§ Mr. Michael Brownasked the Secretary of State for Trade and Industry if he will make a statement on the progress made at the December European Community Council of Industry Ministers.
§ Mr. Giles ShawThe last Industrial Council of the United Kingdom presidency met under my chairmanship on 22 December. My hon. Friend the Parliamentary Under-Secretary of State for Industry represented the United Kingdom.
The Council approved a new directive on state aid to shipbuilding to replace the fifth directive, which expired on 31 December 1986.
Under the new directive, which is to last four years, all subsidies that influence shipbuilding decisions will now have to be disclosed and they will be subject to a common maximum ceiling.
For the first 12 months, the Commission has set the ceiling at 28 per cent. of cost, that is 28 per cent. of the value of contract before aid. Assistance at this level represents 39 per cent. of the resulting contract price. This compares with the maximum limit on production aid of 18.4 per cent. of cost and 22½ per cent. on price available to United Kingdom shipbuilders under the fifth directive. The directive requires the Commission to make arrangements so that the level of aid provided for small ships, those costing less than 6 million ecu, where the impact of international competition from beyond the Community is least severe, will not exceed 20 per cent. of cost, or 25 per cent. of the resulting price.
The total amount of operating support a yard can receive over the course of a year, including compensation for losses as well as contract support, is also subject to the ceiling. In addition, the directive also permits in certain circumstances aid for investment, research and development, and closure. This support falls outside the ceiling.
Spain and Portugal will benefit from transitional arrangements which will exempt them from the common ceiling, though they will be obliged to compete fairly with other member states on individual contracts.
199WThe directive represents a considerable improvement on the previous arrangements, both as regards the inclusion of all relevant subsidies, and the maximum level of subsidy permitted. We now have a directive which gives both an opportunity and an incentive to the European merchant shipbuilding industry to compete against the far east.
The Council also agreed three proposals in the Community's action programme for completing the internal market. They cover improvements to the EC supplies directives, specifying rules for the award of public sector supplies contracts; rules on the use of European standards for public purchases of IT and telecommunications equipment; and noise limits for hydraulic diggers and excavators. These three measures concluded the package of 13 measures discussed at the Internal Market Council on 1 December and, as a result, the number of internal market measures agreed or adopted during the United Kingdom presidency amounted to 48. This represents a substantial acceleration of progress towards the completion of the internal market by 1991.
In addition, the Council agreed a programme of further work aimed at opening up public procurement in the Community, and adopted a regulation for a 1987 tariff quota for Canary Islands cigars and cigarettes.