Silverstone boss contacts Cameron over Circuit of Wales

Silverstone racetrack bosses have asked David Cameron to prevent tens of millions of pounds of potentially "illegal" state aid being used for a new £280m circuit in Wales.

Developers behind the Circuit of Wales scheme in Ebbw Vale, Blaenau Gwent, are said to be asking the Welsh and UK governments to commit up to £50m.

Silverstone's MD has written to the prime minister to intervene.

Planning issues have delayed the start of work at the site.

Heads of the Valleys Development Company wants to create 6,000 jobs and bring 750,000 visitors a year to the area as part of its plans but doubts have been raised over the number of jobs claimed.

'Level playing field'

The development promises to transform one of Wales' most deprived communities.

Alongside the racing circuit, there are plans for hotels, a grandstand, a technology park and a solar park.

But those projects all rely on the racetrack going ahead.

The Circuit of Wales would host all motor racing events except Formula 1.

A spokesperson for Silverstone confirmed on Monday that its managing director Richard Phillips had written to Mr Cameron about funding for the Circuit of Wales.

The letter said: "An injection of funds by the Welsh and/or UK governments to the Circuit of Wales project would amount to a transfer of state resources, which gives Circuit of Wales an economic and selective advantage over other circuits. As such, it could amount to illegal state aid.

"There are 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."

'Own merits'

A statement added: "Silverstone has no objection to competition between UK circuits, but it has to be a level playing field.

"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."

Downing Street confirmed a letter had been received from Silverstone regarding the Circuit of Wales.

Nick Smith, Labour MP for Blaenau Gwent, said Silverstone had received local and UK government funding, and said its objection "feels a bit like the pot calling the kettle black".

No request

He said potential public funding for the Circuit of Wales "should be treated on its own merits", adding: "What wouldn't be fair would be if assistance for the Circuit of Wales were stymied by the self-interest of a competitor such as Silverstone."

The Association of Motor Racing Circuit Owners, which represents 17 UK race tracks, said last summer the circuit would harm motorsport.

Developers have asked both the Welsh and UK governments for up to £50m in total towards the scheme, it was revealed this month.

BBC Wales understands the Welsh government is considering investing £30m in the project.

The Welsh government told BBC Wales on Monday the Circuit of Wales had not asked it for money.

A spokesperson said: "Apart from an initial grant to fund the early stages of project development there has been no request or offer for any funding support for this project."

Michael Carrick, chief executive of the Heads of the Valleys Development Company, said they were disappointed with the letter's contents, adding: "It sounds like Silverstone is resistant to investment within the automotive sector which is vital to its continued growth and development in the UK.

"The suggestion of 'illegal state aid' made by Silverstone also highlights they do not understand the basic process of applying for state funding of this nature."

He said the Welsh government and the Blaenau Gwent community understood and supported the Circuit of Wales "both as a catalyst for economic growth and as a venue for world-class sporting entertainment".

"The Circuit of Wales is a unique investment opportunity - a development designed to meet the public's expectations of a modern sporting venue and the commercial imperative to deliver a business hub that will sustain and support the British motorsport industry," he added.

Prestigious event

A key part of the racing circuit development involves securing the rights to host MotoGP - the motorbike racing equivalent of Formula 1 - which attracts global audiences of up to 300 million.

The company has said it aims to build the circuit in time to host the prestigious event in September 2015 but it is understood no deal has yet been signed.

It was hoped that building work could start on the site last December but there have been delays because of planning issues.

The circuit is being built on 332 hectares (820 acres) of common land so the company has to deregister it, find an equivalent amount of land elsewhere and re-register that as common land.

The Planning Inspectorate for Wales said the process could take almost a year to complete.