European Coal and Steel Community

Part of Orders of the Day — Defence – in the House of Commons at 10:35 pm on 15 October 1991.

Alert me about debates like this

Photo of Edward Leigh Edward Leigh Parliamentary Under-Secretary (Department of Trade and Industry) 10:35, 15 October 1991

It is the truth.

The treaty's consultative committee, which has representatives from trade unions, also wants to see the levy phased out. The industry, the Commission and the Government want the levy to be phased out. Only one party in Europe apparently wants to retain the old fashioned levy, a throwback to post-war years, and that is the new modern Labour party.

The reserve fund has been built up from the levies paid by coal and steel producers over the years. As I have said, it now amounts to some 750 million ecus—or over half a billion pounds. In the Government's view, these reserves should be run down during the remaining lifetime of the treaty. We recognise that, particularly in the coal sector, restructuring and readaptation support will continue to be needed. This would be an excellent use of the ECSC reserves. By using the reserves to meet current expenditure needs, we can reduce and then get rid of the levy.

The European Investment Bank is the Community's principal lending instrument, and could certainly undertake the kind of financing activities that have in the past been carried out by the ECSC. Consequently, there would be no need for a reserve fund as a guarantee for the Commission's lending activities.

The Commission paper recognises that ECSC provisions for the regulation of production and capacity, including interventionist measures to deal with a situation of "manifest crisis", have largely outlived their usefulness. The Government agree with and support the Commission's advocacy of a less interventionist approach. The existing requirement for pre-notification of investment plans is out of step with the current market. It is not clear from the amendment whether the Labour party supports pre-notification of investment plans. How extraordinary it is that, in theory, the industry is still required to give pre-notification of investment plans. If that is what the Labour party supports, it is totally out of tune with industrial best practice.

The requirement should be abolished, except where a company is applying for an ECSC loan. The Commission's studies and forecasts of the steel industry should be abolished or scaled down. We agree with the Commission that the rules governing the way in which prices are calculated and published are ineffective and should be abolished; they have no place in the marketplace of 1991.

There are significant differences between the ECSC and the EEC regimes on competition policy. Procedures for handling ECSC competition cases should be brought into line with those followed under the EEC treaty. National authorities should be consulted, as under EEC rules, and there should be greater transparency of Commission decisions.

We should like the tight control of state aid under the treaty to be maintained. Discussions are under way on a multilateral steel consensus and our aim is to achieve an agreement that imposes the greatest possible discipline.

The Commission's communication argues that the treaty has acquired invaluable experience in promoting social measures. We recognise the value that this aspect of ECSC activity has had in the past. However, not only have these measures been funded from the levy, but the vast readjustments during the 1980s have reduced their necessity.

Unlike the EEC regime, the ECSC makes no provision for a common commercial policy. The Commission's proposal to bring the ECSC regime in line with the EC regime seems entirely logical.