§ Ms. QuinTo ask the Secretary of State for Trade and Industry what formula was used to calculate the extent to which Britain would have to reduce shipbuilding capacity in return for levels of state aid authorised to the industry in the agreement between the United Kingdom Government and the European Commission which resulted in the closure of North East Shipbuilders Ltd, Sunderland.
§ Mr. Leigh[holding answer 25 June 1991]: The level of state aid to British Shipbuilders authorised by the European Commission in December 1988 was not conditional on a particular reduction in United Kingdom merchant shipbuilding capacity calculated by reference to any formula.
In the absence of acceptable bids for the remaining North East Shipbuilders Ltd. shipyards during the eight and a half months in which they had been up for sale, the Government decided in early December 1988 to close the yards. The proposed closure aid at North East Shipbuilders Ltd. to cover such matters as redundancies and the provision of remedial assistance had to be taken into account in determining the overall level of subsidy 591W permissible to British Shipbuilders within the relevant Community shipbuilding aid ceilings. Accordingly these costs were included in the wider package of subsidy measures notified to, and approved by, the European Commission in December 1988.