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Tuesday, 21 October 2014

Guaranteeing future growth for Cumbria

EVERY seven years the European Commission takes a look at which parts of Europe should be specially designated as Assisted Areas where companies can be eligible for discretionary financial support to fund their growth.

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STUART KLOSINSKI

In the past fortnight the EU has published for consultation its draft proposal for 2014 to 2020 in a document called Draft Regional Aid Guidelines.

The EU has increased the population coverage from 42 per cent of the EU population to 45 per cent to give national and regional authorities sufficient room to tackle internal disparities.

On February 1, Joaquín Almunia, vice president of the European Commission responsible for Competition Policy, argued that the EU would allow regional investment aid to large companies only in the least developed regions – the “a” areas – where the balance between the contribution to development and the distortion of competition is more favourable.

However they would also continue to authorise aid to large firms in “c” areas and other regions, provided it meets the Europe 2020 objectives to grow research, development, innovation, and environmental protection under the respective sectoral state aid guidelines

What this decision means is that large companies in much of Britain and in Furness and West Cumbria, which can now receive grant aid, will not do so from January 2014.

Only Europe’s worst-performing EU regions such as much of the EU in southern and eastern Europe would be able to support large companies.

Mr Almunia added large firms might be attracted to an area like Furness without financial support through availability of availability of a skilled labour force, infrastructure, natural resources concluding subsidies should only be used when they can tip the balance and trigger new investment and new jobs.

We have big concerns about the proposals.

Firms employing 250 people or more either in a single site or worldwide as part of a group have a big influence on our economy.

In the future, area like Furness and west Cumbria might not be able to attract both reinvestment by existing large firms or to persuade large firms to come into the area.

So together with the Industrial Communities and Coastal Communities Alliances, Furness Enterprise will be urging the EU to leave things as they are and continue to allow large firms to receive support.

We will also be urging the UK government’s Department for Business to do the same.

A very much second best option would be to have some form of transitional arrangement come in where by for several years large firms can benefit before help ended.

The next six months will be crucial in persuading EU that businesses need support if our economy is to prosper from 2014 to 2020.

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