SCHEDULES
SCHEDULE 1The subsidy control principles
I1ACommon interest
Subsidies should pursue a specific policy objective in order to—
a
remedy an identified market failure, or
b
address an equity rationale (such as local or regional disadvantage, social difficulties or distributional concerns).
I2BProportionate and necessary
Subsidies should be proportionate to their specific policy objective and limited to what is necessary to achieve it.
I3CDesign to change economic behaviour of beneficiary
1
Subsidies should be designed to bring about a change of economic behaviour of the beneficiary.
2
That change, in relation to a subsidy, should be—
a
conducive to achieving its specific policy objective, and
b
something that would not happen without the subsidy.
I4DCosts that would be funded anyway
Subsidies should not normally compensate for the costs the beneficiary would have funded in the absence of any subsidy.
I5ELeast distortive means of achieving policy objective
Subsidies should be an appropriate policy instrument for achieving their specific policy objective and that objective cannot be achieved through other, less distortive, means.
I6FCompetition and investment within the United Kingdom
Subsidies should be designed to achieve their specific policy objective while minimising any negative effects on competition or investment within the United Kingdom.
I7GBeneficial effects to outweigh negative effects
Subsidies’ beneficial effects (in terms of achieving their specific policy objective) should outweigh any negative effects, including in particular negative effects on—
a
competition or investment within the United Kingdom;
b
international trade or investment.