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UK Assisted Areas

Volume 450: debated on Tuesday 10 October 2006

A two-stage public consultation seeking views on the designation of future assisted areas from 2007-13 took place from February to August 2006. Approximately 420 written responses were received from a wide range of stakeholders and interested parties. There were several regional and national information events hosted across the country. Furthermore, the review team and I personally met several delegations to consider individual representations. We have responded positively to all representations and amended the proposed map where in our judgment this is possible and consistent with the principles and criteria the UK Government have determined and the constraints established by the rules set by the European Commission. Copies of the Government’s response to the consultation and the assisted areas map1 being sent to the European Commission for approval have been placed in the House Library.

The assisted areas map will be sent to the European Commission today and it has up to two months to approve it. The assisted areas map is not final until it is approved by the European Commission as complying with its guidelines on regional aid. Upon receipt of this approval, the assisted areas map will be implemented through UK legislation making it operational from January 2007.

Much has changed since the last review of assisted areas in 1998-99. The UK economy has prospered growing faster than any of the G7 industrialised nations. Further countries have joined the European Union. The combination of these two factors has meant that less of Britain is eligible for assisted areas status. The European Commission guidelines published last December specified that the proportion of the UK population covered by assisted areas for 2007-13 will be reduced from the 30.9 per cent. currently covered to 23.9 per cent.

Assisted areas status gives us flexibility to support investment, job creation and retention propositions in the more disadvantaged areas of the UK. This helps us tackle regional disparities in economic performance and to promote social cohesion across the UK. In England we will be working with the regional development agencies to recommend that those areas losing assisted areas status in 2007-13 be recommended for Tier 3 coverage. This will offer SFIE to small and medium-sized enterprises under the new European Commission SME block exemption.

The Government carried out an open and transparent review of the assisted areas in response to new European Commission guidelines on regional aid adopted last December.

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