WORLD TRADE  
ORGANIZATION  G/SCM/N/155/EEC/Add.27
26 November 2007 
 (07-5202) 
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 COMMUNITIES 
 
Addendum
 
   The following addendum to the notification of the European Communities relates to subsidy 
programmes of the United Kingdom .   
 
_______________ 
 G/SCM/N/155/EEC/Add.27 
Page 2  
 
  UNITED KINGDOM  
 
TABLE OF CONTENTS 
  Page  
 
I. AERONAUTICS RESEARCH PROGRAMME ........................................................... 4  
II. CAPITAL GRANTS FOR RENEWABLE TECHNOLOGIES ................................... 5  
III. CARBON TRUST APPLIED RE SEARCH OPEN CALL ........................................... 5  
IV. CCL EXEMPTION FOR ELECTRICITY EXPORTS FROM GOOD 
QUALITY CHP ................................................................................................................ 7  
V. CDC GROUP PLC............................................................................................................ 8  
VI. CIS PHOTOVOLTAIC RE-CLADDING  PROJECT, MANCHESTER .................... 9  
VII. COALFIELDS ENTERPRISE FUND .......................................................................... 10  
VIII.  COMPETITIVENESS IN THE OIL AND GAS SUPPLIES SECTOR 
(COGSS) ........................................................................................................................ ..11 
IX. EMISSIONS TRADING (N416-01,  N104A/02 AND N104B/02)................................. 13  
X. ENGLISH CITIES FUND.............................................................................................. 14  
XI. ENTERPRISE ZONES................................................................................................... 15  
XII. EUREKA INITIATIVE.................................................................................................. 16  
XIII.  EXCISE DUTY TO BIO ETHANOL USED AS ROAD FUEL ................................. 16  
XIV.  GRANT FOR R&D WITHIN AN INDIVIDUAL BUSINESS ................................... 17  
XV. GREEN FUEL CHALLENGE PILOT PROJECT – BIOGAS.................................. 18  
XVI.  GREEN FUEL CHALLENGE PILO T PROJECT – HYDROGEN.......................... 19  
XVII.  GREEN FUEL CHALLENGE PILOT PROJECT – METHANOL.......................... 20  
XVIII.  HIGHLAND OPPORTUNITY LIMITED ................................................................... 21  
XIX.  HIGHLAND PROSPECT LIMITED ........................................................................... 21  
XX. HIGHLANDS & ISLANDS ENTERPRISE – R&D INNOVATION SCHEME 
FOR SMES ...................................................................................................................... 2 2 
XXI.  HIE - SCHEME FOR INITIAL I NVESTMENT AND JOB CREATION................ 23  
XXII.  HISTORIC ENVIRONMENT RE GENERATION SCHEME................................... 24  
XXIII.  HOME SHIPBUILDING CREDIT GUARANTEE SCHEME .................................. 25  
XXIV.  INVEST NI – PROPERTY DEVELOPMENT SCHEME.......................................... 26  
XXV.  LINK COLLABORATIVE RESEARCH SCHEME .................................................. 26  
XXVI.  LOCAL AUTHORITIES – ASSISTANCE FOR SMES............................................. 28  
XXVII.  MERSEYSIDE – SPECIAL AREA & KEY SIDE INVESTMENT GRANT 
SCHEME ......................................................................................................................... 28 
XXVIII.  NI – AGGREGATES LEVY:  EXTENDED RELIEF FOR AGGREGATE 
COMMERCIALLY EXPLOITED IN  NORTHERN IRELAND............................... 29  
XXIX.  NI - BUYING TIME AS SISTANCE SCHEME........................................................... 32   G/SCM/N/155/EEC/Add.27 
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  XXX.  NI:  COMPANY DEVELOPMENT PROGRAMME ................................................. 33  
XXXI.  NI:  COMPETE PROGRAMME ROUND THREE (2003-2008)............................... 34  
XXXII.  NI – GAS PIPELINE ...................................................................................................... 36  
XXXIII.  NI – RESTRUCTURING AID....................................................................................... 37  
XXXIV.  NI - SELECTIVE FINANCIAL ASSISTANCE .......................................................... 37  
XXXV.  NI – SMART.................................................................................................................... 3 8 
XXXVI.  NI:  START PROGRAMME......................................................................................... 40  
XXXVII.  NI:  SUPPORT FOR FILM AND TELEVISION PRODUCTION............................ 41  
XXXVIII.  NI:  TECHNOLOGY FUND (NITECH) ...................................................................... 41  
XXXIX.  NI:  URBAN DEVELOPMENT GRANT (UDG) SCHEME ...................................... 42  
XL. NI VIRIDIAN GROWTH FUND .................................................................................. 43  
XLI. NON-FOSSIL FUEL OBLIGATIONS (NFFOS) ........................................................ 44  
XLII.  PARTNERSHIP SUPPORT FOR RE GENERATION N239/2002 ............................ 46  
XLIII.  PARTNERSHIP SUPPORT FOR REGENERATION – SPECULATIVE AND 
BESPOKE (N747/A/1999 N747/B/1999) ....................................................................... 47  
XLIV.  PHOTOVOLTAIC DEMONSTRATION PROGRAMME........................................ 48  
XLV.  REDUCED RATE OF EXCISE DUTY ON BIODIESEL .......................................... 49  
XLVI.  R&D FOR RENEWABLE AND SUSTAINABLE ENERGY .................................... 50  
XLVII.  R&D TAX CREDIT........................................................................................................ 51  
XLVIII.  REGIONAL SELECTIVE ASSISTANCE................................................................... 53  
XLIX.  RENEWABLES OBLIGATION ORDER 2006........................................................... 54  
L. SCOTTISH ENTERPRISE - PROPERTY SUPPORT SCHEME............................. 55  
LI. SCOTTISH ENTERPRISE – SUPPORT TOWARDS CAPITAL 
INVESTMENT BY EXISTING  AND NEW BUSINESSES ....................................... 56  
LII. SCOTTISH EXECUTIVE - GRANTS FOR OWNER OCCUPATION (GRO) 
SCOTLAND .................................................................................................................... 57  
LIII.  SCOTTISH EXECUTIVE AND SCOTTISH ENTERPRISE RESEARCH AND DEVELOPMENT SCHEME ............................................................................... 59
 
LIV. SELECTIVE FINANCIAL INVE STMENT FOR ENGLAND.................................. 60  
LV. SUPPORT FOR LAND REMEDIATION.................................................................... 60  
LVI. VACCINES RESEARCH RELIEF............................................................................... 61  
LVII.  WALES TOURIST BOARD - INVESTMENT SUPPORT SCHEME...................... 64  
LVIII.  WASTE RESEARCH AND INNOVATION PROGRAMME AND WASTE 
DEMONSTRATOR PROGRAMME............................................................................ 65  
LIX. WDA PARTNERSHIP DEVELOPMENT................................................................... 67  
LX. WDA PROPERTY FO R BUSINESS ............................................................................ 67  
LXI. WELSH RESEARCH AND DEVELOPMENT SCHEME N150/06.......................... 68  G/SCM/N/155/EEC/Add.27 
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  I. AERONAUTICS RESEARCH PROGRAMME 
 [Formerly known as Civil Aircraft Resear ch and Technology Demonstration (CARAD)] 
  The Programme superseded CARAD on 1
st April 2000 but retains the same objectives, 
criteria for support and level of funding as applied to CARAD.   
 
1. Period covered by the notification  
  2005 and 2006.    
2. Policy objectives
 
  To maintain the competitiveness of the UK aeronautics industry by ensuring that essential 
aircraft technologies are available in the long term.  The Aeronautics Research Programme helps 
UK industry overcome the problem of financing long-term research.   
 
3. Background and authority for the scheme
 
  Civil Aviation Act 1982.    4. Form of the subsidy 
 
 
 Grant.    5. to whom and how the subsidy is provided
 
 
 Support for up to 50 per cent of eligible costs for collaborative projects is available in core 
civil aircraft technology sectors.  Beneficiari es include companies, research establishments and 
universities.    6. Total amount budgeted
 
 
 2005 £23m.   
 2006 £17m.    7. Duration of programme
 
 
 The Scheme's duration is not limited.  The current phase covers the five years from 
1 April 2001 to 31 March 2006.  The EC approve d financing for the period from 1 April 1999 to 
31 March 2001, with re-notification be coming necessary after five years.   
 
 Note:  No new project commitments have been  entered into since 31.03.2004, when the 
Scheme closed to new work.  Spe nd will continue to the completion of existing commitments in period 
ending UK financial year 1 April 2008 – 31 March 2009.   
 
8. Assessment of trade effects  
  The objective is to support long-term pre- competitive research in essential aircraft 
technologies, not to assist production.   
   G/SCM/N/155/EEC/Add.27 
 Page 5 
 
 
  II. CAPITAL GRANTS FOR RENEWABLE TECHNOLOGIES  
1. Period covered by the notification  
 
 2005 and 2006.   
 
2. Policy objectives  
  To help the development of the UK's Renewable Industry.    3. Background and authority for the subsidy
 
 
 The purpose of the schemes is to establish a collaborative research and development programme, with the aim of developing innovative a nd cost effective technologies for renewable and 
sustainable energy sources for use in the UK, Europe and globally.    
4.  Form of the subsidy 
 
  Grants.    5. To whom and how the subsidy is provided
 
 
 Companies within the Renewable Energy sector.   
 6. Total amount budgeted
 
  £ 400million over peri od 2002 – 2008.   
 
 It is not possible to provide a year-by-year breakdown of the budget.    7. Duration of the programme
 
  Current contracts run to 31 March 2005.   
 
8. Assessment of trade effects
 
  Development and improvement of the Renewable Energy sector.    
 
III. CARBON TRUST APPLIED RESEARCH OPEN CALL 
 [Formerly named Low Carbon Innovation Program me (LCIP), which in turn superseded the 
Energy Efficiency Best Practice Programme]  1. Period covered by the notification
 
 
 2005 and 2006.    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 Car bon Trust aims to bridge the funding gap in the 
market caused by the presently existing lack of in ternalisation of carbon costs.  Carbon Trust funding G/SCM/N/155/EEC/Add.27 
Page 6  
 
  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 flowing from the deve lopment 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 i ndustries 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 Environment, Food, and Rural Affairs ("DE FRA") and where appropriate 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 DEFRA and the Devolved Admini strations 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 App lied Research Open Call, are the Science and 
Technology Act 1965 and the Environmental Protecti on 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 Industrial 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 budgeted
 
  2005 £2.0 million.   
 2006 £2.2 million.   
 7. Duration of the programme
 
  The Carbon Trust Applied Research Open Call is anticipated to have a duration of at least 
five years.  At present funding is secured for the first three years.   
 8. Assessment of trade effects
 
  No material trade effects given the small size of individual R&D grants and the types of 
organisations that receive the aid.  These are ve ry small companies in the technology development 
stage and do not have material export capacity.    G/SCM/N/155/EEC/Add.27 
 Page 7 
 
 
  IV. CCL EXEMPTION FOR ELECTRICITY EXPORTS FROM GOOD 
QUALITY CHP 
1. Period covered by the notification  
  2005 – 2006.   
 
2. Policy objectives
 
  CHP is a low-carbon technology, which can be between 25 and 30 per cent more efficient in 
primary energy usage than more traditional forms of secondary energy generation.  The aim of the 
scheme is to encourage more usage of this type  of power generation, which is currently at a 
competitive disadvantage due to the 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 transpo se 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 methodol ogy for assessing the energy efficiency of CHP 
schemes based on harmonised efficiency reference values for the separate production of heat and 
power.    
3. Background and authority for the subsidy
 
  In 2001, the Commission approved the exemption of non-Commercial Combined Heat and Power (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 wanted to  extend this exemption to CHP plants that "export" the 
electricity, i.e. that distribute electricity via lo cal networks for supply to the public.  The Commission 
approved this further exemption in 2003.     The exemptions for CHP apply only to "Good Quality CHP", as defined by the UK's CHP 
Quality Assurance programme (CHPQA).  CHPQA provides 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 schem es whose output is certified as Good Quality i.e. 
output that meets certain electrical and power effici encies.  After Good Quality CHP electricity output 
has been identified through CHPQA, any additiona l power output is treated as conventional power 
generation, and so does not qualify for CCL exemp tion.  The CHPQA Standard is currently being 
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 are sold direct from the generators to e nd users.  Section 123 of the Finance Act provides 
the mechanism to exempt from th e Levy supplies of electricity generated from Good Quality CHP 
sold by licensed electricity utilities to end users.    4. Form of the subsidy
 
 
 Tax relief:  exemption from the Climate Change Levy.   G/SCM/N/155/EEC/Add.27 
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  5. To whom and how the subsidy is provided
 
  This scheme exempts Good Quality CHP supplie d by licensed suppliers from Climate Change 
Levy charged to consumers for electricity exports.  This benefits CHP operators wishing to sell Good 
Quality CHP electricity to licensed suppliers by help ing to make up the shortfall between the market 
price obtainable for CHP electricity and its cost of production.   
  The Office for Gas and Electricity Markets, as the UK energy regulator, have the lead role in 
ensuring that any units of electricity sold as having  been generated by Good Quality CHP do in fact 
originate from this source.  They use a mechan ism similar to the system of Levy Exemption 
Certificates already used for tracking renewable 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 Customs and Ex cise are able to audit sales of levy-free electricity 
through their normal assurance procedures.   
6. Total subsidy per year
 
  2005 £36.6 million.     2006 (data unavailable until schemes subm it operational data by end June 2007).   
 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, ther eby running from April 2003 – end 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.  
Whilst we have no data that can provide statistical evidence of the impact of this measure, it is clear 
that its value (currently c.£4.30 per MWh) has helped.   
 
 
V. CDC GROUP PLC 
1. Period covered by the notification  
 
 2005 and 2006.   
 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". 
 
 The tax exemption enables CDC to  re-invest all the returns on its capital for the benefit of the 
poorer developing countries.    G/SCM/N/155/EEC/Add.27 
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  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 Deve lopment 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 N 56/ZOOl) - 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 budgeted
 
  2005 £ 55.5m.    2006  £ 127m.   
 
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.   
 
 
VI. CIS PHOTOVOLTAIC RE-CLADDING PROJECT, MANCHESTER 
1. Period covered by the notification
 
 
 2005 and 2006.   
 2. Policy objectives
  
  The project will act as a beacon for renewable energy in Manchester, the North West and 
the UK.  It will be the largest visible solar array in  the UK and an icon for sustainable development.   
 G/SCM/N/155/EEC/Add.27 
Page 10  
 
   The photovoltaic cell panels will meet about  10 per cent of the building's electricity 
requirements.    3. Background and authority for the subsidy
 
 
 The project will involve cladding the service tower of the 25-storey CIS Building with 
photovoltaic cell panels.  The existi ng cladding is now in an advanced state of decay.  In addition to 
detracting from building appearance, building fabric degradation and the health and safety issue of 
falling materials are causing increasing concern.  En glish Heritage and Arup facades have confirmed 
that repair or replacement with a similar façade is not practicable or sustainable.  CIS aimed through 
consultation to identify and develop the most sustainable solution.   
  The identified solution following a sustainability  assessment is to re-clad the CIS Service 
tower with electricity genera ting photovoltaic panels.   
 
 The legal basis for the aid is 5 Regional Development Agency Act 1998.   
 4. Form of the subsidy
 
  Grant.    
5. To whom and how the subsidy is provided
 
  CIS (Co-operative Insurance Services PLC) ar e seeking a grant contribution towards the 
additional costs of re-cladding the service tower wi th photovoltaic cell pane ls.  The grant will not 
exceed 45 per cent of the extra inv estment costs necessary to meet the environmental objectives of the 
project:  that is, the additional costs of cladding the tower in the silicon th ick film photovoltaic cell 
panels and the additional professional design fees.     Grant aid will normally be payable in stages,  usually in arrears, on production of evidence 
that the required amount of money has been properly spent on the project.    
6. Total amount budgeted
 
  2005 £721,627.00.    2006 £Nil.    
7. Duration of the programme
 
  2 years from March 2004.    8. Assessment of trade effects
 
 
 Aid intensity levels will be within the levels  permitted for environmental protection in an 
Article 87(3)(c') area under the Community Guidel ines on State Aid for Environmental Protection 
(Section E.1.3, paras 30-32).  OJ C 37/03/2001.     VII. COALFIELDS ENTERPRISE FUND 
1. Period covered by the notification
 
  2005 and 2006.     G/SCM/N/155/EEC/Add.27 
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  2. Policy objectives  
  Coalfields Enterprise Fund is a venture fund to provide finance to start up and developing 
companies in a define list of areas which are former coal mining areas.    
3. Background and authority for the scheme
 
  Powers under the Industrial Development Act 1982.    4. Form of the subsidy 
 
 
 Equity, quasi-equity and loans.    5. To whom and how the subsidy is provided
 
 
 Subsidy to the Fund in the form of a loan.   
 6. Total amount budgeted
 
  2005 £1,030,008.    2006 £0.   
 
7. Duration of programme
 
  Fund has a limited life of 10 years running from 2003 to 2014.    
8. Assessment of trade effects
 
  Limited - Increase in the number of small and medium size companies.     
VIII.  COMPETITIVENESS IN THE OIL AND GAS SUPPLIES SECTOR (COGSS) 
1. Period covered by the notification
 
  2005 and 2006.    2. Policy objectives
 
 
 Project proposals must be  relevant to oil and gas exploration or production.  This means that 
their ultimate objective must be goods or services that will be marketed directly or indirectly to oil 
and gas companies, in the UK or in export market s.  OGID (now EDU) concentrates its resources on 
projects in the following areas:    
• Subsea Production Systems 
• Advanced Technology for Underwater Engineering 
• Exploration Technologies 
• Drilling and Production Technologies 
• Reservoir Technologies 
• Onshore Oil, Gas & Petrochemicals 
• Chemical/Process Equipment 
 G/SCM/N/155/EEC/Add.27 
Page 12  
 
   Projects must involve significant technological risk and innovation.  Routine product 
development is not suppor ted under the programme.   
  Projects must need Government support in order to go ahead, or for the project to proceed rapidly enough to stand a reasonable chance of comme rcial success.  If the project is receiving support 
under any other Government scheme, it is not eligible for support from EDU (previously OGID).   
 Projects must be commercially well conceived.  Applicants must demonstrate a good understanding of the market sector at which their proj ect is aimed, to show that they have thought 
through the obstacles, and that they have a credib le route to commercialisation.  EDU (OGID) will 
need to consider whether the applicant has, or is likely to be able to raise, any additional funding 
necessary to commercialise the project.   
  Applicants must be companies, organisations such as universities or research institutions (or, 
exceptionally, individuals) operating in the UK and have the technical resources to undertake the 
project successfully, and the financial resources to provi de their share of the funding, plus an adequate 
margin for contingency.   
  In all but exceptional cases, the project must be  collaborative i.e. there must be financial and 
technical input from companies other than the appli cant e.g. from oil companies, companies in the oil 
and gas supplies sector or other parties with a dir ect interest in the development or commercialisation 
of the product or service.  EDU's (OGID) contribution to the costs of the project  cannot exceed that of 
the applicants' and, on average, EDU has funded about 25 per cent of the costs of projects it has 
supported recently.  EDU can sometimes help applican ts to identify companies who may be interested 
in supporting their project.    3. Background and authority for the scheme
 
 
 Energy Development Unit (EDU directorate) previously known as Oil and Gas Industry Development (OGID Directorate) and prior to th at, Infrastructure and Energy Projects (IEP) in 
July 1998 introduced a programme (COGGS) of su pport to the improvement of the competitiveness 
of the UK suppliers to the oil and gas industry.  The programme includes support to the development 
of new technology by SMEs and a contribution to a LINK programme in collaboration with EPSRC.   
 
 IEP/OGID (now EDU) considered that the careful  use of this relatively low amount will lead 
to significant improvement in the competitiveness of  an industry which has grown from a very low 
level of activity in the 1970s to be the major player on the UKCS (£9Bpa) and has a leading position 
in the world-wide market (£200Bpa).  The funds ar e used to promote co-operation and collaboration 
across the full spectrum of scientific researchers, engi neering companies and end-users oil companies.   
  OGID/IEP, (now EDU and formerly OSO), previously operated a programme of support 
to UK companies predominantly SMEs, involving dir ect support to companies and participation in a 
LINK programme (Hydrocarbon Reservoir).  The ROAME statement for that programme of work covered the period 1995 - 1998.  The revised programme  covers within the oil and gas sector only:   
 
• Development of new technology in SMEs 
• A LINK programme with EPSRC (research council) 
• Projects covering improvements in business practice and management in the sector 
• Studies of the sector's performance 
• Subscriptions to industry bodies pursuing some of EDU's (OGID) objectives 
  Legislation under Section 8 of the Industri al Development Act 1982 and Section 5 of the 
Science and Technology Act 1965.   
  G/SCM/N/155/EEC/Add.27 
 Page 13 
 
 
  4. Form of the subsidy  
  The COGSS grant is a notified state aid.    5. To whom and how the subsidy is provided
 
 
 The funds are used to promote co-operati on and collaboration across the full spectrum of 
scientific researchers, engineering comp anies and end-users oil companies.   
 6. Total amount budgeted
 
 
 2005 £1,123.000.    2006 £343,000.    7. Duration of programme
 
 
 1998 – present.    8. Assessment of trade effects
 
  The COGSS programme covers a broader range of subjects which contribute to the overall 
improvement of the performance of the sector.  The development of new technology continues to be 
the main thrust but at a lower level than in previo us years.  It should be noted that a high level of 
leverage of funds used for this purpose has been achieved in the past.  EDU (OGID) continues to 
encourage applicants to seek out assistance from the end-user oil companies for as many projects as 
possible.   
 
 
IX. EMISSIONS TRADING (N416-01,  N104A/02 AND N104B/02) 
1. Period covered by the notification
 
  2005 and 2006.   
 
2. Policy objectives
  
  The objectives of the scheme are threefold – to achieve a significant amount of absolute 
emission reductions at a reasonable cost, to enable business to gain practical experience of emissions 
trading ahead of a European and international syst em, and to help the City of London establish itself 
as a global centre for emissions trading.    3. Background and authority for the scheme
 
  The UK ETS has been established through a series of voluntary agreements between 
participants and the UK Government, which incorporate the rules of the scheme.  In respect of "direct 
participants", the agreements are contracts under which the UK Government will make incentive 
payments to participants complying with the sch eme rules, including annual commitments to limit 
emissions.  The Government's authority to make in centive payments derives from section 153 of the 
Environmental Protection Act 1990.   
 
4. Form of the subsidy 
 
  Incentive payments for delivering emission reductions.    G/SCM/N/155/EEC/Add.27 
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  5. To whom and how the subsidy is provided
 
  The incentive payments are paid to 33 Direct Participants (see 4 a bove) provided they have 
complied with the scheme rules.  Principally this in cludes ensuring that the participant has sufficient 
allowances in their "compliance account" (an acc ount on the internet-based Emissions Trading 
Registry) to cover their verified annual emissions  by the reconciliation deadline (31 March of each 
year).     The incentive money is paid within 28 workin g days of receipt of an annual emissions 
statement that has been verified  by an accredited verifier.  The money is then paid into the 
participant's nominated bank account either by an automated or manual process.   
 6.  Total amount budgeted
  
  2005 £39.0m.   
 2006 £37.6m.   
 7.  Duration of programme
 
  April 2002 to March 2007.    
8.  Assessment of trade effects
 
  Minimal.  The UK emissions trading schem e is a voluntary scheme whereby individual 
participants receive the incentive payments for emission reductions in line with targets and beyond 
baselines.  The payment is to induce the participan ts to undertake abatement and to mitigate the risk 
of volunteering to enter a new market and take on a binding absolute cap on emissions.   
  In the first four years, over 7 million t onnes of carbon dioxide equivalent emissions 
reductions beyond baseline, have been achieved in total.   
  X. ENGLISH CITIES FUND 
1. Period covered by the notification
 
  2005 and 2006.    
2. Policy objectives
  
  The scheme was set up to assist private investment in neglected areas of the country to bring brownfield sites and empty property back into use.    3. Background and authority for the scheme
 
 
 English Cities Fund is one of a number of measures designed to meet the Government's 
Urban White Paper commitments to bring brownfie ld sites and empty property into use and was 
approved as legitimate State aid by the European Union.    
 The powers for this scheme are found in the Leasehold Reform, Housing and Urban 
Development Act 1993.    G/SCM/N/155/EEC/Add.27 
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  4. Form of the subsidy  
  The English Cities Fund is a limited partnershi p property development and investment vehicle 
set up as a joint venture between the public and private sectors.    
5. To whom and how the subsidy is provided
 
  This is not a grant-making fund but will opera te through long term investment solutions – 
investing in mixed use projects on the fringes of towns and city centres.    
6. Total amount budgeted
 
  2005 £5,397,591.    2006 £3,276,116.    
7. Duration of programme
 
  This approval remains in force until 2006.    8. Assessment of trade effects
 
 
 None.   
 
XI. ENTERPRISE ZONES 
1. Period covered by the notification  
 
 2005 and 2006.   
 2. Policy objectives 
 
  To encourage industrial and commercial activ ity by the removal of certain fiscal and 
administrative burdens in certain defined areas.   
 
3. Background and authority for the scheme
 
  The powers for this scheme are found under 179 and schedule 32 of the Local Government, 
Planning and Land Act 1980.   
 
4. Form of the subsidy 
 
  Enterprise Zones are intended to encourage vi gorous private-sector activity by removing 
certain tax burdens and by relaxing or speeding up th e application of some statutory or administrative 
controls.   
 
5. To whom and how the subsidy is provided
 
  Private sector activity within the Zone receiv es benefits through the removal of certain tax 
benefits.   
 
6. Total amount budgeted
 
  2005 £0.    2006 £0.   G/SCM/N/155/EEC/Add.27 
Page 16  
 
  7. Duration of programme
 
  Enterprise Zones are designated by the Government for a period of 10 years.   
 This approval remains in force until 2006.    
8. Assessment of trade effects
 
  None.     XII. EUREKA INITIATIVE 
1. Period covered by the notification
 
  2005 and 2006.    
2. Policy objectives
 
  To encourage and assist collaborative research  and development projects between European 
companies, research organisations and higher education institutes (HEIs).   
 3. Background and authority for the scheme
 
 
 Science and Technology Act 1965.    4. Form of the subsidy 
 
 
 Grant of up to 50 per cent of eligible project costs.   
 5. To whom and how the subsidy is provided
 
  Mainly given to SMEs, research organisations a nd HEIs - Grant paid quarterly in arrears.   
 
6. Total amount budgeted
 
  2005 £0.999.    2006 £0.477.    
7. Duration of programme
 
  Launched in 1985 – No end date set.    8.  Assessment of trade effects
 
 
 Not available.   
  
XIII.  EXCISE DUTY TO BIO ETHANOL USED AS ROAD FUEL 
1. Period covered by the notification
 
 
 2005 and 2006.    G/SCM/N/155/EEC/Add.27 
 Page 17 
 
 
  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 budgeted
 
 
 2005 £17 million.   
 2006 £19 million.    7. Duration of the programme
 
  No end date set.   
 
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 2005, 85 million litres were released  for use and in 2006, this figure increased to 
95 million litres.   
  
XIV.  GRANT FOR R&D WITHIN AN INDIVIDUAL BUSINESS 
1. Period covered by the notification
 
 
 2005 and 2006.   
 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.   G/SCM/N/155/EEC/Add.27 
Page 18  
 
  4. Form of the subsidy 
 
  Assistance is provided in the form of discretiona ry 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-sized  enterprises" (OJ L 107, 30.4 1996, p.4).   
  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 budgeted
 
  2005 £27M.   
 2006 £27M.   
 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
 
  Grant for R&D is a new scheme replacing the former Smart scheme.  The latest evaluation of 
Smart showed that in 2000 turnover was £500m hi gher and exports £270m higher as result of Smart.   
  The new Grant for R&D scheme will be evaluate d by DTI every five years to verify the 
impact of the scheme.     XV. GREEN FUEL CHALLENGE PI LOT PROJECT – BIOGAS 
1. Period covered by the notification
 
  2005 and 2006.    
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 5 years.   
 4. Form of the subsidy
  
 
 The form of aid is a tax concession.  No duty is charged on the biogas used in the project.    G/SCM/N/155/EEC/Add.27 
 Page 19 
 
 
  5. To whom and how the subsidy is provided  
  The producer of biogas running the pilot project.    6. Total amount budgeted
 
 
 2005 £ N/A.    2006 £ N/A.    7. Duration of the programme
 
 
 The project is expected to end in 2011.   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 now under way.  As the work is still in the developmental phase, there are no trade effects to 
report.    
 
XVI.  GREEN FUEL CHALLENGE PILO T PROJECT – HYDROGEN  
1. Period covered by the notification
 
  2005 and 2006.   
 
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.  As the project developed it became apparent 
that as no tax would be liable there would be no s ubsidy provided via the duty incentive originally 
offered.   
 
4. Form of the subsidy
  
  Tax concession.    5. To whom and how the subsidy is provided
 
 
 Producers.    6. Total amount budgeted
 
 
 2005 £ N/A.   
 2006 £ N/A.   G/SCM/N/155/EEC/Add.27 
Page 20  
 
  7. Duration of the programme
 
  5 years from 2003.    8.  Assessment of trade effects
 
 
 Nil.     
XVII.  GREEN FUEL CHALLENGE PILOT PROJECT – METHANOL 
1. Period covered by the notification
 
  2005 and 2006.    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 applicants .  A Statutory Instrument allowing methanol used 
in the project to be used duty  free was introduced in 2003 and lasts for a period of 5 years.   
 4. Form of the subsidy
  
 
 The form of aid is a tax concession.  No duty is  charged on the methanol used in the project.   
 5. To whom and how the subsidy is provided
 
  The producer of methanol running the pilot project.    
6. Total amount budgeted
 
  2005 £ N/A.    2006 £ N/A.    
7. Duration of the programme
 
  The project is expected to end in 2008.   8. Assessment of trade effects
 
 
 The project, which aims to test the environmental impact of near 100 per cent methanol 
blends in diesel type engines and test the emis sions characteristics and performance of the vehicles, 
was initially hampered owing to lack of funds.  Ho wever, this has been overcome and the project is 
now progressing well.  As the work is still in the developmental phase, there are no trade effects to 
report.    G/SCM/N/155/EEC/Add.27 
 Page 21 
 
 
  XVIII.  HIGHLAND OPPORTUNITY LIMITED 
1. Period covered by the notification  
  2005 and 2006.    
2. Policy objectives
 
  A regional scheme for investing in new or growing SMEs in the Highland Council area of 
Scotland, for development, divers ification and job creation.   
 
3. Background and authority for the scheme
 
  Section 48(4) of the Finance Act 1982.    4. Form of the subsidy 
 
 
 Loans in the range £1,000 – £50,000.    5. To whom and how the subsidy is provided
 
  Loans are provided to SMEs, unsecured below £20,000 and secured above that threshold, up 
to a maximum of 7 years duration at a maximum interest rate of 5 per cent. 
 6. Total amount budgeted
 
  2005 £480,000.   
 2006 £227,000.   
 7. Duration of programme
 
  Open-ended.    
8. Assessment of trade effects
 
  In year 2006/07, the most recent for which figures are available, the number of SMEs assisted during the year was 28 with an average loan of £8,10 7.  70 full-time equivalent jobs were created or 
retained.   
 
 
XIX.  HIGHLAND PROSPECT LIMITED 
1. Period covered by the notification
 
  2005 and 2006.   
 
2. Policy objectives
 
  To secure major investment projects in the Highlands of Scotland.    
3. Background and authority for the scheme
 
  Section 83 of the Local Government (Scotland) Act.    G/SCM/N/155/EEC/Add.27 
Page 22  
 
  4. Form of the subsidy
 
  Loans.    5. To whom and how the subsidy is provided
 
 
 Any business enterprise in the Highland Area ca n apply for consideration for a low interest 
secured loan.    6. Total amount budgeted
 
 
 2005  £71,000.    2006 £60,000.    7. Duration of programme
 
 
 Indefinite.    8. Assessment of trade effects
 
  Minimal.   
 
 
XX. HIGHLANDS & ISLANDS ENTERPRISE – R&D INNOVATION SCHEME FOR 
SMES  
1. Period covered by the notification
 
 
 2005 and 2006.    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/155/EEC/Add.27 
 Page 23 
 
 
  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
 
  2005 £545,147.    2006 £524,430.    
7. Duration of programme
 
  06 September 2001 to 31 December 2011.    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 comp anies assisted trade on the UK market only.   
 
 
XXI.  HIE - SCHEME FOR INITIAL INVESTMENT AND JOB CREATION 
1. Period covered by the notification  
  2005 and 2006.   
 
2. Policy objectives
 
  Business creation and expansion via capital i nvestment:  the objec tives are to increase and 
diversify employment, improve average incomes an d regional GDP in a region featuring geographic 
disadvantages and parity of population.   
 
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).   G/SCM/N/155/EEC/Add.27 
Page 24  
 
  4. Form of the subsidy
 
  Grants, Loans and Interest Relief Grant.    5. To whom and how the subsidy is provided
 
 
 All firms in assisted areas and SMEs only in non-assisted areas and all subject to EU sectoral restrictions.    6. Total amount paid out in grants & loans
 
 
 2005 £15,449,879.    2006 £11,050,974.    7. Duration of programme
 
 
 14 June 2001 to 31 December 2006.    8. Assessment of trade effects
 
  The assistance is provided to locally resident firms in a variety of sectors eligible under EU 
rules for Regional Aid.  The markets served may be local or non-local, but must result in viable and 
self-sustainable trading following the investment.  Th e vast majority of firms assisted are small firms 
serving UK markets.  No estimates of production/sales are available as the assistance is directed at job 
and wealth creation, not production.    
 
XXII.  HISTORIC ENVIRONMENT REGENERATION SCHEME 
1. Period covered by the notification
 
  2005 and 2006.    
2. Policy objectives
 
  The Scheme is intended to secure the repair , restoration and rehabilitation of designated 
historic buildings, conservation areas, ancient monum ents and historic parks and gardens where this 
would otherwise not happen through market forces alone.   
 
3. Background and authority for the subsidy
  
  Regional Development Agencies Act 1998;  Greater London Authority Act 1999, Chapter 29;  Leasehold Reform, Housing and Urban Development Act 1993;  and Local Government Act 2000.   
 
4. Form of the subsidy
 
  Direct grant aid.    5. To whom and how the subsidy is provided
 
 
 Support is paid to the owner or purchaser of the site.  There are a number of eligible costs for project costing.  Payments are made pro rata to the qualifying expenditure.    G/SCM/N/155/EEC/Add.27 
 Page 25 
 
 
  6. Total amount budgeted  
  2005 £2,694,756.    2006 £17,150,918.    
7. Duration of the programme
 
  The approval remains in force until 31 December 2013.    8. Assessment of trade effects
 
 
 None.     
XXIII.  HOME SHIPBUILDING CREDIT GUARANTEE SCHEME 
1. Period covered by notification
 
  2005 and 2006.    2. Policy objectives
 
 
 The objective of the Scheme is to finance the construction, completion or alteration of ships 
and mobile offshore installations at a yard firs t approved by the Secretary of State, through the 
guarantee of the repayment of loans (and the repa yment of related interest) made to UK bodies.   
 3. Background and authority for the Scheme
 
 
 Section 10 of the Industry Act 1972 (as am ended by section 23 and 24 of the Industry 
Act 1975 and Section 2 of the Shipbuilding Act 1979).    4. Form of the subsidy
  
 
 Loan Guarantees.   
 5. To whom and how the subsidy is provided
 
  Ship owners, by way of fixed or floating interest  rates, with repayment periods up to12 years, 
and interest equalisation arrangements with the Banks.   
 6. Total amount budgeted
 
  2005 £16,800k.    2006 £1,680k.   
 
7. Duration of programme
 
  The Scheme closed for new applications in November 2004 and contracts relating to Scheme 
support must be signed by April 2005.   G/SCM/N/155/EEC/Add.27 
Page 26  
 
  8.  Assessment of trade effects
 
  The aim of the scheme is to ensure that UK buyers of ships have financing arrangements 
available to them which are as good as those in ot her countries which are signatory to the OECD 
Understanding on Shipbuilding Subsidies and hence th at UK yards are not relatively disadvantaged.   
 
 
XXIV.  INVEST NI – PROPERTY DEVELOPMENT SCHEME 
1. Period covered by the notification
 
 
 2005 and 2006.   
 2. Policy objectives
 
  Encourage the private sector to construct bu ildings for occupation by Invest NI assisted 
projects.   
 3. Background and authority for the scheme
 
  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 property developers  usually as a lump sum on satisfactory completion 
of the building.    6. Total amount budgeted
 
 
 2005 £3,374,823.00.   
 2006 £720,976.00.    7. Duration of programme
 
 
 Indefinite.   
 8. Assessment of trade effects
 
  Minimal.    
 
XXV.  LINK COLLABORATIVE RESEARCH SCHEME 
1. Period covered by the notification
 
  2005 and 2006.    G/SCM/N/155/EEC/Add.27 
 Page 27 
 
 
  2. Policy objectives  
  The LINK Collaborative Research Scheme aims at strengthening collaboration between 
businesses and universities/other research base organisa tions in key areas of science, technology and 
engineering.   
 
 It is a UK Government-wide initiative involving most Government Departments with significant interest in R&D as well as the Research Councils.  It is managed by the Innovation Group, 
Key Business Technologies, Department of Trade and Industry.    
3. Background and authority for the scheme
 
  The legal basis for the scheme is the Science and Technology Act 1965.    4. Form of the subsidy 
 
 
 Government support is impl emented through grants.   
 5. To whom and how the subsidy is provided
 
  Beneficiaries of the grants are UK businesses, universities and research centres.  Each 
supported project must include at least one business and one university or research centre.   
  The LINK Collaborative Research Scheme supports  industrial (strategic) research projects.  
Intensity of the aid is up to 50 per cent of th e project's eligible costs.  Where public research 
organisations participate in the programme, their contribution is included in the calculation of the aid 
intensity.   
  With effect from May 2002, the scheme was wide ned to operate at the following levels:   
 
• Technical feasibility studies preparatory to in dustrial research with an aid intensity of 
up to 75 per cent;   
• Industrial research carried out in colla boration between businesses, with an aid 
intensity of up to 50 per cent;   
• Pre-competitive development activities carried out in collaboration between 
businesses and research institutes, with a ma ximum aid intensity of 25 per cent.   
 6. Total amount budgeted
 
  2005 £21m.   
 2006 £ nil.   
 7. Duration of programme
 
  The scheme is not limited.  Current notification to December 2006.   
 
8. Assessment of trade effects
 
  The LINK Collaborative Research Scheme may ultimately help participating businesses' 
competitive positions, but much of the project output is widely disseminated.  By notifying the Scheme to the EC, the UK has complied with their ob ligation under Article 88(3) of the EC Treaty.  
The Commission has concluded that the aid fulfils the criteria to be considered compatible with 
the EC Treaty.   G/SCM/N/155/EEC/Add.27 
Page 28  
 
  XXVI.  LOCAL AUTHORITIES – ASSISTANCE FOR SMES  
1. Period covered by the notification
 
  2005 and 2006.    
2. Policy objectives
 
  To allow local authorities in England, Sc otland and Wales to support Small and Medium 
Enterprises.    
3. Background and authority for the scheme
 
  S2 of the Local Government Act 2000 (formerly  S33 of the Local Government and Housing 
Act 1989).    
4. Form of the subsidy 
 
  Grants, loans, guarantees, advice.    5. To whom and how the subsidy is provided
 
 
 This scheme allows local authorities, as part of their responsibility for promoting economic, 
social and environmental well being in their areas, to support SMEs operating in their area from their 
authority's budget (rather than through central governme nt schemes) through a variety of subsidies.   
 6. Total amount budgeted
 
 
 2005 £3,982,486.    2006 £5,240,247.    7. Duration of programme
 
 
 This approval remains in force until 2006.   
 8. Assessment of trade effects
 
  Nil.   
 
 
XXVII.  MERSEYSIDE – SPECIAL AREA & KEY SIDE INVESTMENT GRANT 
SCHEME 
1. Period covered by the notification
 
 
 2005 and 2006.   
 2. Policy objectives
 
  To promote the development, modernisation an d efficiency of an industry and to create, 
expand or sustain productive capacity.  Assisted projects must create or safeguard jobs and be 
commercially viable and sustainable.    G/SCM/N/155/EEC/Add.27 
 Page 29 
 
 
  3. Background and authority for the scheme  
  The scheme was introduced to en able Local Authorities in Merseyside to assist non-SME's in 
situations where a project capable of bringing si gnificant economic benefits to Merseyside requires 
local financial support in order to proceed.   
 
4. Form of the subsidy 
 
  Discretionary grants to secure investment by  non-SME's in situations where local grant 
support is essential to enable the project to proceed.  Each project must clearly demonstrate 
additionally and there must be a clear jus tification as to why grant is required.   
 5. To whom and how the subsidy is provided
 
  Non-SMEs can be assisted in any sector not specifi cally restricted by EC sectoral restrictions.  
The subsidy is by way of grant to support investme nt and the project must take place within the 
assisted area of Merseyside.    6. Total amount budgeted
 
  2005 £570,000.   
 2006 £335,000.   
 7. Duration of programme
 
  The programme will run until 31 December 2006 unl ess a replacement programme is notified.   
 
8. Assessment of trade effects
 
  Project should not directly displace investment or jobs elsewhere.  Projects must provide a net 
benefit in terms of trade to the Merseyside sub-region.    
 
XXVIII.  NI – AGGREGATES LEVY:  EXTENDED RELIEF FOR AGGREGATE 
COMMERCIALLY EXPLOITED IN NORTHERN IRELAND 
1. Period covered by the notification
 
 
 2005 and 2006.   
 2. Policy objectives
 
  The main objectives of the scheme are to support sustainable development and increase the environmental benefits of the levy in Northern Ire land.  Specifically, by linking the receipt of tax 
relief with the need for operators to undertake im provements to the way their operations are run, the 
scheme supports UK Government efforts at sustainabl e development, and encourages the efficient use 
of natural resources;  the scheme has been designed so that it does not have disproportionate effects 
on competition and economic growth.    
3. Background and authority for the subsidy
 
  Following the introduction of the aggregates levy and the original Northern Ireland relief scheme in April 2002, the UK Government was concer ned to ensure that the levy was achieving its 
desired environmental objectives, both in Northern Ireland and the rest of the UK, without unforeseen G/SCM/N/155/EEC/Add.27 
Page 30  
 
  and undesirable economic impacts.  Initial indications after the first year of the levy suggested that, 
while Great Britain had benefited from reduced use of  virgin aggregates and a growth in the recycled 
aggregates sector, Northern Ireland had not been benefiting from the levy in the same way.   
  Representations from the quarrying industry in  Northern Ireland, and other anecdotal 
evidence from the region, suggested that particular lo cal factors were preventing the levy from having 
the environmental impact there it was designed to ac hieve.  These factors included the unavailability 
of recycled aggregate and alternative materials in Northern Ireland (with a consequent inability for the 
industry to adjust in the timescale allowed under the original relief scheme);  adverse competition 
from an increase in illegal quarrying operations in  Northern Ireland and undeclared (and therefore 
untaxed) imports of virgin aggregate from the Re public of Ireland across the land border.  These 
factors were preventing the levy from having the e nvironmental impact it was designed to achieve.  
Moreover, it was suggested that the problem was likely to get significantly worse and increasingly 
affect processed product businesses as their relief was reduced, further undermining the 
environmental impact of the levy in Northern Ireland.   
 
 The UK Government therefore commissioned research, which considered the validity of the industry information and helped inform possible re medial options.  The Symonds' Group (specialist 
consultants in the quarrying and construction sect ors) undertook this work and their report was 
published on 10 December 2003.    
 The Symonds' report demonstrated that the levy was not working as a normal economic 
instrument in Northern Ireland, by having an impact on demand through the price mechanism.  
Instead, prices of aggregates had risen very little , but demand for legitimate aggregates had fallen 
because of the competition that the levy encourag ed from untaxed imports of aggregates from the 
Republic of Ireland, and from illegal quarries.  In Northern Ireland, therefore, the levy was not 
achieving its main environmental objective of reduc ing the environmental impact of aggregates 
quarrying – indeed, the opposite was the case since ille gal quarries can be expected to operate without 
any regard for normal environment practices.   Competition from these sources was having a 
detrimental economic effect on legitimate supplie rs of unprocessed virgin aggregate, and greatly 
reduced existing incentives to utilise recy cled and alternative materials.   
 
 Symonds' research also suggested that it w as unrealistic to expect the aggregates and 
construction sectors to increase their use of levy-free recycled and alternative materials in a period 
of 5 years, because availability of such materials in  Northern Ireland is quite modest and the necessary 
infrastructure for their collection and processing is virtually non-existent.  Symonds also suggested 
that such sources of alternatives and materials for recycling that do exist tend to vary by region, 
mainly arising in or very close to Belfast and the surrounding urban area.  Moreover, the availability 
of cheap virgin aggregate and of cheap landfill sites for disposing of construction and demolition 
wastes (instead of reusing them) meant that there wa s little incentive to use such  recycled material as 
was available.  This was of particular concern to  the UK Government because it critically undermined 
the objective of the original relief scheme for manufacturers of processed products.   
 
 The overall conclusion the UK Government drew from the Symonds' findings was that the 
environmental aims of the levy were unlikely to be  met in Northern Ireland, as the levy and relief 
scheme existed at the time.     Finance Act 2003 replaced section 30A of Part II of the Finance Act 2001, which contains the 
legislation for the aggregates levy, with a new section 30A.  This section permits the Commissioners 
of Revenue and Customs to make regulations governing entitlement to tax credits for aggregate used 
in Northern Ireland for a prescribed purpose.  The regulations covering the relief scheme from 
1 April 2004 are the Aggregates Levy (North ern Ireland Tax Credit) Regulations 2004 
(SI 2004/1959). 
  G/SCM/N/155/EEC/Add.27 
 Page 31 
 
 
  4. Form of the subsidy   
  The form of aid is tax relief, linked to ne gotiated agreements committing beneficiaries to 
making environmental performance improvements.  Th e details of the relief scheme are as follows:   
 
• the relief covers aggregate used in proc essed products and virgin aggregate;   
• the relief is fixed at 80 per cent of the full rate for the full duration of the scheme 
(1 April 2004 to 31 March 2011).  The full rate of levy during the period of this return 
was £1.60 per tonne - the amount of aid beneficiaries received was therefore £1.28 per tonne of aggregate;   
• eligibility to relief is conditional upon claima nts entering into and complying with the 
terms of a negotiated agreement.  The relief is not be discretionary – if the conditions 
of the agreements are met the business is automatically be entitled to relief;   
• the environmental improvements that quarry operators sign up to are regularly 
monitored and reviewed;   
• aggregate used to manufacture processed products in Northern Ireland which is 
subsequently exported from the UK is eligible for the 80 per cent relief;   
• as quarry owners extracting aggregate in Great  Britain or the Republic of Ireland are 
not in a position to enter into agreements a nd do not have to incur the cost of making 
the necessary environmental improvements, th eir aggregate is not eligible for the 
relief, even if it is commercially exploited in Northern Ireland.   
 
 The negotiated agreements set targets for im provement in environmental performance of 
quarrying operations;  among the areas of performan ce covered are air quality, blasting, dust, energy 
efficiency, groundwater and waste management.  E ach agreement is individually tailored to the 
circumstances of the quarry, taking into account, for example, current standards and scope for 
improvement.  The UK Government devised a framework for drawing up and monitoring such 
environmental performance agreements with qua rry operators based upon a framework set out in 
its Code of Practice and Compliance Scheme  and is derived from a report produced for 
the UK Government by consultants from the HELM Group.    
 The Department of the Environment in No rthern Ireland (DoENI) is responsible for 
conducting the initial assessment of a quarry's enviro nmental standards and monitoring performance 
against the targets set out in the agreement.  Comp liance will be reflected by the issue/renewal of a 
certificate by DoENI, which, in turn, will be used  by the business to support claims to relief during the 
period of the certificate's validity.    
 The new scheme is in line with the scope pr ovided in paragraph 51(2)(b) of the Community 
guidelines on state aid for environmental protecti on.  The scheme addresses the levy's unintended 
economic impacts in Northern Ireland, while still de livering environmental benefits, in accordance 
with the levy's objectives.    
5. To whom and how the subsidy is provided
 
  The beneficiaries are businesses that are regi stered with HM Revenue and Customs for the 
aggregates levy and that commercially exploit virgin  aggregate in Northern Ireland.  Aggregate or 
products made from aggregate sent from Northern Ir eland to Great Britain are not eligible for the 
relief and are subject to the full rate of levy upon first commercial exploitation.   
 
6. Total amount budgeted
 
  2005 £30 million.    2006 £30 million.   G/SCM/N/155/EEC/Add.27 
Page 32  
 
  7. Duration of the programme
 
  The relief came into effect on 1 April 2 004 and will continue until 31 March 2011.   
 8. Assessment of trade effects
 
 
 An industry survey in 2002 of a sample of quarry operators found that 52 employees had been made redundant in the firms surveyed in the period April to September 2002, and that a further 58 employees were expected to be made redundant  if there was no improvement in the economic 
downturn of the aggregates industry following the introduction of the levy.   
 
 In addition, the survey showed that 280 jobs could be lost in Northern Ireland as a result of 
aggregates processing companies relocating over the border to the Republic of Ireland, if processed 
products were not given any further protec tion against distortion of competition.   
 
 The extended relief scheme will have a signifi cant impact in helping to prevent these, and 
future, job losses.     
XXIX.  NI - BUYING TIME ASSISTANCE SCHEME 
1. Period covered by the notification
 
 
 2005 and 2006.    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 enabli ng a decision to be made on the appropriateness of 
such a plan.    3.  Background and authority for the scheme
 
 
 Buying Time forms part of the Rescue and Rest ructuring Guidelines.  The authority for the 
scheme is Industrial Development Act (Northern Ireland) 2002.   
 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
 
  2005 £132,000.    2006 £0.00.   
 
7. Duration of Programme
 
  2001/02 to 2006.     G/SCM/N/155/EEC/Add.27 
 Page 33 
 
 
  8.  Assessment of Trade effects  
  To be evaluated.     XXX.  NI:  COMPANY DEVELOPMENT PROGRAMME 
1. Period covered by the notification
 
  2005 and 2006.    
2. Policy objectives
 
  To encourage companies to plan and structure their training and develop activities in line with 
their key business objectives.    
 To promote management development by enc ouraging companies to invest in process and 
competence based management training activities as well as functional and knowledge based activities.     To encourage companies to focus their tr aining and development activities on nationally 
recognised qualifications and accreditations.   
 
 To encourage training and development within  projects designed to improve international 
competitiveness, profitability and growth.     To help attract inward investment projects to Northern Ireland.   
 
 To ensure that the issues of targeting social needs, equality and fair treatment are addressed.   
  To encourage companies to establish th eir own training infrastructures.   
 3. Background and authority for the scheme
 
 
 The Company Development Programme was first introduced in 1990 and managed by the Training & Employment Agency.  The programme is  now managed by Invest NI the new economic 
development agency which was established in Ap ril 2002.  Industrial Development Act (Northern 
Ireland) 2002.   
 
4. Form of the subsidy
 
  Grant.    5. To whom and how the subsidy is provided
 
 
 The programme is open to companies in manuf acturing and tradeable services which satisfy 
eligibility criteria and to hotels and licensed guest  inns certified by the Northern Ireland Tourist 
Board.    
6. Total amount budgeted
 
  2005 £4,849,784.    2006 £6,410,036.    G/SCM/N/155/EEC/Add.27 
Page 34  
 
  7. Duration of programme
 
  Ongoing.    8. Assessment of trade effects
 
 
 During the two years 2000/01-2001/02 236 o ffers of assistance were made under the 
Company Development Programme.  All assistance was linked to the achievements of business objectives.    
 
XXXI.  NI:  COMPETE PROGRAMME ROUND THREE (2003-2008) 
1. Period covered by the notification
 
 
 2005 and 2006.    
2. Policy objectives
 
  Aim of the Compete Round Three Programme:     To stimulate manufacturing and other businesses in Northern Ireland to develop innovative 
and high technology products and processes within a strategic business framework that improves the 
national and international competitiveness of the business.     The strategic objectives of Compete are:  
z to increase the level and quality of pre-competitive development research and 
development in Northern Ireland;   
z to increase the number of businesses involved in research and development;   
z to increase the number of well-designed and commercially successful Northern 
Ireland products introduced in both home and export markets.   
 
 Type/nature of the R&D assisted.   
  The market-led precompetitive development activity leading to innovative new products or 
manufacturing processes.    
3. Background and authority for the subsidy
 
 
 Overall investment in R&D in Northern Ireland is far less than average.  Northern Ireland 
spends only 0.52 per cent of its GDP on R&D compar ed to 1.25 per cent for the UK and 2.08 per cent 
in the US.  To address this gap, Invest Northern Ire land is trying to establish a culture of innovation in 
the region.   
 
 As industry in Northern Ireland is characteris ed by very small businesses, Invest Northern 
Ireland is trying to stimulate small firms that are not currently carrying out any R&D to engage in 
such activities for the first time.    
 Invest Northern Ireland is committed to enc ouraging commercially relevant and well-planned 
research and development.  Its mission is " to accelerate economic development in Northern Ireland, 
applying expertise and resources to encourage inno vation and achieve busine ss success, increasing 
opportunity for all within a renewed culture of enterprise ".    G/SCM/N/155/EEC/Add.27 
 Page 35 
 
 
   The Compete Round Three Programme will be a vital part of Invest Northern Ireland's 
strategy to promote innovation, stimulate higher levels of R&D and Design, and improve knowledge 
transfer to Northern Ireland industry.     The strategic objectives of Compete Round Three are: 
 
z to increase the level and quality of pre-co mpetitive research and development in 
Northern Ireland;   
z to increase the number of businesses involved in research and development;   
z to increase the number of well-designed and commercially successful Northern 
Ireland products introduced in both home and export markets.  
  Invest Northern Ireland, a non-department al public body operates under the Industrial 
Development Act 2002.   
 
4. Form of the subsidy
  
  Invest Northern Ireland delivers  financial assistance through:  
 
(i) direct grants (ii) equity investments – preference shares 
(iii)  repayable loans secured against appropriate asset 
(iv)  any combination of the above 
  The application process and assessment criteria are the same for all projects.    
 The amount and form of assistance offered to a company depends on a range of factors 
including:    
z Project quality, meaning the level of innovati on and the benefits a successful outcome 
will bring to the NI economy;   
z The stage of development of the company;   
z The balance of the project between capability and capacity components;   
z The funding available from the company or  the private sector to implement the 
project.   
  Grants are the usual aid instrument, the cash grant equivalent of any repayable form of 
assistance is calculated on the basis of the differe nce between the return on the actual instrument 
offered compared with the commercia l return from that instrument.   
 
5. To whom and how the subsidy is provided
 
  To stimulate manufacturing and other businesses in Northern Ireland to develop innovative 
and high technology products and processes within a strategic business framework that improves the 
national and international competitiveness of th e business.  All awards are discretionary.   
 6. Total amount budgeted
 
 
 2005 £2,997,123.00.   
 2006 £2,070,146.00.    7. Duration of the programme
 
 
 2003 – 2007.   G/SCM/N/155/EEC/Add.27 
Page 36  
 
  8. Assessment of trade effects
 
  Subject to periodic evaluation.     XXXII.  NI – GAS PIPELINE 
1. Period covered by the notification
 
  2005 and 2006.    
2.  Policy objectives
  
  The development and maintenance of an effici ent, economic and co-ordinated gas industry in 
Northern Ireland.    
3. Background and authority for the subsidy
 
  On 21 September 2001, the Northern Ireland Executive announced its support for the development of a multi million pound gas project. The support is in the form of a grant package up to 
£38m, including an Irish Government contribution of €12.7m / £8.5m.    
 The project involves the construction by Bord Gais Eireann United Kingdom, BGE (UK), a 
subsidiary of the state owned Republic of Ireland gas company, of a gas pipeline from Dublin to 
Antrim (known as the South - North pipeline) which will link with a pipeline from near Carrickfergus 
to Londonderry (the North West pipeline).    
 The pipeline to the North West was completed in October 2004 and the company completed 
construction of the South-North pipeline in October 2006.    These gas transmission pipelines will facilitate  the supply of gas to 10 towns along their 
routes.   
 The subsidy is being paid under the Energy (Northern Ireland) Order 2003.   
 4. Form of the subsidy
 
  Grant payments.   
 
5. To whom and how the subsidy is provided
 
  BGE (UK) – Grant payments.    6. Total amount budgeted
 
 
 2005 £2.33m.    2006 £17.08m.     NB: additional payments made in 20 03, 2004, and planned for 2007.   
 
7. Duration of the programme
 
  The North West pipeline was constructed in 2004 and the South/North pipeline was built in 2006.    G/SCM/N/155/EEC/Add.27 
 Page 37 
 
 
  8. Assessment of trade effects  
  Will facilitate the development of the gas indus try in Northern Ireland and also cross border 
trading.    
 
XXXIII.  NI – RESTRUCTURING AID  
1. Period covered by the notification
 
  2005 and 2006.   
 
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 enabli ng a decision to be made on the appropriateness of 
such a plan.   
 3. Background and authority for the subsidy
  
  Restructuring Support forms part of the Rescue and Restructuring Guidelines.  The authority 
for the scheme is Industrial Developm ent Act (Northern Ireland) 2002.   
 
4. Form of the subsidy
  
  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
 
 
 2005 £132,000.    2006 £0.00.    7. Duration of the programme
 
 
 To be evaluated.    8.  Assessment of trade effects
 
  To be evaluated.   
 
 
XXXIV.  NI - SELECTIVE FINANCIAL ASSISTANCE 
1.  Period covered by the notification
 
 
 2005 and 2006.   G/SCM/N/155/EEC/Add.27 
Page 38  
 
  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.  It is the equivalent of the Regional Selective 
Assistance Scheme in Great Britain.   
  The SFA Scheme relates solely to the setting up of a new establishment, the extension of an 
existing establishment or the starting up of an activ ity involving a fundamental change in the product 
or production process of an existing establishment.  The latter may be rationalisation, diversification 
or modernisation programmes being undertaken by companies.   
 3.  Background and authority for the scheme
 
  Industrial Development Act (Northern Ireland) 2002.   
 
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
 
  2005 £49,796,042.    2006 £52,509,655.    7.  Duration of Programme
 
 
 Indefinite.    8. Assessment of Trade effects
 
 
 Subject to periodic evaluation.  Most recent evaluation (completed 2002) indicates that during 
the 1980s and 1990s, Selective Financial Assist ance offered to industry in NI increased both 
employment and productivity in NI's manufacturing sector by between 7 per cent and 10 per cent.   
  
XXXV.  NI – SMART 
1. Period covered by the notification
 
  2005 and 2006.    2. Policy objectives
 
 
 Smart is a scheme, which provides awards to help individual and SMEs  research and develop 
technologically innovative products and processes or bu y external consultancy to improve their use 
and exploitation of technology.  Smart aims to:     G/SCM/N/155/EEC/Add.27 
 Page 39 
 
 
  - Improve the future competitiveness of th e Northern Ireland economy by supporting 
innovative individuals and SMEs, which are a dynamic source of new wealth, and by 
encouraging more SMEs to become innovative;  and 
- Help contribute towards a climate which encour ages investment in innovative technology by 
individuals, firms and financial institutions and which stimulates a market in technological 
advice.   
 3. Background and authority for the subsidy
 
  The SMART scheme is delivered in Northern Ireland by Invest NI.  Invest NI is a body 
corporate established under the Industrial Developm ent Act 2002. For administrative purposes Invest 
NI is classified as a Non-Departmental Public Body.    4. Form of the subsidy
 
 
 Smart is a discretionary grant award scheme .  Feasibility studies and micro projects are "de-
minimis" elements.  Development projects are notified state aid.     Feasibility studies are projects of at least £30,0 00 eligible costs with a duration of between 6 
and 18 months.  The award covers up to 75 per cent of eligible project costs up to a maximum 
assistance of £45,000.   
 
 Micro projects are small development projects of at least £5,000 eligible costs and lasting up to 12 months duration.  The awards cover up to  50 per cent of eligible costs up to a maximum 
assistance of £10,000.    
 Development projects are projects of at least £60,000 eligible costs with a duration of 
between 6 and 36 months.  The awards cover up to  40 per cent of eligible project costs up to a 
maximum of £150,000.    5. To whom and how the subsidy is provided
 
 
 The awards are provided to the award applicant.  They are discretionary, payable in stages, 
normally in arrears, on production of evidence that the required amount of money has been properly spent on the project.    6. Total amount budgeted
 
 
 2005 £227,733.00.    2006 £494,873.00.    7. Duration of the programme
 
 
 The scheme has current approval up to 31 Marc h 2007 under the current notification.  This 
represents a 5-year extension to the State Aid approval number N 280/99, which expired on 
31 March 2002.    8. Assessment of trade effects
 
 
 This scheme offers support for pre-competitiv e R&D and as such the impact on trade is 
negligible.     G/SCM/N/155/EEC/Add.27 
Page 40  
 
  XXXVI.  NI:  START PROGRAMME 
1. Period covered by the notification
 
  2005 and 2006.    
2. Policy objectives
 
  To stimulate and increase the level of indus trial research undertaken by Northern Ireland 
companies and to increase the number of companies undertaking industrial research, either on their own or in partnership with one or other of the two Northern Ireland universities.   
 
3. Background and authority for the scheme
 
  Economic competitiveness is directly rela ted to business expenditure on research and 
development (BERD).  The START programme w as established to encourage Northern Ireland 
companies to invest in technologically based, i ndustrially focussed research and development (R&D), 
because their expenditure on R&D (and in particular  their expenditure on industrial/strategic research) 
was seen to lag well behind many of their major co mpetitors in the rest of the United Kingdom and 
the rest of the World.  The current legislative authority for the programme comes from the Industrial 
Development Act (Northern Ireland) 2002.    
4. Form of the subsidy
 
  Assistance is normally in the form of a gr ant.  However, in some cases, the START 
programme may provide assistance in a repayable fo rm e.g. full equity or redeemable preference 
shares.   
 
5. To whom and how the subsidy is provided
 
  The programme is open to Northern Ireland based companies and Northern Ireland universities.  Assistance is offered up to 50 per cent of  eligible costs.  In exceptional circumstances, 
university only projects may be supported at a leve l up to and including 100 per cent.  There is no 
minimum level of assistance.  In the case of grant assistance, grant is payable on vouched and 
approved expenditure incurred by the project participants.    6. Total amount budgeted
 
 
 2005 £1,704,731.00.   
 2006 £1,711,667.00.    7. Duration of programme
 
  Indefinite.   
 
8. Assessment of trade effects
 
  The START Programme is evaluated every 5 years and the last evaluation took place in 2001.  Based on 1996 and 1999 statistical data, the 2001 eval uation concluded, the START programme was 
responsible for an additional 9 per cent increase in Northern Ireland BERD and an additional 50 per 
cent increase in business expenditure on industrial/strategic resear ch, when expressed as percentages 
of Gross Domestic Product.      G/SCM/N/155/EEC/Add.27 
 Page 41 
 
 
  XXXVII.  NI:  SUPPORT FOR FILM AND TELEVISION PRODUCTION 
1. Period covered by the notification  
  2005 and 2006.    
2. Policy objectives
 
  The Scheme seeks to provide funding for live ac tion or animated feature films or live action 
or animated television drama series or serials which have a distinct Northern Ireland cultural 
dimension.  The Fund intends to provide support in order to facilitate the development of a specific 
Northern Irish cultural voice through the producti on of cultural film and television drama by 
providing financial support in accordance with the criteria set out in the Communication on certain 
legal aspects relating to cinematographic and other audio-visual guidelines (2002/C 43/04), for 
example the production of the following:    
• The production of a cultural film or television drama.   
• Projects involved in co-productions to produce a cultural film or television drama.   
• These measures have the primary aim of ensuring that the culture and creative 
potential of Northern Ireland are expressed through creative film and television drama 
sector. 
 3. Background and authority for the subsidy
 
 
 The Industrial Development (Nor thern Ireland) Order 1982.   
 4. Form of the subsidy
 
  Loan.    
5. To whom and how the subsidy is provided
 
  The Scheme is limited to the film and TV drama sectors.    6. Total amount budgeted
 
 
 2005 £1,834,000.    2006 £1,834,000.    7. Duration of the programme
 
 
 Indefinite.   
 8. Assessment of trade effects
 
  Not relevant.   
 
 
XXXVIII.  NI:  TECHNOLOGY FUND (NITECH) 
1. Period covered by the notification
 
  2005 and 2006.   G/SCM/N/155/EEC/Add.27 
Page 42  
 
  2. Policy objectives
 
  The Fund's main objective is to encourage Re search & Development activities of spin-outs 
and start-ups from research.  There is also a furthe r objective of encouraging research within already 
existing Small to Medium sized Enterprises.  Support will only be given to companies and researchers 
in Northern Ireland.   
 3. Background and authority for the scheme
 
  The proposal to establish the NITECH Growth Fund was announced by the Chancellor of the 
Exchequer as part of his 1998 package of economic initiative for Northern Ireland.  The authority for 
this scheme comes from the Northern Ireland Order 1982 and its subsequent revisions as well as State 
Aid N 481/01.    4. Form of the subsidy 
 
 
 This will normally take the form of equity funding but occasionally will be small grants.   
 5. To whom and how the subsidy is provided
 
  This subsidy is aimed at Small to Medium sized Enterprises, individual researchers, research 
teams and university departments within Northern Ireland.  The investment by the Fund will amount 
to a maximum of 60 per cent of the eligible costs of  for industrial research and 35 per cent of the costs 
for pre-competitive research.    6. Total amount budgeted
 
 
 2005 £685,000.    2006 £235,000.    7. Duration of programme
 
 
 The NITECH Fund will run from 1st January 2002 – 31st December 2006.   
 8. Assessment of trade effects
 
  Due to the fund's limited span of operation an assessment of trade effects is not yet feasible.  
This will be made available throug h annual reports to be submitted to  the European Commission.  The 
first of these will be due after the 31
st March 2004.   
  
XXXIX.  NI:  URBAN DEVELOPMENT GRANT (UDG) SCHEME  
1. Period covered by the notification
 
 
 2005 and 2006.    2. Policy objectives
 
 
 The Scheme is an instrument of Urban Regene ration.  Its principle objective is economic and 
physical regeneration of deprived inner city ar eas by the stimulation of private enterprise and 
investment through the development of vacant, derelict or underused land or buildings.    G/SCM/N/155/EEC/Add.27 
 Page 43 
 
 
  3. Background and authority for the scheme  
  Statutory & Legal basis – The Social Need (Northern Ireland) Order 1986.  Approved 16 December 2003.    
4. Form of the subsidy 
 
  Grant.    5. To whom and how the subsidy is provided
 
 
 To developer/occupiers and speculators - Gran t is paid on construction works on lodgement 
of architects certificates certifying that  work has been completed.   
 6. Total amount budgeted
 
 
 2005 £1.64 million.    2006 £1.33 million.    7. Duration of programme
 
 
 Indefinite.   
 8. Assessment of trade effects
 
  No trade effect.  The UDG scheme is larg ely about shortfall gap funding of speculative 
office/retail developments for letting.  Where there are developer/occupier schemes they relate to 
small retail and or office developments where there are no trade effects.     
XL. NI VIRIDIAN GROWTH FUND  
1. Period covered by the notification
 
 
 2005 and 2006.    2. Policy objectives
  
 
 The main objective of the scheme is to addr ess perceived gaps in the provision of venture 
capital and loan funding for small enterprises in the manufacturing and tradable services sectors, 
based in Northern Ireland.  The objective is to  address market failure in the deal size range £50k-
£250k.     By addressing gaps in the provision of funding, it is expected that the development of the 
SME sector will be accelerated and additional jobs w ill be created.  In addition, the promotion of 
enterprise will be strengthened leading to a reduction in grant dependency.   
  A regional objective is to bring the level of venture capital activity in NI up to the UK average and thereby ensure that growth companies are not disadvantaged through lack of funding for 
start up and expansion.   G/SCM/N/155/EEC/Add.27 
Page 44  
 
  3. Background and authority for the scheme
 
  The legal basis for the scheme is Article 7 of  the Industrial Development (NI) Order 1982, as 
well as the Fund contract and operating guidelines.    
 The Fund was set up as a limited partnership,  registered under the Limited Partnership 
Act 1907.  This is a standard vehicle for this type of fund in the UK.    4.  Form of the subsidy
 
 
 Private sector investment in the Fund will require underpinning of around 33 per cent grant 
support, in order to show a sufficiently attractive ra te of return for the private sector to induce it to 
invest.    5. To whom and how the subsidy is provided
 
 
 The subsidy is provided to the Fund to enable  it to offer commercial investment terms in 
order to attract private sector investors.    6. Total amount budgeted
 
 
 2005 £334,000.   
 2006 £334,000.    7. Duration of programme
 
 
 The Fund was set up as a 10 year limited partners hip that can be extended with the consent of 
all investors to 12 years to facilitate successful exits from the Fund.   The active investment period will last for 5-6 years and there will then be a period of 4-5 years during which funds will be managed with the aim of successfully exiting.    
8.  Assessment of trade effects
 
  The supply side effect is that small businesses will be able to access funds at the right price and at the right time to help them develop thei r business.  The Fund will provide start-up and 
development capital in a mix of equity and loans.   
 
 On the demand side, the Fund will encourag e investor ready proposals, will stimulate 
entrepreneurship and should accelerate the shift away from grant dependency.     
XLI. NON-FOSSIL FUEL OBLIGATIONS (NFFOS) 
1. Period covered by the notification
 
  2005 and 2006.    2. Policy objectives
 
 
 The UK Government is committed to supporting the development of renewable energy and 
the specific objectives of the NFFO scheme are to encourage:    
• diverse, secure and sustainable energy supplies;    G/SCM/N/155/EEC/Add.27 
 Page 45 
 
 
  • reduction in emission of pollutants;  
• development of internationally comp etitive renewables industries.   
 
3. Background and authority for the scheme  
  In Great Britain, Sections 32 and 33 of the El ectricity Act 1989 and subsequent Orders - also 
Section 67 of the Utilities Act 2000 and subsequent Orders - State Aid reference for NFFO is 
N153/98.  In Northern Ireland, the legislative aut hority is under Articles 35 to 41 of the Electricity 
(NI) Order 1992.  State aid reference for NFFO in NI is N276/93.    4. Form of the subsidy
 
 
 Under the NFFO scheme, Orders were made  which required the then public electricity 
suppliers (now the supply successor companies in Great Britain) to contract with renewable 
generators for the supply of electricity generate d from renewable sources.  The price paid for the 
electricity under those contracts is above the market  price for electricity and the electricity suppliers 
are compensated for this by payments out of the Fossil Fuel Levy which was provided for in 
section 33 of the Electricity Act and in Northern Ire land, by Article 36 of the Electricity Order 1992.  
The levy is charged on the electricity suppli es of all licensed electricity suppliers.   
 5. To whom and how the subsidy is provided
 
  See para. 4 above.   
 
6. Total amount budgeted
 
  For England & Wales:    2005 £-104.4m 
 2006  £-169.53m 
  For Scotland:    2005  £ NA  2006  £-35m (April – December) 
 
 For Northern Ireland:    2005 £5.45m  2006 £6.42m  Notes:
   
 
- Since the introduction of the Renewables oblig ation in April 2002, negative amounts have 
arisen as receipts from suppliers have exceeded the total payments due to generators.  This 
has resulted from the added value of ROCs fro m NFFO contracts being sold with the power 
to suppliers.   
- Figures for Scotland for the period 2005 and January to March 2006 are not available as 
Ofgem has recently moved accounting premises to new location.   
 7. Duration of programme
 
  The last remaining contracts in Great Britain e xpire in 2018.  In Northern Ireland the last 
remaining contract expires in 2015.   G/SCM/N/155/EEC/Add.27 
Page 46  
 
  8. Assessment of trade effects
 
  The NFFO scheme was designed to stimul ate the UK renewables industry with the 
expectation that electricity so produced would be  mainly supplied to the UK domestic market.   
 
 
XLII.  PARTNERSHIP SUPPORT FOR REGENERATION N239/2002 
1. Period covered by the notification
 
  2005 and 2006.   
 
2. Policy objectives
 
  To increase the stock of housing available for owner-occupation in areas where this is useful from a social and regeneration perspective.   
 
3. Background and authority for the scheme
 
  Regional Development Agencies Act 1998.    Greater London Authority Act 1999.    Leasehold Reform, Housing and Urban Development Act 1993.   
 
 UK notification 18 March 2002.    European Commission approval letter of 24 May 2002.    4. Form of the subsidy 
 
 
 Grant.    5. To whom and how the subsidy is provided
 
  Housing developers who woul d provide housing for owner occupation in areas where costs of 
development exceed the value of completed hosing.  There are a number of eligible costs for project 
costing.  Payments are made pro rata to  the developer's qualifying expenditure.   
 6. Total amount budgeted
 
 
 2005 £8,700,000.   
 2006 £9,521,573.    7. Duration of programme
 
  The approval remains in force until 31 December 2006.   
 
8. Assessment of trade effects
 
 
 None.    G/SCM/N/155/EEC/Add.27 
 Page 47 
 
 
  XLIII.  PARTNERSHIP SUPPORT FOR REGENERATION – SPECULATIVE AND 
BESPOKE (N747/A/1999 N747/B/1999) 
1. Period covered by the notification  
  2005 and 2006.   
 
2. Policy objectives
 
  Support private sector initial investment in a wide range of land a nd property regeneration 
projects, which would not proceed without public sector support.   
 
3. Background and authority for the scheme
 
  Regional Development Agencies Act 1998, Greater London Authority Act 1999 and Leasehold Reform, Housing and Urban Development Act 1993.   
 
• State aid N 747/A/99 - Partnership support for regeneration (1):   
  Support for speculative developments.   
• State aid N 747/B/99 - Partnership support for regeneration (2):   
  Support for bespoke developments.   
 4. Form of the subsidy 
 
 
 Under both speculative and bespoke approvals:   
 
• Regeneration Grant 
• Loans  
  Under speculative only:    
• Joint Venture arrangements preferable to private sector 
 5. To whom and how the subsidy is provided
 
  Aid is provided to the developer.  There are a number of eligible costs for project costing.  
Payments are made pro rata to the developer's qualifying expenditure.   
 
6. Total amount budgeted
 
  2005 £62,444,003.    2006 £82,140,890.   
 
7. Duration of programme
 
  The approval remains in force until 31 December  2006, thereafter a block exemption has been 
introduced to cover the Speculative and Bespoke  schemes which will remain in force until 
31 December 2013.   
 
8. Assessment of trade effects
 
  None.    G/SCM/N/155/EEC/Add.27 
Page 48  
 
  XLIV.  PHOTOVOLTAIC DEMONSTRATION PROGRAMME 
1. Period covered by the notification
 
  2005 and 2006.    
2. Policy objectives
  
  The objective is to provide support for grid -connected and a small number of off-grid 
electricity generation from photovoltaic installations , primarily on buildings, in the form of capital 
grants to cover a proportion of the capital costs.   
 
3. Background and authority for the subsidy
 
  The overall aim of the scheme is to help meet the UK's longer-term needs for clean electricity 
supplies and to contribute to the reduction of CO2 em issions by encouraging individuals/organisations 
to invest in photovoltaic installations, primarily  on buildings, where they would not otherwise 
normally invest in equipment for conventional electric ity generation.  This will result in a reduction in 
the use of, and dependence on, electricity from th e grid, providing environm ental benefits, as most 
electricity currently provided through the grid is gr ey electricity.  It is hoped the scheme will result in 
a steady acceleration of the number of UK PV installations.  The scheme will achieve this aim through the provision of capital support, in the form of grants, to cover a proportion of the 
installations' costs.  The grid-connected installatio ns will be able to sell on any surplus energy 
generated.     Science and Technology Act 1965.    
4. Form of the subsidy
 
  Capital grants.    5. To whom and how the subsidy is provided
 
 
 Grants are available to a variety of indivi duals and groups ranging from private householders, 
schools, community groups, and SMEs to housing asso ciations, local authorities, private developers 
and large companies.  Inasmuch as grants are made  available to undertakings in the meaning of 
Article 87(1) EC Treaty, the UK acknowledges that payments require prior notification and approval 
by the Commission.   
 
6. Total amount budgeted   
  2005  £764,326.    2006 £5,049,010.    
7. Duration of the programme
 
  The programme was originally set up for 3 years, 2002 – 2005, but has been extended by a further year until 2006.    
8. Assessment of trade effects
 
  The impact of the programme on the PV sector will be determined by the evaluation report to 
be drawn up after the scheme closes in 2007.  The fo llowing observations have been made to date:   
  G/SCM/N/155/EEC/Add.27 
 Page 49 
 
 
  • There has been an increased awareness of the technology in the general population;  
this is proven by the increased number of household applicants year on year.   
 
• The current programme has generated some re duction in costs but has not lead to the 
significant reduction you might expect for bulk buying/deployment.   
 
• Number of companies registered to inst all PV technology has increased from 10 to 
approximately 60.   
 
• New manufacturing/assembly plants have been established in UK since start of 
programme:   
    Romag/BP solar – glass/glass facility.   
   Sharp – Module Assembly (Wrexham).   
   Marley roofing/Solar Century – UK PV roof tiles.    
• There are now over 700 accredited PV products available in the UK.   
 
• There are now a range of electricity providers that offer export tariffs (for surplus 
energy generation).   
 
• There has been a streamlining in the gr id-connection process making it easier during 
the installation process.   
  
XLV.  REDUCED RATE OF EXCISE DUTY ON BIODIESEL 
1. Period covered by the notification
 
 
 2005 and 2006.    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 incen tive 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.    
5. To whom and how the subsidy is provided
 
  Producers of biodiesel.   G/SCM/N/155/EEC/Add.27 
Page 50  
 
  6. Total amount budgeted
 
  2005 £6.6 million.    2006 £33.8 million.    
7. Duration of the programme
 
  No end date set.    8. Assessment of trade effects
 
 
 The introduction of the duty incentive has led to increased use of road fuel biodiesel. 
160 million litres of biodiesel were released for use in 2006.  Prior to the introduction of the duty differential, no biodiesel was used in the UK.    
 
XLVI.  R&D FOR RENEWABLE AND SUSTAINABLE ENERGY 
1. Period covered by the notification
 
  2005 and 2006.    
2. Policy objectives
 
  To help increase research and development in the renewable and sustainable energy sector.   
 3. Background and authority for the scheme
 
 
 Government's objectives to find alternative sources of energy production through more 
environmental friendly and sustainable ways.  Science and Technology Act 1965.    4. Form of the subsidy 
 
 
 Grants.   
 5. To whom and how the subsidy is provided
 
 
• To companies with within the renewable and sustainable energy R and D field.   
• Grant is up to 75 per cent.   
 
6. Total amount budgeted  
  2005 £202,800.    2006 N/A.    
7. Duration of programme
 
  Current contracts run until end of April 2005 with possibility of extensions.   
 8. Assessment of trade effects
 
 
 The development of the market should increase.   The grant allows fo r research into the 
Renewable sector to be continued.    G/SCM/N/155/EEC/Add.27 
 Page 51 
 
 
  XLVII.  R&D TAX CREDIT 
1. Period covered by the notification  
  2005 and 2006.    
2. Policy objectives
  
  The aim of the R&D tax credit is to encourag e innovation by companies which are small or 
medium-sized enterprises (SMEs).  To do this, it gi ves companies, including high-tech start-ups, an 
incentive to take up R&D activities, and encourages companies already carrying out R&D to increase 
their levels of R&D.   
 3. Background and authority for the scheme
 
  The R&D tax credit was introduced in 2000 after extensive consultation both on the details of 
the scheme (Inland Revenue technical note "Resear ch 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 an d 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 no tified and approved under references N245/2003 (on 
4 September 2003) and N293/2004 (on 6 December 2004).     Legislation governing the scheme was introdu ced in the Finance Act 2000 (Schedules 20 and 
21) and subsequently amended in the Finance Act 2002 (Schedule 15), the Finance Act 2003 
(Schedule 31) and the Finance Act 2004 (section 141).   
 4. Form of the subsidy 
 
  Tax relief (see below).    
5. To whom and how the subsidy is provided
 
  The incentive is given as an increased tax relie f for certain spending on R&D.  Small or 
medium-sized companies are able to claim reli ef equal to 150 per cent of their qualifying R&D 
expenditure, comprising a general deduction availa ble to all companies undertaking R&D of 100 per 
cent and the enhanced R&D tax relief of a further 50 per cent.  A company paying tax at the 2004 
small companies' rate (19 per cent), therefore saves in tax a total of 28.5 per cent of the cost of the qualifying R&D, comprising a deduction available to all companies of 19 per cent and the subsidy of 9.5 per cent.     A company not yet in profit may surrender the relief to the Government in return for a 
payment representing 24 per cent of the cost of th e R&D.  This represents a discount of around 16 per 
cent on the cash value of the tax credit if used agains t profits, where the company is taxed at the small 
company rate of 19 per cent. The amount surrenderable is limited to the lower of:    
• the proportion of the unrelieved loss attri butable to the qualifying R&D expenditure, 
and 
• the gross employment and social security taxes (Pay-As-You-Earn tax and National 
Insurance Contributions) paid by the co mpany for the period of the claim.   
 G/SCM/N/155/EEC/Add.27 
Page 52  
 
   The availability of R&D tax credit to a corporat e SME is subject to the following criteria:   
   (a) the qualifying expenditure for the R& D tax credit for any accounting period of the 
company is limited to the aggregate of:   
 
• the direct costs of staff directly invo lved in carrying out the R&D activity.  
These costs comprise the gross remunera tion (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 transformable 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 produced, 65 per cent of the payments due to the subcontractor (representing a genera lised measure of the costs above).  
Alternatively, the company may claim th e actual costs it incurs within the 
above categories.  This latter rule is the only option where the principle 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.  
 
  (c) the R&D tax credit is not available on R& D spending 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.   
  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 budgeted
 
  2005 £230 million.    2006 £230 million.   
 
 The latest figures on the estimated take-up and costs of the R&D schemes are published as National Statistics on the H M Revenue & Customs website at:     http://www.hmrc.gov.uk/stats/corporate_tax/randdtcmenu.htm
 
 
7. Duration of programme  
  Indefinite.    8. Assessment of trade effects
 
 
 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 te rritorial limit to R&D qualifying for tax credits, but 
the incentive does operate by reducing UK corporation tax, so there may be some impact on decisions 
to locate R&D.  However the measu re applies only to SMEs, and it is larger companies that tend to 
operate internationally, particularly when it comes to the location of R&D, so the impact of the R&D 
tax credit on such location decisions is likely to be small.    G/SCM/N/155/EEC/Add.27 
 Page 53 
 
 
   No assessment of the impact of the R&D tax credit is currently available.  However, the 
following data provides some indication of firms' de cisions to locate R&D spending in the UK.  This 
shows the proportion of business R&D performed in the UK that is accounted for by UK-owned 
companies:    
 Intramural Expenditure (£ million) 
 
 2001 2002 2003 
UK-owned businesses 7331 8127 7532 
Non UK-owned businesses 5005 4983 6155 
Source:  "Research and Development in UK Business 2003" 
Office for National Statistics.   
 
 Expenditure as % of total business R&D in UK 
 
 2001 2002 2003 
UK-owned businesses 61% 61% 54% 
Non UK-owned businesses 39% 39% 46% 
Source:  "Research and Development in UK Business 2003" 
Office for National Statistics.   
 
 It is not possible to provide a robust estimat e of the impact of R&D tax credits on trade 
effects using present data.  There are two major caveats  in trying to determine the effect of the SME 
tax credit scheme from these figures:    
• The data covers all companies, not just SMEs.   
• Many different factors other than tax cred its affect the amount of R&D expenditure 
conducted in the UK by both UK and foreign firms. 
 
XLVIII.  REGIONAL SELECTIVE ASSISTANCE 
1. Period covered by the notification
 
  2005/06 and 2006/07.   
 
2. Policy objectives
  
  To assist economic development in areas of special hardship.    
3. Background and authority for the scheme
 
  The Industrial Development Act 1982.    4. Form of the subsidy
  
 
 Mainly grant (also loan, guarantee and shares).   G/SCM/N/155/EEC/Add.27 
Page 54  
 
  5. To whom and how the subsidy is provided
 
  The scheme is available to eligible projects of manufacturing and service sector firms of any size based in or moving into the Assisted Areas of Great Britain.    
 Financial assistance is on a discretionary basis, usually in the form of a grant phased against 
achievement of progress on the project (jobs & capital costs).    6. Total amount budgeted
 
 
 2005/06 £167.7m.   
 2006/07 £125.5m.    7. Duration of programme
 
 
 Scheme closed in England to ne w applications on 31 March 2004.   
 8. Assessment of trade effects
 
  This scheme is designed to help areas of special difficulty to compete on level terms with more advantaged regions.   
 
 
XLIX.  RENEWABLES OBLIGATION ORDER 2006 
 [Since its introduction in 2002 the RO has been amended in 2004;  2005;  2006 and 2007.  
The period which is being notifie d was covered by the Renewabl es Obligation Order 2005 and then 
the Renewables Obligation Order 2006.] 
 1. Period covered by Notification
 
  2005 and 2006.    
2. Policy Objectives
 
  To help the development of the Renewable Industry.    3. Background and authority for the scheme
   
 
 The Scheme was set up as the Government's  main mechanism for supporting renewable 
energy.  It imposes an obligation on energy companies to source a percentage of their electricity sales 
from eligible sources.  The Rene wables Obligation Order 2002.   
 4. Form of the subsidy 
 
 
 Recycling of buy-out payments.    5. To whom and how is the subsidy provided
 
 
 Companies within the Renewable energy sector  which have met their Renewables Obligation 
through Renewables Obligation Certificates (ROCs).     Buy-out fund recycled in autumn of each year.     G/SCM/N/155/EEC/Add.27 
 Page 55 
 
 
   2005 £135,657,001.   
 2006 £126,704,565.    6.  Duration of programme
 
 
 To 2026/27 but UK authorities will renotify the Obligation in 2012.   
 7.  Assessment of trade effect
 
  Development and improvement of the Renewable Energy sector.   
 
 
L. SCOTTISH ENTERPRISE - PR OPERTY SUPPORT SCHEME  
1. Period covered by the notification
 
 
 2005 and 2006.   
 2. Policy objectives
  
  To support the development of premises and buildings for commercial purposes by the private sector - Construction of new buildings or renovation of existing ones - Granted where there is in the 
view of the granting authorities a market failure.  Can support speculative and bespoke developments.   
 3. Background and authority for the subsidy
 
  Operated by Scottish Enterprise on the basis of the Enterprise and New Towns (Scotland) 
Act 1990, as amended by Scottish Statut ory Instrument 2001 No 126.   
 4. Form of the subsidy
  
  Development grants, subsidised loans, interest  rebates, development financing aid (grants, 
rental guarantees), loan guarantees, joint ve nture 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
 
  2005 £4,105,032.   
 2006 £5,025,000.   
 7. Duration of the programme
 
  To 31 December 2006.   G/SCM/N/155/EEC/Add.27 
Page 56  
 
  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 aid.   
  
LI. SCOTTISH ENTERPRISE – SUPPORT TOWARDS CAPITAL INVESTMENT 
BY EXISTING AND NEW BUSINESSES   
1. Period covered by the notification
 
  2005 and 2006.    2. Policy objectives 
 
 
 Support to new and existing businesses undertaking initial capital investment.  Subject to sectoral and regional restrictions.  Where provided in areas eligible for domestic regional aid, it is 
meant to favour regional development.  Where provide d in other areas, it is restricted to SMEs.   
 3. Background and authority for the subsidy
  
 
 Section 8 (1) (a) (i) of the Enterprise and New Towns (Scotland) Act 1990.    4. Form of the subsidy 
 
 
 Direct grants.   
 5. To whom and how the subsidy is provided
 
  To new and existing businesses.  Within A ssisted Areas, SMEs and larger enterprises, 
otherwise SMEs only -   The subsidy is paid as a grant from Scottish Enterprise.   
 
6. Total amount budgeted
 
  2005 £19.67m.    2006 £3.68m.   
 
7. Duration of the programme
 
  To 31 December 2006.    8. Assessment of trade effects
 
 
 The scheme is designed to provide support for initial investment to companies setting up new 
establishments, extending existing establishments or introducing a new product or process.  As such it 
will encourage investment which w ill result in new products being tr aded and increased trading from 
the area concerned.   
 
 The Commission view is that the scheme has potential to produce an effect on trade between 
Member States.  However, the Commission have  approved the scheme on the basis that it favours 
regional development, when applied in Assisted Areas, and more generally SME development.   
  G/SCM/N/155/EEC/Add.27 
 Page 57 
 
 
  LII. SCOTTISH EXECUTIVE - GRANTS FOR OWNER OCCUPATION (GRO) 
SCOTLAND 
1. Period covered by the notification  
  2005 and 2006.   
 
2. Policy objectives 
 
  The purpose of the GRO grant scheme is, by providing grants towards the provision of housing for owner occupation, to support the social  inclusion and community regeneration objectives 
of Scottish Ministers by promoting mixed tenure and sustainable communities through the provision 
of low cost owner occupied housing as part of wide r efforts to ensure effective physical, social and 
environmental regeneration.     GRO grants for the provision of housing for owner occupation are therefore intended to 
increase the supply of owner occupation in areas where there is a shortage of low cost home 
ownership opportunities and/or to meet the needs of  those who are unable to afford owner occupied 
housing because their incomes are too low.  Proposals which involve the provision of high value housing, that is housing which is not affordable to  those whose aspirations are met by low cost home 
ownership housing are therefore ineligible for grant funding.    
 Specifically, GRO grants are targeted at three types of project.   
 
 Type 1 
 
 Projects which contribute to tenure diversification in single tenure priority housing estates or 
neighbourhoods forming part of an area-based re generation strategy, thereby providing a mix of 
rented and owner occupied housing.     Houses are provided to designated client groups.  After a fixed time, any houses not sold to priority groups are offered on the open market.     Type 2 
 
 Projects which contribute to strategies fo r regenerating older urban neighbourhoods, 
particularly where these are categorised by a limited supply of good quality houses for owner 
occupation and/or by limitations in the range of av ailable house sizes and types relative to demand.   
 
 Where the existing market for owner occupied housing is limited in size or access for low-
income purchasers is restricted by price, targeti ng of low-income purchasers and first time buyers is 
likely to be an explicit objective.  Where these factors ar e not present, client group targeting may be 
relatively less important as a primary objective.     Type 3 
 
 Projects which contribute to the provision of  housing for owner occupation at affordable 
prices in pressured market area (usually in rural lo cations) where the supply of such housing is limited 
in quantity, or where access for lower income hou seholds wishing to become owner occupiers is 
constrained by market forces.   
  Grants will only be made available where th e houses provided are to be offered for sale to 
prioritised categories of people, such as those unabl e to obtain social rented housing, local residents 
living in rented accommodation through lack of opp ortunities locally to purchase a home, first time G/SCM/N/155/EEC/Add.27 
Page 58  
 
  buyers and those with a family or work connectio n with the area wanting to return.  For projects 
involving initial sales at less than full market va lue, Communities Scotland/local authorities will seek 
to clawback any surplus profits ma de following the first re-sale of the grant funded house where this 
takes place within a minimum period of five years and a maximum period of 10 years of the initial sale.   
 
3. Background and authority for the scheme
 
  Authority given by EU in agreement State Aid No 497/01 – United Kingdom – Grants for Owner Occupation – Scotland.   
 
4. Form of the subsidy 
 
  Grant.    
5. To whom and how the subsidy is provided
 
  Applicants for GRO grant are expected to be:    
• Private housing suppliers, that are individua ls, partnerships or registered companies 
set up for the purposes of providing housing.   These organisations may or may not 
undertake the construction works concerned themselves.  They are all undertakings 
within the context of Article 87/1 of the EC Treaty.   
 
• Housing trusts, that is private organisati ons formed by groups of individuals or 
organisations who share a common purpose relating to the provision and/or 
management of housing for sale or rent.  Housing trusts will normally be corporate 
bodies and may have charitable status.   
  Housing associations that are not registered by Communities Scotland may also qualify for assistance.  They must, however, be demonstrably independent of any registered body.    
 Any proposal involving a company formed by or involving a local authority will require 
referral within the Scottish Executive.    6. Total amount budgeted
 
 
 2005 £6,593,883.   
 2006 £2,804,660.    7. Duration of programme
 
  December 2001 to 31 December 2006.   
 
8. Assessment of trade effects
 
  Not applicable.    
  G/SCM/N/155/EEC/Add.27 
 Page 59 
 
 
  LIII.  SCOTTISH EXECUTIVE AND SCOTTISH ENTERPRISE RESEARCH AND 
DEVELOPMENT SCHEME 
1. Period covered by the notification  
  2005 and 2006.   
 
2. Policy objectives
 
 
• To assist enterprises to research and de velop new innovative products, processes or 
 
• services with commercial potential (including feasibility studies, industrial research 
 
• and pre-competitive development 
 
• To stimulate innovation and encourag e best practice throughout business 
 
• To foster the creation and development of new high-tech start ups 
 
• To strengthen the scientific and technological bases of industry 
 
• To encourage co-operation between enterp rises and the research base and help to 
effect wealth creation from the science base 
 
3. Background and authority for the subsidy  
  Enabling legislation for the Scottish Execu tive is the Science and Technology Act 1965, 
while for Scottish Enterprise and Highlands & Isla nds Enterprise it is the Enterprise and New Towns 
(Scotland) Act 1990, as amended by Scottish Statutor y Instrument 2001 No 126, which reduced the 
operational area of Scottish Enterprise by removi ng parts of The Moray Council area previously 
covered.    4. Form of the subsidy
 
 
 Grant support.    5. To whom and how the subsidy is provided
 
  Businesses undertaking eligible R & D projects.   
 
6. Total amount budgeted
 
  2005 £13,553,003.   
 2006 £11,812,568.   
 
7. Duration of the programme
 
  To 31 March 2006.    8. Assessment of trade effects
 
 
 External benefits or spillover effects fro m supported projects accrue most frequently to 
Award recipients' customers, but their suppliers and competitors also benefit.   G/SCM/N/155/EEC/Add.27 
Page 60  
 
   Not all supported firms have direct competitors for the outcomes of their projects and this in 
part explains why evaluations have shown displ acement rates (i.e. negative effects on other, 
unsupported firms) to be low.   
  LIV. SELECTIVE FINANCIAL INVESTMENT FOR ENGLAND 
1. Period covered by the notification
 
  2005/06 and 2006/07.    
2. Policy objectives
 
  To assist economic development in areas of special hardship.    3. Background and authority for the scheme
 
 
 The Industrial Development Act 1982.    4. Form of the subsidy
  
  Grant.   
 
5. To whom and how the subsidy is provided
 
  The scheme is available to eligible projects of manufacturing and service sector firms of any size based in or moving into the Assisted Areas of England.   
 
 Financial assistance is on a discretionary basis, usually in the form of a grant phased against 
achievement of progress on the project (jobs & capital costs).    6. Total amount budgeted
 
 
 2005/06 £69.4m.   
 2006/07 £30.3m.    7. Duration of programme
 
 
 Indefinite.   
 8. Assessment of trade effects
 
  This scheme is designed to help areas of special difficulty to compete on level terms with more advantaged regions.   
 
 
LV. SUPPORT FOR LAND REMEDIATION 
1. Period covered by the notification
 
 
 2005 and 2006.    G/SCM/N/155/EEC/Add.27 
 Page 61 
 
 
  2. Policy objectives  
  The aim of the scheme is to bring land back into productive use by addressing the detrimental 
effects of previous usage which contribute to, and are unlikely to be rectified as a result of, market 
failure.   
 
3. Background and authority for the subsidy
 
  Regional Development Agencies Act 1998.    Greater London Authority Act 1999 (Chapter 29).   
 Enterprise and New Towns (Scotland) Act 1999.   
 Leasehold Reform, Housing and Urban Development Act 1993.    Local Government Act 2000.    Local Government in Scotland Act 2003.    
4. Form of the subsidy
  
  Dereliction Aid grant and Relocation aid grants.    5. To whom and how the subsidy is provided
 
 
 Aid is paid to the owner of the land.  There are a number of eligible costs for project costing.  
Payments are made pro rata to the developer's qualifying expenditure up to 100 per cent of eligible 
costs plus a maximum of 15 per cent of the cost of  the work, as per the Environmental Aid guidelines. 
 6. Total amount budgeted
 
 
 2005 £23,469,611.    2006 £20,188,537.    7. Duration of the programme
 
 
 The approval remains in force until 31 December 2013.   
 8. Assessment of trade effects
 
  None.   
 
 
LVI. VACCINES RESEARCH RELIEF 
1. Period covered by the notification
 
  2005 and 2006.   
 
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 in comparison for the demand for medicines for 
people in more affluent countries, there is less economic incentive for pharmaceutical companies to 
devote resources to these diseases.  Vaccines research relief is not primarily aimed at boosting UK 
productivity, though there may be some incidental benefits.    G/SCM/N/155/EEC/Add.27 
Page 62  
 
  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) and N293/2004 (on 6 December 2004).   
 
 Legislation governing the scheme was introdu ced in the Finance Act 2002 (Schedules 13 and 
14) with effect from 15 April 2003.  The VRR sch eme was subsequently amended in the Finance 
Act 2002 (Schedule 15), the Finance Act 2003 (Schedul e 31) and the Finance Act 2004 (section 141).   
 
4. Form of the subsidy
 
  Tax relief (see below).    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 50 per cent of their qualifying 
R&D expenditure as an enhancement to the general deduction that they would otherwise get for R&D 
spending.  However, loss making SMEs are furt her entitled to claim a payable credit from the 
Government equal to 16 per cent of the enhan ced relief for spending on the specified diseases 
(although they must then give up the enhanced relief claim).     Taking an example of a SME company in profit paying tax at the 2004 small companies' rate (19 per cent), it would be entitled to claim the mainst ream R&D tax credit of 150 per cent and then on 
top of this a further 50 per cent for qualifying spe nding on R&D into the specified diseases.  Thus for 
£100 of qualifying spending it would receive £19 of ge neral tax relief available to all companies, 
£9.50 of enhanced tax relief under the R&D tax credit scheme for SMEs and a further £9.50 of enhanced tax relief under the VRR scheme.  If this  same company was loss making it would claim up 
to £24 of repayable tax credit under the general R& D tax credit for SMEs scheme and up to £8 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 attri butable to the qualifying VRR expenditure, 
and 
• the gross employment and social security taxes (Pay-As-You-Earn tax and National 
Insurance Contributions) paid by the co mpany 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:   
  G/SCM/N/155/EEC/Add.27 
 Page 63 
 
 
  • the direct costs of staff directly invo lved in carrying out the R&D activity.  
These costs comprise the gross remunera tion (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 transformable 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 independen t research carried out by a charity, university or 
scientific research organisation;  plus 
 
• if the company subcontracts all or part  of the R&D to someone other than a 
charity, university or scientific research organisation 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 act ual 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 has 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.   
  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
 
  2005 £10 million.    2006 £10 million.    
 The latest figures on the estimated take-up and costs of the R&D schemes are published as 
National Statistics on the H M Revenue & Customs website at:     http://www.hmrc.gov.uk/stats/corporate_tax/randdtcmenu.htm
 
 7. Duration of the programme
 
 
 The notification to the European Commission limited the scheme covered by the notification 
to 10 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/155/EEC/Add.27 
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  8. Assessment of trade effects
 
  No assessment of the impact of VRR is curre ntly available.  However, the following data 
provides some indication of firms' decisions to locate R&D spending in the UK.  This shows the 
proportion of business R&D performed in the pharmac eutical sector by UK owned companies.  Of 
course, R&D on the specified diseases will represent only part of the total R&D performed in the 
pharmaceutical sector:     Intramural Expenditure (£ million) (for the pharmaceutical sector)  
 2001 2002 2003 
UK-owned businesses 1804 2044 1897 
Non UK-owned businesses 1236 1260 1344 
Source:  "Research and Development in UK Busi ness 2003" Office for National Statistics.   
 
 Expenditure as % of total business R& D in UK (for the pharmaceutical sector) 
 
 2001 2002 2003 
UK-owned businesses 59% 62% 59% 
Non UK-owned businesses 41% 38% 41% 
Source:  "Research and Development in UK Busi ness 2003" Office for National Statistics.   
 
 The existing data do not allow a robust estimate to be made of the impact of VRR on trade effects although any effect will be small given the scale of this measure.   
 
 
LVII.  WALES TOURIST BOARD - INVESTMENT SUPPORT SCHEME 
1. Period covered by the notification
 
 
 2005 and 2006.   
 2. Policy objectives
 
  Enhance the quality of the tourism product in Wales.    
3. Background and authority for the scheme
 
  Section 4 of the Development of Tourism Act 1969.    4.  Form of the subsidy
 
 
 Grant.    5. To whom and how the subsidy is provided
 
  Subsidy is provided as a grant to both privat e and public sector organisations Undertaking 
tourism development.   
 6. Total amount budgeted
 
  2005 £ Nil Return.   
 2006 £ Nil Return.    G/SCM/N/155/EEC/Add.27 
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  7. Duration of programme  
  Indefinitely, pending advice from sponsor department.   
 8. Assessment of trade effects
 
 
 Independent evaluation carried out by Sega l Quince Wicksteed (2000) demonstrate positive 
impacts, good value and additionality.     LVIII.  WASTE RESEARCH AND INNOVATION PROGRAMME AND WASTE 
DEMONSTRATOR PROGRAMME 
1. Period covered by the notification
 
  2005 and 2006.   
 
2. Policy objectives
 
  The focus of the scheme is:    
- to facilitate the developmen t and implementation 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 disposed  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 Secretary 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 development 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 Advisory 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, and will submit its recommendations to DEFRA.  G/SCM/N/155/EEC/Add.27 
Page 66  
 
  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 proposal s 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 incl uding 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 ; c onfirmation 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 t hose making use of the scheme.  Projects involving co-
operation between firms, universities and research ins titutes 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 budgeted
 
  2005 £10.    2006 £10.    7. Duration of the programme
 
 
 Waste Research & Innovation Scheme is for a duration of 3 years.  The Waste Demonstrator Programme will run until 2009.    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 
will be widely disseminated through the research  and waste communities, including articles in  G/SCM/N/155/EEC/Add.27 
 Page 67 
 
 
  technical journals and other publi cations and conferences.  The associated Data Centre will also 
assure access for the general public to in formation and data on the projects.   
  
LIX. WDA PARTNERSHIP DEVELOPMENT 
1. Period covered by the notification
 
  2005 and 2006.    2. Policy objectives
 
 
 To ensure the availability of suitable business pr emises within which initial investment can be 
established.    3. Background and authority for the scheme
 
 
 Authority N656/99.    4.  Form of the subsidy 
 
  Grant.   
 
5. To whom and how the subsidy is provided
 
  Property developers, investment companies and financial institutions in Wales via four grant 
instruments.  
 
6. Total amount expended
 
  2005 £459,000.    2006 £13,919,775.    
7. Duration of programme
 
  31 December 2006.    8. Assessment of trade effects
 
 
 Not applicable.     
LX. WDA PROPERTY FOR BUSINESS 
1. Period covered by the notification
 
 
 2005 and 2006.    2. Policy objectives
 
 
 To ensure the availability of suitable business pr emises within which initial investment can be 
established.   G/SCM/N/155/EEC/Add.27 
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  3. Background and authority for the scheme
 
  Authority N655/99.    4. Form of the subsidy
 
 
 Grant.    5. To whom and how the subsidy is provided
 
 
 Companies in Wales via three primary grant instruments.   
 6. Total amount expended
 
  2005 £1,274,084.   
 2006 £1,064,048.   
 7. Duration of programme
 
  31 December 2006.    
8. Assessment of trade effects
 
  Not applicable.     LXI. WELSH RESEARCH AND DEVE LOPMENT SCHEME N150/06 
1. Period covered by the notification
 
  2005 and 2006.    2.  Policy objectives
 
 
 SMARTCymru will help individuals, small and medium-sized enterprises (SME's) by 
providing grant support to research, design and deve lop technologically innovative products and 
processes.    
 "The overall objective is to aid better exploita tion of industrial potential through innovation, 
research and technological development."    3. Background and authority for the scheme
 
  Legal basis: Science & Technology Act 1965.   
  Industrial Development Act 1982.   
  Scheme notified and authorised by the Commission on 14 March 2003 under State Aid number N 28/2003, by letter referenced SG(2003) 228962.    
 Administration of the scheme transferred from the Welsh Development Agency to the 
National Assembly for Wales and extended notifi cation until 31 March 2009.  Scheme alterations 
notified and authorised by the Commission on 9 March 2006 under State Aid number N 150/2006, by letter referenced C (2006) 1606.     G/SCM/N/155/EEC/Add.27 
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  4. Form of the subsidy  
  Grant.    5. To whom and how the subsidy is provided
 
 
 Companies through grant payments.    6. Total amount budgeted
 
 
 2006 £7,055,000.   
 7. Duration of programme
 
  Ongoing.   
 
8. Assessment of trade effects
 
  Information on the safeguarding/creation of jobs and private sector investment in innovation and research and development is collect ed upon completion of the project.   
 
 
 
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