§ Mr. ClaphamTo ask the Secretary of State for Trade and Industry if an annual increase in pre-tax profit will cause operating aid to be terminated; and what recovery mechanism exists. [154478]
§ Mr. HainUnder the UK Coal Operating Aid Scheme, aid is payable to loss-making production units only in respect of losses incurred through the production of qualifying (industrial) coal. Thus any reduction in such losses will reduce the level of aid payable, and any mine making an actual net profit before subsidy in any given financial year will not be eligible for subsidy in that year. However, the level of subsidy payable is not directly affected by the overall level of profits or losses made by the applicant company as a whole.
Applications for aid, and payments of aid if European Commission approval is given, are made on the basis of forecast losses. However, once each of the applicant company's relevant financial years encompassing the subsidy period is over, there will be a reconciliation process in which the forecasts are compared with actuals for the applicant production unit in that subsidy period. If actual losses have been less than forecast, any consequent overpayment of aid will be set off against any further subsidy payments due or otherwise recovered.