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The Rt Hon Boris JOHNSON Secretary of State for Foreign Affairs Foreign and Commonwealth Office King Charles Street London

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The Rt Hon Boris JOHNSON Secretary of State for Foreign Affairs Foreign and Commonwealth Office King Charles Street London EUROPEAN COMMISSION Brussels, 5.10.2016 C(2016) 6292 final PUBLIC VERSION This document is made available for information purposes only. Subject: State aid case no. SA.46361 (2016/N) – United Kingdom - Amendment to the regional aid map 2014-2020 of the United Kingdom for the period 2017-2020 Sir, 1. PROCEDURE (1) On 28 June 2013 the Commission adopted the Guidelines on Regional State Aid for 2014-2020 (hereinafter "RAG")1. On the basis of the RAG the United Kingdom ("UK") authorities notified their regional aid map, which was approved by the Commission on 21 May 2014 for the period from 1 July 2014 until 31 December 20202. (2) Pursuant to point 5.6.2 of the RAG, Member States may notify amendments to their regional aid map in the context of the mid-term review in 2016. The amended regional aid maps will be in force from 1 January 2017 until 31 December 2020. 1 OJ C 209, 23.07.2013, p.1 2 Decision for State aid case SA.38113 – United Kingdom Regional aid map 2014-2020, OJ C 233, 18.07.2014, p.21 The Rt Hon Boris JOHNSON Secretary of State for Foreign Affairs Foreign and Commonwealth Office King Charles Street London SW1A 2AH United Kingdom Commission européenne/Europese Commissie, 1049 Bruxelles/Brussel, BELGIQUE/BELGIË - Tel. +32 22991111 (3) The Commission published on 25 June 2016 a Communication amending Annex I to the RAG (hereinafter, the "Communication")3. In this Communication, the Commission presented up-to-date statistical data to be used as a basis for the mid-term review of the list of regions qualifying for regional aid status pursuant to Article 107(3)(a) TFEU (hereinafter referred to as "'a' areas"). The annex to this Communication identified those NUTS 2 regions for which the per capita GDP for the period 2012-2014 had fallen to 75% or less of the EU-28 average and that could therefore qualify as 'a' areas from 1 January 2017 until 31 December 2020. The Commission invited the Member States concerned to notify the amendments to their regional aid map before 1 September 2016 at the latest. (4) By electronic communication dated 1 September 2016, the UK duly notified a proposal for amendments to its regional aid map in the context of the mid-term review. 2. DESCRIPTION OF THE PROPOSED AMENDMENT (5) In their notification, the UK authorities propose to amend the regional aid map 2014- 2020 in line with the provisions of the Communication. In particular, the UK authorities propose to include the whole NUTS 2 region of Tees Valley and Durham as an 'a' area with a standard aid intensity ceiling of 25% for large enterprises, and this for the period from 1 January 2017 until 31 December 2020. Under the regional aid map 2014-2020, approved by Commission Decision of 21 May 2014, only parts of the Tees Valley and Durham region are designated as Article 107(3)(c) areas. (6) The UK authorities propose no other modifications to the regional aid map as approved by Commission decision of 21 May 2014. 3. ASSESSMENT (7) Eurostat data shows that the average GDP per capita of the NUTS 2 region of Tees Valley and Durham for the period 2012-2014 has fallen to 73.67% of the EU-28 average. This is why the region is listed in Annex I of the Communication as one of the regions that could qualify for regional aid pursuant to Article 107(3)(a) TFEU from 1 January 2017 until 31 December 2020. (8) The proposed maximum aid intensity of 25% for large enterprises in Tees Valley and Durham region for the period 2017-2020 is in line with the provisions set out in paragraph 172(c) of the RAG. In accordance with paragraph 177 of the RAG, the maximum aid intensities applicable to large enterprises can be increased by up to 20 percentage points for small enterprises or by up to 10 percentage points for medium- sized enterprises. (9) The Commission notes that all other conditions set out in the Decision of 21 May 2014 on the regional aid map of the United Kingdom remain unchanged. 3 Communication from the Commission (2016/C 231/01) amending Annex I to the Guidelines on regional aid for 2014-2020 (Mid-term review of the regional aid maps), OJ C 231, 25.6.2016, p.1 2 4. COMPATIBILITY (10) In view of the above, the Commission concludes that the mid-term review of the regional aid map of the United Kingdom for the period from 1 January 2017 until 31 December 2020, as notified by the UK authorities, is in line with the RAG. The revised list of regions eligible for regional aid under article 107(3) (a) and (c) from 1 January 2017 until 31 December 2020 is presented in annex. (11) The Commission recalls that the maximum aid intensities specified in the regional aid map apply only to investments carried out in sectors that fall within the scope of the RAG, as defined in paragraph 10 thereof. In particular, these aid ceilings apply to the processing and marketing of agricultural products only to the extent laid down in the Community guidelines for State aid in the agriculture and forestry sector4, or in any guidelines replacing them. 5. CONCLUSION (12) The Commission has accordingly decided: - to approve the amendment of the regional aid map of the United Kingdom for the period from 1 January 2017 until 31 December 2020 as set out in the Annex, as it fulfils the conditions laid down in the Guidelines on regional State aid for 2014-2020 and the Communication amending Annex I to the Guidelines on regional State aid for 2014-2020. (13) Any request concerning this letter should be sent by registered letter or fax to: European Commission Directorate-General for Competition State Aid Registry B-1049 Brussels Belgium Fax No: +32 2 29 61242. Yours faithfully For the Commission Margrethe VESTAGER Member of the Commission 4 OJ C319, 27.12.2006, p.1., as amended by the notice published in OJ C390, 24.11.2015, p.4. 3 ANNEX to the decision on case SA.46361 (amending decision on case SA.38113) Guidelines on regional State aid for 2014-2020 (OJ C 209, 23.07.2013, p. 1) The United Kingdom - Regional aid map applicable from 1.1.2017 to 31.12.2020 (Approved by the Commission on …) 1. Regions eligible for aid under Article 107(3)(a) TFEU from 1.1.2017 until 31.12.2020 NUTS 2 Name of NUTS 2 region Maximum aid intensities code (applicable to large enterprises)° UKC 1 Tees Valley and Durham 25 % UKK 3 Cornwall and the Isles of Scilly 25 % UKL 1 West Wales and The Valleys 25 % ° For investment projects with eligible expenditure not exceeding EUR 50 million this ceiling is increased by 10 percentage points for medium sized companies and 20 percentage points for small companies as defined in the Commission Recommendation of 6 May 2003 concerning the definition of micro, small and medium-sized enterprises (OJ L 124, 20.5.2003, p. 36). For large investment projects with eligible expenditure exceeding EUR 50 million, this ceiling is subject to adjustment in accordance with paragraph 20(c) of the Guidelines on national regional aid for 2014-2020. 2 Regions eligible for aid under Article 107(3)(c) TFEU from 1.1.2017 until 31.12.2020 (a) Predefined Article 107(3)(c) TFEU areas (Sparsely populated areas) NUTS 3 Name of NUTS 3 region Maximum aid intensities Code (applicable to large enterprises)° UKM6 1 Caithness & Sutherland and Ross & Cromarty 15 % UKM6 3 Lochaber, Skye & Lochalsh, Arran & Cumbrae and Argyll & Bute 15 % UKM6 4 Eilean Siar (Western Isles) 15 % °For investment projects with eligible expenditure not exceeding EUR 50 million this ceiling is increased by 10 percentage points for medium sized companies and 20 percentage points for small companies as defined in the Commission Recommendation of 6 May 2003 concerning the definition of micro, small and medium-sized enterprises (OJ L 124, 20.5.2003, p. 36). For large investment projects with eligible expenditure exceeding EUR 50 million, this ceiling is subject to adjustment in accordance with paragraph 20(c) of the Guidelines on national regional aid for 2014-2020. (b) Non-predefined Article 107(3)(c) TFEU areas NUTS Code Name of NUTS region (and eligible parts of the NUTS region Maximum aid intensities concerned) (applicable to large enterprises)° Zone 1 Cumbria and Borders UKD11 West Cumbria (Partly) 10% Only the following parts of the above NUTS 3 region are eligible: E05003180 Arlecdon Ward; E05003115 Aspatria Ward; E05003145 Barrow Island Ward; E05003181 Beckermet Ward; E05003182 Bootle Ward; E05003183 Bransty Ward; E05003117 Broughton St. Bridget's Ward; E05003146 Central Ward; 05003184 Cleator Moor North Ward; E05003185 Cleator Moor South Ward; E05003147 Dalton North Ward; E05003148 Dalton South Ward; E05003186 Distington Ward; E05003187 Egremont North Ward; E05003188 Egremont South Ward; E05003123 Ellen Ward; E05003124 Ellenborough Ward; E05003125 Ewanrigg Ward; E05003126 Flimby Ward; E05003190 Frizington Ward; E05003191 Gosforth Ward; E05003192 Harbour Ward; E05003127 Harrington Ward; E05003193 Haverigg Ward; E05003149 Hawcoat Ward; E05003194 Hensingham Ward; E05003195 Hillcrest Ward; E05003150 Hindpool Ward; E05003196 Holborn Hill Ward; E05003128 Holme Ward; E05003197 Kells Ward; E05003130 Marsh Ward; E05003198 Millom Without Ward; E05003199 Mirehouse Ward; E05003131 Moorclose Ward; E05003200 Moresby Ward; E05003132 Moss Bay Ward; E05003133 Netherhall Ward; E05003151 Newbarns Ward; E05003201 Newtown Ward; E05003152 Ormsgill Ward; E05003153 Parkside Ward; E05003154 Risedale Ward; E05003155 Roosecote Ward; E05003203 Sandwith Ward; E05003204 Seascale Ward; E05003136 Seaton Ward; E05003137 Silloth Ward; E05003138 Solway Ward; E05003202 St.
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