§ Mr. RedwoodTo ask the Secretary of State for Trade and Industry if he will ensure that coal subsidised by EU Governments is not imported into the UK. [54657]
§ Mr. MandelsonOur commitments under our membership of the European Coal and Steel Community and the World Trade Organisation prevent us from imposing import controls in the way suggested. But we have taken, and will continue to take, a strong line against European state aid for coal where it distorts competition in the UK market.
We have already taken action within the European Coal and Steel Community to prevent unfair competition from German graded anthracite in the UK market. We conveyed a complaint to the European Commission on behalf of Celtic Energy Ltd. setting out how state aid provided to Sophia Jacoba and Ibbenburen mines led to a distortion in the anthracite market in the ECSC and particularly in the UK. Following an investigation the Commission found there had been abuse of state aid and reached a decision on 29 July requiring repayment of DM20 million state aid by the German producers. This decision provides UK producers with an assurance that such unfair practices will not recur and should help to open up continental markets for competitive UK exports of anthracite. For the future it is important that the Commission interprets the Coal State Aids Code strictly; we question the continuing availability of large scale state aid for coal producers except in the context of clearly defined closure programmes. Elsewhere, we are examining carefully the extent to which Polish housecoal and power-station coal is being sold in the UK market at prices below production costs, and will pursue the matter vigorously. We will continue to press for an open and competitive coal market in Europe and an end to practices which discriminate unfairly against UK exports.