HC Deb 08 February 1995 vol 254 cc335-7
12. Mr. Barry Jones

To ask the President of the Board of Trade what representations he has made concerning EU member states employing subsidies in steel production; and if he will make a statement.

Mr. Ian Taylor

The Government have made their opposition to continued subsidies to steel producers very clear both to the Commission and to other member states. We have done this at Council meetings and in correspondence. Our lobbying will continue.

Mr. Jones

Does the Minister agree that the strip mills of Llanwern, Port Talbot and the sister plant at Shotton in my constituency are performing magnificently in producing the required products? What will happen, however, when the current excellent trading conditions for steel end? What will he do at the heart of Europe to ensure that member states cease cheating by employing subsidies against the best interests of British steel and British plant? So far, it seems to the Opposition that the Government are unable and unwilling to act.

Mr. Taylor

There is an inconsistency in the hon. Gentleman's question: the credit he has paid to the current production and capabilities of the steel mills in Wales compares with the policies of the Labour Government in the 1970s, when those mills performed extremely badly. I have already told the hon. Gentleman that Ministers are taking up problems with steel subsidies in the rest of the European Coal and Steel Community at every opportunity. Yesterday, in Brussels, I met Commissioner van Miert and raised that very issue with him. An important balance must be obtained. We will do no good, however, just by screaming from the sidelines. We must ensure that we have an overall package to persuade other member countries that they should reduce their subsidies so that long-term competition in the industry, as shown by the excellent performance of British steel, will prevail. That will be achieved only through argument.

Mr. Nicholls

Does my hon. Friend agree that the extreme difficulty that Her Majesty's Government have already encountered in trying to persuade our European Union partners not to subsidise steel illegally would be made even more difficult if we went into a federal Europe as advocated by the Labour party, where we would have no chance of success?

Mr. Taylor

My hon. Friend has particular views on the subject of Europe. As a Department of Trade and Industry Minister, my interest is in looking after British manufacturing. British manufacturers would find it impossible to compete in world markets if they did not perform strongly in their own home market—the European Union of 370 million people. Without strong institutions in the European Union, we would never be able to ensure that competition policies were properly put in place in other countries as they are in this one.

Mr. Wilson

Does the issue not go to the heart of Tory troubles on Europe? We have Ministers making different statements by the hour on their attitudes towards Europe, while the Prime Minister is a Euro-sceptic on a Monday, Wednesday and Friday and pro-European on a Tuesday, Thursday and Saturday. What we need is action rather than words; yet when we need tough action in Europe, we throw away our ability to wield that influence in defence of our national industries because of the barbed messages that come out of the Government every hour and every day of the week.

Mr. Taylor

The hon. Gentleman should pay more attention to the excellent work of Under-Secretaries of State, who are fighting for Britain day after day in the Councils of Europe. There I was yesterday, face to face with Commissioner van Miert, saying that we want a strong Commission to enforce competition policy throughout the European Union. That is the consistent line that we take and I enjoy doing just that. I am delighted to say that a Belgian socialist has an acute understanding of why it is essential to have competition policy throughout the Union. Perhaps if the hon. Gentleman compared notes with Commissioner van Miert, he might understand the subject better himself.

Mr. Ian Bruce

Does my hon. Friend agree that the subsidies currently given to the European nationalised steel industries are a disgrace, as are the subsidies paid to state monopolies in telecommunications? Does my hon. Friend further agree that those state monopolies in other European countries are gaining some support from the thought that even the Leader of the Opposition cannot remove clause IV from the socialist constitution on the basis that the Opposition still believe that one must subsidise industries to make them efficient?

Mr. Taylor

I shall leave the problem of clause IV to the private grief of the Labour party. In the European Union, it is important to attempt to achieve common rules and regulations. One can do that only with strong Community institutions—with a strong Commission making proposals about competition policy that are enforced and then backed up by the European Court. I remind the House that, if it were not for the European Court of Justice, it would not have been possible for us to challenge the subsidy to Air France—as we are doing—and if it were not for a strong Commission, we would not have achieved the British Airways flights into Orly against the opposition of Air France. The European Union works for Britain when we enforce the rules, and that means working with the institutions.

Mr. Hardy

The Minister will recall that, 14 months ago, the Government proclaimed it a great triumph when the Council of Ministers said that it would carefully monitor that unfair trade. However, is the Minister aware that his recent written answer to me suggests that the Government have remarkably little knowledge of the results of the work of the monitors? When will the Government monitor the monitors to ensure that we can find out whether those practices are continuing or being stopped?

Mr. Taylor

The hon. Gentleman may wish us to monitor the monitors monitoring monitors. I simply want some action. We shall get action if we try to persuade other member countries of the long-term need to work towards non-subsidised industries. If the hon. Gentleman pays attention to the detail, he will realise that, in many cases, we have managed to persuade other countries, against internal political opposition, to transform the basis of the way in which they treat industries such as the steel industry. It is not an overnight success. All nations are confronted by domestic pressures, with industries that are declining. Nevertheless, the success of British steel is a sign of what could happen throughout the European Union, and domestic success is the best way for us to argue our case.

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