NORTHUMBERLAND FOODS IS ELIGIBLE FOR FUNDING SUPPORT

12.00.00am BST (GMT +0100) Mon 1st Jun 2009

Northumberland Foods is eligible for funding support from central or local government, says Northumberland Lib Dem MEP Fiona Hall.

The Amble food processing firm has been looking for help following demands by its electricity supplier for a bond to underwrite its electricity bill - effectively an advance payment.

Northumberland County Council had considered providing a loan to the company to cover the bond, but received last minute advice from accountancy firm Deloitte, that such a loan might contravene European state aid rules, which are used to make sure that companies in different countries operate on a level playing field.

But Fiona Hall has taken up the case directly with officials in the European Commission, who have confirmed that subsidised loans and loan guarantees are allowed, under newly relaxed rules on state aid designed to help companies struggling in the current economic recession.

Said Fiona:

"I believed from the start that it was possible to support Northumberland Foods without contravening European state aid rules and this has now been confirmed.

"Because of the recession many rules have been relaxed in order to make sure that businesses get the support that they need.

"The Commission made it clear to me that help to Northumberland Foods would be covered by the temporary framework on state aid agreed between the UK government and the Commission.

"I have been a bit concerned all along that the state aid argument was being used as an excuse. Now that the position is clear, I hope that financial support will be forthcoming.

"I've offered to help Northumberland Foods by lobbying BERR officials if any further pressure is necessary."