HC Deb 06 April 1981 vol 2 cc678-9
14. Mr. Colin Shepherd

asked the Secretary of State for Industry what progress is being made in his discussions in the Community on the problems of the steel industry.

Mr. Tebbit

As I said in my written answer on 30 March to my hon. Friend the Member for Brigg and Scunthorpe (Mr. Brown), I attended a special meeting of the council on 26 March to discuss steel. A resolution on steel recovery policy was agreed calling for restructuring with capacity reductions as the only lasting solution, strict market discipline between producers, and the phasing out of State aids under Commission control. Steel is among the subjects to be discussed at the informal meeting of Industry Ministers which I shall attend tomorrow.

Mr. Shepherd

Is my hon. Friend aware that some of the remarks that he made in the written answer gave considerable encouragement to those involved in the steel industry? Will he say a word or two more about the private sector, especially the "Phoenix" companies? What assurances is he able to give the "Phoenix" companies that their competitive position will not be undermined before State aids are withdrawn?

Mr. Tebbit

The first of the "Phoenix" companies, Allied Steel and Wire, has been formed. We hope that the company will be trading under that name and in that context before too long. Other companies are being discussed by the possible participants. Until there is an agreement on sensible prices, capacity reductions and the phasing out of State aid, the sectors of the steel industry that are unsubsidised, whether in Britain or in other countries, will be at great risk. That is why I am so anxious to get this business done with as soon as possible.

Mr. Michael Brown

May I congratulate my hon. Friend on the robust stand that he has been taking in the Commission in recent days? However, I must press him on the extent to which he feels that he will be able to obtain an agreement from France in particular in ensuring that there are genuine capacity reductions in other Community countries.

Mr. Tebbit

In this respect, France is not the main problem in Europe. Progress has been slow because no one wants to reduce capacity, least of all Britain. We have already reduced our capacity greatly.