HC Deb 18 May 1981 vol 5 cc6-7
7. Mr. Richard Shepherd

asked the Secretary of State for Industry what progress has been made in the steel negotiations in the European Economic Community.

Mr. Tebbit

Discussions on State aids to the steel industry are proceeding under the aegis of the Council of Ministers and the United Kingdom is pressing for a draft decision. At its next meeting on steel the council is expected to consider preliminary proposals by the Commission. Discussions on voluntary restraint after 30 June are continuing among Community steel producers who are being assisted by the European Commission. Progress has been made but many issues have still to be resolved.

Mr. Shepherd

Although I am grateful to my hon. Friend for that reply, is there any possibility of European agreement on steel prices by the end of, say, the second quarter?

Mr. Tebbit

I hope so, although it will be difficult to achieve. Things have not been made any easier because, as a result of the French presidential elections, the French have felt unable to take part in the meetings scheduled for 12 May and 25 May. However, I hope that we shall have a meeting on 1 or 2 June at which some decisions will be reached.

Mr. Hooley

Will the Minister give an assurance that the special steel sector will not be further undermined by imports from EEC Countries? Those imports have increased from about 10 per cent. to 50 per cent. of the British market.

Mr. Tebbit

That will largely depend on the degree to which workers, managers and proprietors of such companies meet the competition.

Sir Anthony Meyer

Will my hon. Friend agree that production restraints can at best be only a short-term palliative? Does not he further agree that if such restraints are to be effective they must be enforced all round, and include—unfortunately—some British Steel products?

Mr. Tebbit

My hon. Friend is right to say that production restraints are an unhappy short-term measure. Long-term measures must include the ending of subsidies to steel making across Europe. Britain has taken a substantial slice of the capacity cutbacks that have been made. I should be reluctant for Britain to cut back further while others in Europe continue to subsidise and extend their production.

Dr. John Cunningham

Although my hon. Friends and I are reassured by the Minister's last response, will not he agree that, in the context of the restructuring of European steel, it is clearly unacceptable for us to continue with closures without any agreement with our European partners? Will the hon. Gentleman make it clear, particularly to some of his hon. Friends, that he is committed to continuing the agreement on quotas that is due to expire on 30 June?

Mr. Tebbit

I am committed to seeking an agreement in Europe that will continue, or replace with something better, the present agreement on quotas and prices. It does not matter how that objective is achieved, but we certainly share it. As in the case of other businesses, it is always possible for steel companies to close themselves by raising their prices or losses to a level that their customers or financiers cannot accept.

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