§ 11. Mr. IllsleyTo ask the President of the Board of Trade what representations he has made to the European Commission regarding illegal subsidies to European carpet manufacturers.
§ Mr. EggarThe UK Government maintain regular contact with the Commission to monitor its progress in pursuing cases of illegal aid in this sector and will continue to do so to ensure that the Commission does not let the matter go by default.
§ Mr. IllsleyI am grateful for that response. Will the Minister press the EC particularly with regard to Belgium and the illegal subsidies that the Belgian Government have given to carpet manufacturers operating in this country—notably the Beaulieu and Fabelta companies? The Belgian Government were found guilty of supplying illegal subsides to those companies, thus allowing them to operate in this country to the detriment of British carpet manufacturers. I have a constituency interest in the matter. Shaw Carpets Ltd. in my constituency announced the redundancies of 50 per cent. of its work force over Christmas, and its difficulties arise, in part, from those illegal subsidies.
§ Mr. EggarI am well aware of the concern of the hon. Gentleman and other hon. Members on both sides of the House about the Belgian case in particular. As the House probably knows, Belgian aid to the Beaulieu carpet company, to which the hon. Gentleman referred, has been ruled illegal. The Belgian Government and the Belgian courts are currently involved in action to recover from the company aid that was given illegally and that is proceeding. The United Kingdom Government are keeping in close touch with the Commission to make sure that pressure is maintained to ensure repayment. I am sure that the hon. Gentleman will welcome the United Kingdom's success in making sure that the Maastricht treaty provides for fines on member states that do not comply with judgments.
§ Mr. Anthony CoombsWhile I welcome the new marketing efforts of the carpet industry, does my right hon. Friend agree that it is of concern that 52 per cent. of the British market in carpets is foreign supplied, and it has taken no fewer than seven years for the Belgian Government still not to pay back the £5 million subsidy they gave Beaulieu? In that regard, will my right hon. Friend engage with the European Commission to examine the possible subsidies on the cost of polypropylene to Belgian carpet companies to the competitive disadvantage of British carpet companies, which have seen polypropylene prices rise by 20 per cent. in the past year when there does not seem to have been an equal effect on Belgian carpet manufacturers?
§ Mr. EggarI assure my hon. Friend that we share his concern on that particular aid case and we are monitoring carefully the position in Belgium. We are keen to work closely with the British carpet industry to make sure that competition is absolutely fair and that the general state aid rules are applied evenly across the European Union.