The following Local Government practice note provides comprehensive and up to date legal information covering:
ARCHIVED: This Practice Note has been archived and is not maintained. For further reading on this subject, see: State aid—overview.
The European Union Rules (EU rules) on state aid prohibit member states from granting aid or assistance which distorts or threatens to distort competition and inter-state trade. Therefore whenever a public body or publicly-funded body (such as a quango) provides financial support to an undertaking they need to consider carefully whether such support constitutes state aid, particularly given that the European Commission (the Commission) is obliged to claw back any illegally granted state aid (and relevant interest on such aid).
However the EU also recognises that state aid may be a necessary element of government policy where for example it wants to attract inward investment into underdeveloped regions (often known as 'assisted areas') or to encourage investment in high technology industries.
Article 107(1) of the Treaty on the Functioning of the European Union (TFEU) contains the basic prohibition on the grant of state aid, whereas TFEU, art 7, paras (2), (3) describe the type of state aid that the EU may allow. For a measure to constitute state aid, it must:
be a form of assistance by or through a public body or publicly funded body (such as a quango)
confer an advantage on an undertaking (an undertaking is a
Free trials are only available to individuals based in the UK
Complete all the fields above to proceed to the next step.
**Trials are provided to all LexisPSL and LexisLibrary content, excluding Practice Compliance, Practice Management and Risk and Compliance, subscription packages are tailored to your specific needs. To discuss trialling these LexisPSL services please email customer service via our online form. Free trials are only available to individuals based in the UK. We may terminate this trial at any time or decide not to give a trial, for any reason. Trial includes one question to LexisAsk during the length of the trial.
To view the latest version of this document and thousands of others like it, sign-in to LexisPSL or register for a free trial.
Existing user? Sign-in
Subrogation in insurance and reinsuranceWhat is the right of subrogation?In the context of insurance and reinsurance, the right of subrogation entitles an insurer or reinsurer, having indemnified the (re)insured, to ‘step into its shoes’ to bring an action in the (re)insured’s name. For the purpose
Common financial covenantsThis Practice Note explains certain common financial covenants used in commercial finance transactions including:•minimum net worth test•gearing ratio•leverage ratio (or debt to equity ratio)•current ratio (or acid test ratio)•cashflow ratio•interest cover ratio, and•loan
Indemnity costs orders—principlesThis Practice Note considers orders for costs determined on an indemnity basis (indemnity costs orders). A court may order that costs are assessed on an indemnity basis so that any doubt as to the costs claimed are resolved in favour of the receiving party. Compare
Discharge by frustrationCoronavirus (COVID-19): In addition to the below content on force majeure generally, see also:•Coronavirus (COVID-19) toolkit—Contracts•Coronavirus (COVID-19) and contractual obligations—checklisttogether with the Q&A (in the related content pod on the right hand side) for
0330 161 1234