Silverstone seeks clarification over state aid

By on Monday, March 24, 2014
Lotus F1 Team

Lotus F1 Team

Silverstone bosses have written to UK prime minister David Cameron in a bid to prevent 'illegal' state aid being given to a potential new circuit in Wales.

Developers behind the Circuit of Wales racetrack in Ebbw Vale have asked for the UK and Welsh government to commit up to £50m to the project.

The Circuit of Wales plans to host major motorsport - but not Formula 1 - and Silverstone officials released a statement asking for clarification on the matter.

'Silverstone is fully supportive of regeneration projects and the creation of new jobs, however, when Silverstone Circuit was recently looking for support to secure the future of the Formula 1 British Grand Prix and protect Motorsport Valley - a cluster of motor sport, automotive and high performance engineering businesses at the heart of the motor sport industry sector, comprising 4,300 companies, employing 41,000 people and generating annual sales of £9 billion – the application was denied on the basis that this would be classed as illegal State aid,' read a statement.

'In the absence of such aid, Silverstone had to sell off assets to ensure the Formula 1 British Grand Prix was retained in the UK.'

'Silverstone has been advised that an injection of funds by the Welsh and/or UK governments to the Circuit of Wales project could also amount to illegal State aid, as a transfer of State resources would give Circuit of Wales an economic and selective advantage over other circuits (and developments). There are currently a number of well established, privately funded circuits in the UK, including Wales, that feel that the British motor sport industry would be threatened by the addition of a government funded circuit.'

The circuit, which hosted the first Formula 1 race in 1950, insists that competition is not an issue but desires a level playing field when it comes to rivals.

'To be clear, Silverstone has no objection to competition between UK circuits, but it has to be a level playing field', continued the statement.

'Based on its unrivalled knowledge and experience of running an international motor racing venue for over 60 years, it is Silverstone’s view that the Circuit of Wales project is unviable.

'In 2008, UK motor sport experienced a similar scenario, when a previous management team at Donington Park circuit underestimated the financial realities of hosting Formula 1. A proposed major upgrade failed to materialise due to unrealistic projections and a consequent lack of investment.

'Silverstone reiterates that it is sympathetic to the economic situation in Ebbw Vale, but motor sport at circuit level is not particularly profitable and is often loss making. Many UK circuits are under-utilised and struggle for revenue. It is unrealistic to suggest Circuit of Wales will be the exception.'

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