§ Mr. Martin Stevens
asked the Secretary of State for Trade and Industry if he will make a statement on the outcome of the European Steel Council on 29 October.
§ Mr. Peter Morrison
I welcome the agreement reached by Community Industry Ministers in Luxembourg 47W in the early hours of 30 October on a new system of steel production quotas and a new code governing state aids to the steel industry from 1 January 1986. Quotas on coated sheet and reinforcement bar will be lifted from 1 January 1986 as a first step towards a return to a free market; the effects of this will be monitored so that, if necessary, controls can be reintroduced. In addition, the agreement on quantities should permit BSC to sustain its share of the United Kingdom market as of right, without recourse to the expensive and uncertain quota purchases they have had to make under the current quota system.
The new state aids code will ban all investment and operating aids, and the Commission will scrutinise all payments by Governments to steel firms to ensure they comply with the new and much more stringent permitted aids and are on commercial terms. This tough regime should protect both the private and public sector against the risk of subsidies to their continental competitors.