&D.  This represents a discount of around 
30 per cent on the cash value of the tax credit if u sed against profits, where the company is taxed at 
the small company rate of 20 per cent.  The am ount surrenderable is limited to the lower of: 
 
 the proportion of the unrelieved loss attribut able to the qualifying R&D expenditure;  
and 
 
 the gross employment and social security taxes (Pay-As-You-Earn tax and National 
Insurance Contributions including equivalent contributions in other EEA states) paid by the company for the period of the claim. 
 
 The availability of R&D tax credit to a corpor ate SME is subject to the following criteria: 
 
(a) the qualifying expenditure for the R&D ta x credit for any accounting period of the 
company is limited to the aggregate of:  
 the direct costs of staff directly involved in carrying out the R&D activity. 
These costs comprise the gross remune ration (excluding be nefits-in-kind) 
plus national insurance contributions payable by the company, plus 
contributions to a pension scheme paid by the company;  plus  
 the cost of consumable or transformabl e materials used directly in the R&D 
activity;  plus  
 the cost of computer software, power, water and fuel used directly in the 
R&D activity;  plus  
 if the company subcontracts all or part  of the R&D while retaining ownership 
rights of any intellectual property (IP) produced ( from 9 December 2009 a company no longer requires to own the IP created by the R&D carried out), 65 per cent of the payments due to the subcontractor (representing a 
generalised measure of the costs abov e).  Alternatively, the company may 
claim the actual costs it incurs within th e above categories.  This latter rule is 
the only option where the principal and subcontractor are connected.  
(b) the qualifying expenditure must exceed a threshold minimum.  This is set at an 
annualised rate of £10,000 a year.  Spending at or above £10,000 qualifies for the tax 
credit in full.  No tax credit is available if  the spending does not meet this threshold; 
 G/SCM/N/220/EEC/Add.27 
Page 46  
 
  (c) the R&D tax credit is not available on R&D sp ending that has been met by a grant or 
subsidy.  No R&D expenditure will qualify fo r the tax credit if incurred in relation to 
a project in receipt of any other notifiable State aid;  
(d) the credit is only available to a company if it is a going concern; 
 
(e) There is a cap of €7.5m on the total amount of R&D tax credit and vaccine research 
relief that can be claimed in respect of any particular R&D project.  
 R&D spending by joint ventures and consortia will be eligible for the R&D tax credit, but 
only insofar as the tax credit can be limited to corporate SMEs. 
 6. Total amount budgete d (in millions of £) 
 
 Estimates of the number of claims made for R&D tax credits and the cost of support claimed 
are published as National Statistics on the HM Revenue and Customs we bsite, broken down by  
type of scheme.  The latest figures were publishe d in October 2010 and cover years up to 2008-09.  
The statistical tables, including background information, can be found at: http://www.hmrc.gov.uk/stats/corporate_tax/randdtcmenu.htm  
 
 The expected costs of R&D tax credits in 2009-10 and 2010-11 for all  
companies are also published on the HM Revenue and Customs web site at:  
http://www.hmrc.gov.uk/stats/tax_expenditures/table1-5.pdf  
 
 The expected cost of the SME scheme is estimated to be £250 million in 2009-10 and 
£260 million in 2010-11.  It should be noted that th ese are forecast estimates and the actual cost of 
support will depend on the claims actually made  by companies relating to those years. 
 7. Duration of programme 
  Indefinite.  
8. Assessment of trade effects 
 
 No assessment of the impact of the R&D tax cr edit is currently available.  The aim of the 
R&D tax credit scheme is to increase innovation by companies, flowing from increases in their R&D 
expenditure.  There is no territorial limit to R& D qualifying for tax credits, but the incentive does 
operate by reducing UK corporation tax, so there ma y be some impact on decisions to locate R&D.  
However the measure applies only to SMEs, and it is larger companies that tend to operate 
internationally, particularly when it comes to the location of R&D.  Therefore, the impact of the R&D 
tax credit on such location decisions is likely to be small.  
XXXVIII.  RENEWABLES OBLIGATION ORDER 2009 
 
[Since its introduction in 2002 the RO has been amended in 2004, 2005, 2006, 2007, 2009, 2010 and 2011.  The period which is being notified was covered by the Renewables 
Obligation Order 2009 incorporating amendments  made by the Renewables Obligation Order 
(Amendment) Order 2010 for England and Wa les, the Renewables Obligation Order 
(Northern Ireland) 2009 incorporating amendm ents made by the Renewables Obligation 
(Amendment) Order (Northern Ireland) 2010 fo r Northern Ireland, and the Renewables 
Obligation (Scotland) Order 2009 incorporati ng amendments made by the Renewables 
Obligation (Scotland) Amendment Order 2010 for Scotland] 
  G/SCM/N/220/EEC/Add.27 
 Page 47 
 
 
  1. Period covered by Notification 
 
 2009 and 2010.  2. Policy Objectives 
  To deliver an increase electricity generation from eligible renewables sources.  3. Background and authority for the scheme   
 
 The Scheme is currently the Government's  main mechanism for supporting large scale 
renewable electricity generation. It imposes an obligation on licensed electricity companies to source a specified and annually increasing proportion of their electricity sales from eligible sources.  As of 
1 April 2009, when 'banding' was introduced, diffe rent technologies receive different numbers of 
ROCs per MWh, to reflect differences between te chnologies including the cost of generation and 
potential for large-scale deployment. Generators ar e then able to sell their ROCs onwards to the 
suppliers.  
 
 In the event the supplier is unable to provide the requisite number of ROCs they will pay the 
buyout price for each ROC by which they fall short of meeting their Obligation. The buyout price was 
set in 2002 and has increased in relation to inflat ion (measured by the Retail Price Index – RPI). The 
buyout fund at the end of the compliance year is r ecycled to suppliers in proportion to the number of 
ROCs they presented. 
 
 The Renewables Obligation Order 2009, The Renewables Obligation (Scotland) Order 2009 
and The Renewables Obligation Or der (Northern Ireland) 2009. 
 
4. Form of the subsidy  
  Recycling of buy-out payments.    5. To whom and how is the subsidy provided 
  Licensed electricity suppliers who have met their Renewables Obligation through Renewables 
Obligation Certificates (ROCs).  Monies are then  passed on to electricity generators generating 
electricity from eligible renewable sources by way of power purchase agreements etc.  
 Buy-out fund recycled in autumn of each year.   
 6. Total amount budgeted 
  April 2009-March 2010 £325,928,958 (this figure is the actual amount).  
 April 2010-March 2011 £112,415,973 (this figure is a projection only). 
 7.  Duration of programme 
  To 2036/37 but UK authorities will renotify the Obligation in 2012.   
 
8.  Assessment of trade effect 
  The RO is open to renewable generating stati ons situated in the UK regardless of  their 
country of ownership.   G/SCM/N/220/EEC/Add.27 
Page 48  
 
  XXXIX.  RURAL BROADBAND ACCESS PROJECT - AWM 
 
1. Period covered by Notification 
  2009 and 2010. 
 
2. Policy Objectives 
  WMES Pillar 1 – Developing a diverse and dynamic business base – The project will increase ICT infrastructure in rural and other currently excluded areas of the region, thereby increasing the 
opportunities for businesses based in these areas and redressing the current imbalance in broadband 
availability between rural and urban areas.   WMES Pillar 3 – Creating conditions for growth – The project will work to ensure the delivery of affordable broadband services to all curren tly unserved areas and will strive to achieve the 
Agency's target of providing 100 per cent broadba nd coverage to businesses and households in the 
West Midlands before the project end date.     WMES Pillar 4 – Regenerating Communities – The project will aim to reduce the tendency for businesses to locate (or re-locate) away from rura l areas (ultimately leading to de-population in 
these areas) due to lack of broadband access. 
 
 Regeneration Zones - The project will provide broadband access to remote and currently excluded businesses and communities within the Rura l Regeneration Zone, North Staffordshire and 
North Black Country/South Staffordshire Zones.  
 Technology Corridors – The infrastructure element of the project will provide broadband 
access in any of the Technology Corridors, if analys is highlights parts of these areas to be without 
coverage.   RABBIT provision will support access to broadband services where cable/ADSL services are not available in the Corridors. 
 
 Clusters – Where possible the project will support the development of the key business 
clusters.  3. Background and authority for the scheme 
  Regional Development Act 1998 Section 5(1).  4. Form of the subsidy 
  Grant. 
 
5. To whom and how the subsidy is provided 
  Direct Beneficiary – West Midlands Ne tworking Company (grant claims to AWM) 
 
 Intermediary Beneficiaries  - Broadband infrastructure suppliers (one-off fee to offset 
installation costs, invoiced to WMNC by suppliers) 
   - SWRDA (grant claims to WMNC for management of the 
RABBIT scheme) 
  G/SCM/N/220/EEC/Add.27 
 Page 49 
 
 
  End Beneficiaries – Businesses, communities and individual residents in rural areas of the 
West Midlands (some grant claims direct to SWRDA and WMNC). 
6. Total amount budgete d (in millions of £) 
 
 2009 £3.63 
 2010 £0 Scheme finished. 
 7. Duration of programme 
  End March 2010. 
 
8. Assessment of trade effects 
  No assessment of trade effects resulting from the pr oject has been undertaken. 
 XL. SE – ATLAS BROADBAND INFRASTRUCTURE SCHEME FOR RETAIL PARKS 
 
1. Period covered by the notification 
  2009 and 2010.  
2. Policy objectives  
 
 The project intends to ensure the widespread  availability and use of high-speed broadband 
services at conditions closer to those in areas w ith a greater density of population and businesses. 
 
3. Background and authority for the scheme 
 
 Section 8 (1) (a) (i) of the Enterprise and New Towns (Scotland) Act 1990.   Project ATLAS is aimed at lowering prices of broadband services for commercial users located in business parks.  The project will be geographically limited to providing infrastructure on 
business parks.  Technically, the infrastructure will comprise only "passive" infrastructure (ducts, 
chambers, fibres and Meet-Me-Rooms).  Operati onally, the asset management, the maintenance and 
the leasing of dark fibre will be outsourced to an Asset Manager.  It will provide neutral access on a 
non-discriminatory basis for service providers at an a ppropriate point on, or close to the perimeter of 
each business park. 
 
 The European Commission considers that the public investment in Project ATLAS will only be provided to the extent necessary to develop the use of broadband services, particularly by SME's.  
This is in line with Community priorities as i ndicated in the e-Europe 2005 Action Plan.  The 
intervention is designed in a way that does not dist ort competition to an extent contrary to the 
common interest. 
 
4. Form of the subsidy  
  Grant to preferred bidder.  G/SCM/N/220/EEC/Add.27 
Page 50  
 
  5. To whom and how the subsidy is provided 
 
 A preferred bidder will manage the assets on beha lf of Scottish Enterprise, which will remain 
the owner of the assets, and lease capacity to w hole sale operators and/or Service Providers on a 
transparent, open access and non-discriminatory basis. 
 
6. Total amount budgeted 
  2009 £0.622  2010 £0.196 
 
7. Duration of programme 
  Project lifespan of 25 years.  
8. Assessment of trade effects 
 
 Insofar as the intervention is liable to aff ect telecom operators and service providers from 
other Member States, the measures have an effect on trade.  The telecom market is more and more open to competition between operators  and service providers, which gene rally engage in activities that 
are subject of trade between Member States.  Ther e may also be an effect on competition between the 
end-users and their competitors in other Member St ates, although the importance of that effect will 
probably be relatively low.  
XLI. SE – BIO-ENERGY INFRASTRUCTURE SCHEME 
 1. Period covered by the notification 
 
 2009 and 2010.  2. Policy objectives 
 
The key objectives are to: 
 
 increase business's competitiveness by tackling rising fuel costs and reducing their 
carbon footprint;  
 provide learning benefits that will help  accelerate the industry and achieve more 
efficient and cost-effective use of biomass for heat; 
 
 contribute towards renewable energy targets; 
 
 maximise carbon savings; 
 
 create a market for biomass equipment and services; 
 
 create a good spread of exemplar biomass h eat projects across Scotland that will 
encourage businesses to switch to renewable technologies; 
 
 create a range of projects that will deliver learning benefits that will accelerate the use 
of biomass for heat in the future. 
  G/SCM/N/220/EEC/Add.27 
 Page 51 
 
 
  3. Background and authority for the scheme 
 
Section 5(b) The Science and Technology Act 1965. 
 4. Form of the subsidy 
 
Capital grants. 
 5. To whom and how the subsidy is provided 
 
 SMEs based in Scotland are eligible to  apply to install biomass boilers for the 
production of heat.  
 Private householders are not eligible.  
 
 Funding cannot be given out retrosp ectively under any circumstances.  
 
 Average subsidy per unit = £70,000. 
 
6. Total amount budgete d (in millions of £) 
 
 2009 £1.75 million  2010 £1.75 million  
7. Duration of programme 
 
 The scheme was officially opened to applications on 19 December 2008 and closed for 
applications in September 2010.  Payments are scheduled to end by 31 March 2011. 
 8. Assessment of trade effects 
 
It is too early to assess the impacts of the scheme. 
 
XLII.  SE – BROADBAND FOR SCOTLAND 
 1. Period covered by the notification 
 
 2009 and 2010.  2. Policy objectives 
 
 To provide broadband to 100 per cent known de mand of premises located too far from their 
telephone exchange to receive a broadband service.  3. Background and authority for the scheme 
 
 Following demand side intervention during 2003- 2004 and a supply-side intervention in 2005 
which collectively took broadband coverage to ove r 99 per cent, a further supply-side intervention 
was deemed necessary to close the gap on basi c broadband coverage and address 100 per cent of 
known demand.  None of the beneficiaries of th e new intervention were provided with broadband 
during the 2005 supply-side intervention. 
 G/SCM/N/220/EEC/Add.27 
Page 52  
 
  4. Form of the subsidy 
 
 Grant.  5. To whom and how the subsidy is provided 
  To the project supplier – Avanti Communicati ons, following receipt of monthly invoices in 
arrears during the rollout period of the project.  Avanti Communications was paid a pre-set fee (dependent on technology solution) per premises connected in the project.  
6. Total amount budgete d (in millions of £) 
 
 2009 £1.902  2010 £0.114  
7. Duration of programme 
  
 5 years.  8. Assessment of trade effects 
 
 No displacement of trade as programme deliv ered broadband in economically unviable areas 
of Scotland. 
 
XLIII.  SE – HIE GENERAL BLOCK EXEMPTION SCHEME 
 1. Period covered by the notification 
 
 2009 and 2010.  2. Policy objectives 
 
 Highlands & Islands Enterprise (HIE) is a regi onal development agency for a region that is 
lacking in development relative to the EU averag e.  The primary policy objectives are to grow the 
businesses and social enterprises and develop commun ities, resulting in an increase in Gross Value 
Added to the Scottish economy.  Economic growth will be sustainable, and objectives include 
creating the conditions to become a low–carbon region (significantly reduced emissions of 
greenhouse gases). 
  The scheme provides the following types of State aid:  
 Capital investment for start-up and expansion 
 Early years start-up funding for SMEs 
 Investment in exceeding existing environm ental standards and early adoption of 
proposed new environmental standards 
 Additional costs of energy saving measures and high efficiency co-generation of 
electricity and heat 
 Generation of renewable energy 
 Studies into environmental effects of renewable energy and energy saving 
 For SMEs only, External consultancy and attending trade fairs 
 Training 
 Property development to provide industrial premises where market failure exists  G/SCM/N/220/EEC/Add.27 
 Page 53 
 
 
   
3. Background and authority for the scheme 
  The scheme forms part of the economic and co mmunity development activity of the Scottish 
Government's regional development agency in the Highlands & Islands region of Scotland.  
Highlands & Islands Enterprise was created by an act of parliament as a non-departmental regional 
body (Enterprise & New Towns Act (Scotland) 1990).    4. Form of the subsidy 
 
 Grants & Loans. 
 5. To whom and how the subsidy is provided 
  Subsidies are provided after appraisal of a busin ess plan to support firms of all sizes.  Some 
measures are only provided to Small and Medium sized  firms (according to the EU definition of an 
SME) and some measures provide aid to both large a nd small firms, usually at higher grant rates for 
SMEs than for larger firms.  Firms must be unde rtaking new development in the qualifying area (The 
Highlands & Islands region of Sco tland).  Subsidies are offered to the minimum extent necessary for 
the project to proceed, must contribute to the re gional development policies and must be eligible 
under EU State aid procedures. 
 
6. Total amount budgete d (in millions of £) 
 
 2009 £4.3  2010 £3.0 
 
7. Duration of programme 
  1 January 2009 to 31 December 2013.  8. Assessment of trade effects 
  Subsidy levels conform to EU State aid Guide lines which control aid to levels anticipated to 
restrict trade distortion to levels acceptable unde r EU and WTO State aid agreements which aim to 
achieve a positive balance in favour of de velopment of the wider economy.    
 XLIV.  SE – HIGHLAND OPPORTUNITY 
 
1. Period covered by the notification 
  2009 and 2010.  
2. Policy objectives 
 
 A regional scheme, for the Highland Council area of Scotland, for investing in new or growing SMEs for development, di versification and job creation. 
 
3. Background and authority for the scheme 
 
 Section 48(4) of the Finance Act 1982.  G/SCM/N/220/EEC/Add.27 
Page 54  
 
  4. Form of the subsidy 
 
 Loans in the range of £1,000-£50,000.  5. To whom and how the subsidy is provided 
  Loans, unsecured up to £50,000, are provided to SMEs for a term of up to 7 years at an interest rate of 5 per cent.  6. Total amount budgete d (in millions of £) 
 
 2009 £0.60m  2010 £0.60m 
7. Duration of programme 
 
 Open-ended. 
 8. Assessment of trade effects 
  The number of SMEs assisted during 2010 was 27 with an average loan of £22,222.  210 jobs 
were created or sustained. 
 
XLV.  SE – REGIONAL SELECTIVE ASSISTANCE SCOTLAND 
 
1. Period covered by the notification 
 
 2009 and 2010. 
 2. Policy objectives 
 
The objective is to support regional developmen t through new investment projects and job 
creation in Assisted Areas.  
 
3. Background and authority for the subsidy 
  Enterprise and New Towns (Scotland) Act 199 0, as amended 1 April 2001, by Scottish 
Statutory Instrument 2001 No. 126. 
 
Powers to offer RSA in Tier 1 and Tier 2 areas are under section 7 of the Industrial 
Development Act 1982 and Article 13 of the EC General Block Exemption Regulation 
(EC) No 800/2008.  4. Form of the subsidy  
 
Grant support for capital expenditure on tangible assets- land, site preparation, buildings, 
plant and machinery, and also intangible assets (paten ts and know-how costs).  Aid can also be given 
for the wage costs of newly created jobs linked to  investment.  Aid is subject to maximum limits 
dependent on the location of the supported company. 
  G/SCM/N/220/EEC/Add.27 
 Page 55 
 
 
  5. To whom and how the subsidy is provided 
 
 Aid is provided to SMEs and non-SMEs located  within Assisted Areas.  Applicants must 
submit an application for assistance to SE before work  on the project or activity has started, and the 
application must be approved in writing before work can commence on the project.  Where the 
applicant is a large company, additional conditions  will be applied to ensure that the aid has an 
incentive effect.   6. Total amount budgeted 
 
 2009 £ 22.187M 
 2010 £ 32.994M 
 
7. Duration of the programme 
 
 To 31 December 2013. 
 8. Assessment of trade effects 
  Potential recipients potentially participate in  trade between Member States.  The scheme is 
therefore regarded by the Commission as affecting trad e.  The aid is regarded as compatible with the 
Treaty as it has the objective of regional developm ent and is in accordance with the guidelines on 
regional aid and the General Block Exemption Regulation. 
 
XLVI.  SE – RESEARCH AND DEVELOPMENT INNOVATION SCHEME FOR SMES 
 1. Period covered by the notification 
 
 2009 and 2010.  2. Policy objectives 
 
 To stimulate and support applied R&D by SMEs , as a precursor to investment leading to 
diversification and expansion of the local econo my.  There is a strong link between innovation by 
businesses and regional economic growth.  The leve l of expenditure by firms on R&D in the 
Highlands & Islands is less than the Scottish average,  which is in-turn below the level in the UK.  The 
particular difficulties affecting R&D within this region are:   
 
 (a) The predominance of SMEs (17,380, or  99.7 per cent of businesses in the region 
employ less than 200 persons).   
  (b) The below average productivity of the economy (recent Eurostat figures for the 
annual GDP per capita in the Highlands & Is lands Region ranged from 75 per cent to 
77 per cent of the EU average in the period 1994 to 1997 and averaged 71 per cent in 
2000 – 2002 on a comparable basis of 15 EU Member States).   
  (c)  The high costs associated with periphe rality and sparseness of population.  This not 
only affects the costs of materials, but also the costs of services and expertise from 
the main R&D institutions, of which there are few in or near to the region.  There are 
no universities based in the region.   
  (d)  There is a small base to the pyramid of  skills and expertise, which is available to 
develop ideas and carry out research and development.   G/SCM/N/220/EEC/Add.27 
Page 56  
 
  3. Background and authority for the scheme 
 
 The scheme forms part of the economic and co mmunity development activity of the Scottish 
Government's regional development agency in the Highlands & Islands region of Scotland.  
Highlands & Islands Enterprise was created by an act of parliament as a non-departmental regional 
body (Enterprise & New Towns Act (Scotland) 1990).   
 4. Form of the subsidy 
  Grants.   
 
5. To whom and how the subsidy is provided 
  Recipients must be SMEs according to th e EU definition of an SME, or research 
establishments on behalf of SMEs.   
 
6. Total amount of grant payments 
  2009 £ 0  2010 £ 0.306   
7. Duration of programme 
 
 To 31 December 2011 - Closed  for new cases 1 January 2009. 
 8. Assessment of trade effects 
  No direct affects, as tradable goods ar e not normally produced in R&D projects.  
Consequential investment leads to production in goo ds and services in a wide variety of sectors (the 
scheme is non-sector specific and non-specific in term s of favouring neither local nor export market 
for the ultimate products).  Virtually all co mpanies assisted trade on the UK market only. 
 XLVII.  SE – SCOTTISH ENTERPRISE BU SINESS SUPPORT SCHEME 2009-2013 
 
1. Period covered by the notification 
  2009 and 2010. 
 
2. Policy objectives 
  The objective is to support business development primarily for SMEs.  Fields covered include 
management, finance, new technology, e-commerce, protection of intellectual property rights, assessing 
feasibility of new ventures, environmental protection;   participation in trade fairs and exhibitions;  
studies relating to investment decisions on envi ronmental protection, energy saving measures and 
energy from renewable energy sources;  purchase of specific dedicated capital equipment and/or assets related to a development project and which are additional to the SME.  
 3. Background and authority for the scheme 
  The legal basis for the scheme is the Eur opean Communities Act 1972 and the Enterprise and 
New Towns (Scotland) Act 1990, as amended 1 Apr il 2001, by Scottish Statutory Instrument 2001 
No. 126.  The scheme operates under the Eur opean Commission's General Block Exemption 
Regulation (GBER) and the scheme reference number is X43/2009.  G/SCM/N/220/EEC/Add.27 
 Page 57 
 
 
  4. Form of the subsidy 
 
 Grant.  5. To whom and how the subsidy is provided 
  To companies who apply to Scottish Enterprise for support under a number of grant products.  
Applicants must submit an application for assistance to SE before work on the project or activity has 
started, and the application must be approved in writing before work can commence on the project.  
Where the applicant is a large company, additional conditions will be applied to ensure that the aid 
has an incentive effect.  
 6. Total amount budgete d (in millions of £) 
 
 2009 £10.182 
 2010 £10.011 
 7. Duration of programme 
  To 31 December 2013.  
8. Assessment of trade effects 
 
 Potential recipients potentially participate in trade between Member States. The scheme is 
therefore regarded by the Commission as affecting trad e.  The aid is regarded as compatible with the 
Treaty as its objectives concur with the General Block Exemption Regulation. 
 
XLVIII.   SE – SCOTTISH ENTERPRISE  TRAINING SCHEME 2009-13 
 
1. Period covered by the notification 
  2009 and 2010. 
 
2. Policy objectives  
  To assist companies to carry out workforce tr aining in support of their business development 
needs. 
 
3. Background and authority for the subsidy 
  The Enterprise and New Towns (Scotland) Ac t 1990, as amended 1 April 2001, by Scottish 
Statutory Instrument 2001 No. 126 - The scheme operates under the European Commission's General Block Exemption Regulation (GBER) and the scheme reference number is X47/2009. 
 
4.  Form of the subsidy  
 
Grants or access to training programmes procured by SE. 
 
5. To whom and how the subsidy is provided 
 
 To companies, SMEs and non-SMEs. Applicants must submit an application for assistance to 
SE before work on the project or activity has starte d, and the application must be approved in writing G/SCM/N/220/EEC/Add.27 
Page 58  
 
  before work can commence on the project.  Where the applicant is a large company, additional 
conditions will be applied to ensure th at the aid has an incentive effect.  
 6. Total amount budgeted 
 
 2009 £5.133M 
 2010 £3.306M 
 
7. Duration of the programme 
 
 To 31 December 2013. 
 8.  Assessment of trade effects 
  Potential recipients potentially participate in  trade between Member States.  The scheme is 
therefore regarded by the Commission as affecting trad e.  The aid is regarded as compatible with the 
Treaty as its objectives concur with the General Block Exemption Regulation. 
 
XLIX.  SE – SCOTTISH INVESTMENT FUND 
 
1. Period covered by the notification 
  2009 and 2010.  2. Policy objectives 
 
 To build capacity, capability and financial sustai nability in the third sector;  ensuring a strong 
and active third sector reaches his potential and ma kes a key contribution to the national outcomes of 
the Scottish Government.  To achieve this objectiv e the fund will support enterprise in the third sector 
through investment in individual organisati ons supported by integral business support and 
management development.  Investment in outcome s linked to the purpose of the Scottish Government 
in creating a more successful country, with opportunities for all through increasing sustainable 
economic growth. Organisational capacity developmen t - not project funding - in order to create a 
more financially sustainable, enterprising and bu siness-like third sector;  increasing the turnover of 
the social economy and reducing long-term dependen ce on grants and contributing to better public 
services by making the third sector more able to deliver effective, evidence-based and innovative 
services. 
 
3. Background and authority for the scheme 
 
 Scottish Investment Fund – Investment St rategy, Scottish Gove rnment, June 2008. 
 4. Form of the subsidy 
  The fund is managed by Social Investment  Scotland (SIS) on behalf of the Scottish 
Government and provides assistance to third sector or ganisations in the form of  grants and loans 
from the fund.  
5. To whom and how the subsidy is provided 
 
 This fund invests a mixture of debt, non-repaya ble strategic investment and risk capital to 
established social enterprises. The minimum investment is £100,000 and the maximum £1m. 
  G/SCM/N/220/EEC/Add.27 
 Page 59 
 
 
  6. Total amount budgete d (in millions of £) 
 
 2009   £9.54m   2010 £14.06m  
7. Duration of programme 
 
 31 March 2011, although there is a possibility  that the programme will be extended for a 
further year to 31 March 2012.  
8. Assessment of trade effects 
 
 Nil.  
L. SE – SCOTTISH LOCAL AUTHORITIE S - SUPPORT FOR REGIONAL, SME 
INVESTMENT AND EMPLOYMENT AID 
 
1. Period covered by the notification 
  2009 and 2010.  
2. Policy objectives 
 
 To promote business start up and development.  3. Background and authority for the scheme 
 
Section 20 of the Local Government Act 2003 and Articles 13, 14 & 15 of the EC General 
Block Exemption Regulation (EC) No 800/2008 an d the scheme reference number is X159/2008. 
 
4. Form of the subsidy 
 
 Grants of up to 40 per cent toward s expenditure on tangible assets. 
 5. To whom and how the s ubsidy is provided/committed 
 
 Provided to new or expanding SMEs in the fo rm of grant towards capital expenditure as 
defined within compliant scheme of assistance. 
 6. Total amount budgete d (in millions of £) 
 
 2009 £2.041M  2010 £2.162M 
 
7. Duration of programme 
  2007-2010.  
8. Assessment of trade effects 
 
 No impact on trade between regions or Member States. 
 G/SCM/N/220/EEC/Add.27 
Page 60  
 
  LI. SE – SCOTTISH PROPERTY  SUPPORT SCHEME 2009-2013 
 
1. Period covered by the notification 
  2009 and 2010. 
 
2. Policy objectives  
  The implementing bodies have a number of statutory functions including furthering the 
development of Scotland's economy. The purpose of  the Scottish Property Support Scheme is to 
support the development of premises and buildings  for commercial purposes by the private sector. 
Such development can involve the constructi on of new buildings and/or the renovation and 
conversion of existing ones.  
 
 This support will be provided in situations wh ere there is, in the view of the implementing 
bodies, a market failure. Examples of such mark et failures are situations where the estimated 
development costs of the property exceed its estimat ed end market value or where risk aversion and 
uncertainty in forecasting project outco mes prevents property development.  
 
 Using various instruments the implementing bod ies will at their discretion provide an amount 
of aid that is the minimum necessary for selected pr operty development project s to go ahead, with the 
maximum aid intensities as determined by the relevant State aid regulations. 
 3. Background and authority for the subsidy 
  Enterprise and New Towns (Scotland) Act 199 0, as amended 1 April 2001, by Scottish 
Statutory Instrument 2001 No. 126. 
 4. Form of the subsidy  
  Development grants, subsidised loans, interest  rebates, development financing aid (grants, 
rental guarantees), loan guarantees, joint venture finance, development services. 
 
5. To whom and how the subsidy is provided 
  Projects can be launched at the initiative of the granting authorities themselves if they own a site and wish to see it developed.  Developers would normally be sought  by public tender, with the bid 
requiring the lowest subsidy and meeting the qualitativ e criteria being selected.  Projects may also be 
brought to the funding authorities by the property de velopers, in which case an assessment would be 
made of new economic benefits compared with  cost, the need for public sector intervention 
established, and the minimum level and intensity of aid calculated.  The recipients may be property 
developers or end-users.  Grants are only provided  for initial investment as described in the guidelines 
on regional aid, and maximum aid intensities are applie d in Assisted and non-Assisted areas as per the 
regional aid map.  Out with Assisted Areas, support is restricted to SMEs. 
 6. Total amount budgeted 
  2009 £0.212M 
 2010 £0.194M 
 
7. Duration of the programme 
  To 31 December 2013.  G/SCM/N/220/EEC/Add.27 
 Page 61 
 
 
  8. Assessment of trade effects 
 
 Potential recipients – property developers and occupiers – all potentially participate in trade 
between Member States.  The scheme is therefore regarded by the Commission as affecting trade.  
The aid is regarded as compatible with the Treaty as it has the objec tive of regional development and 
is in accordance with the guidelines on regional ai d and the General Block Exemption Regulation. 
 
LII. SE – SCOTTISH RESEARCH, DEVELOPMENT AND INNOVATION SCHEME 
 
1. Period covered by the notification 
  2009 and 2010.  2. Policy objectives 
 
 The principal objective of the scheme is to encourage enterprises in Scotland to undertake 
innovative research and technological development w ith commercial potential in order to stimulate 
growth, strengthen competitiveness, and boost employme nt in Scotland.  It aims to provide an 
incentive for enterprises to unde rtake research, development and innovation (R&D&I) activities in 
addition to their existing R&D&I activities and to en courage enterprises that are not currently doing 
so, to carry out R&D&I. 
 
3. Background and authority for the scheme 
  The legal basis for the scheme is the Eur opean Communities Act 1972 and the Enterprise and 
New Towns (Scotland) Act 1990, as amended 1 April 2001, by Scottish Statutory 
Instrument 2001 No. 126. 
 4. Form of the subsidy 
  Grant.  
5. To whom and how the subsidy is provided 
 
 To companies who apply to Scottish Enterpri se for support under a number of grant products. 
Applicants must submit an application for assistance to SE before work on the project or activity has 
started, and the application must be approved in writing before work can commence on the project.  
Where the applicant is a large company, additional conditions will be applied to ensure that the aid 
has an incentive effect.  The scheme will permit the granting authorities to assist enterprises (in 
isolation or in collaboration with other industrial partners and/or public or private research base 
organisations) to carry out innovation, research and development (R&D&I) projects falling under a 
range of categories:   
 
 Aid for R&D Projects 
 Aid for Technical Feasibility Studies 
 Aid for Industrial Property Rights Costs for SMEs 
 Aid for Young Innovative Enterprises 
 Aid for Process and Organisational Innovation in Services Activities 
 Aid for Innovation Advisory Services and Innovation Support Services for SMEs 
 Aid for the Loan of Highly Qualified Personnel for SMEs 
 G/SCM/N/220/EEC/Add.27 
Page 62  
 
  6. Total amount budgete d (in millions of £) 
 
 2009 £17.100  2010 £20.457  
 
7. Duration of programme 
 
 To 31 December 2013. 
8. Assessment of trade effects 
 
 Potential recipients potentially participate in  trade between Member States.  The scheme is 
therefore regarded by the Commission as affecting trad e.  The aid is regarded as compatible with the 
Treaty as its objectives concur with the R&D&I Framework.  
LIII.  SE – TOWN CENTRE REGENERATION FUND 
 
1. Period covered by the notification 
  2009 and 2010.  2. Policy objectives 
  To support the regeneration of town centres and local high streets across Scotland through strategic capital investment.  3. Background and authority for the scheme 
  Section 126 of the Housing Grants, Constr uction and Regeneration Act 1996 - The scheme 
operates under the European Commission's Genera l Block Exemption Regulation (GBER) and the 
scheme reference number is X607/2009.  4. Form of the subsidy 
  Grant.  5. To whom and how the subsidy is provided 
 
 Businesses and organisations undertaking project s to improve the offer and attractiveness of 
town centres and local high streets.  6. Total amount budgete d (in millions of £) 
 
 2009/10 - £60m total budget   
 
So far - £0.550 was spent. 
 7. Duration of programme 
 
 2009/10 - this was a one year capital only fund.  
  G/SCM/N/220/EEC/Add.27 
 Page 63 
 
 
  8. Assessment of trade effects 
 
 The greatest majority of TCRF projects were  undertaken by local authorities, followed by 
community groups.  In one instance, a local SM E business secured funds to build and fit out a 
children's soft play area project.   
 
 The business report that they have taken a dere lict town centre site and redeveloped it into a 
major community attraction, drawing people from outlyin g areas back into their to wn centre.  The soft 
play area opened its doors to the public on 3 November 2010.  LIV. SE – WAVE AND TIDAL ENERGY SUPPORT 
 
1. Period covered by the notification 
  2009 and 2010. 
 
2. Policy objectives 
  Aim of the Scheme is to provide grants to businesses to support the installation and commissioning/deployment of pre-commercial wave and tidal electricity generating devices at the European Marine Energy Centre.  Scheme also supports components of projects requiring testing at 
EMEC e.g. mooring systems, foundation installation syst ems etc. that will lead to reduced project cost 
and/or improved operation and maintenance for the industry. 
 
 Key objectives  
 To support the early development of wave  and tidal technologies that need to 
complete pre-competitive R&D through deploy ment and demonstration in Scotland;   
 
 To capture key data on the resource, costs (construction, installation, commissioning, 
operational and maintenance) and en ergy performance and revenue;   
 
 To produce in a clear, transparent and una mbiguous report, an economic evaluation of 
all projects supported by the scheme, whilst maintaining the confidentiality of 
commercially sensitive information;   
 
 To promote the development of a diverse renewables supply;   
 
 To secure the increased learning benefits  and cost reductions from the initial 
deployment of these devices;  and   
 To increase carbon savings in line with the Scottish Ministers' commitment as set out 
in 'Changing our Ways:  Scotland's Clim ate Change Programme' published in 2006. 
 3. Background and authority for the scheme 
  The Scheme operates under the Scottish Govern ment Sciences & Technology Act, 1965.  
State Aid approval for the scheme is via UK approval N504/2000 Renewables Obligations and 
Capital Grants for Renewable Technologies, and UK approval - N318/2005 Wa ve and Tidal Stream 
Energy Demonstration.  G/SCM/N/220/EEC/Add.27 
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  4. Form of the subsidy 
 
 Grant support.  5. To whom and how the subsidy is provided 
  The grants are paid to wave and tidal energy developers.  Payable at a maximum of 40 per cent of the total costs and paid in arr ears upon completion of agreed milestones. 
 6. Total amount budgete d (in millions of £) 
 
 2010 £3 million.  7. Duration of programme 
 
 To 30 June 2011. 
 8. Assessment of trade effects 
  Nil.  LV. SE – WESTERN ISLES BUSINESS SUPPORT SCHEME 
 
1. Period covered by the notification 
  2009 and 2010. 
 
2. Policy objectives 
  To provide support to new and existing businesses and social enterprises.  3. Background and authority for the scheme 
  This Scheme (Business Support Scheme Refere nce Number :  X 151/2008) is operated under 
the European Commission General Block Exemption Regulation (EC) No 800/2008 (Articles 13, 14, 15, 26, 27),  Local Government Scotland Act 2003 and the European Communities Act 1972.  
4. Form of the subsidy 
 
 Micro Business Loan – Soft Loan – up to £2,000 (interest-free).  Business loan - Soft Loan – up to £10,000 (4% interest). 
 Business loan - Soft Loan – up to £50,000 (4% & 6% interest). 
 Micro Business Grant – up to 50% of  eligible costs, up to £5,000. 
 
5. To whom and how the subsidy is provided 
  New and Existing Businesses / Social Enterprises.  
6. Total amount budgete d (in millions of £) 
 
 2009 £0.078M (actual loan/grant amount)  2010 £0.132M (actual loan/grant amount)   G/SCM/N/220/EEC/Add.27 
 Page 65 
 
 
   2009 £0.010M (cash grant Equivalent) 
 2010 £0.014M (cash grant Equivalent)  7. Duration of programme 
 
 Unlimited. 
 8. Assessment of trade effects 
  State aid test completed for each application - no trade effects. 
 
LVI. THE ENERGY TECHNOLOGIES INSTITUTE (ETI) 
 
1. Period covered by the notification 
 
 2009 and 2010. 
 2. Policy objectives 
  The objective of the ETI is to accelerate th e development, demonstration and commercial 
deployment of energy technologies in order to increase energy efficiency, reduce greenhouse gas 
emission and help achieve energy and climate cha nge goals.  The measure aims at coordinating R&D 
efforts by the state and the industry and addressing th e barriers to effective deployment of new energy 
technologies in the UK.  3. Background and authority for the scheme 
 The legal basis is Section 2 or 5 of the Sc ience and Technology Act 1965, Section 5(2)(a) 
 Regional Development Agencies Act 1998, the E ngineering and Physical Science Research 
Council Royal Charter and the Technology Strategy Board Royal Charter.  
4. Form of the subsidy 
 
 Direct grant.  5. To whom and how the subsidy is provided 
  ETI members and project participants via the ETI on either a capped actual cost basis or agreed fixed price for milestones achieved. The ETI is funded on a 50:50 basis private/public.  6. Total amount budgete d (in millions of £) 
 
 Actual Spend in period (public funding) 
  2009   £5.2m  2010 £11.1m  
 Contractually committed spend (public funding) 
  2009 £12.3m  2010 £11.7m  G/SCM/N/220/EEC/Add.27 
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  7. Duration of programme 
 
 Currently 26 projects projected to December 2017.  8. Assessment of trade effects 
  Each project is reviewed so as to establish the incentive effect of state aid. The categories for 
all ETI projects receiving public funding are:  
 Increase in R&D scope; 
 Increase in speed; 
 Increase in total amount spent on R&D&I; 
 Increase in R&D human capital. 
 
LVII.  VACCINES RESEARCH RELIEF 
 
1. Period covered by the notification 
  2009 and 2010. 
 
2. Policy objectives 
  The objective of Vaccines Research Relief (VRR ) is to encourage companies to increase 
research spending into specified diseases.  Becau se demand for drugs and vaccines to treat diseases 
which mostly affect people in poorer countries is low compared with demand for medicines for people 
in affluent countries, there is less incentive for ph armaceutical companies to devote resources to these 
diseases.  Vaccines research relief is therefore not primarily aimed at boosting UK productivity, though there may be some incidental benefits.  3. Background and authority for the subsidy 
  VRR was introduced in 2002, but took effect  for expenditure from April 2003.  It was not 
formally consulted on, however it used the already successful model of research and development tax 
credits for small or medium-sized enterprises, and so the basic architecture of the scheme was already 
well known to companies. 
 
 It was notified to the European Commission as a State aid and approved by them under reference N228/02.  Amendments have been no tified and approved under references N245/2003 (on 
4 September 2003), N293/2004 (on 6 December 2004) and N34/2007 (on 15 January 2007). 
  Legislation governing the scheme was introduced in the Finance Act 2002 (Schedules 13 
and 14) with effect from 15 April 2003.  The VRR scheme was subsequently amended in the Finance 
Act 2003 (Schedule 31), the Finance Act 2004 (secti on 141), the Finance Act 2007 (Section 49) and 
the Finance Act 2008 (Section 30).  The legislat ion was rewritten in clearer language, but not 
amended in substance, in the Corporation Tax Act 2009 (CTA 2009).  It is now in Chapter 7 of 
Part 13 of CTA 2009. 
 
4. Form of the subsidy 
  Tax relief (see below).   G/SCM/N/220/EEC/Add.27 
 Page 67 
 
 
  5. To whom and how the subsidy is provided 
 
 The incentive is given as an increased tax relief for certain spending on R&D into vaccines or 
drugs for the prevention or treatment of specifi ed diseases.  The diseases specified are HIV/AIDS, 
tuberculosis and malaria.  The scheme differs for small or medium-sized companies (SMEs) and other 
companies.  Both SMEs and non-SMEs are able to  claim relief equal to 40 per cent (for expenditure 
on or after 1 August 2008, previously 50 per cent) of their qualifying R&D expenditure as an 
enhancement to the general deduction that they wo uld otherwise get for R&D spending.  However, 
loss making SMEs are further entitled to claim a paya ble credit from the Government equal to 16 per 
cent of the enhanced relief for spending on the speci fied diseases (although they must then give up the 
enhanced relief claim). 
  Taking as an example a SME company in profit paying tax at the 2011 small companies' rate (20 per cent), the company would be entitled to cl aim the normal R&D tax credit of 175 per cent and 
then on top of this a further 40 per cent for qualifyi ng spending on R&D into  the specified diseases.  
Thus for £100 of qualifying spending it would recei ve £20 of general tax relief available to all 
companies, £15 of enhanced tax relief under the R& D tax credit scheme for SMEs and a further £8 of 
enhanced tax relief under the VRR scheme.  If this  same company was loss making it would claim up 
to £24.50 of repayable tax credit under the genera l R&D tax credit for SMEs scheme and up to £6.40 
of tax credit under the VRR scheme.  
 As with the SME R&D tax credit scheme, the amount surrenderable for a cash repayment is 
limited to the lower of:  
 The proportion of the unrelieved loss attribut able to the qualifying VRR expenditure;  
and  
 the gross employment and social security taxes (Pay-As-You-Earn tax and National 
Insurance Contributions, including equivalent contributions in other EEA states) paid 
by the company for the period of the claim.  
The availability of VRR to a company is subject to the following criteria: 
 
(a) the qualifying expenditure for the VRR for any accounting period of the company is 
limited to the aggregate of:  
 the direct costs of staff directly involved in carrying out the R&D activity.  
These costs comprise the gross remune ration (excluding be nefits-in-kind) 
plus national insurance contributions payable by the company, plus contributions to a pension scheme paid by the company;  plus 
 
 the cost of consumable or transformabl e materials used directly in the R&D 
activity;  plus  
 the cost of computer software, power, water and fuel used directly in the 
R&D activity;  plus  
 contributions to independent research carried out by a charity, university or 
scientific research organization (onl y for expenditure incurred before 
1 August 2008);  plus  G/SCM/N/220/EEC/Add.27 
Page 68  
 
   if the company subcontracts all or part of the R&D then 65 per cent of the 
payments due to the subcontractor (representing a generalised measure of the costs above).  Alternatively, the comp any may claim the actual costs it incurs 
within the above categories (except any contributions to independent research).  This latter rule is the only option where the principle and 
subcontractor are connected;  plus 
 if the company subcontracts all or part of the R&D to a charity, university or 
scientific research organisation then the whole sub-contract expenditure qualifies for relief.  
(b) the qualifying expenditure must exceed a threshold minimum.  This is set at an 
annualised rate of £10,000 a year.  Spending at or above £10,000 qualifies for VRR in 
full.  No VRR is available if the spending does not meet this threshold; 
(c) VRR is not available on R&D spending that h as been met by a grant or subsidy.  No 
R&D expenditure will qualify for the tax credit if incurred in relation to a project in 
receipt of any other notifiable State aid; 
(d) VRR is only available to SME companies if they are going concerns; 
(e) A large company receiving VRR must provide a declaration of the incentive effect of 
the relief; 
(f) There is a cap of €7.5m on the total amount of R&D tax credit and vaccine research 
relief that can be claimed in respect of any particular R&D project. 
 R&D spending by joint ventures and consortia w ill be eligible for VRR, but only insofar as 
the tax credit can be limited to companies. 
 
6. Total amount budgeted 
  Estimates of the number of claims made for R&D tax credits and the cost of  support claimed are published as National Statistics on the HM Revenue and Customs website, broken 
down by type of scheme.  The latest figures were  published in October 2010 and cover years up to 
2008-09.  The statistical tables, including background information, can be found at: 
http://www.hmrc.gov.uk/stats/corporate_tax/randdtcmenu.htm  
 
 The expected costs of R&D tax credits for all companies  in 2009-10 and 2010-11  
are also published on the HM Revenue and Customs web site at: 
http://www.hmrc.gov.uk/stats/tax_expenditures/table1-5.pdf  
 
 The expected cost of the VRR scheme is est imated to be less than £1 million in each of 
2007-08 and 2008-09.  It should be noted that these are forecast estimates and the actual cost of support will depend on the claims actually made  by companies relating to those years. 
 
7. Duration of the programme 
  The notification to the European Commission limited the scheme covered by the notification 
to ten years.  This limit applies to new projects and not to taxpayers in respect of tax relief for relevant 
R&D commenced within this period.  Once a taxpayer had embarked on the project that is eligible for 
tax relief, it would be entitled to the relief for the remainder of the project.   G/SCM/N/220/EEC/Add.27 
 Page 69 
 
 
  8. Assessment of trade effects 
 
 No assessment of the impact of the VRR scheme is currently available.  The aim of the VRR 
scheme is to increase R&D expenditure  into vaccines for certain diseases.   There is no territorial limit 
to R&D qualifying for tax credits, but the incentiv e does operate by reducing UK corporation tax, so 
there may be some impact on decisions to locate R&D.  The small scale of the relief, however, 
suggests that any such impact is likely to be small. 
LVIII.  WASTE RESEARCH AND INNOVATION PROGRAMME AND WASTE 
DEMONSTRATOR PROGRAMME 
 1. Period covered by the notification 
 
 2009 and 2010.  2. Policy objectives 
  The focus of the scheme is:  
 To facilitate the development and implemen tation of new technologies for treating the 
biodegradable fraction of municipal solid wast e, where these have yet to be proved to 
be technically and commercially viable in the UK.  As a consequence, it would reduce 
the amount of biodegradable waste dis posed of to landfill in England; 
 
 to encourage the development of technology, which reduces the costs and 
environmental impact of waste management;  
 to promote the implementation of new technology that can recover and recycle 
material rather than merely stabilises it.  
 The scheme addresses the lack of R&D funding for new technology in England and aims to 
develop better, faster and cheaper ways of trea ting biodegradable municipal waste and other waste 
streams.  It should put the United Kingdom closer to the course required to achieve the Landfill 
Directive targets.  
3. Background and authority for the subsidy 
 
 The UK faces challenging targets to meet th e EC Landfill Directive requirements for limiting 
the disposal of biodegradable wastes to landfill an d increasing the rates of recovery and re-use of 
wastes.  The legal basis of this programme is head (1) of section 153(1) of the Environmental 
Protection Act 1990, according to which:  "The Secr etary of State may, with the consent of the 
Treasury, give financial assistance to, or for the purposes of […] (l) the environmental protection 
technology scheme for research and developmen t in the United Kingdom in relation to such 
technology."  4. Form of the subsidy 
  The subsidy will take two forms:   The grant aid instrument:  the same Adviso ry Committee as the one assessing the bids under 
WRIP will assess a short outline summary of the projects, including details of the technology, 
time-scales, funding requirements and outcomes, an d will submit its recommendations to DEFRA.  G/SCM/N/220/EEC/Add.27 
Page 70  
 
  Following a decision by DEFRA based on the advi ce of the Committee, successful bids will be 
worked up into full-scale proposals.  Full scale pr oposals will be reviewed externally by at least 
three members of the Committee and a final decision will be taken by DEFRA.   All projects will be subject to audit on completi on to ensure public funds had been spent in 
strict accordance with the contract. 
  A programme management contractor will ma nage the WDP.  This contractor will be 
appointed by competitive tender following normal pr ocurement rules and will be advertised in the 
OJEC.  The contractor will report to DEFRA including compliance with state aid rules and reporting 
requirements. 
  The co-investment instrument:  the co-investment aid would only be available to private 
companies or suitable consortia, which would be able  to quickly take forward a demonstration project 
to a profitable commercial activity and where, becau se of the perceived risk of the technologies, the 
projects would be unable to proceed without such fi nance to help lever manufacturers and suppliers.  
This aid approach would be targeted at high risk projects which if successful would have a large market potential, which can be quickly exploited.  The aim of this instrument is to help attract private 
sector investment in the projects.  The criteria for co-investment projects would include:  a clear 
business plan which identifies the market potential a nd anticipated financial returns from successfully 
commercialising the technology to be demonstrated ;  confirmation of how the intellectual property 
rights of the project will be protected;  financial viability including confirmation of other sources of 
investment income;  an agreed timetable and thresh old for repayment of the investment made by the 
programme.  5. To whom and how the subsidy is provided 
  Bids will be accepted from companies, universities and research establishments without restriction on the size of beneficiaries.  The scheme is being run on a general basis but, because of the nature of the scheme, waste management companie s, their equipment suppliers and local authorities 
are expected to be a significant percentage of those making use of the scheme.  Projects involving 
cooperation between firms, universities and research in stitutes will also be eligible, but there are no 
special terms for such bids.  The final award de cision will be taken by the Department of the 
Environment, Food and Rural Affairs ("DEFRA" ) on the basis of the advice received from the 
Committee.  Funds would be paid in accordance with a contract on the basis of achieving key 
milestones.  
6. Total amount budgete d (in millions of £) 
 
 2009 £0.8  2010 £0.06  7. Duration of the programme 
  Waste Research & Innovation Scheme is for duration of three years.  The Waste Demonstrator Programme runs until 2009.  The scheme ended 31 March 2010. 
 8. Assessment of trade effects 
  The Waste Demonstrator Programme's research  findings will be disseminated through case 
studies written about the projects in all cases.  Site visits by end user decision-makers will also be 
organized.  The associated Data Centre will also assure access for the general public to information 
and data on the projects.  The Waste Research a nd Innovation Programme will ensure that findings  G/SCM/N/220/EEC/Add.27 
 Page 71 
 
 
  will be widely disseminated through the research  and waste communities, including articles in 
technical journals and other publi cations and conferences.  The associated Data Centre will also 
assure access for the general public to information and data on the projects. 
 
LIX. WAG – CAPITAL INVESTMENT AID AND EMPLOYMENT AID  
 
1. Period covered by the notification 
  2009 and 2010.  
2. Policy objectives 
 
 The aims of the Scheme are to allow the Welsh Assembly Government to:   
 
 assist with the development of the most disadvantaged regions in Wales by supporting 
sustainable investment, job creation and safeguarding employment; 
 
 help address regional imbalances within Wa les and between Wales and the rest of 
the UK;  
 help address market failures such as commercial property investment ; 
 
 help to offset the difficulty that SMEs  have obtaining capital investment and 
employment aid given the risk-averse natu re of certain financial markets and the 
limited collateral that SMEs may be able to offer.  
 3. Background and authority for the scheme 
 
 The scheme will be open to all enterprises in Wa les.  All aid awarded under the Scheme will 
be transparent and in line with criteria set out in the General Block Exemption Regulation. 
 
 Legal:  Powers of the Welsh Ministers whic h allow the Welsh Assembly Government to 
support enterprises under the Scheme are contained in:  
 the Welsh Development Agency Act 19 75 (section 1) (as amended);  and  
 the Housing Grants, Construction a nd Regeneration Act 1996 (section 126) 
 The Industrial Development Act 1982 
 
 The legislation which gives effect to EC Law in Wales is: 
 
 the European Communities Act (1972) (section 2(1));  and 
 the Government of Wales Act (section 80). 
 
4. Form of the subsidy 
  
Grants. 
 5. To whom and how the subsidy is provided 
  Companies undertaking capital investment, through payment of grants on achievement of 
agreed capital expenditure, job crea tion and job safeguarding triggers. 
 G/SCM/N/220/EEC/Add.27 
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  6. Total amount budgete d (in millions of £) 
 
2009 £47.407M 2010 £67.122M 
7. Duration of programme 
 
1 January 2009 to 31 December 2013. 
 8. Assessment of trade effects 
 
 Information on the safeguarding/creation of jobs and private sector investment is collected 
during the lifetime of the project and upon completion. 
 
LX. WAG – FINANCE WALES JEREMIE FUND 
 1. Period covered by the notification 
 
 2009 and 2010.  2. Policy objectives 
 
 Horizontal scheme aimed at the provision of risk capital support to Small and medium sized 
enterprises(SMEs) in Wales.  3. Background and authority for the scheme 
 
 Investment would only be permitted in viable en terprises located in Wales that fall within the 
EU definition of SMEs and which are not in difficu lty (in line with the Commission's definition of a 
firm in difficulty). Investing in AIM/Ofex-quoted firms would be ineligible.    No investment would take place in comp anies active in the following industries – 
shipbuilding (as defined in the Framework on Stat e aid to Shipbuilding, OJ C317, 30.12.2003 
p11-14), coal (high, medium and low grade categor y A and B within the meaning of the internal 
codification system for coal laid down by the UN Economic Commission for Europe) and steel (as defined in Annex I in the guidelines on National Regional Aid for 2007-2013, OJ C 54, 04.03.2006 
p13-45).  
 Legal:  Section 60 of the Government of  Wales Act 2006 and section 1 of the Welsh 
Development Agency Act 1975. 
 
4. Form of the subsidy 
   Both loan and equity instruments are utilised in providing investment finance to businesses to 
facilitate expansion and growth. 
 5. To whom and how the subsidy is provided 
  The investments are made into SMEs by way of one-off or staged payments. 
  G/SCM/N/220/EEC/Add.27 
 Page 73 
 
 
  6. Total amount budgete d (in millions of £) 
 
 2009 £19m  2010 £29m  
7. Duration of programme 
 
 The investment phase of the scheme is desi gned to run from April 2009 until March 2014. 
8. Assessment of trade effects 
 
 The most appropriate measure of the effect on trade is by recognition of the private finance 
leveraged alongside these investments, the gross su m (leverage plus direct investment) representing 
growth in the supply of capital in the economy that would otherwise not have occurred.   
 
LXI. WAG – RESEARCH, DEVELOPMENT AND INNOVATION SCHEME  
 
1. Period covered by the notification 
  2009 and 2010.  2. Policy objectives 
  The overall aim of the scheme is to support r esearch, development and innovation (hereinafter 
R&D&I) activities in companies.   One of the principal objectives of the scheme is to stimulate R&D and innovation activity and 
encourage best practice throughout business, fo ster the creation and development of innovative 
business starts up, help businesses develop innov ative products, processes and technologies and 
internationally tradable services with commercial potential. 
 
 Another key objective of the schemes is focused on addressing the need to encourage collaboration and effective co-operation between companies and research organisations including 
higher education institutions to raise both the level and the quality  of commercially relevant R&D 
activity.    The scheme will help boost the levels of R& D expenditure in businesses and higher education 
and increase the number of businesses performing effective R&D&I and the number of businesses 
participating in R&D&I for the first time.  
 3. Background and authority for the scheme 
  The Scheme will be open to enterprises of a ll sizes as well as research organisations and not-
for- profit innovation intermediaries (such as tec hnology centres, incubators and chambers of 
commerce) in Wales or those who plan to establish a business in Wales.   
  Large enterprises as well as SMEs may appl y for aid under the Scheme, subject to the 
eligibility restrictions identified in relation to the individual measures to be supported under the 
Scheme. 
 
 The Scheme also provides funding for R&D&I projects implemented by research 
organisations.  Funding can be granted for ec onomic and/or non-economic activities of research G/SCM/N/220/EEC/Add.27 
Page 74  
 
  organisations although the primary obj ective of this element of support will be directed towards their 
non economic activities.     Where research organisations are engaged in  economic activities, the research organisations 
will be treated as enterprises and the aid granting co nditions will be the same as those applicable to 
enterprises. 
  All aid awarded under the Scheme will be tran sparent and in line with criteria set out in the 
General Block Exemption Regulation. The Scheme is not sector specific.    
 Legal:  Powers of the Welsh Ministers whic h allow the Welsh Assembly Government to 
support organisations under the Scheme are contained in: 
 
 the Welsh Development Agency Act 1975 (section 1) (as amended);   
 The legislation which gives effect to EC Law in Wales is: 
 
 the European Communities Act (1972) (section 2(1));  and  
 the Government of Wales Act 2006 (section 80). 
 4. Form of the subsidy 
  Grant. 
 
5. To whom and how the subsidy is provided 
  Companies through grant payments.  6. Total amount budgete d (in millions of £) 
 
 2009   £9.544M  2010   £5.991M  7. Duration of programme 
  1 January 2009 to 31 December 2013.  8. Assessment of trade effects 
  Information on the safeguarding/creation of jobs and private sector investment in innovation 
and research and development is colle cted upon completion of the project. 
 
LXII.  WAG – SUPPORT FOR TRAINING SCHEME  
 
1. Period covered by the notification 
  2009 and 2010.  2. Policy objectives 
  The aim of the Scheme is to allow the Wels h Assembly Government to provide support to 
enterprises in Wales to actively encourage them to inv est in training.  The scheme is made available to  G/SCM/N/220/EEC/Add.27 
 Page 75 
 
 
  businesses to stimulate demand for learning and skills development which will have a direct impact 
on the performance of a particular business, and in turn, make a contribution to the economic success 
of Wales.   3. Background and authority for the scheme 
  In principle the Scheme will be open to all ente rprises in Wales, although in line with Welsh 
Assembly Government policy focus some elements will only be open to SMEs, or certain targeted 
sectors. 
All aid awarded under the Scheme will be transp arent and in line with criteria set out in the 
General Block Exemption Regulation.  Th e scheme reference number is X1/2009. 
 
 Legal:  Powers of the Welsh Ministers whic h allow the Welsh Assembly Government to 
provide training support under th is Scheme are contained in: 
 
 the Learning and Skills Act 2000 (Section 34) 
 the Education Act 2002 (Section 14)  
 
The legislation which gives effect to EC Law in Wales is:  
 the European Communities Act (1972) (section 2 (1)) 
 the Government of Wales Act 2006 (section 80) 
 
4. Form of the subsidy 
  The form of the subsidy was a financial contri bution towards the training costs of enterprises 
in training their staff (workforce development), for companies taking on people who had been made 
redundant (via REACT initiative), to safeguard jobs and improve workforce skills during the 
economic downturn (PROACT initiative) and to gene rally improve the skills and competitiveness of 
the workforce (Workforce Development - Discretionary Funding Programme). 
 
5. To whom and how the subsidy is provided 
 
 The scheme provided subsidies to Large firms and SMEs, by way of financial 
subsidies towards the costs of workforce training.  
 
 The Scheme at all times respected the GB ER Training Aid limits and ceilings in 
doing so.   
6. Total amount budgete d (in millions of £) 
 
2009:  £3.248M 
2010:  £3.392M 
 7. Duration of programme 
  To 31 December 2013.  G/SCM/N/220/EEC/Add.27 
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  8. Assessment of trade effects 
 
 The effect of the scheme was to generally improve competitiveness a nd productivity of the 
enterprises involved and to ensure enterprises re mained competitive during the 2009-2010 economic 
downturn and recession, and improve their trading levels.  
 
LXIII.  WELSH LOCAL GOVERNMENT - CAPITAL INVESTMENT AND EMPLOYMENT 
AID  
 
1. Period covered by the notification 
  2009 and 2010.  2. Policy objectives 
 
 The aim of the Scheme is to allow local author ities in Wales to provide support to enterprises 
in Wales.  Aid may be awarded for the following purpo ses in support of investment or job creation:   
 
 Supporting business start-ups  
 Supporting SME investment and growth  
 Supporting SME diversification 
 Supporting SME adaptation to changing circumstances  
 Supporting the conversion of business premises to meet modern requirements  
  The principles of the Scheme are in line with  the guiding principles of the Commission's State 
Aid Action Plan to provide less and better targeted aid. 
 3. Background and authority for the scheme 
  The Scheme will be open to all SMEs in Wa les excluding those active in the following 
sectors:   
 
o Coal – enterprises which carry out an activity in connection with coal production where coal 
is defined as high, medium and low grade category A and B within the meaning of the 
internal codification system for coal laid down by the UN Economic Commission for Europe;   
o Steel – enterprises which carry out activities related to the production of one or more of the 
following products:  pig iron and ferro-alloys;  crude and semi finished products of iron, 
ordinary steel or special steel;  hot finished prod ucts of iron, ordinary steel or special steel;  
cold finished products and tubes as set out in Article 2 of the General Block Exemption Regulation;   
o Synthetic fibres – enterprises which carry out any type of activity in connection with 
extrusion/texturisation of all generic types of fibre and yarn based on polyester, polyamide, 
acrylic or polypropylene irrespective of thei r end uses;  or polymerisation (including 
polycondensation) where it is integrated with extrusion in terms of the machinery used;  or 
any ancillary process linked to the contemporane ous installation of extrusion/texturisation 
capacity by the prospective beneficiary or by  another company in the group to which it 
belongs and which, in the specific business activ ity concerned is normally integrated with 
such capacity in the terms of the machinery used;    G/SCM/N/220/EEC/Add.27 
 Page 77 
 
 
  o Shipbuilding – enterprises involved in the buildi ng, repair or conversion of ships as covered 
by the Framework on State Aid to Shipbuilding Commission Regulation (EC) (2003/C 317/06);   
o Fisheries and aquaculture covered by Counc il Regulation (EC) No 104/2000 of 17 December 
1999 on the common organisation of the market s in fishery and aquaculture products as 
amended by Regulation (EC) No 1759/2006;   
 
 The primary production of agricultural produc ts (as defined in the General Block 
Exemption Regulation);  or  
 
 The processing and marketing of agricultural products when (1) the amount of aid is 
fixed on the basis of the price or quantit y of such products purchased from primary 
producers or put on the market by the enterprise concerned or (2) the aid is 
conditional on being partly or entirel y passed on to primary producers.  
 
 In addition, aid will not be allowed for the following activities:   
 
 aid to export related activities, namely aid directly linked to the quantities exported, to 
the establishment and operation of a distribution network or to other current costs linked to the export activity;  or   
 aid contingent upon the use of  domestic over imported goods.  
 
 Aid may not be given where the proposed recipient of the aid is:   
 
 subject to an outstanding order for the recove ry of aid which has been declared by the 
Commission to be illegal and incompatible with the common market;  or   
 "a firm in difficulty" within the meaning of Chapter 2 of the Community guidelines 
on State aid for rescuing and restructuring firms in difficulty (OJ C 244, 1.10.2004, p.2).  
 
 Legal:  Local Government Act 2000 C22 Part 1. 
 4. Form of the subsidy 
  Economic Development Grant.  
5. To whom and how the subsidy is provided 
 
To Businesses through grant payments. 
 6. Total amount budgete d (in millions of £) 
 
 2009 £0.728M  2010 £2.269M  7. Duration of programme 
 
 Aid under this scheme may be granted until 31 December 2013. 
 G/SCM/N/220/EEC/Add.27 
Page 78  
 
  8. Assessment of trade effects   
 
 Information on job creation, enterprises financ ially supported, enterprises created and social 
enterprises financially supported is co llected during the project life time. 
 LXIV.  WELSH LOCAL GOVERNMENT - SME DEVELOPMENT SCHEME  
 
1. Period covered by the notification 
  2009 and 2010. 
 
2. Policy objectives 
  The aim of the Scheme is to allow local aut horities in Wales to provide support to SMEs in 
Wales to actively promote additional consultancy activity and participation in trade fairs.  
 
 Local Authorities in Wales have a key role to play in supporting SMEs, thus contributing to securing a strong SME base to ensure that the economy of Wales grows and prospers in line with other Member States. In particular local author ities support business start-ups, SME investment and 
growth, SME diversification, SME adaptation to  changing circumstances and support the conversion 
of business premises to meet modern requirements.  
 
 The principles of the Scheme are in line with  the guiding principles of the Commission's State 
Aid Action Plan to provide less and better targeted aid.  3. Background and authority for the scheme 
  The Scheme will be open to all SMEs in Wa les excluding those active in the following 
sectors:    
 coal – SMEs which carry out an activity in connection with coal production where 
coal is defined as high, medium and low grade category A and B within the meaning of the internal codification system for coal laid down by the UN Economic 
Commission for Europe;   
 
 fisheries and aquaculture - covered by Council Regulation (EC) No 104/2000 of 
17 December 1999 on the common organisation of the markets in fishery and aquaculture products as amended by Regulation (EC) No 1759/2006;   
 
 the primary production of agricultural produc ts (as defined in the General Block 
Exemption Regulation);  or   
 the processing and marketing of agricultural products when (1) the amount of aid is 
fixed on the basis of the price or quantit y of such products purchased from primary 
producers or put on the market by the SME concerned or (2) the aid is conditional on being partly or entirely passed on to primary producers.  
 
 In addition, aid will not be allowed for the following activities:    
 aid to export related activities, namely ai d directly linked to the quantities exported, 
to the establishment and operation of a dist ribution network or to other current costs 
linked to the export activity;  or   G/SCM/N/220/EEC/Add.27 
 Page 79 
 
 
   aid contingent upon the use of  domestic over imported goods.  
  Aid may not be given where the proposed recipient of the aid is:    
 subject to an outstanding order for the rec overy of aid which has been declared by the 
Commission to be illegal and incompatible with the common market;  or  
 
 "a firm in difficulty" within the meaning of Chapter 2 of the Community guidelines 
on State aid for rescuing and restructuring firms in difficulty (OJ C 244, 1.10.2004, p.2).  
 Legal:  Local Government Act 2000 C22 Part 1 
 4. Form of the subsidy 
  
Grants. 
 5. To whom and how the subsidy is provided 
 
 Direct payments to consultancy companies. 
 6. Total amount budgete d (in millions of £) 
 
2009: £0 
 2010: £0.053 
 7. Duration of programme 
 Aid under this Scheme may be granted until 31 December 2013. 
 
8. Assessment of trade effects 
 
 Information on the safeguarding/creation of jobs and private sector investment in innovation and research and development is colle cted upon completion of the project. 
 LXV.  YORKSHIRE AND HUMBER - PROLONGATION OF YH R&D SCHEME FOR 
LARGE COMPANIES 
 
1. Period covered by the notification 
 
2009 to 2010. 
 
2. Policy objectives 
 
1) To raise the economic performance of large enterprises and associated SME supply 
chains within Yorkshire and Humber to cont ribute to their long term and sustainable 
advantage,  
 2) To encourage large enterprises within Yo rkshire and Humber to undertake R&D.  
 G/SCM/N/220/EEC/Add.27 
Page 80  
 
  3) To encourage increased collaboration be tween large enterprise s in Yorkshire and 
Humber with 1) the knowledge base e.g. un iversities and 2) other large enterprises 
and SME supply chain companies. 
 3. Background and authority for the scheme 
  The scheme is operated by Yorkshire Forward as  a response to low rates of R&D expenditure 
in the region.    4. Form of the subsidy 
  A grant against defrayed R&D expenditure.  5. To whom and how the subsidy is provided 
 
 Large companies in the Yorkshire and Humb er region whose applications are assessed and 
approved and who have submitted claims  against defrayed R&D expenditure. 
 6. Total amount budgete d (in millions of £) 
 
 2009 £4.84m 
 2010 £4.84m 
 7. Duration of programme 
  Five years to 31 December 2013. 
 
8. Assessment of trade effects 
  To be evaluated.  
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