§ Mr. HarrisTo ask the President of the Board of Trade what is his Department's policy on the level of the shipbuilding intervention fund during 1997. [13634]
§ Mr. Greg KnightFollowing a decision of the European Commission, I have decided that the United Kingdom's maximum level of support for large ships from 1 January 1997 shall continue to be 9 per cent. This is inclusive of shipbuilders' tax relief of 2 per cent.
I have similarly decided that the maximum level of support for small ships from 1 January 1997 shall continue to be 4.5 per cent. This is inclusive of shipbuilders' tax relief of 2 per cent. These levels are the maximum permitted by the EU shipbuilding regime.
The shipbuilding intervention fund was due to end in July 1996 on the introduction of the Organisation for Economic Co-operation and Development agreement respecting normal competitive conditions in the commercial shipbuilding and repair industry. However, the agreement has not yet been ratified by all parties. The shipbuilding intervention fund and equivalent support in other member states will continue until 31 December 1997, pending the implementation of the OECD agreement. Shipbuilders' tax relief in respect of merchant ships will be terminated at the same time.