§ Mr. BeithTo ask the Secretary of State for Trade and Industry if he will formulate plans for state aid to the UK coal industry which are compliant with article 2(1) of Commission Decision 3632/93/ECSC. [104902]
§ Mrs. Liddell[holding answer 17 January 2000]: Article 2 (1) of Commission Decision 3632/93/ECSC sets out the three objectives for which aid to the coal industry might be considered compatible with the ECSC Treaty.
The Judgment of the Court of First Instance of 9 September 1999 in respect of case T-220/98 made it clear that the three objectives listed correspond individually to particular categories of aid.
The first category refers to operating aid under Article 3 of the Decision, which must cause no distortion of competition or discrimination between UK coal producers or users, requires a plan showing a significant reduction in operating costs over the period to July 2002 with the prospect of viability thereafter. There is also a requirement for degression of aid.
The second category is in respect of aid to solve the social and regional problems created by total or partial reduction in the activity of production units. Aid for the Reduction of Activity under Article 4 requires a closure date to be set, which must normally be before expiry of the Decision in 2002. There is no provision for investment aid within the ECSC state aid code set out in the Decision. The Government have Commission approval under Article 5 of Decision 3632/93/ECSC to pay state aid up to £891 million over the period to July 2002 in respect of residual environmental and ex-employee liabilities inherited from British Coal.
The third category covers objectives to help the coal industry adjust to the introduction of new environmental protection standards which require the modification of existing installations.
We are continuing to work constructively with the industry to promote a level playing field for coal both in the UK and in Europe, and to identify undue regulatory burdens.