Orders of the Day — Steel Industry

Part of the debate – in the House of Commons at 10:53 pm on 28 July 1981.

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Photo of Mr Norman Tebbit Mr Norman Tebbit , Waltham Forest Chingford 10:53, 28 July 1981

Of course, they could import, but the same is true there. Excessive discounting would be unlikely, and there are measures within the Community to help deal with that. Moreover, imports from third countries outside the Community are almost all closely controlled in one form or another, mostly by voluntary restraint arrangements.

The arrangement, as I said, is not perfect. We should all agree about that. However, I do not believe that it is fatally flawed by what I frankly admit is an imperfection of this sort. We shall do our best to put it right.

As I said, article 63.3 of the Treaty gives the Commission a specific power to issue binding recommendations on this subject. This is, therefore, the appropriate way to proceed. However, the legal advisers to the Commission and the Council have advised that the urgency of dealing with the market situation to achieve the objectives of the Treaty justifies a temporary use of a decision under article 95.1, which covers cases not otherwise provided for in the Treaty. This decision will, therefore, operate only until 30 June 1982. The Commission has, in error, published the decision 1835/81 on 4 July, despite the reserve which I recorded pending completion of parliamentary procedures. However, in response to our protest, it recognised that this reserve is still in force.

At the same time, the Commission issued recommendation 1835/81, requiring member States to give effect nationally to a similar measure from 1 July 1982. An order under the European Communities Act 1972 will be introduced during the next Session to implement the recommendation.

I have talked so far about measures to improve the current market situation with the objective of raising prices sufficiently to enable really efficient undertakings to cover their costs. However, such market restraint measures, which might be crudely called a cartel, can provide no secure long-term solution. That must depend on remedying the structural imbalance and closing the gap between capacity and demand in a way that leaves a modern and streamlined industry capable of operating viably and competitively in the sort of market environment that must be expected.

I and my European colleagues were in agreement that Government subsidies incompatible with the ECSC Treaty, which have encouraged the creation and retention of unviable capacity, should be progressively eliminated. It can be to the advantage of no one for Governments to be drawn into subsidisation to maintain capacity and production in excess of market requirements