§ Lord Shore of Stepneyasked Her Majesty's Government:
What were the criteria used by the European Commission for judging the Chancellor of the Exchequer's proposal to assist small and medium firms in Northern Ireland with a 100 per cent first year capital allowance to be a state aid, and what reasons the Commission gave; on what date the Government were informed of the Commission's ruling; and what period of time they were given by the Commission to make the necessary changes in the Finance Bill. [HL22]
§ Lord McIntosh of HaringeyThe criteria used by the European Commission in considering the proposals was whether they were compatible with state aid rules within Article 87 of the Treaty of Rome (as amended by the Treaty of Amsterdam). The Commission determined that the measure constitutes state aid within the meaning of Article 87.
The scheme was notified to the Commission on 30 September 1998. The non-agricultural elements were judged to be compatible with state aid rules on 25 June 1999. The agricultural elements were judged compatible on 19 October 1999. The Commission set no time limit for the changes to the scheme, which were made in the Finance Act 1999. The scheme could not be brought in without the approval of the Commission.