HC Deb 15 October 1991 vol 196 cc257-82 10.35 pm

The Parliamentary Under-Secretary of State for Industry and Consumer Affairs (Mr. Edward Leigh): I beg to move, That this House takes note of European Community Document No. 5577/91 relating to the future of the European Coal and Steel Community; supports the Government's view that early termination is to be preferred; but considers that, in the event that the Treaty is not terminated early, the flexibility contained within the Treaty should be used to bring about a less interventionist application of its provisions and to reduce burdens on business.

Mr. Speaker

I have selected the amendment standing in the name of the Leader of the Opposition.

Mr. Leigh

The treaty establishing the European Coal and Steel Community expires in 2002. The European Commission has produced a document which identifies three principal options. The first is to extend the treaty beyond 2002, either as it stands or in an amended form. The second is early termination of the treaty, with the coal and steel industries then becoming subject, like other industries, to the provisions of the EEC treaty. The third option is to allow the treaty to expire in 2002. In that case, the interim period could be used to repeal or modify certain ECSC provisions and to incorporate others into the EEC treaty if that should prove to be necessary.

Early termination of the ECSC treaty is the Government's preferred option. But we recognise that such a solution may not be attainable. It would require unanimous acceptance by the Council and ratification by the national Parliaments of all member states; and that seems unlikely. We would, therefore, be prepared to allow the treaty to continue until it lapses in 2002, provided that the interim period is used to bring about a less interventionist approach and to reduce burdens on business.

I will explain why the Government have reached that conclusion. The ECSC treaty entered into force in 1952, five years before the treaty of Rome. At that time there was a world shortage of steel and a need to expand steel-making capacity to assist in the reconstruction of post-war Europe. There was a shortage of coal, and coal accounted for a dominant share of energy supplies. Against that background, it is not difficult to understand why the original six founder members of the Coal and Steel Community established a regime which provided for a high degree of intervention in the running of those industries.

In 1991, those conditions no longer apply. The plain fact is that the ECSC treaty is no longer in tune with the way in which modern market economies operate. The coal and steel industries are not special cases in the sense that they were when the Coal and Steel Community was established.

Mr. Tam Dalyell (Linlithgow)

Having said that the coal and steel industries are not special cases, does the Minister intend during his speech to explain the rights and wrongs of Commissioner Bruce Millan's charges on additionality? Commissioner Milian has outlined what seems to us to be a watertight case by the Commission which hits areas of the coal fields, particularly those well served by the Coalfield Communities Campaign, extremely hard.

Mr. Leigh

I had not intended to deal with that tonight, but I am happy to answer the hon. Gentleman's question now. We regret that Commissioner Milian has not released those moneys. Our position is absolutely clear and there can be no doubt that the moneys are genuinely additional. They are taken into account in setting public expenditure totals and the British Government remain convinced that decisions of this type should be taken at a national, rather than at a Commission, level. I strongly suspect that any Government would take the same view.

Mr. Allen McKay (Barnsley, West and Penistone)

Is it not a fact that what Commissioner Milian is recommend-ing will not assist the British Treasury? In other words, he has available millions of pounds in funds for contingencies such as exist in my constituency, which had 30,000 miners 10 years ago and now has none, where bus deregulation has ruined the transport system and where cuts in local government spending are hitting local services. Millan is taking such issues on board, but the Government are stopping the process. It is additional money for areas such as that. It is money provided by someone else. Stepping in is not Milian or Europe but the British Government.

Mr. Leigh

It is not the Government who are stopping the release of the money; it is Commissioner Milian. This country pays considerably more in structural funds than it receives in return. We have made our position absolutely clear: the moneys that we receive from Europe for the RECHAR fund are genuinely additional—and it is, after all, our money. We give Europe the money in the first place; it does not come from Commissioner Milian. I am very sorry that the Commissioner seeks to spite the noses of his socialist friends, and I very much hope that he will release the money soon.

Mr. Alexander Eadie (Midlothian)

Is the Minister aware that all the other countries in the Community have satisfied the strictures laid down by the Commission, and that all the money has been allocated? Are all the other countries out of step with our Government? Does the Minister agree that it is wrong for the money to be buried in the Treasury after being allocated? The coal-mining areas need that money, and they should get it quickly. It is time for the Government to relent.

Mr. Leigh

The hon. Gentleman is right: the coal-mining areas do need the money. What a pity that Commissioner Milian has not released it. The Department of the Environment, the Treasury and the Department of Trade and Industry have shown themselves to be very flexible in this regard. We had a very constructive meeting with Commissioner Millan in April and the Department of the Environment has introduced a new top-slicing arrangement that should have satisfied the Commissioner.

The fact is that Commissioner Milian cannot insist on the Government's being treated like a county council and county council's being treated like a Government. It is for this Government to decide the total of public expenditure, and as long as we remain in office that is exactly what we shall do.

Dr. Norman A. Godman (Greenock and Port Glasgow)

Will the Minister confirm that he holds the same view in relation to the RENAVAL programme funds? That programme is extremely important to my constituency and the constituency of Glasgow, Govan, both of which have suffered from a terrible decline in their traditional industries. Does the Minister disagree with Commissioner Millan about that money?

Mr. Leigh

Exactly the same argument applies to RENAVAL as applies to RECHAR. Our position is absolutely clear: the moneys are genuinely additional. We take account of them in setting the totality of public expenditure. I very much hope, for the sake of Commissioner Millan's former friends, that he will release the money.

We are determined and consistent about this; we are not going to give way. We have already proved ourselves to be very willing to compromise. We have introduced top-slicing through the Department of the Environment. That is that. It is now up to Commissioner Milian to release the money. I hope that he reads Hansard. He will gain nothing by stalling. Let the whole House know that only one person is preventing the coal-mining and shipbuilding areas from receiving the money—Commissioner Milian.

Ms. Joyce Quin: (Gateshead, East)

The Minister has said that the Government are absolutely clear about their position. In that case, will he comment on the widely reported differences of view between the Department of Trade and Industry and the Treasury on the one hand, and the Department of the Environment and the Scottish and Welsh Offices on the other?

Mr. Leigh

The whole House knows that it is constitutionally impossible for Ministers to disagree, and that they therefore never do so.

Interesting though RECHAR and RENAVAL matters are, they are not strictly relevant to the debate, so I shall now proceed with my speech, although I have been happy to give way to hon. Members and to try to answer their questions.

Several Hon. Members


Mr. Leigh

I shall be happy to give way later, but this is a short debate, and I have already given way four or five times.

Several Hon. Members


Madam Deputy Speaker (Miss Betty Boothrovd)

Order. The Minister has made it clear that he will not give way for the moment.

Mr. Leigh

I am sorry that Opposition Members do not want to hear about our plans for the restructuring of the coal and steel communities.

The coal and steel industries are not special cases in the sense that they were in 1952 when the Coal and Steel Community was established. Industry itself recognises that and has argued for a smooth transition from the conditions of the ECSC treaty to a complete assimilation into the EEC treaty. We believe, as do the industries themselves, that the time has come when coal and steel should be treated like other industries.

Of course, there is a need for proper transitional arrangements, whether the treaty is terminated early or is allowed to run its course until 2002. We must make a start now to work out what these should be. This is not something that can be put on the back burner. The coal and steel regime must be brought up to date. The burdens that the present regime imposes on business must be reduced. In order to do that, the provisions of the ECSC treaty need to be examined in detail so that we can see how the objective of orderly assimilation to the EEC regime can best be achieved.

Dr. Kim Howells (Pontypridd)

The Minister is right to say that the situation has changed dramatically since the initial agreement was drawn up. Nevertheless, we are on to an extremely important point in terms of European energy policy. Due to the decline of the coal industries in Europe, we look to the ECSC to provide us with an overall European framework for dealing with the problems of pollution, employment and the regeneration of the coalfields. Does the Minister agree that the ECSC provides us with a very good basis for doing just that?

Mr. Leigh

We are proposing an orderly rundown of the ECSC so that we can take up some of the hon. Gentleman's points and put the coal and steel industries into exactly the same position as our other industries.

There are schemes such as ISERBS—the Iron and Steel Employees Readaptation Benefits Scheme—that helps steel workers who are made redundant. British Coal Enterprise Ltd. has received £60 million from the Government. There are also the mechanisms of the European social fund, the European Investment Bank and the European regional development fund, all of which are available to take up the slack as the old treaty is run down. This treaty was created in 1952 when very different conditions appertained. It was probably necessary to adopt a much more interventionist approach. Those conditions have changed completely. We believe, as do the Commission and every other country in Europe, that the coal and steel industries can be treated in the same way as other industries. It is not right that they should be seen as special cases.

Sir Teddy Taylor (Southend, East)

As the Minister has been attacked viciously by a lot of silly Members of Parliament in all parts of the House, would it not be appropriate at this stage to let him know that at least there will be delight in Southend-on-Sea and, I am sure, in many other Conservative constituencies that we have in him a Minister who is prepared to stand firm on a vital issue concerning democratic sovereignty? Does he appreciate that if he caved in to the outrageous proposals of the Labour party he would be falling for a straight trick, whereby the Commission is trying to seize a share of public expenditure so that the bureaucrats in Brussels can decide where cash is spent in Britain instead of our democratically elected Government? Is the Minister aware that the Department of Trade and Industry has done a fantastic job, that he has got to stand firm, and that if he caved in it would lead to a denial of democracy?

Mr. Leigh

My hon. Friend makes his point in his usual robust fashion.

I welcome the Commission document, not because the Government agree with everything in it but because it is a useful starting point for discussion. It identifies the main issues and sets out the principal options.

Mr. Peter Hardy (Wentworth)

The Minister should explain the Government's attitude to the ECSC reserves. A substantial sum is held in reserve. The Commission appears to wish that sum in the reserve fund to be maintained, even after the expiration of the treaty. What is the Government's view? From a perusal of the documents, I cannot tell whether the Government agree with the Commission, nor can I tell from the Minister's remarks whether he agrees with Lord Hesketh whose letter appears to show a great deal more enthusiasm for the continuation of sectoral aid than the hon. Gentleman's speech has done so far.

Mr. Leigh

I shall come to the issue of reserves and the levy. We believe that the reserves which have been built up as a result of the levy being imposed and which amount to about half a billion pounds should be used until the termination of the treaty to help the coal and steel communities. What happens after 2002 is for the then Government to decide. There are other European mechanisms, such as the European Investment Bank, that could be used to fill the gap left by the levy.

The levy is paid by all manufacturers of products covered by the treaty. The levies are assessed annually by the Commission based on the average value of the products concerned. Why, in 1991, should the coal and steel industries alone be obliged to make such payments? The levy is discriminatory. It applies to no other industries. It therefore puts coal and steel producers—and their customers—at a competitive disadvantage. It is no more and no less than a tax on production. It is the one and only current example of a Community tax. The Government believe that the time has come to abolish this tax. There are, anyway, sufficient reserves to meet all anticipated expenditure between now and the termination date.

Mrs. Edwina Currie (Derbyshire, South)

As my hon. Friend knows, my constituency does not qualify for any of these moneys because South Derbyshire has successfully moved away from the old coal industry and replaced it with much more successful modern industries. However, I wish to press home the point made by my hon. Friend the Minister. The system of levying a tax on the producers of these products has helped to put the European coal and steel industry at a serious worldwide competitive disadvantage. The system has not helped the industry; it has helped to destroy it.

Mr. Leigh

My hon. Friend is right. In this day and age it is old fashioned to levy a tax on the production of industry. Why should we put our industry at a competitive disadvantage?

As the debate proceeds I should like to know whether the Labour party is still in favour of the levy. I do not know as it is not not entirely clear from its amendment. If the Labour party is in favour of a levy, it is in favour of discriminating against the coal and steel industries and of continuing a system that is out of date and a throwback to the Attlee Government. If that is the Labour party's policy, it puts in a different light the modern image that the party tried to convey at its conference.

Is the Labour party in favour of imposing a direct levy on the coal and steel industries? When the hon. Member for Gateshead, East (Ms. Quin) speaks for her party she must answer that question because it is of immense concern to the industry. The industry wants the levy abolished for the reasons given by my hon. Friend the Member for Derbyshire, South (Mrs. Currie). Almost everybody wants the levy to be abolished. The only people who want to retain the levy are in the Labour party. Why is that?

Dr. Kim Howells


Mr. Leigh

It is the truth.

The treaty's consultative committee, which has representatives from trade unions, also wants to see the levy phased out. The industry, the Commission and the Government want the levy to be phased out. Only one party in Europe apparently wants to retain the old fashioned levy, a throwback to post-war years, and that is the new modern Labour party.

The reserve fund has been built up from the levies paid by coal and steel producers over the years. As I have said, it now amounts to some 750 million ecus—or over half a billion pounds. In the Government's view, these reserves should be run down during the remaining lifetime of the treaty. We recognise that, particularly in the coal sector, restructuring and readaptation support will continue to be needed. This would be an excellent use of the ECSC reserves. By using the reserves to meet current expenditure needs, we can reduce and then get rid of the levy.

The European Investment Bank is the Community's principal lending instrument, and could certainly undertake the kind of financing activities that have in the past been carried out by the ECSC. Consequently, there would be no need for a reserve fund as a guarantee for the Commission's lending activities.

The Commission paper recognises that ECSC provisions for the regulation of production and capacity, including interventionist measures to deal with a situation of "manifest crisis", have largely outlived their usefulness. The Government agree with and support the Commission's advocacy of a less interventionist approach. The existing requirement for pre-notification of investment plans is out of step with the current market. It is not clear from the amendment whether the Labour party supports pre-notification of investment plans. How extraordinary it is that, in theory, the industry is still required to give pre-notification of investment plans. If that is what the Labour party supports, it is totally out of tune with industrial best practice.

The requirement should be abolished, except where a company is applying for an ECSC loan. The Commission's studies and forecasts of the steel industry should be abolished or scaled down. We agree with the Commission that the rules governing the way in which prices are calculated and published are ineffective and should be abolished; they have no place in the marketplace of 1991.

There are significant differences between the ECSC and the EEC regimes on competition policy. Procedures for handling ECSC competition cases should be brought into line with those followed under the EEC treaty. National authorities should be consulted, as under EEC rules, and there should be greater transparency of Commission decisions.

We should like the tight control of state aid under the treaty to be maintained. Discussions are under way on a multilateral steel consensus and our aim is to achieve an agreement that imposes the greatest possible discipline.

The Commission's communication argues that the treaty has acquired invaluable experience in promoting social measures. We recognise the value that this aspect of ECSC activity has had in the past. However, not only have these measures been funded from the levy, but the vast readjustments during the 1980s have reduced their necessity.

Unlike the EEC regime, the ECSC makes no provision for a common commercial policy. The Commission's proposal to bring the ECSC regime in line with the EC regime seems entirely logical.

Mr. Michael Welsh (Doncaster, North)

I should like to ask the Minister for advice. All members of the EC can borrow on the open market. Is it suggested that nationalised industries will be allowed to borrow on the open market?

Mr. Leigh

British Steel is no longer a nationalised industry, and nor will be British Coal after we have won the next election. That disposes of that point.

Finally, under the treaty of Rome, only the Council can enact specific rules——

Mr. Tony Favell (Stockport)

When my hon. Friend said "finally" I realised that this would be my last chance to intervene. Can he say how much the European Coal and Steel Community has cost British taxpayers since it was set up?

Mr. Leigh

I do not have a figure for that, but I shall certainly write to my hon. Friend. However, if he did not hear what I said earlier, I can tell him that enormous reserves of £500 million have been built up and that the levy is imposed directly on all producers. That is anachronistic and should be abolished as soon as possible.

Under the treaty of Rome, only the Council can enact specific rules, so there is negotiation and consultation with member states. That is not so under the ECSC treaty, which confers wide rule-making and executive powers on the Commission. My hon. Friend the Member for Southend, East (Sir T. Taylor), who is an expert in these matters, will know that under the treaty the Commission is known as the high authority.

The Commission may seek to retain those powers. That would raise wider issues of competence that we and other member states would need to consider most carefully. Such issues will have to be addressed before the treaty is terminated in 2023 or earlier.

The treaty has served us well in the past, but in a number of important respects it has outlived its usefulness. The coal and steel industries can no longer lay claim to the special treatment that was appropriate in the 1950s, and they recognise that.

Mr. Frank Haynes (Ashfield)

If the Government win the vote, that one is out of the way. What is the Minister prepared to do about the moneys that are available under RECHAR? Will he convince the Treasury that it should take its grubby hands off those moneys and let them serve their purpose?

Mr. Leigh

I think that I have answered five questions on that subject and have made our position clear. We give more money in structural funds than we receive in return. It is our money. The Government will decide how the money is spent, and that is that.

Mr. William Cash (Stafford)

Will my hon. Friend make it clear that one reason why we resist these proposals is that we do not want economic and monetary union? Implicit in these proposals and in the papers which were presented to the Select Committee on European Legislation and which are before the House is the suggestion that, to facilitate economic and monetary union, we should go down the route proposed by the Commission. Will my hon. Friend make it clear that we will not go down the route of economic and monetary union in the terms currently proposed?

Mr. Leigh

I leave those weighty matters to my right hon. Friends the Prime Minister and the Chancellor of the Exchequer. Although I might want to pontificate on such points, perhaps I had better leave them to my right hon. Friends.

Mr. Gerald Howarth (Cannock and Burntwood)

I hope that my hon. Friend will make it clear that Conservative Members bitterly resent the activities of Commissioner Milian in preventing the release of moneys to our constituencies under the RECHAR programme because of the bogus accusation that the Government are not already assisting the coal communities with specific funds.

Mr. Leigh

My hon. Friend is right. During the past 12 years, the Government have invested more in the coal industry than all other Governments put together since 1945. The Government have invested £100,000 every hour of every working day in the modernisation of the British coal industry. Since the end of the miners' strike, the productivity of the industry has soared by more than 100 per cent. British Coal recently achieved an impressive weekly output of well over 5 tonnes per man shift.

The hon. Member for Ashfield (Mr. Haynes) talks about closing pits. The Labour Government closed more pits than we have closed, and the Labour party should respond to the point. British Coal has a bright and successful future under a Conservative Government. It will provide the coal that the market needs.

Mr. Alan Meale (Mansfield)

The Minister is talking about a great revival. Would he like to comment on the Rothschild report which his Government funded and which talks about 47 pit closure problems for British Coal and coal-mining communities in the United Kingdom?

Madam Deputy Speaker

Order. That may be an interesting question, but it is irrelevant to the treaty.

Mr. Leigh

Our aim is to have an orderly and smooth transition to the EEC regime. Industry's interests can best be met by early termination of the treaty or by a less interventionist application of its provisions and a reduction in the burdens that it imposes on business. That is always our aim in the Department of Trade and Industry.

11.2 pm

Ms. Joyce Quin (Gateshead, East)

I beg to move, to leave out from second "Community" to the end of the Question and to add instead thereof: believes that the European Coal and Steel Community should be allowed to run its course and that between now and the expiry date of 2002 ways of incorporating industrial, social and regional elements of the ECSC treaty into the EC treaties should be fully examined. I welcome the opportunity to debate the future of the ECSC treaty. It is good that, for once, the House is able to debate a European matter at an early stage, offering—we hope—a chance for hon. Members to have their voices heard in the decision-making process. None the less, I believe that the way in which the Department of Trade and Industry has brought forward this subject for debate is far from satisfactory. We have a take note motion in front of us. Usually, such motions are fairly neutral and pass without a vote. We expected that to happen tonight, but the motion is far from neutral. It is expressed in the language of Tory party dogma, and right hon. and hon. Friends and I have tabled an amendment so that our views are clearly spelt out.

We believe that, once again, the Government are isolated in the European Community on this issue, because no other country favours an early winding up of the ECSC treaty in the way that the British Government do. Indeed, the only Government ally I could find was, not surprisingly, their spokesperson in the European Commission, Sir Leon Brittan, who tried to persuade his Commission colleagues to back him but singularly failed to do so.

The Government's position is as outlined by the Minister: they do not like the ECSC treaty because it is interventionist and includes elements of industrial policy as well as social and regional measures which, as we know, are financed by the ECSC levy. We like the idea of the treaty because of the way in which it favours the promotion, the modernisation and even the expansion of the coal and steel sectors and the way in which it provides help with, for example, research.

I was rather surprised that the hon. Member for Derbyshire, South (Mrs. Currie) did not mention the fact that ECSC financial support can be given for research and for industrial modernisation, and therefore that the levy is not simply a tax that provides no benefit to the industry; it can be used by the industry for very valuable projects.

Mrs. Currie

May I put to the hon. Lady the fact that if the industry, much of which, of course, is privately owned—many of the companies involved are private companies and always have been—did not have to pay the levy, it could finance its own research and might pick rather better winners than any Government might.

Ms. Quin

If the hon. Lady looks at the record, she will see that many worthwhile projects, as well as collaborative work done across Europe, have been supported by the levy. She should recognise the role that a public and private partnership can play in the operation of the ECSC treaty. In the future, between now and the expiry of the treaty, the money can continue to be used wisely for the future of the industry.

It is possible, of course, under article 58 of the ECSC treaty, to produce measures to manage the industry during the period of so-called manifest crisis. Many of us here tonight will remember that article 58 was used in the early 1980s during the prolonged steel crisis. Those measures resulted in a system of quotas under which production was shared out among EC member countries. It was a very painful period, especially in the United Kingdom where the Government seemed hell bent on seeing the industry contract to a dramatic extent. If the Government had been left to their own devices, the situation would have been even worse in Britain, and the social and regional consequences would have been even more severe, if that can be imagined, without the redundancy payments, the financial assistance for retraining and the finance for new industry starting up in regions that were affected by the crisis.

It is true that in the ECSC treaty coal and steel are treated as a special case. We all understand the historical reasons why that is so. However, I wish that it had been possible for other industrial sectors to receive some similar treatment. The shipbuilding sector, for example, had a painful contraction and run-down. Merchant shipbuilding in this country has practically disappeared. EC money was not available there for new investment, for modernisation or for research, which have been possible in the case of coal and steel.

I understand that the Government take the view that the manifest crisis measures are no longer necessary and will never be applied in the future. However, I believe that if the Government agree with the report by their consultants, to which my hon. Friends and other hon. Members have referred, there will be a severe manifest crisis in the coal industry. I hope that that does not come about, but it may be unwise to remove those parts of the ECSC treaty which provide for co-operation in a period of manifest crisis.

Cases such as shipbuilding and other sectors, which were not able to be approached in that manner, show that there may be a good reason why some of the ECSC provisions should be examined closely in the period between now and the expiry of the treaty in 2002 to see whether they can be extended to other sectors and what elements of the treaty could be incorporated into the EC treaty, and to see what could be done to help certain industrial sectors in the future.

The ECSC also contains important social measures. Some of the ideas in the ECSC treaty foreshadow later developments in the European Community such as the European social charter. When I listen to Ministers, I sometimes get the impression that they feel that the European social charter is simply an unwelcome addition to the European Community's main activity, which should be simply to create a large common market. However, the ECSC treaty shows us clearly that those social and regional concerns were part of the European process from the beginning.

Although the Government may find it unfashionable or unpleasant to swallow those ideas, many of us think that those ideas are sensible. There is, for example, the fact that Government and industry should work together to create the conditions for long-term industrial prosperity, and that they should work together to resolve social and regional problems created by economic and industrial change, and by the need for modernisation.

We should look beyond the United Kingdom to the former East Germany and the countries of eastern Europe, all of which are hoping for a closer association with the European Community in future. Has the Minister considered that it might be possible to use ECSC provisions as a way of helping the painful economic transition in eastern Europe? We know that eastern Europe has an old coal and steel sector, and we know also that great environmental problems have been created in the area. The former communist regimes of eastern Europe were probably the least environmentally friendly that the world has ever known. It is unfortunate that until now the British Government have been one of the least generous Administrations in their attitude towards change in eastern Europe. Surely we should examine the treaty to ascertain how eastern European countries can be helped between now and its expiry, and in what way some of its provisions can be continued thereafter.

Measures to help regions are an important aspect of the treaty. The low-interest soft loans that have been available from the ECSC to coal and steel areas have been extremely useful, and could provide a good precedent for other sectors of industry. I am not surprised, however, that the Minister said little in support of EC regional measures. As a member of the No Turning Back group, I presume that he supported its pamphlet that poured scorn on European regional policy and declared that it served no useful purpose. It seems to me that without the stimulus of the ECSC or the work of European regional Commissioners such as Commissioner Milian, regional policy would have disappeared entirely from the Government's agenda. It has almost disappeared, and perhaps it was the existence of regional commitments at European level that forced the Government to respond to some of the issues that otherwise they would have ignored.

Mr. Gerald Howarth

I think that we are all concerned to ensure that within the United Kingdom there Is fair distribution and help to the regions that are less advantaged than others. The point that underlies this EEC nonsense is that we contribute £2,000 million and gel. back £440 million, or thereabouts. It is the British taxpayers' money, not EEC money, that is being recycled by the EEC. Many of us find that offensive.

Ms. Quin

The hon. Gentleman is missing the point. The EC regional funds are governed by an agreement that the moneys should be used in the designated regions. It is our contention that the moneys are not being used in those regions because they are not providing additional benefit. The Treasury is regarding the funds as a convenient source of national money and is not allowing the funding of the extra economic activity that was the purpose of the regional funds.

Mr. Cash

Is the hon. Lady aware that in Germany massive funds are being made available to the coal and steel industries, in addition to the moneys that are available under the ECSC? These funds are blatantly contradictory to the competition rules that apply within the Community as a whole and they should be discontinued. With these arrangements in place, British coal and steel workers are placed at a considerable disadvantage. I understancl that the hon. Lady wants to help those workers rather than to do them the disservice that she does with the arguments that she advances.

Ms. Quin

Differing levels of state aids within the Community concern me greatly. I am even more concerned that the British Government have unilaterally cut support in the hope that other countries will follow them. That was an unrealistic approach and it would have been far better to argue for the harmonisation of state aids and more even treatment.

In considering regional help from Brussels to coal and steel areas we should draw attention to the Government's appalling record, especially in regard to the RECHAR scheme. I am riot surprised that money is in jeopardy, given the Government's failure to give assurances that it will be used to provide benefit to the designated regions. I am disappointed that, despite the disagreements in Government circles, the Minister could not give us any assurances on that point tonight. I am also worried that RECHAR could be the tip of the iceberg. The Government are not applying European rules properly through their misuse of European money. How long will it be before the Commission decides to widen the argument to the rest of the European structural funds? If that happened, it would be dangerous for this country.

The Minister said that the money was additional, but that does not make sense when we consider that during the period when European regional funds almost doubled, regional preferential assistance to British regions was cut by more than 60 per cent. Despite the existence of those extra funds, the amount of money entering the United Kingdom regions has declined dramatically during this Government's period of office.

With regard to RECHAR and the other EC regional funds, we will continue to highlight how the Government have denied to some of our most hard-pressed areas the assistance that they could have used to promote their long-term economic and industrial well-being.

Our position in respect of the ECSC is close to the majority of European countries and to the Commission —the treaty should be allowed to run its course and we should use the intervening period thoroughly to examine what aspects of the ECSC treaty can be incorporated into the EC treaty itself.

Dr. Godman

Does my hon. Friend agree that the Government's apparent objective of early termination of the treaty is extremely provocative? The Minister does not have a cat in hell's chance of achieving that so-called objective in the Council meeting.

Ms. Quin

I do not agree with the Government's view, but it seems to be tactically very unwise to use an issue like this, where there is absolutely no chance of success, simply to create antagonism among other EC member countries for no useful purpose.

Sir Teddy Taylor

Does the hon. Lady accept the simple statement that it is not the Government who are denying funds to necessary industries, rather Commissioner Millan is responsible? [Interruption.] That is true. He is using blackmail by saying, "Give up the right to decide how our money is spent or else you won't get it." In the interests of democracy, will the hon. Lady accept that it is Brussels that is saying no, not the Government?

Mr. Dalyell

On a point of order, Madam Deputy Speaker. Is "blackmail" a parliamentary word?

Madam Deputy Speaker

In the context that it was used, it is perfectly acceptable to me.

Ms. Quin

The point made by the hon. Member for Southend, East (Sir T. Taylor) is not justifiable and it is not true. Commissioner Milian is trying only to get the British Government to respect the agreement into which they have already entered—that the money would be additional. The Government agreed to that and signed the agreement, but they are not respecting it. That is what the argument is all about. If the hon. Member for Southend, East is right, it is inexplicable that virtually all the coalfield areas support Commissioner Milian. If the hon. Gentleman is right, they would be supporting him. The fact that they are not doing so is very significant.

Mr. Cash

Does not the hon. Lady believe that she should be putting pressure on Commissioner Milian—[Interruption.]

Madam Deputy Speaker

Order. Only one debate at a time, please.

Mr. Cash

Does the hon. Lady believe that, in line with my earlier point, she should be putting pressure on our friend, Commissioner Milian, to make sure that there is a level playing field as respect state aids provided by other countries in the coal-steel regime? It is precisely because that is not being done that makes our position that much worse, and that of the workers whom she is supposed to represent, as I do.

Ms. Quin

The matter of state aids goes far wider, as the hon. Gentleman knows, than the ECSC treaty. The matter comes within the remit of Commissioner Sir Leon Brittan, not Commissioner Milian. I have referred many times to the discrepancies in levels of state aid within the European Community and used them as a reason for a far more supportive approach for industry by the Conservative Government. I recently wrote an article about that, and I should be delighted to show it to the hon. Gentleman if he is at all interested.

Mr. Favell

Is the hon. Lady able to say what the administrative cost is of the Europeans churning the money in that way? Conservative Members believe it to be the most enormous white elephant, and it has been for years and years. Did the Labour party do its arithmetic before it opposed the motion?

Ms. Quin

We know that one way of simplifying the system and making it cost less money is to allow the regions to have much more direct links with Brussels over the allocation of the money. Because of the Government's insistence on everything having to go through the Treasury, even when they act contrary to the rules in Brussels which they originally accepted, the present situation is very unsatisfactory. The Government are helping to waste some of the money on unnecessary administrative burdens.

The Government's attitude to the ECSC treaty is a clear example of the way in which they have failed not only the regions but the United Kingdom as a whole. It will be left to an incoming Labour Government to repair the damage and put us on the road to regional and industrial recovery.

11.20 pm
Sir Teddy Taylor (Southend, East)

I wish to say a few brief words on which I hope hon. Members will reflect.

I am sure that, if I represented a steel or coal area and if there were the slightest chance of getting more money under any guise, I would support it. Opposition Members have fought bravely and sincerely in the interests of their constituents. They are quite right, and I am sure that their constituents would be glad to do it also. However, they must realise that we are not talking just about cash for industry and commerce. We are talking about a fundamental right of the United Kingdom Government. If people do not like what the Government are doing, they can chuck them out at the election. They can elect the Labour party and they can change things. At least we have the power to decide.

The Department of Trade and Industry has achieved a victory on a fundamental point, and we are proud of it. It has said that the Government will stand firm on the basic principle that cash coming from Europe is indeed additional cash and that we, as a democratic Government, decide how it is then parcelled out. If we say that Commissioners will decide how the cash is to be spent in Britain, what the blazes is the point of Opposition Members trying to be elected to Government? If we say that the Brussels machine will decide how the cash is allocated and how it is spent on top of Government money, we will throw away a huge section of decision making.

Opposition Members fight sincerely and valiantly for their constituents. What do they do if they do not like what the Euros are doing? What do they do if they think that they are wasting money—throwing good money after bad? They can do nothing whatsoever about it. It is an essential issue of democracy.

For the first time in a long time I am delighted to support a Government motion on a Euro issue. There is no doubt that there has been a change. If Opposition Members had come to the Conservative party conference they would have seen a significant change of opinion, just as if I had gone to the Labour party conference I would have been aware of a change. After some of the crazy undemocratic actions of the EEC, there is now a desire on the part of the Government to try to fight some battles. At least we are fighting one here.

The hon. Member for Gateshead, East (Ms. Quin) said that we are out of step—the other countries do not bother about it. If they are offered money by Commissioner Millan, the other countries say, "All right, we will take it, and shove it on top of our policies." Of course, the other countries are doing that. We must remember that most of those countries are net recipients of EEC funds. The difference is that Britain and one other are massive contributors. Last year, despite all the glories of the changes made by the former Prime Minister, who got refunds and rebates, the net contribution by the United Kingdom was £2.3 billion. That is an underestimate, because, on top of that, much of the money was given to traders to dump food, and that was expected to be receipts.

Mr. Hardy

The hon. Gentleman has always been consistent and tonight he has let the cat out of the bag in giving us his assessment of the Government's approach. As he has long been critical of the EC, will he not at least be sufficiently generous to congratulate Commissioner Milian on seeking to ensure that the rules that he has to apply are applied fairly and properly to Britain and to everywhere else? In making sure that the funding is being properly applied, he has discovered that it is not being properly applied here because the Government have agreed with the hon. Gentleman and are in breach of their own commitments as well as the rules of the Community.

Sir Teddy Taylor

If the hon. Gentleman looks back into history, he will find that that is the consistent view of United Kingdom Governments—that cash given from Brussels under these aids is added to the investment total. It is, of course, additional and the Government then determine its distribution. If we did not do that, we would be throwing away a huge section of the decision-making powers of any democratic Government.

Despite what Ministers say—we know that they have denied this—we are aware that there has been a battle over this. The easy way would be to say, "Okay, we'll take Mr. Millan's cash and quietly hand over this power." It would be easy to do that because every other member state does it—except the United Kingdom. It is not true that the law or the obligations are clear and precise. There are different interpretations, but this is a battle worth fighting.

Mr. Cash

I agree with 90 per cent. of what my hon. Friend is saying, but will he make it absolutely clear that he would not in any way want to see the wrapping up of the ECSC treaty in favour of an EEC treaty combined with economic and monetary union, which is implicit in the proposals? In other words, does he agree that he would reject that aspect also?

Sir Teddy Taylor

I should, if I were——

Madam Deputy Speaker

Order. The hon. Member for Stafford (Mr. Cash) is rather wide of the mark. Perhaps the hon. Member for Southend, East (Sir T. Taylor) will come back to the treaty under discussion.

Sir Teddy Taylor

It would be an insult to you and to the House, Madam Deputy Speaker, if I were to be drawn into all the business about EMU. The ECSC is complicated enough without straying into other areas.

My second point to hon. Members is, "Please, please don't think that there are no conditions attached to taking easy cash." We should think about the problems facing many of our constituents. I am sure that many people in the constituencies of Opposition Members will have got into trouble by taking easy cash. Well, this would be easy cash. We could simply knock on Mr. Millan's door and say, "Right, we'll take it," and then piles of money would flow into the United Kingdom as a result of the administrative hold-up. But what would we be giving up in exchange? We are giving up the democratic rights of the Government. If the Government make a mess of things, they can be thrown out. If there is a by-election, people will give the Government a warning. I advise Opposition Members who have fought hard for their constituents— and some of them fought in the war for democracy—not to throw away this additional freedom of action of Governments. Opposition Members should remember that if the Government are doing something that they do not like, they can fight to chuck them out.

Mr. Jimmy Hood (Clydesdale)

Does the hon. Gentleman agree that if Bruce Milian had £300 million to give away to farmers Conservative Members would be turning somersaults to get hold of that money? Are we not seeing another example of an attack on the mining communities and are not these objections simply because the money is for those mining communities?

Sir Teddy Taylor

I am sure that, on reflection, the hon. Gentleman will realise that I accept—most Conservatives think this privately although we cannot talk about it—that the common agricultural policy is a load of rubbish, a waste of money and that it damages the third world. If we look at the figures, we find that for the money that we give there, we could give every farmer a cheque for £127,000 and say, "Good luck. Do as you like. Go on your way." But because the system is wasteful and bureaucratic, they do not get it. I agree with the hon. Gentleman. I am not talking about farmers or miners because both farmers and miners are decent people, whom we must protect. That is why we should talk not about them and their respective merits, but about democracy.

My second and final point which I hope that hon. Members will think about is, "Please, please don't think that everything spent by the EEC is good and that everything spent on research is good and is not wasteful." Let us think for a moment about the recent decision.

Way back in 1975 I recall listening to hon. Members such as the Minister for Transport when it was made abundantly clear that, come what may, there would be no question of any EEC or Government funding for anything that was then called the channel tunnel. We had advertisements all over the newspapers saying——

Madam Deputy Speaker

Order. I have given the hon. Gentleman a good run, but he is now widening the debate considerably.

Sir Teddy Taylor

I am coming right back to the ECSC. I do not think that you will have heard, Madam Deputy Speaker, and I know that hon. Members will be shocked to hear that, believe it or not, the ECSC, which was set up to defend coal and steel, has given a £300 million cheap loan to the channel tunnel in addition to the £1.3 billion given by the European investment bank. Now the Government's latest plans are to pretend that the line is partly a commuter line and put piles of money into it.

The funds are being used in a bogus way to give backstairs Government money to promote and keep going white elephants such as the channel tunnel and others. I ask hon. Members please to remember that this is not an issue of giving or not giving cash to miners. The fact is that if Bruce Milian had kept to the rule that the Commission has abided by until now—it had never broken it until recently—the money would be coming from Brussels. It is not coming because there has been a change of policy in the EEC, not on the part of the Government. The Government have not changed the rules or their policies. We have always proposed the idea of additionality.

The Commission has changed its mind. It is saying, "We are not sending the cash because you will not agree to our decision making." It is a huge democratic issue. Therefore, I hope that Opposition Members will not go through all the nonsense of saying that the Government are denying the cash. Opposition Members know what the facts are. They know that Mr. Milian has changed the rules and is now saying, "You agree to my rules, the rules which other members accept, or you will not get the cash." It is absolutely disgraceful——

Mr. Dalyell


Sir Teddy Taylor

I have a high regard for the hon. Member for Linlithgow (Mr. Dalyell). He has always supported the right things. But he knows what the facts are. The rules have been changed.

Mr. Dalyell

In what way has Commissioner Milian changed the rules?

Sir Teddy Taylor

Previously the Commission accepted the policy of the United Kingdom that the funds would come to us, that we would add them to the total and that we would make our decision about distribution. That is a fact. The Minister may be able to clarify the issue further, but the facts are clear and precise. Opposition Members know what the issues are. Therefore, I hope that while they fight valiantly for their constituencies, their coal miners and the steel industry, they remember the democratic issue and the rights of a democratic Parliament.

If the Government do things that people do not like, we can get rid of them. If the people do not like what Mr. Milian and the Commission do, they are utterly powerless.

11.31 pm
Mr. Alexander Eadie (Midlothian)

As the debate progresses we can probably conclude that the No Turning Back group is very much alive in the Department of Trade and Industry. The hon. Member for Southend, East (Sir T. Taylor) had better realise that this is not a question of democracy. It is not even a question of decision-making. It is a question of the money that we will throw away if we subscribe to the bogus democratic arguments that the hon. Gentleman sought to advance.

I found it a bit rich when the Minister talked about non-intervention and taxes. In Britain an energy tax is being applied. There is an energy tax on the coal industry to subsidise the nuclear power industry. That is the policy of the Government. So it is clear that the Government pursue interventionist policies. The Minister talked about a less interventionist approach. We listened yesterday to an interventionist approach when the Secretary of State for Transport talked about subsidising the Huntingdon line. There may be a good argument for it but I simply suggest that it is bogus for the Minister to talk at the Dispatch Box about non-intervention, taxes and subsidies when his Government pursue such policies.

Commissioner Bruce Milian has been attacked in the debate tonight for holding back the money. The argument of the hon. Member for Southend, East is not so much that the miners should get the money. He wants to get his hands on the money too. He uses the bogus argument that the Treasury has the right to decide even though the Government came to an agreement about how the money should be allocated. It is no use trying to say that the rules were changed; they were not. Her Majesty's Government entered into a binding agreement on how the funds should be allocated. Money was earmarked for mining areas, such as mine which is job hungry, and such deprived areas are waiting for it now. Yet the Government argue that it is Mr. Milian who is holding them back.

We in the House are always arguing about additionality. Mr. Milian has made it perfectly clear that every other country in the EEC has carried out the decisions. This Government entered into a binding agreement and all the other countries have agreed, but this Government want to go back on their word. They want the money that is earmarked for mining areas to be buried in the Treasury, which would then decide on its allocation. The House must decide whether the mining areas are to be deprived of the money that was specifically earmarked to deal with the contraction of the mining industry.

This is not a question of sovereignty. Tory Members have advanced a bogus argument. It is a question whether the Government are still so prejudiced against miners that they want to deprive mining areas of the money allocated to them. We deprecate that.

The Minister spoke of the Government's record on assistance for mining areas. All I say to him is give them time. If the Rothschild report is implemented, there will be no mining industry left. As a supporter of the No Turning Back group and as part author of a pamphlet of it, the hon. Gentleman will be happy about that.

Having listened to the debate, I can understand why the Government are facing defeat at the general election. I understand from the attitude of hon. Gentlemen. They want to hold on to money that is earmarked for areas that have suffered from the contraction of the mining industry. It is a disgrace that a Minister should come to the Dispatch Box and make such a case when he knows that his Government entered into a binding agreement, yet will betray it.

11.37 pm
Mr. William Cash (Stafford)

I shall speak briefly in support of the comments of my hon. Friend the Member for Southend, East (Sir T. Taylor). He is right about sovereignty for the very reason mentioned by the hon. Member for Midlothian (Mr. Eadie), who touched on the question of taxation in relation to these proposals.

The documents make it clear that one of the main ingredients of the proposals in the treaty is the provision of a genuine and direct tax. As the explanatory memorandum states: the Commission points out that the levy on the ECSC industries … used to fund redeployment aid, is the sole example of a genuine Community tax. Now we have the proposal for an energy tax which will compound the problem, but I shall not stray into that this evening. The memorandum continues by saying that the Commission advocates the retention of these proposals precisely because this is a genuine Community tax. That is at the heart of the sovereignty question and why I agree 100 per cent. with the Government and my hon. Friend. The reality is that we are dealing with a matter that goes to the heart of the functions of this House.

I mentioned the control of state aids when I intervened in the speech of the hon. Member for Gateshead, East (Ms. Quin). The Commissions's document states: Control of State aids is more restrictive in the ECSC Treaty than in the EEC Treaty. It is precisely because of the misuse of state aids to France and Germany, through the derogations that have been conceded, that our coal and steel workers are put at such a disadvantage. They should be supporting us, not vice versa.

Mr. Hood

The hon. Gentleman appears to be against regional aid and he seems to have the support of the hon. Member for Sherwood (Mr. Stewart), who has a mining community in his constituency. The hon. Members seem to be against regional aid, in particular aid to mining communities. However, the Government have already agreed to that policy, but, as my hon. Friend the Member for Midlothian (Mr. Eadie) has said, they are now welching on that agreement. As a result, the millions of pounds that could be spent in deprived areas will no longer be available. The hon. Member for Stafford (Mr. Cash) supports that policy.

Mr. Cash

The hon. Gentleman does not appear to have comprehended the point about regional aid. The problem with regional aid is that it distorts economies in a way that ensures that the money goes on resources that are not properly used. It would be far better to have effective economies through competition that would be able to compete with one another. That is what the European Community is supposed to be all about. The hon. Member for Clydesdale (Mr. Hood) will not, of course, agree with me because he is a socialist, if not a marxist.

Mr. Hood

Thank you.

Mr. Cash

The hon. Gentleman may thank me because that is what he is.

The whole problem about state aid is that it distorts the market and militates against the interests of the very people who Opposition Members are supposed to represent. That is the problem and one of the reasons why the Government are completely right in their policy.

Mr. Alex Salmond (Banff and Buchan)

Is the logic of the hon. Gentleman's argument——

Madam Deputy Speaker

Order. Is the hon. Member for Stafford (Mr. Cash) giving way or has he finished his speech?

Mr. Cash

I gave way because the hon. Member for Banff and Buchan (Mr. Salmond) is so persuasive.

Madam Deputy Speaker,

It would be nice if that were indicated to me.

Mr. Salmond

Since the hon. Member for Stafford (Mr. Cash) is against all forms of state aid, is the logic of his argument that he is against the billions of pounds spent in London docklands in the past three years?

Mr. Cash

Where state aids are used in a manner that is contrary to the provisions of the EEC treaty—that is where the problem arises—they are unlawful and they should be dispensed with. There are occasions when within the context of treaties they are allowable and that would be acceptable in the docklands case. When dealing with state aids which are unlawful and which should not be used, they should be dispensed with. That is what Commissioner Brittan is trying to do, and he is running into a lot of difficulty with the French and the Germans for precisely that reason.

11.41 pm
Mr. Alex Carlile (Montgomery)

The ECSC treaty played a considerable part in the rebuilding of the manufacturing industry in Europe. One should not look upon it as though it were a dreadful error, as seems the implication from some Conservative Members' speeches. However, it must be accepted that today the ECSC treaty looks outdated. and out of context in modern Europe. Change is overdue. An obvious example is that the levy that cannot logically be regarded as appropriate in today's liberal economic democracies of Europe and in their common market.

The long-term question is whether, and if so how, the two important industries of steel and coal should still be supported by special financial provisions and to what extent they should be integrated into the post-1992 market. With the sole exception of agriculture—I make that exception because of its universal distribution across the Community countries—it seems sensible and logical that all the industries of Europe, including steel and coal, properly be regarded by the same standard within the Community.

Another important issue that arises was not considered in the 1950 treaty because it was not a subject for debate at that time—the environment. The ECSC treaty fails to take into account any of the urgent environmental imperatives which we understand today, but did not understand 40 years ago. It fails to mirror the commitment that the European Commission has made in the past two years in favour of tough carbon and desulphurisation ceilings to be imposed on heavy manufacturing industry and the energy industry.

Modern European economics mean that we must end local protectionism of industries, including coal and steel, in terms of direct state aid and subsidies. Primarily, that too means that the EC must create an equal standard for the treatment of industries in all member states.

In some member states—I cite Italy as an example because the evidence is clear—the Government have enabled the steel industry to be underpinned by large subsidies, despite obvious inefficiencies. I hope that we all agree that any new legislation to emanate from the EC must ensure that no member state permanently subsidises inefficient producers elsewhere in the Community, particularly when the British steel industry has made significant productivity gains during the last 10 years. Whether it was right to achieve those gains in the way it occurred is open to debate. Nevertheless, we in the United Kingdom have taken the medicine prescribed by world markets. Others have still to face up to it, and it is not right that we should pay for their recalcitrance.

While we appreciate that many provisions in the ECSC treaty are anachronistic in many respects, there is still an overwhelming need for policies that address the industrial development and future of the industries themselves and, perhaps more particularly, of the geographical areas in which they are set.

The areas where coal and steel were predominant in employment terms are now in transition from dependence on those industries. Nowhere in the United Kingdom is that more obvious than in north Wales, where a successful transition has been made from almost total dependence on coal and steel to coal and steel being part of a much wider range of productive industry.

The circumstances of coal and steel decline, especially as, hopefully, we see the countries of east and central Europe joining the EC, either with associate or full member status, mean that we must concentrate policy on regenerating the regions where the industries are dying or have died. Funding must be made available in future, though probably not through ECSC machinery, to enable stronger regional governments to facilitate measures such as retraining for laid-off workers and seed-corn capital initiatives.

The Government's determination to terminate the ECSC treaty at an early stage and to regulate the two industries through the broader provisions of the treaty of Rome risks sacrificing the urgency of the transitional regional development that needs to be achieved.

If the commitment by the EC on environmental regulations is to mean anything, any new treaty or amendment to the treaty of Rome must entrench the targets for carbon emissions and desulphurisation. My party believes that such commitments should have constitutional force. There should be the certainty of enforcement and the Government should say that, whatever happens to the ECSC treaty, a high priority will be given not only to regional regeneration but, with that constitutional force, to protecting the environment. There must be devised and agreed a new EC energy strategy with much stronger commitments to the environment than the British Government have ever been prepared to make.

While these EC documents are silent on those environmental issues, their balanced conclusions on other matters are sensibly cautious and a practical and correct part of what we can properly regard as the evolution of the economic and monetary union to which I aspire. My party regrets that the Government do not show the same level of commitment. That is why, I believe, Commissioner Milian looks with a suspicion shared by many on the Government's attitude to additionality. The Government know, I am sure, that their reputation on the additionality question is worse than that of any other Government in the Community—although that may be something on which the hon. Member for Southend, East (Sir T. Taylor) would congratulate them.

It is a matter of regret to my party that the Government are not prepared to recognise that the gradual approach represented by the European Community documents is a reasonable and proper one; and that they adopt such a grudging approach to change in the Community.

11.49 pm
Mr. Gerald Howarth (Cannock and Burntwood)

The attitude taken by the Opposition tonight suggests that they have lost none of their enthusiasm for levies and taxes. The speech of the hon. and learned Member for Montgomery (Mr. Carlile) showed that at least there is a constructive view in his party, and that the Commission's proposal was out of date. It is unfortunate, however, that the Labour party should choose to side with the institutions of the EEC against our own domestic interests.

There is no doubt that all hon. Members who represent coalfield areas have a common interest in ensuring that the £100 million of RECHAR money wends its way to our constituencies as quickly as possible. I find it extraordinary that the hon. Member for Midlothian (Mr. Eadie) can so breathtakingly dismiss the massive amounts of public funding that have been given to our industry by the Government. According to my hon. Friend the Minister, the industry has received some £14,000 million of taxpayers' money. No one in his right mind could accuse the Government of having done anything other than support the industry most generously. My own constituency has seen the effects of derelict land grant. In the past eight years or so, it has received some £6 million and areas that were formerly derelict have been transformed.

I believe that Commissioner Millan is the man who is being thoroughly bloody-minded. It is most unfortunate that the Opposition have chosen to support him, and the institutions of the EEC, against domestic and constituency interests. As a former Minister, Commissioner Milian knows as well as anyone the way in which the United Kingdom organises its public finances. He knows that the Treasury maintains control over all aspects of public expenditure and that it must so do.

We must bear in mind the fact that the Government have acknowledged that the question of additionality exists. That is why, in the attempt to reach an accommodation with Commissioner Milian. nearly £100 million has already been committed to ensure that the RECHAR money can be released. Some £45 million of top-slicing has been agreed, along with £22 million of derelict land grant, £25 million for British Coal Enterprise Ltd. and £6 million in rural coalfield grant. That shows that the British Government have sought to do a deal with Mr. Millan—but he is not interested; he is only prepared to be bloody-minded.

Mr. Andy Stewart (Sherwood)

May I reinforce what my hon. Friend has just said? Before doing so, however, may I nail the lie attributed by the hon. Member for Clydesdale (Mr. Hood)——

Madam Deputy Speaker

Order. I do not think that any hon. Members have been exchanging lies here this evening.

Mr. Stewart

The view attributed to me is not my view. I have always supported the additional money coming to the areas that I represent. This year, under the stage 2 funding from the EEC, Newark and Sherwood district council is having three projects funded to the tune of £500,000 each. We are disgusted that the further help through RECHAR that is earmarked for my constituency, and for part of Ashfield district council, is being blocked by Mr. Milian.

Mr. Howarth

My hon. Friend makes a fair point.

As the hon. Member for Gateshead, East (Ms. Quin) was so courteous in giving way to me earlier, she enabled me to refer to a number of issues. All that I would say to her and to her colleagues is that we have common cause to make, which is to persuade Commissioner Milian that he is the villain of the piece.

11.54 pm
Mr. Kevin Barron (Rother Valley)

The Opposition are not surprised that the Government have tabled this motion, although it was done without much notice. They have shown constant disregard for the effects of their policies on areas that depend on coal and steel. Since they came to office in 1979, 220,000 jobs in the coal industry have been lost, as well as thousands of jobs in the steel industry. They have all been assisted by redundancy payments from ECSC funds.

It is also not surprising that the Government stubbornly refuse to pass on the full £100 million of RECHAR aid to coalfield communities. Earlier this year I went to the Department of the Environment with a delegation from the Coalfield Communities Campaign. We were told plainly by a Tory Minister that the Government agreed with the arguments made by us and by Bruce Millan, but that it was the Treasury and the Department of Trade and Industry who were stopping it being passed on. That shows the division in Whitehall regarding this money. The £100 million has not been paid out. Other member states who are eligible have met the rules that these people think are offensive. If we do not meet those rules pretty quick, I have no doubt that that £100 million designated for this country, to provide assistance in areas where it is very much needed, will end up in France, Spain and other member states that are meeting the rules laid down by the Commission. Those who sit on the Treasury Bench are not telling the truth if they say that that money has been stopped by the Commission.

Many points have been made about this issue. Even the European Parliament found time to debate a resolution asking the United Kingdom Government to adhere to the additionality rules of the European Community to which they were a party in the first place. Once again we are out of step with the 11 other member states, yet Ministers argue that the 11 others are out of step with this Government. It is about time that they put their house in order so that we can get assistance for the regions.

The context of the debate is the future of the ECSC treaty. The amendment tabled in the names of my right hon. and hon. Friends puts our case. We believe that the treaty should run its course through to 2002. We also believe that the levy that provides the funds for loans and interest rate subsidies should remain in place. With the Government's dismantling of any real semblance of regional policy, the only place to turn to has been the EC. With their record on regional aid and RECHAR, it is no wonder that the Government would like to see the levy abolished.

We agree with the Commission that these provisions would be useful as social flanking measures, but the Government apparently believe that this is far too much an interventionist approach. Such an ideological debate does not look well when it is compared with the common agricultural policy, which I assume Conservative Members support. I do not expect that the Minister disagrees that the farmers in Gainsborough and neighbouring areas should get assistance from the CAP. If it is good enough for farmers to be paid on occasion for doing nothing. it is also good enough for ex-miners and ex-steel workers. They should get assistance when their industries are being run down.

The guidelines on production and capacity that can be issued under the provisions of the ECSC treaty are rarely used. When they are used, as they were in the early 1980s, it is to get rid of the "manifest crisis" in the coal and steel industries. From what we have heard during the past seven days about the Government's plans for the British coal industry, once again there is going to be a "manifest crisis" in the not-too-distant future—a Government-sponsored crisis, since they are bent on privatising the British coal industry. However, they say little about privatisation. In fact, the "p" word is not to be used about the national health service.

We see a need for the ECSC treaty to be used in the future. When the treaty finally runs out in the year 2002, other industries that are not covered by such help and protection may he needed. That is what the Commission is saying. It does not agree with the ideological claptrap that we have heard from the Department of Trade and Industry and the Government. A lot more sense is coming from the Commission than from Whitehall.

We shall press our amendment to a Division because we feel that it is in the national interest to do so.

11.59 pm
Mr. Leigh

I am grateful to all the hon. Members who have taken part in the debate, including the hon. and learned Member for Montgomery (Mr. Carlile) and my hon. Friends the Members for Southend, East (Sir T. Taylor), for Cannock and Burntwood (Mr. Howarth) and for Stafford (M r. Cash). They have all debated the RECHAR money. I explained my position clearly and fairly. The Government believe that these moneys are genuinely additional. We regret that Commissioner Millan is choosing to withhold them. If coal mining communities are being denied the moneys, it is the fault not of the Government but of Commissioner Millan. The Government are interpreting the rules correctly. I regret that Opposition Members have not taken this opportunity to remind Commissioner Millan of his duty to coal mining areas.

Mr. Peter Hain (Neath)

Will the Minister give way?

Mr. Leigh

No. I gave way 10 or 12 times in my opening speech.

I was surprised by the comment of the hon. Member for Rother Valley (Mr. Barron). I think that I heard him correctly when he said that is was possible, and perhaps desirable, that Commissioner Millan should decide not to give the funds to this country but should divert them to other European countries.

Mr. Barron

I did not say that.

Mr. Leigh

I shall give way to the hon. Gentleman because it is important to set the record straight. That was my understanding and that of some of my hon. Friends.

Mr. Barron

I did not say that that was desirable. I said that it was likely to happen, given that the Government, unlike other member states who are eligible for the money, will not take notice of the rules. In those circumstances, it is likely that we could lose the money. Ministers have told me that they disagree with what has been said tonight. When will the Government put their house in order, as have other member states, and get this much needed help to areas that have had a massive rundown in basic industries?

Mr. Leigh

If the money is to go to those areas, the decision lies with Commissioner Millan. We are interpreting the rules correctly. We pay £1,800 million into the structural funds and receive £900 million back—£600 million via the Fontainebleau agreement—hence it costs us £300 million per annum. That is our money. We pay it in. The Government will decide how the funds are disbursed.

The treaty is outmoded and out of date. I asked the hon. Member for Gateshead, East (Ms. Quin) whether she would explain the Labour party's position. Under the treaty, the Commission can levy a discriminatory tax on the coal and steel industries. It is significant and interesting that the hon. Lady would give no indication of the Labour party's view on the levy. It is a discriminatory levy.

This is the first industry debate after the party conferences. We heard much about the Labour party's new industrial policy. It seems that the Labour party is still wedded to the past. It alone is committed to retaining the treaty, which places a discriminatory levy on the industry.

Mr. Richard Shepherd (Aldridge-Brownhills)

Will my hon. Friend give way?

Mr. Leigh

No. I do not have time.

The treaty results in rules and regulations being made which govern investment in the industry. The Labour party has built its socialist rock and will not be moved from it. It will stay in opposition because it alone wants to keep the treaty as it is. It wants to live in the past. We want to take the coal and steel industries into the future. We have put massive investment into the coal industry. The steel industry is now profitable. Under the Labour party it lost £1 billion. We are producing twice as much steel with half as many men employed. We can be proud of the coal and steel industries.

It being one and a half hours after the commencement of proceedings on the motion, MADAM DEPUTY SPEAKER proceeded, pursuant to Standing Order No. 14 ( Exempted business), to put the Questions necessary to dispose of them.

Question put, That the amendment be made:—

The House divided: Ayes 65, Noes 189.

Division No. 228] [12.4 am
Banks, Tony (Newham NW) Lewis, Terry
Barnes, Harry (Derbyshire NE) Lofthouse, Geoffrey
Barron, Kevin Loyden, Eddie
Battle, John McAvoy, Thomas
Beith, A. J. McKay, Allen (Barnsley West)
Bennett, A. F. (D'nt'n & R'dish) McMaster, Gordon
Bermingham, Gerald McNamara, Kevin
Boyes, Roland McWilliam, John
Brown, Gordon (D'mline E) Mahon, Mrs Alice
Caborn, Richard Meale, Alan
Campbell, Menzies (Fife NE) Michie, Bill (Sheffield Heeley)
Carlile, Alex (Mont'g) Mitchell, Austin (G't Grimsby)
Can, Michael Morgan, Rhodri
Clelland, David O'Brien, William
Cox, Tom O'Neill, Martin
Cryer, Bob Pike, Peter L.
Cunliffe, Lawrence Quin, Ms Joyce
Dalyell, Tam Redmond, Martin
Davies, Ron (Caerphilly) Reid, Dr John
Dixon, Don Rogers, Allan
Dobson, Frank Salmond, Alex
Dunnachie, Jimmy Skinner, Dennis
Eadie, Alexander Snape, Peter
Foster, Derek Steel, Rt Hon Sir David
Godman, Dr Norman A. Turner, Dennis
Golding, Mrs Llin Wareing, Robert N.
Graham, Thomas Welsh, Andrew (Angus E)
Hain, Peter Welsh, Michael (Doncaster N)
Hardy, Peter Wise, Mrs Audrey
Hood, Jimmy Wray, Jimmy
Howells, Dr. Kim (Pontypridd)
Johnston, Sir Russell Tellers for the Ayes:
Kilfoyle, Peter Mr. Frank Haynes and
Kirkwood, Archy Mr. Ken Eastham.
Leadbitter, Ted
Alexander, Richard Chope, Christopher
Amess, David Clarke, Rt Hon K. (Rushcliffe)
Amos, Alan Colvin, Michael
Arbuthnot, James Conway, Derek
Arnold, Jacques (Gravesham) Coombs, Anthony (Wyre F'rest)
Ashby, David Coombs, Simon (Swindon)
Baldry, Tony Cope, Rt Hon Sir John
Batiste, Spencer Currie, Mrs Edwina
Bennett, Nicholas (Pembroke) Davies, Q. (Stamf'd & Spald'g)
Bevan, David Gilroy Davis, David (Boothferry)
Blackburn, Dr John G. Day, Stephen
Blaker, Rt Hon Sir Peter Dorrell, Stephen
Body, Sir Richard Douglas-Hamilton, Lord James
Boswell, Tim Dover, Den
Bottomley, Peter Dunn, Bob
Bowden, A. (Brighton K'pto'n) Durant, Sir Anthony
Bowden, Gerald (Dulwich) Dykes, Hugh
Bowis, John Eggar, Tim
Brandon-Bravo, Martin Evans, David (Welwyn Hatf'd)
Brazier, Julian Evennett, David
Brooke, Rt Hon Peter Fairbairn, Sir Nicholas
Brown, Michael (Brigg & Cl't's) Fallon, Michael
Burt, Alistair Favell, Tony
Butler, Chris Fenner, Dame Peggy
Carlisle, John, (Luton N) Fishburn, John Dudley
Carlisle, Kenneth (Lincoln) Forsyth, Michael (Stirling)
Carrington, Matthew Forth, Eric
Cash, William Fowler, Rt Hon Sir Norman
Channon, Rt Hon Paul Franks, Cecil
Chapman, Sydney Freeman, Roger
French, Douglas Norris, Steve
Gale, Roger Oppenheim, Phillip
Gill, Christopher Paice, James
Goodlad, Alastair Patnick, Irvine
Gorst, John Peacock, Mrs Elizabeth
Greenway, John (Ryedale) Porter, David (Waveney)
Gregory, Conal Powell, William (Corby)
Griffiths, Peter (Portsmouth N) Price, Sir David
Gummer, Rt Hon John Selwyn Raison, Rt Hon Sir Timothy
Hague, William Rathbone, Tim
Hamilton, Neil (Tatton) Redwood, John
Hanley, Jeremy Rhodes James, Sir Robert
Hannam, John Rossi, Sir Hugh
Hargreaves, A. (B'ham H'll Gr') Rowe, Andrew
Hargreaves, Ken (Hyndburn) Ryder, Rt Hon Richard
Harris, David Sackville, Hon Tom
Haselhurst, Alan Sayeed, Jonathan
Hawkins, Christopher Shaw, David (Dover)
Hayward, Robert Shaw, Sir Michael (Scarb')
Heathcoat-Amory, David Shelton, Sir William
Hind, Kenneth Shepherd, Colin (Hereford)
Howarth, G. (Cannock & B'wd) Shepherd, Richard (Aldridge)
Howell, Rt Hon David (G'dford) Skeet, Sir Trevor
Howell, Ralph (North Norfolk) Smith, Sir Dudley (Warwick)
Hughes, Robert G. (Harrow W) Smith, Tim (Beaconsfield)
Hunt, Rt Hon David Soames, Hon Nicholas
Hunt, Sir John (Ravensbourne) Speller, Tony
Hunter, Andrew Squire, Robin
Irvine, Michael Stanley, Rt Hon Sir John
Jack, Michael Steen, Anthony
Janman, Tim Stern, Michael
Jessel, Toby Stevens, Lewis
Jones, Gwilym (Cardiff N) Stewart, Allan (Eastwood)
Jones, Robert B (Herts W) Stewart, Andy (Sherwood)
King, Roger (B'ham N'thfield) Stewart, Rt Hon Sir Ian
Kirkhope, Timothy Summerson, Hugo
Knapman, Roger Tapsell, Sir Peter
Knight, Greg (Derby North) Taylor, Ian (Esher)
Knowles, Michael Taylor, Sir Teddy
Latham, Michael Temple-Morris, Peter
Lawrence, Ivan Thompson, Patrick (Norwich N)
Leigh, Edward (Gainsbor'gh) Townsend, Cyril D. (B'heath)
Lennox-Boyd, Hon Mark Tracey, Richard
Lightbown, David Trippier, David
Lilley, Rt Hon Peter Twinn, Dr Ian
Lloyd, Sir Ian (Havant) Vaughan, Sir Gerard
Lloyd, Peter (Fareham) Viggers, Peter
Lord, Michael Wakeham, Rt Hon John
Luce, Rt Hon Sir Richard Waller, Gary
Lyell, Rt Hon Sir Nicholas Ward, John
MacGregor, Rt Hon John Wardle, Charles (Bexhill)
McLoughlin, Patrick Watts, John
McNair-Wilson, Sir Patrick Wells, Bowen
Malins, Humfrey Widdecombe, Ann
Mans, Keith Wilkinson, John
Martin, David (Portsmouth S) Wilshire, David
Miller, Sir Hal Winterton, Mrs Ann
Mills, Iain Winterton, Nicholas
Miscampbell, Norman Wolfson, Mark
Mitchell, Andrew (Gedling) Wood, Timothy
Monro, Sir Hector Yeo, Tim
Morrison, Sir Charles Young, Sir George (Acton)
Moss, Malcolm
Moynihan, Hon Colin Tellers for the Noes:
Neubert, Sir Michael Mr. John M. Taylor and
Nicholls, Patrick Mr. Nicholas Baker.
Nicholson, David (Taunton)

Question accordingly negatived.

Main Question put and agreed to.

Resolved, That this House takes note of European Community Document No. 5577/91 relating to the future of the European Coal and Steel Community; supports the Government's view that early termination is to be preferred; but considers that, in the event that the Treaty is not terminated early, the flexibility contained within the Treaty should be used to bring about a less interventionist application of its provisions and to reduce burdens on business.

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