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accurate--is that the Commission's proposal is to move from a ceiling level of 20 per cent. to 11 per cent. Disgracefully, in the negotiations the Department of Trade and Industry has been talking about 10 per cent. or lower. The last time there was a precipitate change in the level of aid from 26 per cent. to 20 per cent. Kvaerner lost two ships. Given the current margins, a drop from 20 per cent. to 11 per cent. or 10 per cent. will be a severe handicap in the competitive international world.

I want to lend my weight, for what it is worth, to what was said by the hon. Member for Gateshead, East (Ms. Quin) in respect of the Commission's so-called study, which builds up to the argument about the correct ceiling level for aid. It is a deeply flawed study, particularly when five of the eight ship types are taken from a single yard in Denmark, with a tax regime that is heavily weighted and is probably worth a subsidy of about 30 per cent. The Minister asked the hon. Member for Gateshead, East what level of ceiling aid she wanted. I can tell him what I want. I want 18 per cent. That is a reasonable position for yards such as Kvaerner to be in now. That is what we want from the Department of Trade and Industry in its discussions with the Commission.

11.52 pm

Mr. Leigh : I am grateful to be given an opportunity to try to reply to some of the many interesting points that have been made in the debate. Having spent nearly eight years on the Back Benches, I have always wondered at Ministers who come to the House with prepared texts. I have always thought that it would be far more impressive if they tried to reply to the points raised. I am not sure that I will succeed in doing that, but I will do my best.

The first question to me came from the hon. Member for Newcastle upon Tyne, Central (Mr. Cousins), who asked whether work on the oil rig industry will be allowed. The answer is yes. The Commission has said that it will not allow operations predicated upon a return to shipbuilding. If a project is viable without necessitating a return to shipbuilding it is okay with the Commission. Work for the oil rig industry is not regarded as shipbuilding in general, so it is not caught by the directive. I hope that that answers the hon. Gentleman's point.

The hon. Member for Gateshead, East (Ms. Quin) asked many questions, as is her right. I have little time, but I shall try to answer as many as I can. The first concerned that appalling word

"degressivity". I made it clear in opening that the directive would not require automatic degressivity. Any change will be based on objective criteria after inquiry by consultants.

The hon. Lady and the hon. Member for Sunderland, North (Mr. Clay) asked about the treatment of East German yards. Whether we like it or not, those yards are part of the European Community-- [Interruption.] So are our yards, as we fully accept.

I failed to mention earlier that the German Government have been undecided about special treatment under operating aid. They have changed their mind twice already, and at present are asking for special treatment. I make it absolutely clear that we shall oppose it. We expect a major restructuring programme. The Germans have big problems, but we shall scrutinise the Commission's treatment of the problem and the degree and rate of

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restructuring of the yards. Far from our being complacent, I hope that the hon. Member for Sunderland, North will accept that we take a robust view.

The hon. Member for Gateshead, East asked about research and development training. R and D in shipbuilding and marine engineering is supported by the Government through our "Wealth From the Oceans" collaborative R and D programme. We also support the Eureka programe, Euromar and the Community's Mast and Euram programmes.

The hon. Lady asked about RENAVAL. Approval of RENAVAL programmes for Plymouth, Tyne and Wear and Teesside are expected from the Commission this year. RENAVAL programme applications should be ready to go to the Commission for eligible parts of Fife, Strathclyde and Merseyside. I much regret, however, that in calculating REVANAL grants the Commission is proposing not to take account of job losses suffered in 1990. This week, I asked Commissioner Millan in a letter to reconsider that, but I have not yet received a reply.

The hon. Member for Gateshead, East mentioned Aluminium Shipbuilders Ltd. There is no prospect of excluding aluminium ships from the seventh directive. Their inclusion has been checked. The only reason for excluding them would be so that ASL could build at Southwick. The motion to exclude aluminium ships was defeated in the European Parliament following a proposal from a Labour Member of the European Parliament.

The hon. Member for Belfast, East (Mr. Robinson) made some points. Let me make it clear that officials acting on my behalf did not seek a ceiling of less than 10 per cent. It is true that our aim is to reduce aid ceilings, but that is for negotiation. One does not necessarily begin negotiating at the level one expects to end up with. We must balance the much higher suggestions from the southern member states. I am not in a position to give the House the outcome of those negotiations.

I thank my hon. Friend the Member for the Isle of Wight (Mr. Field) for the kind remarks that he made about me. He centred his remarks on the Danish yards. The Commission's proposal was not based on prices quoted by one Danish yard. It took account of prices from a range of yards in different member states. Danish ship owners receive tax support, but it is not as high as 30 per cent. Production aid in Denmark is monitored by the Commission and converted to grant equivalent. If hon. Members, including my hon. Friend the Member for the Isle of Wight, have evidence that the Commission or those who advise me are missing something, we should be pleased to pass it on to the Commission.

The hon. Member for Sunderland, North (Mr. Clay) made some points. Sunderland yards were not sold because nobody wanted to buy them. They were given closure aid and could not reopen without returning that aid. Many of the difficult negotiations with the Commission have been necessary because the hon. Member and others have tried to wheedle their way around the clear ground rules, which were laid down from the beginning. Many of us admire the diligent work that the hon. Gentleman has done on behalf of his constituents, but those ground rules were laid down clearly and nothing that we could have done would have overcome them.

Mr. Clay : The hon. Gentleman said that I was trying to wheedle my way around the rules, yet six months after the closure one of his predecessors, the right hon. Member for

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Braintree (Mr. Newton), argued in Brussels for a reopening of shipbuilding in Sunderland and was told by the Commissioner that that was not on and that he should have known that over the previous six months. That is a fact.

Mr. Leigh : The fact is that this story of NESL has gone on for a long time. A closure package has been agreed. Some £250 million of taxpayers' money has been sunk into this shipyard. The Government have done everything they can to keep shipbuilding going in Sunderland, but it has not been possible to keep it going. The saga has continued. It has weaved around and around as the hon. Member for Sunderland, North has refused to accept the economic facts of life. We must accept that, despite our best efforts, shipbuilding will not return to Sunderland. With the help of closure aid, we have achieved a first-rate package for Sunderland. Sunderland needs to look to the future, not always to the past, as the hon. Gentleman does in his obsessions. We have a first-rate package which will ensure that we get a wide range of opportunities and jobs for Sunderland--

It being one and a half hours after the commencement of proceedings on the motion, Mr. Deputy Speaker-- put the Question, pursuant to Standing Order No. 14 (Exempted business).

Question put :-

The House divided : Ayes 103, Noes 43.

Division No. 8] [12.01 am

AYES

Alexander, Richard

Alison, Rt Hon Michael

Amess, David

Amos, Alan

Arbuthnot, James

Arnold, Jacques (Gravesham)

Arnold, Sir Thomas

Atkinson, David

Baker, Rt Hon K. (Mole Valley)

Baker, Nicholas (Dorset N)

Batiste, Spencer

Bennett, Nicholas (Pembroke)

Bevan, David Gilroy

Blackburn, Dr John G.

Boswell, Tim

Bottomley, Peter

Bowis, John

Brazier, Julian

Bright, Graham

Brown, Michael (Brigg & Cl't's)

Burns, Simon

Burt, Alistair

Butterfill, John

Carrington, Matthew

Chapman, Sydney

Chope, Christopher

Clark, Dr Michael (Rochford)

Davies, Q. (Stamf'd & Spald'g)

Davis, David (Boothferry)

Day, Stephen

Douglas-Hamilton, Lord James

Dunn, Bob

Dykes, Hugh

Evans, David (Welwyn Hatf'd)

Favell, Tony

Field, Barry (Isle of Wight)

Fishburn, John Dudley

Forsyth, Michael (Stirling)

Franks, Cecil

French, Douglas

Goodlad, Alastair

Goodson-Wickes, Dr Charles

Gorman, Mrs Teresa

Gregory, Conal

Griffiths, Peter (Portsmouth N)

Hamilton, Neil (Tatton)

Hanley, Jeremy

Hargreaves, Ken (Hyndburn)

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Column 264

Harris, David

Hawkins, Christopher

Howarth, G. (Cannock & B'wd)

Hughes, Robert G. (Harrow W)

Hunter, Andrew

Irvine, Michael

Jack, Michael

Jones, Gwilym (Cardiff N)

Jopling, Rt Hon Michael

Kirkhope, Timothy

Knapman, Roger

Knight, Greg (Derby North)

Knowles, Michael

Lang, Ian

Leigh, Edward (Gainsbor'gh)

Lightbown, David

Lilley, Rt Hon Peter

Lord, Michael

MacGregor, Rt Hon John

Maclean, David

McLoughlin, Patrick

Malins, Humfrey

Mans, Keith

Maude, Hon Francis

Mawhinney, Dr Brian

Miller, Sir Hal

Mills, Iain

Mitchell, Andrew (Gedling)

Neale, Gerrard

Neubert, Michael

Nicholls, Patrick

Nicholson, David (Taunton)

Norris, Steve

Paice, James

Patnick, Irvine

Raffan, Keith

Renton, Rt Hon Tim

Ridsdale, Sir Julian

Roberts, Sir Wyn (Conwy)

Shaw, David (Dover)

Steen, Anthony

Stern, Michael

Stevens, Lewis

Stewart, Andy (Sherwood)

Taylor, Ian (Esher)

Taylor, John M (Solihull)

Tebbit, Rt Hon Norman

Thurnham, Peter

Tredinnick, David

Twinn, Dr Ian

Wakeham, Rt Hon John

Watts, John

Wells, Bowen

Widdecombe, Ann

Young, Sir George (Acton)

Tellers for the Ayes :

Mr. Tom Sackville and

Mr. Timothy Wood.

NOES

Barnes, Harry (Derbyshire NE)

Beggs, Roy

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