CBI: Graph: UK near bottom of league for state aid
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Graph: UK near bottom of league for state aid

British state financial assistance to businesses is among the lowest among 27 EU member nations

The UK needs to be competitive as a location for industrial activity - and, as the chart below shows, other EU countries have made much more significant contributions as a proportion of GDP in recent years.

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In 2010 the UK government's direct financial intervention amounted to 0.2% of GDP - a figure dwarfed by state aid levels in France (0.7% of GDP), Germany (0.6%) and Sweden (0.8%). Of the 27 EU countries, 22 contributed more in state aid to businesses than Britain.

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Getting the underpinning economic landscape right is critical, but governments also make more direct interventions with business that affect competitiveness (so called State Aid in the EU).

For example, in the UK initiatives such as the R&D tax credit, patent box and regional growth fund have been valuable in supporting activity and influencing decision-makers to invest. In some countries there may also be more direct state investment in individual businesses.

Over time it is clear that the UK is always near the bottom of the league in terms of State Aid supporting industry and services. It is likely that this has given some of our competitors an advantage in terms of investment in new capabilities and industrial capacity.

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