COMMISSION DECISION of 1 March 1978 approving aids from the United Kingdom to the coal-mining industry during the coal marketing year 1977/78 (Only the English text is authentic) (78/298/ECSC)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

Having regard to Commission Decision 528/76/ECSC of 25 February 1976 regarding the Community system of measures taken by the Member States to assist the coal-mining industry (1),

Having consulted the Council,

I

Whereas the United Kingdom Government has informed the Commission, pursuant to Article 2 of the above Decision, of the financial measures which it intends to implement directly or indirectly for the benefit of the coal industry during the coal marketing year 1977/78 (2) ; whereas the following of these measures may be approved pursuant to that Decision; >PIC FILE= "T0019564">

Whereas these aids meet the criteria laid down in the Decision for the admissibility of such State assistance; 1. Whereas the aid for the recruitment and retention of skilled workers is a grant from the United Kingdom Government towards the costs incurred by the National Coal Board (NCB) in 1977/78 for the relocation of personnel under its production rationalization programme ; whereas, in order to ensure that skilled workers are retained, the costs incurred by relocated miners must be reimbursed by the NCB ; whereas such costs include removal costs, resettlement costs, travel expenses and compensation for temporary loss of income;

Whereas the United Kingdom Government is to contribute £ 2 76 million towards such costs borne by the NCB in 1977/78;

Whereas the purpose and form of the aid show that it meets the criteria set out in Article 8 of the Decision;

2. Whereas the £ 10 78 million aid to cover the costs of stocks of coal and coke is based on total producers' stocks, and additional stock held by consumers financed directly or indirectly by the producers, amounting to some 18 million tonnes ; whereas, with monthly production of around 10 million tonnes, stocks eligible for aid under Article 9 (2) amount to 8 million tonnes ; whereas the amount of aid per tonne is accordingly £ 1 74 ; whereas the actual cost of stocks (including depreciation and interest) is substantially higher than the amount of aid;

Whereas the purpose and form of the aid show that it meets the criteria set out in Article 9 of the Decision;

3. Whereas the £ 7 million aid for power station coal is intended to cover the cost of deliveries of power station coal to Scotland ; whereas United Kingdom coal is more expensive in Scotland than comparable competitive energy sources because of transport costs ; whereas the purpose of this aid is to stabilize in the long term the sale of steam coal in this marketing area and hence it fulfils the provisions of Article 11 of the Decision;

4. Whereas the £ 10 million aid to cover the operating losses of pits will cover only part of the losses of pits in unprofitable coalfields ; whereas several unprofitable pits are likely to be closed in the coal marketing year 1977/78 ; whereas the National Coal Board (NCB) is anxious to mitigate the resulting social problems as far as possible ; whereas the NCB's productivity will be improved by the closure of unprofitable pits ; whereas the NCB has taken steps to increase the capacity of productive coalfields and to develop new coalfields in order to balance out the reductions in capacity which will be caused by the closures and to ensure that production is stabilized in the long term;

(1) OJ No L 63, 11.3.1976, p. 1. (2) The coal marketing year 1977/78 runs from the beginning of April 1977 to the end of March 1978. Whereas the purpose and form of the aid show that it fulfils the provisions of subparagraph 1 of Article 12 (1) and of Article 12 (2) of the Decision;

II

Whereas, in accordance with Article 3 (2) of the Decision, the examination of the compatibility of the abovementioned aids with the proper functioning of the common market must also extend to all other financial measures to support current production in 1977;

Whereas for the coal marketing year 1977/78 aids for current production in the United Kingdom will amount to 59 71 million European units of account or 0 748 European unit of account per tonne ; whereas the British coal industry therefore receives the lowest subsidy of all coal-producing Member States;

Whereas the examination of the compatibility of this aid with the proper functioning of the common market requires no detailed information or investigations: - there were no supply difficulties on the British market in 1977,

- progress with rationalization, together with new investment projects, brought a reduction in production costs and stabilized production in 1977,

- there was no disruption of competition as a consequence of the United Kingdom aids in 1977;

Whereas it can therefore be stated that the aids for the British coal industry for current production in the coal marketing year 1977/78 are compatible with the proper functioning of the common market;

Whereas this also applies when account is taken of aids to the coal industry pursuant to Decision 73/287/ECSC;

III

Whereas, pursuant to Article 14 (1) of the Decision, the Commission must ascertain that the aids authorized are used exclusively for the purposes set out in Articles 7 to 12 thereof ; whereas the Commission must be informed in particular of the amount of these aids and the manner in which they are apportioned,

HAS ADOPTED THIS DECISION:

Article 1

The Government of the United Kingdom is hereby authorized in respect of the coal marketing year 1977/78 to grant aids totalling £ 30 400 000 to the British coal-mining industry. The said aids are made up as follows: 1. grant not exceeding £ 2 76 million to cover the costs incurred by the National Coal Board in respect of relocation of personnel under the production rationalization programme;

2. aid not exceeding £ 10 78 million towards stocking costs in respect of coal and coke;

3. aid not exceeding £ 7 million for deliveries of power station coal to Scotland;

4. aid not exceeding £ 10 million to cover the operating losses of pits.

These aids shall not exceed actual losses.

Article 2

The United Kingdom shall notify the Commission by 30 June 1978 of the details of the aids granted pursuant to this Decision, and in particular of the amounts paid and the manner in which they are apportioned.

Article 3

This Decision is addressed to the United Kingdom.

Done at Brussels, 1 March 1978.

For the Commission

Guido BRUNNER

Member of the Commission