5 European State Aid approval
10. In order for the
new scheme to be implemented,
State Aid approval is required from the European Commission. After
receipt of the UK Government's State Aid application, the Commission
have three months in which to consider the application. If further
information is sought by the Commission then the 3 month time
period is extended. Other interested parties (including other
Member States) may submit comments; this procedure can delay the
application by 12 months or more.
11. The Government's State Aid application was submitted
to the European Commission on 5 January 2004.[6]
12. In evidence to us on 25 February 2004, the Economic
Secretary to the Treasury was unsure whether or not the introduction
date of 1 April 2004 could be met but stressed that every effort
was being made to assist the Commission in meeting this target.
13. We are concerned about the effect any delay in
introducing the new scheme might cause. If the new scheme is not
in place by 1 April 2004 then under the present levy relief scheme
the relief is set to reduce by a further 20 per cent on this date
to 60 per cent. Subsequent introduction of the new scheme later
in the year may necessitate the refunding of this additional 20
per cent—assuming that the new scheme can be applied retrospectively—back
to 1 April 2004.
14. Under either scenario many businesses in Northern
Ireland would be subjected unnecessarily to increased costs in
the coming months. The Treasury told us that planning for late
introduction of the new scheme, and development of a procedure
for returning overpayments to those businesses, was not currently
its priority.[7]
15. It was also apparent that, should the new scheme
be rejected by the Commission, the Treasury was unsure of the
future of the aggregates levy in its current form either in relation
to Northern Ireland or the UK as a whole.
6 Ev 58 Back
7
Qq 96-101 Back
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