British Steel

HC Deb 16 February 1994 vol 237 cc945-56 3.30 pm

Mr. Robin Cook (Livingston)

(by private notice): To ask the President of the Board of Trade if he will make a statement on the decision of the European Commission to fine British Steel.

The Minister for Industry (Mr. Tim Sainsbury)

The European Commission announced this morning the decision to impose fines of slightly more than 100 million ecu on 16 steel companies from six Community and three Scandinavian countries.

Under the treaty of Paris—the European Coal and Steel Community treaty—the Commission has sole jurisdiction in the application of competition law to cartels and restrictive agreements so far as they concern primary steel products. I would emphasise that the Government support the full and fair application of the Community's competition rules.

My latest information is that British Steel has not yet received formal notification from the Commission. However, the fines are being levied following a Commission investigation into alleged anti-competitive activity in beams. The Commission has made a finding of price fixing, exchange of information and market sharing.

The procedures which have led to the imposition of the fine constitute a legal process. It is open to the company to appeal and I understand that it intends to do so.

The House will recall that the European steel industry had operated with production quotas administered by the Commission under the manifest crisis provisions of the ECSC treaty between 1980 and 1988.

The chairman of British Steel has told me that the company is surprised at the decision, particularly since it contends that the Commission was aware of exchanges of information that continued after the ending of the manifest crisis on 30 June 1988.

I would stress that this matter is entirely for the Commission and the company, but we shall be studying the wider implications carefully and discussing them with British Steel at the earliest opportunity.

Mr. Cook

Does not the Minister appreciate that the statement which the House wanted was not one about what the Commission had decided, but one about what was the view of the British Government and what the British Government were going to do about it? Does he not understand that the survival of the British steel industry is not something else that he can add to the long list of things for which the Government will take no responsibility?

Does not the Minister realise that the reason why today's fine will cause anger and anxiety among the work force at British Steel is that it is another blow to an industry which has already lost 100,000 jobs and shed double the capacity of the rest of Europe?

Will the Minister confirm that the fine which has been imposed on British Steel is larger than that on any of the 16 companies to which he referred, and is three times larger than the next biggest fine? Why should British Steel, which has already made the biggest cuts in capacity, now be hit with the biggest fine? Will the Minister confirm that the value of the fine imposed on British Steel is larger than the profits that it declared for the first six months of 1993? What will that mean for steel plants that are already at risk and are already having difficulty making ends meet?

In the light of today's fine, will the Minister now reconsider his decision at the meeting of the Council of Ministers in December to agree to large new subsidies for German, Italian, Spanish and Portuguese steel industries? Will he confirm that, at the meeting, he agreed to state subsidies of £5 billion to those industries? How can it be fair competition to fine British Steel millions and subsidise German and Italian steel by billions? Does the Minister remember saying before the meeting that no deal was better than a bad deal? Will he now admit that it was a bad deal and that today's fine makes it a worse deal for British Steel?

Will the right hon. Gentleman now tell the Commission what he failed to tell it in December, and that is that there will be no more cuts in steel capacity in Britain until the rest of Europe have matched the cuts in capacity that we have already made, and that the solution to the crisis in the steel industry in Europe is to wind down subsidies to capacity in the least efficient companies, not to fine British Steel and threaten the most efficient steel plants in Europe?

Mr. Sainsbury

I find Labour Members' great enthusiasm for all things related to Europe and their untrammelled support for the treaty of Rome somewhat at odds with the hon. Gentleman's approach to the question. He asked what the Government intend to do about it. I suppose that he might have been suggesting that we leave the European Union and seek the abrogation of the treaty of Rome and the treaty of Paris. If he is not suggesting that, I assume that he would like us and other member states to adhere to the provisions of the treaty. The hon. Gentleman displays his ignorance of the provisions of the treaty by asking what the Government can do about something which, as I made clear in my answer, is entirely a matter for the Commission and for the company concerned.

I am happy—he might be surprised—to agree with the hon. Gentleman on one thing. I am surprised that he ever says anything that I find myself able to agree with. He said that it would be most useful for British steel companies to wind down the illegal state subsidies being paid in the rest of Europe. That indeed was the purpose of the agreement of 17 December. It was unanimously agreed in the Council of Ministers because it brought about not only a substantial reduction in capacity but, more important, an agreement to end operating cost subsidies and the imposition of the strictest monitoring arrangements on that point that we have ever had in the European Community.

Several hon. Members

rose—

Madam Speaker

Order. Now that we have had the initial exchange, I am looking for brisk answers and even brisker questions.

Mr. Michael Bates (Langbaurgh)

Will my right hon. Friend dismiss the hollow words of Opposition Members who opposed the privatisation of British Steel which has led to its productivity? Will he accept that the news will be a bitter blow to the workers and managers at British Steel at Skinningrove in my constituency? Will he also accept that, on top of the decision that they will have to face capacity cuts, the news is unwelcome? Does my right hon. Friend agree that we want Europe's most efficient steel producer, British Steel, to be allowed to operate in a free market and on a level playing field?

Mr. Sainsbury

I am very happy to agree that we want British Steel, which is probably Europe's most efficient producer of primary steel products, to be able to operate and trade in a free and fair market. That is why we entirely support the Commission in what it is seeking to do to end illegal state subsidies. We will pursue that objective as energetically as we can, and we will monitor the Commission's performance in monitoring illegal state subsidies as closely as we can.

Mr. Richard Caborn (Sheffield, Central)

Does the Minister agree that it is crude timetabling for the Commission to bring forward the matter after three years of investigations? Would it be more in tune with the deal that he tried to do to take out 25 million tonnes of excess capacity and compare that with the British Steel Corporation's and the British steel industry's removal of capacity, particularly with the manifest crisis, which was done in the reference period and which mitigated against our own steel industry? When he attends the next ministerial conference, will he ensure that there are no further reductions until the deficit produced in the manifest crisis between 1980 and 1988 is met? Will he at least give the British steel industry a fair crack of the whip?

Mr. Sainsbury

Our extensive contacts with British Steel and the British steel industry show that most of all they want the elimination of the operating cost subsidies that go to state-owned companies in other parts of Europe. They also want and expect further reductions in capacity. Substantial reductions in capacity were agreed at the Industry Council on 17 December. It was also agreed that there should be strict monitoring arrangements to ensure that there was an end to operating cost subsidies.

I assure hon. Members that, in our efforts to ensure that the agreement is adhered to, we shall leave no stone unturned. The Commission is already aware of our views on the subject and I shall ensure that it will remain in no doubt about them.

Mr. John Butcher (Coventry, South-West)

Does my right hon. Friend agree that the Commission cannot face both ways? On 17 December, it was asked and gave approval to sanction retrospectively £5 billion of illegal subsidies in Spain, Italy and Germany. Is it not the industrial economics of the mad house to sanction such support and not to reduce the capacity of inefficient producers? If the removal of 5 million tonnes of capacity is part of the deal, will there be a guarantee that the reduction will be made among those inefficient producers in other parts of Europe?

Mr. Sainsbury

As my hon. Friend said, we want substantial reductions in capacity, particularly in the three countries that he mentioned—Germany, Italy and Spain—where the reductions in capacity that occurred in the United Kingdom have not been matched. Furthermore, we want the elimination of operating cost subsidies. The subsidies that were sanctioned by the Industry Council on 17 December were connected with restructuring and reduction in capacity. Those operating cost subsidies have distorted the market, to the disadvantage of British steel producers. We are determined to eliminate those subsidies.

Mr. Peter Snape (West Bromwich, East)

What impact will the fine have on British Steel's production and, consequently, on British manufacturing? Given that the Minister, on two previous occasions, has made hand-washing—or hand-wringing—statements on the future of the British industry, is he prepared to defend from the Dispatch Box any sector of our once great industry?

Mr. Sainsbury

I do not know what constitutes hand wringing—or hand washing—in the hon. Gentleman's eyes, but I and many commentators believe that my statement the other day was good news for British Aerospace and the British car industry. The fine is, of course, a matter for British Steel, but it has said already that it intends to appeal and it thinks that it has a good case. 'We should await the outcome of that appeal.

Mr. Roger Knapman (Stroud)

What guarantee will my right hon. Friend give that, if the fines are confirmed and British Steel meets its fine as a private limited company, in Italy the fine will not be paid by a further subsidy from the Italian Government? After all, £28 million is a lot of money. It would keep 28 Members of the European Parliament going for a full working year.

Mr. Sainsbury

I appreciate my hon. Friend's concern, but the largest fines were levied on private sector companies. A number of private companies in Germany, for example, had substantial fines imposed upon them. I cannot say whether they will appeal, and I cannot anticipate the outcome of appeals in that or any other case.

Mr. D. N. Campbell-Savours (Workington)

Will the Minister confirm that the workers and shareholders of British Steel will pay the fine but that in other parts of the Community the taxpayer will pay the fine?

Mr. Sainsbury

The hon. Gentleman may not have heard my previous reply. I said that most of the companies, especially those that received the largest fines, which are subject to appeal, are private sector companies, so their shareholders and workers will pay the fines.

Sir Roger Moate (Faversham)

Is it not clear that, unless there is a major reduction in capacity soon across the whole of Europe, the British steel industry and others will be in a state of manifest crisis? While we fully accept that my right hon. Friend is robustly trying to turn every stone and achieve everything, can he explain what steps are open to the British Government to protect the British steel industry against further penalties of this sort and further unfair competition if the Commission continues to fail to deliver the goods?

Mr. Sainsbury

As I said in the statement, we support the full and fair application of the Commission's competition rules. We are not in favour of cartels. 'We believe that they operate to the disadvantage of customers of the industry. It is against that background that we are seeking to create a fairer competitive environment for steel in Europe. That requires not only the elimination of capacity, to which my hon. Friend referred—a certain amount of elimination has already been agreed and we hope to see more—but, most of all, the elimination of operating cost subsidies to British Steel's competitors so that those competitors must compete with British Steel on a fair basis. That is what we are now moving towards as a result of the agreement of the Industry Council on 17 December. As I said, I am determined to ensure that that agreement is adhered to.

Dr. Jeremy Bray (Motherwell, South)

Can the Minister explain why the Commission is acting on beams and sections while maintaining that the principal problem is the excess capacity of strip products?

Mr. Sainsbury

The two issues are not directly connected because the investigation, which goes back to 1991—it has lasted for some three years—relates to agreements which the Commission contends existed with regard to those particular products. The hon. Gentleman is right to draw attention to the fact that the overcapacity, which a number of hon. Members have referred to and which is most evident in the Community at present, relates to flat products and other products rather than beams.

Mr. Phillip Oppenheim (Amber Valley)

Is it not the case that the biggest rigger of the market is the European Commission? Over the years, the Commission, together with European Governments, has meddled and fiddled with the steel industry so that it has created a mess of unproductive overcapacity. Is the real lesson from this that, while markets may not produce perfect solutions, they produce solutions that are a great deal less imperfect than the beggar-my-neighbour industrial policy and protectionism of the type that is constantly espoused by Labour Members and, unfortunately, by the Commission?

Mr. Sainsbury

I am happy to agree with my hon. Friend in his support for markets providing the best solution. Unhappily, Labour Members are still some decades away from realising that. My hon. Friend says that the Commission is the biggest rigger of the market and, indeed, the period of manifest crisis declared in the provisions of the European Coal and Steel Community—the treaty of Paris—was obviously a rigging of the market. The Community is also capable of unrigging markets. It is its efforts to bring about the elimination of unfair subsidies that we support and hope to see effective.

Mr. Roy Hughes (Newport, East)

When will the Minister recognise that in order to create an efficient steel industry in this country many thousands of jobs were lost, and that what is needed now, above all else, is a level playing field because other countries simply have not cut back as we have done? For example, Germany, Spain and Italy are subsidising their industries. Is it not simply bizarre therefore to talk about fining the British steel industry? I warn the Minister that it can only lead to further job losses. When will he stand up for our steel industry?

Mr. Sainsbury

I assure the hon. Gentleman that the steel industry wishes to see not only capacity reductions but, most of all, the elimination of the subsidies about which he has just complained. That is what we agreed at the Industry Council on 17 December, and that is what I shall stand up for as strongly as I can. It is in all our interests, and especially the interests of British Steel and its customers, to see those unfair subsidies eliminated.

Mr. Roy Thomason (Bromsgrove)

Does not my hon. Friend find it extraordinary that the Commission should come to this conclusion when it appears that it was aware of the exchange of information between steel companies before the inquiry was embarked upon? The Commission made no complaint about the exchange of that information, and now seeks to penalise those who have been undertaking action of which it was aware. Should it not be embarking on a little criticism of its internal arrangements?

Mr. Sainsbury

My hon. Friend has particular knowledge of the industry and makes his point powerfully. It would be wrong for me to prejudge the outcome of the appeal, and I am sure that the issues to which my hon. Friend referred will be raised in that process.

Mr. Ron Leighton (Newham, North-East)

Although I think that the Commission's proposal is outrageous, the Minister cannot object. He voted for the Single European Act, and for the Maastricht and other European treaties which handed over the British steel industry to the unelected and unaccountable Commission. Of course there is an alternative. This sovereign Parliament could say that the proposal is unfair and un-British, and that the Commission could get stuffed.

Mr. Sainsbury

That might almost be unparliamentary language. I must say to the hon. Gentleman what I said in answer to the hon. Member for Livingston (Mr. Cook). We are a member of the European Community, and we adhere to the treaty of Paris. If the hon. Gentleman is suggesting that we leave the EC, he is entitled to his view. [HON. MEMBERS: "We should leave it."] We know the view of Opposition Members who sit below the Gangway, because we hear them all too frequently from sedentary positions. However, it is not the view of the Opposition Front Bench.

Mr. Graham Riddick (Colne Valley)

Is not it the case that since privatisation—indeed, as a result of it—British Steel has become one of the most productive, competitive and efficient steel manufacturers in the world? Bearing in mind that British Steel, as I understand it, faces the largest fine, will my right hon. Friend do everything in his power to ensure that the Commission does not discriminate against British Steel to the advantage of heavily subsidised steel manufacturers on the continent?

Mr. Sainsbury

I am happy to agree with my hon. Friend about the efficiency and productivity of British Steel. It is notable that, under nationalisation at the time that the Conservative Government came to power, it took more than 13 man hours to produce a tonne of steel. It now takes substantially less than five man hours, and that makes British Steel one of the most efficient steel producers in the world. I want British Steel to be able to operate and benefit from that efficiency without others having illegal subsidies. We are moving towards achieving that, and we require the Commission's action to achieve it.

Mr. Peter Mandelson (Hartlepool)

Will the Minister confirm that British Steel's production costs are as much as $90 per tonne below those of its European rivals? As that is the case, is not the issue at stake in this dispute the expectation that British Steel will cut back on its production to accommodate the higher-cost subsidised steel of other European producers? Why will not the Minister say today that he will resist that in all circumstances? What power will he muster to do so?

Mr. Sainsbury

If the hon. Gentleman knows of any evidence to support his allegations, I shall be interested to see it. I have no knowledge that there is any substance to those allegations. I think that he will find it totally without foundation that there is some connection between this decision and capacity.

Mr. William Cash (Stafford)

Will my hon. Friend recall what he said just now about the treaty of Paris and leaving the European Community? Does he accept that many of us have no desire to leave the EC, but simply want it to work fairly? Is not the way to achieve that to renegotiate the arrangements of the treaty of Paris and other treaties? The disastrous mess created over the coal industry was a direct result of the failure to renegotiate those treaties so that we had a level playing field in Europe. Does not that also apply to British Steel in this issue?

Mr. Sainsbury

I think that my hon. Friend might have meant to refer to British Coal at the end of his question rather than British Steel. The treaty of Paris—the European Coal and Steel Community treaty—enables unfair, unapproved subsidies to be eliminated if strong enough action is taken. The Commission has expressed its view that it wants to take that action. We want to see those subsidies eliminated. If we succeed and the Commission succeeds in that objective, that will be the best possible thing that we can do for British Steel. It will be further evidence, which I am sure that my hon. Friend will appreciate, of the benefits of the Community and our membership of it.

Mr. Barry Jones (Alyn and Deeside)

Where is the evidence of the fight by the Minister with regard to the subsidies in Germany, Spain and Italy? Do not Ministers present a pathetic spectacle whingeing and whining their way around Europe?

Mr. Sainsbury

The hon. Gentleman's outburst was more in keeping with the normal attitude of his hon. Friends below the Gangway and was somewhat uncharacteristic of him. He, sadly perhaps, was not able to be present at the Industry Council, but I assure him that not only on that occasion but on every other occasion when we have discussed steel, which is an important issue in the Industry Council meetings, I have done as much as I possibly could. Regrettably we sometimes had less support from our European Community colleagues than I would have hoped for.

Mr. Iain Duncan Smith (Chingford)

Does my right hon. Friend agree that the reality is that the Commission has put up a smokescreen to cover its ineffective action on the position of subsidy in the steel industry across Europe? We must kick and push the Commission to get on with the business because British Steel is under serious threat. It has been privatised, it is not subsidised, it is highly competitive and it could easily collapse under such pressure.

Mr. Sainsbury

I assure my hon. Friend that, although I doubt that kicking and screaming would be part of my behaviour, I shall do all that I can to ensure that the subsidies are eliminated. I know of no evidence that the fines on the 16 companies are in any way connected with the current efforts to eliminate subsidies and reduce capacity.

Mrs. Helen Jackson (Sheffield, Hillsborough)

Does the Minister recognise that the health of the steel industry, and in particular the special steel industry, is fundamental to the whole of manufacturing industry in Britain? He must do more than continue his efforts within Europe. Why does not he consider positive ways in which the Government now could give added support to the steel industry, such as in electricity costs, research investment and environmental matters, as our European competitors do without compunction?

Mr. Sainsbury

I hope that the hon. Lady has noticed the recent decisions that have led to significant reductions in electricity costs for major users. Indeed, they were welcomed by those major users. I find myself somewhat puzzled by the hon. Lady's question. She seemed to ask for subsidies for the British steel industry, which is what I thought we were trying to get rid of on a Europe-wide scale.

Mr. Christopher Gill (Ludlow)

Does not the Commission's action convince my right hon. Friend that, far from being impartial in such matters, the Commission is entirely partisan and seeks to impose political solutions to the problem?

Mr. Sainsbury

I am not so convinced. As I have been requested energetically by hon. Members on both sides of the House to do, I shall support the Commission in its efforts to eliminate unfair subsidies.

Mr. Stuart Bell (Middlesbrough)

The Minister misunderstands and misconceives the anger in the House today. In relation to British industry, when it comes to hand-wringing and hand-washing, he has no lessons to learn from Pontius Pilate.

With regard to the remark made by the hon. Member for Langbaurgh (Mr. Bates), and associating my hon. Friend the Member for Redcar (Ms Mowlam) with my comments, is the Minister aware of the deep disappointment on Teesside that people have worked so hard, made so many sacrifices and faced so many cuts, yet because British Steel is successful it has had imposed a greater fine? The matter has been going on for three years. The British Government tell us that they wish to be at the heart of Europe. What representations has the Minister made on behalf of British Steel to the EC Commission in those three years?

Mr. Sainsbury

In common with most of his hon. Friends, the hon. Gentleman is anticipating the outcome of the legal process. The matter has yet to go to appeal. As my hon. Friend the Member for Bromsgrove (Mr. Thomason) said, British Steel believes that during the appeal several substantial issues will be considered. It contends that those will support the actions for which it and a number of other companies are being fined. We should not assume that the appeal will go adversely, any more than we should assume that it will succeed. [Interruption.] Opposition Members tend to recommend intervention in legal proceedings, but I wonder whether they would approve if those legal proceedings were taking place in the courts of Great Britain.

Mr. Roy Beggs (Antrim, East)

Does the Minister recognise that, while he hopes that a level playing field will be brought about, many British industries are being killed off and some may even die in despair before his hope is realised? Has he considered the implications for a related industry? The United Kingdom shipbuilding, ship repair and conversion industries have lost out and will lose out this year because of unfair support. Major contracts worth £40 million, which could come to the United Kingdom, are likely to go to other European Community countries. It is disgraceful that the Government have not taken as robust a stand as Clinton took the other day with the Japanese.

Mr. Sainsbury

I entirely agree with the hon. Member that the shipbuilding industry has some parallels with the steel industry. The Northern Ireland shipbuilding company, Harland and Wolff, is a company transformed and is now very efficient. Like British Steel and other steel companies in Britain, it wants to compete on what we habitually refer to as a level playing field. Only the Commission can achieve that, and that is what we want it to do. The Commission is well aware of the fact that the British Government attach the strongest importance to the elimination of those subsidies, and it will be constantly reminded of that point of view by what hon. Members on both sides of the House have said today and on every other possible occasion.

Mr. Peter Hardy (Wentworth)

Does the Minister agree that the recent closure of the competitive Templeborough plant in Rotherham is ample demonstration of the abject failure of the Government and the Commission? Does he accept that the most successful engineering steel industry in Europe is now imperilled? What action will the Government take to resolve the anxiety, other than withdrawing the iron and steel employees readaptation benefit scheme, ISERBS, which was a singularly foolish thing to do?

Mr. Sainsbury

I am sure that, like the hon. Gentleman, we all regret the closure of the Templeborough works. It was not directly connected with the events under discussion, but United Engineering Steels will benefit substantially—as would British Steel—from the elimination of unfair subsidies, which I have already mentioned and on which the Commission is working.

Mr. Hardy

When?

Mr. Sainsbury

They should be stopped even now.

Mr. Alex Salmond (Banff and Buchan)

Do not the findings substantiate the view that British Steel sacrificed Ravenscraig—the heart of the Scottish steel industry—as the entry price to a sordid price-fixing cartel in Europe? Far from the Government having nothing to do with the arrangements, is it not true that they knew about them, aided and abetted them and that that is why they did not force the sale of Ravenscraig by British Steel? Instead of defending British Steel's illegal activities, why does the Minister not apologise to the people of Lanarkshire and Scotland for allowing their plant to be used as the sacrificial lamb for British Steel's dirty deals in Europe?

Mr. Sainsbury

That unsubstantiated allegation is typical of the hon. Gentleman. Ravenscraig made flat products, but the issue concerns beam, long products.

Mr. Thomas McAvoy (Glasgow, Rutherglen)

The Minister has badly misjudged the mood of the House this afternoon. As the European Commission's findings will affect the future viability of British Steel, does he agree that he was wrong to withdraw the ISERBS arrangement, which assisted redundant steel workers throughout Britain, but especially in Scotland? As he and the Government have done nothing but preside over our rolling over to our European opponents and agree to cuts in British steel production figures, has he considered resigning?

Mr. Sainsbury

As I told some of his hon. Friends, the hon. Gentleman is anticipating the outcome of the appeal and particularly dire consequences. I know that the fine is substantial, but it might be reduced even if the appeal is not upheld. We should not prejudge the outcome, nor should we prejudge the consequences for British Steel.

Mr. Peter Shore (Bethnal Green and Stepney)

The Minister speaks of the sole competence of the European Commission. Is not this pathetic non-statement an inevitable consequence of the transfer of power from this country and this Government to the institutions, which are unelected and irresponsible, in the European Community? Is not this statement the harbinger of many more to come, just as the statement that he made about Rover only a fortnight ago was foreshadowed? If the British privatised slimmed-down steel industry is as competitive and world beating as Ministers claim, why is it necessary to become mixed up with a European price cartel?

Mr. Sainsbury

The right hon. Gentleman's views on all matters European are well known in the House and, I think, disagreed with by members of his own Front Bench. I must bring his attention to a point that he might not have reflected on. There is general agreement on both sides of the House that we want to see the elimination of unfair subsidies. Only the Community can bring about that elimination.

Mr. Dennis Skinner (Bolsover)

Have not we reached a sorry state of affairs when the combination of this Tory Government and the Common Market has resulted in the steel industry being fined, after they signed a treaty based on the free movement of capital and labour? We have the cheapest steel and coal, yet the Common Market does not buy a cobble. The Government have just about closed down the shipbuilding industry. Is it not high time that Britain considered the question—it must be faced at some time—of getting out of the Common Market? It has been an unmitigated disaster from beginning to end. It will even affect the grocer, who will be buying his supermarket trolleys from Germany.

Mr. Sainsbury

We can always rely on the hon. Gentleman to speak with habitual moderation. I fear that we normally can rely on him to express sentiments with which his colleagues on the Front Bench would not agree.

Mr. Bob Cryer (Bradford, South)

Are not the Government already opting out of the treaty of Paris with their abandonment of the ISERBS scheme with special redundancy payments for steel workers? If they can abandon protection for steel workers, why can they not abandon the imposition of the Commission through the treaty of Paris? Why do not the Government realise that the Common Market Commission is not some lofty objective body but a group of Commissioners fighting for each member state's interests? Has the right hon. Gentleman instructed our Commissioners to do that? Have Ministers behaved like that? Or have they capitulated, as usual, to the diktat of the unelected Commissioners?

Mr. Sainsbury

The hon. Gentleman's description of the operations of the Commission and of the Commissioners is, as I suspect he knows, a travesty of the truth. I can tell the hon. Gentleman that the abolition of the ISERBS scheme, as he would have seen from the study, a copy of which is in the Library, was not proving to be effective or good value for money, but was entirely compatible with the treaty of Paris.

Mr. Kevin Barron (Rother Valley)

Will the Minister tell us exactly what operating subsidies were identified at the Council of Ministers meeting in December? Will he tell us the date on which they will end?

Mr. Sainsbury

I refer the hon. Gentleman to a written answer that I gave earlier in the year about the outcome of—

Mr. Barry Jones

This is awful.

Mr. Sainsbury

It was about the outcome of the Industry Council, which, contrary to the views of the hon. Gentleman, who seems to be getting a bit worked up about this, was not awful. It will be awful if it does not deliver.

What was agreed was a reduction of 4.6 million tonnes of capacity. That we want to see occur. What was also agreed was the elimination of operating cost subsidies, and the strictest monitoring arrangements which the Commission has ever introduced and which the Community has ever seen. We shall hear at the next Industry Council how effectively they are working. I hope to be able to report to the House that they are working effectively and are helping British Steel.