§ Mr. Hickmetasked the Secretary of State for Trade and Industry if he will make a statement on the European Commission's approval of funding for the British Steel Corporation.
§ Mr. Norman LamontOn 29 June 1983 the Commission issued a series of decisions giving its opinion on each member state's aid and restructuring plans to achieve financial viability. These decisions made the approval of aid conditional on further cuts in hot rolled product capacity of 8.3 million tonnes throughout the Community by the end of 1985. These cuts are to be additional to the 18.4 million tonnes reduction already undertaken or pledged by member states in return for the approval of aid.
Before the deadline of 31 January 1984 the Government notified the Commission of how they intend to meet the requirements specified in the decision of 29 June 1983. In their reply, which my right hon. Friend the Secretary of State and I repeated in our discussion with Vice-Presidents Ortoli and Davignon and Commissioner Andriessen last Thursday, the Government confirmed that we would comply with the terms of the 29 June decision, but that our commitment was conditional upon all member states similarly fulfilling their obligations.
Approval of any aid payment to the British Steel Corporation before December 1985 is conditional upon capacity reductions amounting in total to 500,000 tonnes of hot rolled products. My right hon. Friend and I explained to the Commission that further interim aid would be needed beyond 31 January 1984 in order to allow the review of strategic options now being undertaken by the corporation to be completed and for Government to take a view on the recommendations made. I am now pleased to report that the Commission has authorised a further payment of aid of £355 million. I can confirm the capacity reductions identified in respect of this aid do not involve closures of steelmaking capacity in any integrated works and contribute significantly towards the 500,000 tonnes specified in the Commission's decision. For reasons of commercial confidentiality I cannot go further in identifying the plants concerned.