§ Mr. ClaphamTo ask the Secretary of State for Trade and Industry what criteria the independent panel uses to decide which collieries will receive operating aid. [153457]
§ Mr. HainUnder the UK Coal Operating Aid Scheme, as approved by the European Commission on 15 November 2000, applications for aid are considered under eight criteria. The full text of the Scheme is available on the DTI website at www.dti.gov.uk/support/coal.htm, but the criteria include: degression of costs must be demonstrated by the production unit; the level of subsidy must not cause the delivered price to undercut third country coal of an equivalent quality sold on equivalent terms; the coal covered by the application must be used for electricity generation or industrial purposes; no single undertaking will be eligible for more than £75 million.
Applications which satisfy these criteria will be submitted to the European Commission for approval. It is not for the Import Parity Price (IPP) Panel to decide which collieries will receive operating aid. However, the panel will advise my right hon. Friend the Secretary of State for Trade and Industry on the IPP in respect of contracts related to an application for subsidy. This advice will help my right hon. Friend the Secretary of State for Trade and Industry to ensure that the level of subsidy paid does not cause the delivered price of coal to undercut third country coal of an equivalent quality sold on equivalent terms. The panel's response to consultation on its methodology for advising on the IPP is also available on the internet at www dti.gov.uk/support/coal.htm.