HC Deb 23 November 1994 vol 250 cc594-6
15. Mr. Hutton

To ask the President of the Board of Trade if he will make a statement about state aid to the shipbuilding industry.

Mr. Heseltine

The European Community's seventh directive on shipbuilding regulates state aids to shipbuilding within the Community in 1994 and is likely to be extended to cover 1995. The Government support the OECD shipbuilding agreement which provides for the elimination of shipbuilding subsidies, on a multilateral basis, from 1 January 1996.

Mr. Hutton

I thank the President for that answer. What will be the subsidy for 1995 under the shipbuilding intervention fund scheme? Has he given any consideration to extending the period applying to guaranteed loans under the home shipbuilding loan guarantee scheme?

Mr. Heseltine

I cannot give the hon. Gentleman the answer that he requests. We expect the European Commission to announce the rate of subsidy; for 1994 it is 9 per cent. The moment I have updated information I shall make it available to the House.

Mr. Gallie

Given the pleas of Opposition Members in respect of the referral of both bids for VSEL to the Monopolies and Mergers Commission, can my right hon. Friend advise me on how on earth the British Aerospace bid can be referred to the MMC, as it has no shipbuilding interests at present?

Mr. Heseltine

I know that my hon. Friend will understand if I do not get drawn on that matter.

Mr. Beggs

The president must be aware of just how difficult it is for any United Kingdom shipyard to win orders or successfully tender bits for new business against European yards. The obvious conclusion is that some hidden subsidy or support is given to shipyards in Europe—support that British yards, and Harland and Wolff in Northern Ireland, cannot obtain. That is damaging their chances of gaining new business—[Interruption.]

Madam Speaker

Order. Is everybody sitting comfortably? [Laughter.]

Mr. Beggs

Now that that cargo has docked, I shall proceed. I call upon the President of the Board of Trade to endeavour to establish whether hidden subsidies are being given to European yards, and to secure a level playing field for our own industry to compete on.

Mr. Heseltine

I am sympathetic to the hon. Gentleman's point. If there is any evidence of the sort of hidden subsidies to which he refers, I shall take it extremely seriously and seek to have them withdrawn.

It is important, however, to realise that the situation is not as bleak as the hon. Gentleman suggests. Vosper Thornycroft's turnover is up 22 per cent., and more than 90 per cent. of its business is in exports—a commendable achievement.

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