Question to the Department for Business, Energy and Industrial Strategy:

To ask Her Majesty's Government what plans they have, if any, to apply for COVID-19 to be considered an exceptional circumstance under Article 107(2) of the Treaty on the Functioning of the European Union, and what assessment they have made of how that could alter the support provided to businesses in the UK.

Aid for COVID-19 related losses may be given under article 107(2)(b) or article 107(3)(b) of the Treaty on the Functioning of the European Union (TFEU).

Article 107(2)(b) requires the European Commission to approve aid to make good the damage caused by natural disasters or exceptional occurrences. The Commission declared on 12 March that COVID-19 qualified as an exceptional occurrence. A key feature of this provision is that schemes must only compensate businesses for damages actually suffered as a result of COVID-19. Schemes under this provision must be individually notified to and approved by, the Commission.

Under Article 107(3)(b) the Commission may approve aid to remedy a serious disturbance in the economy. Under this article, the Commission has introduced some welcome flexibilities into the rules to deal with the impacts of the COVID-19, in the form of a Temporary Framework. This facilitates aid going to the companies who need it most, quickly and efficiently.

When the Government considered its State aid options in response to the COVID-19 outbreak, it took the decision to design schemes that would allow organisations to access funds quickly and easily with a minimal number of checks and balances attached to the application and approval processes.

Following work by BEIS officials, the COVID-19 Temporary Framework was approved by the Commission under the Temporary Framework on 6 April. This allows public authorities to introduce their own aid measures without the necessity of obtaining an individual Commission approval. The combination of this and other measures such as the Coronavirus Business Interruption Loan Scheme (CBILS) and the Self Employed Income Support Scheme constitute an important part of the unprecedented programme of Government support for business to address the impacts of the COVID-19 pandemic.