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State Aid rules aim to ensure fair competition and a single common market. Giving favoured treatment to some businesses would:

• harm business competitors;

• risk distorting the normal competitive market; and

• hinder the long-term competitiveness of the Community. 

That is why the European Community founding Treaty generally forbids State-funded aid that would favour certain businesses or goods production. 

“Neither the beneficiaries of state Aid nor their competitors prosper in the long term. Very often, all public subsidies achieve is to delay inevitable restructuring operations without helping the recipient actually to return to competitiveness. Unsubsidised firms who must compete with those receiving public support may ultimately run into difficulties, causing loss of competitiveness and endangering the jobs of their employees. Ultimately, the entire market will suffer from State Aid, and the general competitiveness of the European economy is imperilled.” Citizen’s Guide to Competition Policy

The State Aid rules contribute to the effective functioning of the Single Market and European Union economic reform in two key ways:

(i) They prevent State Aid that would seriously distort competition - thereby helping to achieve a fair market for businesses in all Member States;

(ii) They allow State Aid that promotes economic development and other legitimate policy objectives, where this benefit outweighs any distortion of competition.

Seek advice early

State Aid can be complex and getting it wrong can mean recovering aid from business. The key message within the State Aid regime is that you should seek advice at the earliest stage. This will help you to avoid problems later on. Advisers can help you to:

• design aid to avoid or minimise the element of State Aid;

• avoid giving illegal State Aid and the penalties for this;

• select and use the most suitable available vehicles for State Aid;

• handle notifications and procedures for getting State Aid approval; and

• save time, effort and worry. 

Sources of advice

• DTI's State Aid Branch advises government departments and agencies on the State Aid. rules (except agriculture and transport).

• If you are a private sector organisation, you should direct your State Aid queries in the first instance to your Regional Government Offices, however if you are unable to contact these offices you can contact the DTI enquiry unit.

• Department for Environment, Food and Rural Affairs (DEFRA) advises on State Aid rules for agriculture, fisheries and aquaculture.

• Department for Transport (DfT) advises on State Aid rules for transport.

• Office of the Deputy Prime Minister (ODPM) can advise on State Aid schemes for land and property regeneration.

• Devolved Administrations. The Scottish Executive, the Welsh Assembly Government and the Department for Enterprise, Trade & Investment in Northern Ireland can provide initial advice and liaise with DTI, DEFRA, DfT and ODPM on your behalf if necessary.

• Our links page lists other useful State Aid resources.

Contact
 

If you are a private sector organisation, you should direct your State Aid queries in the first instance to your Regional Government Offices, however if you are unable to contact these offices you can contact the DTI Enquiry Unit.
DTI Enquiry Unit dti.enquiries@dti.gsi.gov.uk	020 7215 5000

Notifications

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