EU Regional State Aid is vitally important to allow companies to create new and maintain existing jobs in many parts of Wales. The European Commission is currently reviewing the regional State Aid guidelines, which set out how much financial assistance the UK and Welsh Government can provide to companies.
Some proposals for the new guidelines threaten to reduce or impose a ban on financial assistance to large companies, with more than 250 employees, in some areas. Imposing a limitation on the scope of regional state aid for large companies could have a serious effect on economic performance in parts of Wales.
Welsh Labour‘s DEREK VAUGHAN MEP said:
"This is an issue that I have raised with the Commission in private meetings and Committee meetings in the European Parliament. I believe that some of the Commission's proposals could be improved further in order to help deliver economic regeneration to many parts of Wales.
The recognition of parts of East Wales as an Assisted Area is crucial to encourage the continued development of the local economy. However, if a ban is imposed on large enterprises this could be detrimental to growth in the affected areas.
Large companies have already brought a huge amount of investment into areas across Wales, which benefits from having many world-leading international companies located here. If the option of state aid is removed, then this could seriously damage the possibility of future investment in the area."
The Commission has recently stated that it is considering introducing some exemptions to the rules for large companies so that some may still receive financial assistance.
This has been welcomed by Mr Vaughan, who said:
"The Commission must be flexible in their approach to the revision of the guidelines on state aid. I hope that the Commission can introduce some exemptions to the proposed ban on large companies so that Wales can continue to attract investors."
"With discussions still ongoing, I will be doing everything I can before the Commission's proposals are finalised to ensure that areas of Wales don't lose out."
- Under the current rules, 24% of the UK population is covered by Assisted Area status.
- Under the current guidelines, West Wales and the Valleys (Anglesey; Blaenau Gwent; Bridgend; Caerphilly; Carmarthenshire; Ceredigion; Conwy; Denbighshire; Gwynedd; Merthyr Tydfil; Neath Port Talbot; Pembrokeshire; Rhondda Cynon Taff; Swansea and Torfaen) is an Assisted Area under category 3 (a), which receives the largest amount of assistance, while parts of East Wales are included in category 3 (c), receiving less help.
- Areas of East Wales listed in category 3 (c) are Flintshire and parts of Cardiff (Creigiau / St Fagan’s; Pentyrch; Pontprennau / Old St Mellons and Trowbridge), Newport (Gaer; Graig; Liswerry; Llanwern; Marshfield; Pillgwenlly and Tredegar Park) and Powys (Aber-craf; Cwm-twrch; Ynyscedwyn and Ystradgynlais)