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17/10/2006
Government redirects assistance for NI businesses
The Department of Enterprise, Trade and Investment has today announced that it has withdrawn the State aid notification of the proposed Government intervention aimed at reducing electricity prices for business which had been announced in the 2004 Budget.
The decision follows a review by the Department which concluded that even if the proposal received State aid clearance, the combined effect of the loss of the first three years of the funding and the expected requirement for the benefit of the intervention to be spread over all customers would have substantially reduced the potential impact on business costs.
In the context of ongoing budget management and as part of the Comprehensive Spending Review, Ministers will consider alternative options aimed at the business community.
The then DETI and DFP Minister, Ian Pearson, announced in September 2003, a Budget proposal totalling some £200 million over the period to 2012 aimed at bringing about a significant reduction in electricity prices across the business sector.
The proposed intervention would have removed some of the excess costs inherited from privatisation in the form of the Ballylumford Contract Buyout – the legacy privatisation costs are the main reason for the high electricity prices in Northern Ireland over the past decade.
Following doubts about the compatibility of the proposed intervention with European State aid requirements, a formal State aid notification of the proposed intervention was submitted to the European Commission in August 2005.
Meanwhile, the Federation of Small Businesses has expressed serious concern at the announcement by the Department of Enterprise, Trade & Investment that they are to withdraw the subsidy application for businesses struggling with high electricity costs.
Wilfred Mitchell, FSB Policy Chairman said: “This is extremely disappointing news that the Government are to withdraw the proposed subsidy application for business owners in Northern Ireland who are struggling with the high cost of electricity.
“We were surprised to learn from European sources that the Government had not adequately done their homework in their preparation for this proposal and was no real shock when the European Commission stated that it breached European State Aid requirements.”
He continued: “Businesses in Northern Ireland have the highest electricity, insurance and crime rates in the UK and we still have the introduction of Water Charges to come in April 2007. These high costs are putting a huge burden on local business owners and are restricting the ability of our Economy to be sustainable.
“If the Government is serious about growing our private sector, then they need to announce practical assistance to local businesses.”
(SP)
The decision follows a review by the Department which concluded that even if the proposal received State aid clearance, the combined effect of the loss of the first three years of the funding and the expected requirement for the benefit of the intervention to be spread over all customers would have substantially reduced the potential impact on business costs.
In the context of ongoing budget management and as part of the Comprehensive Spending Review, Ministers will consider alternative options aimed at the business community.
The then DETI and DFP Minister, Ian Pearson, announced in September 2003, a Budget proposal totalling some £200 million over the period to 2012 aimed at bringing about a significant reduction in electricity prices across the business sector.
The proposed intervention would have removed some of the excess costs inherited from privatisation in the form of the Ballylumford Contract Buyout – the legacy privatisation costs are the main reason for the high electricity prices in Northern Ireland over the past decade.
Following doubts about the compatibility of the proposed intervention with European State aid requirements, a formal State aid notification of the proposed intervention was submitted to the European Commission in August 2005.
Meanwhile, the Federation of Small Businesses has expressed serious concern at the announcement by the Department of Enterprise, Trade & Investment that they are to withdraw the subsidy application for businesses struggling with high electricity costs.
Wilfred Mitchell, FSB Policy Chairman said: “This is extremely disappointing news that the Government are to withdraw the proposed subsidy application for business owners in Northern Ireland who are struggling with the high cost of electricity.
“We were surprised to learn from European sources that the Government had not adequately done their homework in their preparation for this proposal and was no real shock when the European Commission stated that it breached European State Aid requirements.”
He continued: “Businesses in Northern Ireland have the highest electricity, insurance and crime rates in the UK and we still have the introduction of Water Charges to come in April 2007. These high costs are putting a huge burden on local business owners and are restricting the ability of our Economy to be sustainable.
“If the Government is serious about growing our private sector, then they need to announce practical assistance to local businesses.”
(SP)
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