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including those who have ceased economic activity in the United Kingdom ; providers and recipients of services ; retired persons ; self-sufficient people ; and students.

The order confirms that any EEA national may enter the United Kingdom on production of a valid passport or identity card. I should add that this wording comes from the EC directives that link the right of entry to the production of an EEA passport or identity card.

As long as they continue to qualify under the order in one of these categories, EEA nationals are free to remain in the United Kingdom without any further formality. I should make it clear that in some other member states, where there is a compulsory system of registration, residence permits are obligatory, but in this country there is no obligation to apply for a residence permit. If an EEA national does so, of course, subject to proof of their entitlement, a residence permit confirming this status will be issued. The residence permit is a card with the holder's photograph available to EEA nationals residing here. It is issued free of charge and, with certain exceptions, is normally valid for five years,

For example, workers who are to be employed in the United Kingdom for more than three months, but less than 12 months, are issued with a residence permit valid for the period of employment. Students' residence permits are valid for the duration of the course of study or, where the course lasts for more than one year, the validity of the permit may be limited to one year.

Mr. Max Madden (Bradford, West) : The Minister will know that the primary concern of the Joint Committee on Statutory Instruments involved students. Will he give information on the procedures and the evidence that the UK authorities will require, first, to assure themselves that a student has the resources to support himself or herself and, secondly, to satisfy the validity of a spouse and family ?

Mr. Wardle : I understand the hon. Gentleman's concern and I shall come to that point, as is my wont, at a fair gallop to allow as much debate as we can reasonably have.

The order also confirms the right of appeal to the independent immigration appellate authorities for any EEA national or family member who is refused a residence permit or residence document or has one withdrawn.

Those rights of residence are qualified by the important power to refuse admission to, or to remove from, the United Kingdom any EEA national whose exclusion or deportation could be justified on grounds of public policy, public security or public health.

The order provides that EEA family members of EEA nationals benefit from the same rights of residence as the EEA principal. They are not required to apply for a residence permit, but may do so if they wish and, so long as they remain members of the family of an EEA national who is exercising residence rights in the United Kingdom, they benefit from the same entitlements.

Any family member who is not an EEA national and who is coming to the United Kingdom to install himself with an EEA national exercising rights of residence will need to be in possession of an EEA family permit. That family permit is an entry clearance issued by British diplomatic posts overseas to those who can demonstrate

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that they are family members of an EEA national who is resident, or is about to become resident, in the United Kingdom.

No charge will be made for the issue of such a family permit. We have chosen the name "EEA family permit" to distinguish it from a visa issued under the immigration rules. The power to demand such an entry clearance is contained in article 3(2) of directive 68/360/EEC.

Mr. Neil Gerrard (Walthamstow) : Will the Minister clarify the status of a non-EEA national who does not have such a document ? Will it be regarded as one of the documents that are necessary under section 10 of the Asylum and Immigration Appeals Act 1993 ? If so, that will have an impact on the rights of that person to have an appeal.

Mr. Wardle : I shall seek to clarify the hon. Gentleman's point in a few moments.

Non-EEA family members of EEA nationals who are coming to the United Kingdom for other reasons--for example, a short visit--will not be required to hold an EEA family permit, but family members who are visa nationals will need to obtain a visa or an EEA family permit, depending on the purpose of their stay, before travelling here. That answers the hon. Gentleman's question.

The definition of "family members" in the order covers all those family members of EEA nationals with an entitlement to reside here with the EEA national in accordance with the various directives--the spouse, dependent children, parents or grandparents. I should add that any children under 21 years of age are regarded in EC law as being entitled to accompany their parents ; that provision dates back to 1968.

In addition, we allow for the admission of other dependent relatives of EEA nationals as provided for in EC regulation 1612/68. That provision, however, is not contained in the order, first, because it is not an absolute entitlement to entry and, secondly, because EC regulations have direct effect in United Kingdom law and, therefore, do not require separate transposition.

Hon. Members will have noticed that the order contains a provision in article 2(2) that precludes non-EEA nationals from any entitlement to enter or remain in the United Kingdom by contracting a marriage of convenience to an EEA national. We recognise that EC law does not enable us to apply all the provisions of the immigration rules, such as the primary purpose test, in EEA marriage cases, but we do not accept that a party to a marriage of convenience has any right to benefit from EC law relating to the admission and residence of family members. We intend to maintain a strong line against bogus marriages and we will ensure that non-EEA nationals are not able to use marriages of convenience as a way of obtaining residence in the United Kingdom.

I understand that the Joint Committee on Statutory Instruments has expressed its doubts about the vires of the reference in the order at article 6(2)(h)(ii) to the adequacy of the financial resources available to an EEA student. We take a different view from the Joint Committee over the drafting of this article, the wording of which comes directly from the students directive. The article states, among other things, that a student for purposes of the order means a person who

"has sufficient resources to avoid him becoming a burden on the social assistance system of the United Kingdom."

The term social assistance, rather than social security, is

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used here simply because that term is used in the directive. Although not defined in EC law, it is regarded as covering income-related benefits such as income support.

The order does not specify by what means a student may demonstrate that he has adequate resources. We do not consider that it is necessary to set out that evidence of means may be provided by way of a declaration, or such alternative means as are at least equivalent, or that the absence of any such detailed procedural reference creates any doubt about the transposition of the students directives by the order.

When an EEA student applies for a residence permit, we only ask for only reasonable evidence of funds, and a declaration including letters indicating financial support from parents or other sponsors would be regarded as sufficient.

In parallel with the order, we shall bring into force section 7(1) of the Immigration Act 1988, which removes the requirement on EEA nationals to obtain leave to enter the United Kingdom.

I should mention an administrative change relating to the non-EEA dependants of Irish nationals, which is linked to the order. Until now, given our close links with Ireland, it has been our practice to regard the non-EEA spouse and dependants of an Irish national as settled as soon as they arrive in the United Kingdom. This practice is different from the treatment of non-EEA spouses of other EEA nationals, who would normally be issued with a five-year residence permit. There is some evidence, moreover, of non-EEA nationals contracting marriages of convenience with Irish nationals. We have decided, therefore, that, following the entry into force of the order, the non-EEA dependants of an Irish national who apply under EC law will be treated under the order in the same way as the non-EEA dependants of all other EEA nationals. Irish nationals, in such circumstances, will be issued with a residence permit, normally valid for five years, and their non-EEA spouse or other dependants will be issued with a residence document of the same limited validity. Irish nationals with a non-EEA spouse will not, however, be obliged to apply for residence permits and the non-EEA spouse may choose to apply under the immigration rules in the same way as a non-EEA national who marries a British citizen. Furthermore, the change will affect only Irish nationals with non-EEA dependants. Accordingly, it will not cause any inconvenience for the great majority of Irish nationals living here.

Mr. Keith Vaz (Leicester, East) : Will the Minister assure the House that additional resources will be made available to the immigration service to enable it to deal speedily with these changes ?

Mr. Wardle : The hon. Gentleman knows that, as soon as the changes come into force, that will be attended to. It has been taken into account under the normal procedure in our negotiations with the Treasury.

In the context of EEA nationals more generally, the order will not result in any fundamental change of treatment. It will enable us to discharge our commitment to implement formally the latest directives in United Kingdom law and will thus enable us to maintain one of the best records within the European Union for transposing EC law into domestic legislation. The United Kingdom is second only to Denmark in its rate of transposition of single market measures.

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I hope that the order will go some way towards clarifying the effects of EC law on rights of residents by consolidating in this one document the key provisions of the nine separate EC directives on which it is based. Time is short because of the earlier debates, but, if I have the opportunity, I will seek to answer some of the points that I suspect the hon. Member for Nottingham, North (Mr. Allen) and other hon. Members will raise. If I do not get the opportunity to do that before 7 o'clock. I assure the House that I will write to hon. Members. I commend the order to the House.

6.40 pm

Mr. Graham Allen (Nottingham, North) : Out of courtesy to hon. Members and those outside, I hope that in the not-too-distant future the House will timetable its business so that our debates on immigration and other matters can be heard by those who regard such issues as significant. We often get, at best, one and a half hours quite late, and on this occasion we have only 30 or 40 minutes to debate the matter at the end of other business.

It is sad to see a great Department of State in trouble and out of political control, but that is what has happened over the past few months in the Home Office, especially on immigration and nationality matters. Immigration policy was never much more than an add-on to Conservative thought, a way to supplement playing the race card at general elections, and it was never taken seriously as a significant policy matter.

In the past few months, there have been a number of banana skins and some deliberate miscalculations. It started at Christmas with the fiasco over Jamaicans coming to our country. About 160 people were detained for no good reason and not one person was charged as a result. We still do not know whether the Minister had agreed to that or whether it was a freelance operation at Gatwick airport by immigration officers who were perhaps not under proper political control.

There was the fiasco of the Campsfield detainees. At one point, about 150 political asylum seekers were on hunger strike. Was that fiasco a weapon deliberately designed to put off people seeking asylum in our country or did it have its own momentum and get out of hand because of lack of control from the top ? Hon. Members could pepper the Government's record with examples from their casework relating to immigration and asylum matters in which discretion has not been used in the way that it should. That applies especially in the context of the abolition of the right of appeal for student or other visitors. Thousands of people are denied the right of appeal that was used successfully until last year.

We could add to the catalogue. There was the tragedy of Joy Gardner, the present banana skin of identity cards or border checks and the "when the music stops" nonsense that is being played with the European Commission. We are right up to date with the pantomime surrounding the order. The Government have had six years to prepare the instrument, but it is unclear and deeply confusing and confused. I challenge hon. Members to read it if they have the time. It may not even conform to EC directives.

Just over a week ago, the order was debated in the other place and so many discrepancies were found by my noble Friend Lord McIntosh of Haringey and by Lord Bonham-Carter that the Minister responsible for the order,

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Lord Annaly, felt unable to put it to a vote. It is amazing that the order has not been withdrawn or rewritten in a form that would be acceptable to both Houses.

Mr. Charles Wardle : I am used to the hon. Gentleman's normal delivery, but he has raised a couple of issues to which he and the House would expect me to reply. The Joint Committee made one point in its report that we saw no reason to change.

The hon. Gentleman spoke about the order being withdrawn in the other place, but that did not happen. The debate was adjourned and my noble Friend undertook to look into a number of points raised in the debate and follow them up by writing to the noble Lords. He gave no undertaking that the order would be amended before being reintroduced and we have no intention of so doing.

Mr. Allen The debate was adjourned in the other place, and it is unusual for a debate on such an affirmative order to be adjourned there or in this House. If it is a familiar process, I should be happy for this debate to be adjourned so that hon. Members could have more than 15 minutes during which they can seek to intervene on my speech. It is an unusual procedure, but I should be happy to see it repeated in the House if the Minister thinks that it is appropriate. It is evident from the recent record of the Home Office, from Joy Gardner to the Jamaican incident and to the order placed before the two Houses, that the Department is a complete shambles. Someone inside or outside the Home Office needs to get a grip on the Department and restore its political primacy so that, instead of blaming officers at Gatwick or Heathrow, we can call Ministers to account at the Dispatch box.

The Home Secretary has attempted to steer clear of immigration matters and keep to law and order, which has given great pleasure to my hon. Friend the Member for Sedgefield (Mr. Blair). We all know from recent opinion polls the outcome of that battle.

The order puts into UK law parts of nine different EC directives which, as the Minister said, will give the rights conferred on nationals of European Union member states to nationals of the European Free Trade Association. The measure was enthusiastically backed by Conservatives during proceedings on the European Economic Area legislation, but a few weeks ago those same people, bereft of any sense of purpose in Europe, sought to appease their Europhobes with puerile antics in the Council of Ministers on the issue of enlargement. That put at risk the chance for colleagues in Austria, Norway, Sweden and Finland to become members of the European Union. That shows how lacking in importance are European and immigration matters to the Government and the Home Office. Having deliberately created that difficulty over enlargement, Conservatives had to back down in humiliation. I do not mind the Conservative party ritualistically inflicting humiliation on itself over Europe, but I do object when my country has its good public image and good European image dragged down into the mire alongside the internal battles of the Conservative party.

Despite our broad and necessary support for the measure, I wish to raise a number of general points, some of which the Minister touched on and others that he sidestepped. In view of the time constraints, it may assist

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the House if I put those points as a series of questions. Colleagues who wish to intervene may take the opportunity to do so. Is the Minister aware that the rules for EEA nationals throw into sharp relief the lack of corresponding rights for resident third country nationals in the United Kingdom--notably, settled Commonwealth country citizens ? Although the order did not need to include them, as it is designed to implement a European agreement only, will the Government resolve the anomaly whereby an Austrian citizen, for example, will now have more rights in the European Union than an Indian citizen who has lived here for 30 years ? The European Commission recently proposed improving the rights of resident third country nationals throughout the union. Will the Government support its proposals ?

Will the Minister further define the reference to "a marriage of convenience" in paragraph 2(2) ? Who is to decide what is a marriage of convenience ? Couples have been questioned by Home Office officials in a way that suggests that it is treating applications as though people must meet the requirements of British immigration law on marriage. European law gives automatic rights to the spouses of people who have moved for a treaty purpose. British immigration rules could mean no right of appeal against refusal and deportation. If a person has been in the UK less than seven years, he or she has no full right of appeal against such a decision. European Union nationals and their family members have extra safeguards against deportation under EU law. The Minister must be aware of fears that the measure is an attempt to export Britain's primary purpose rule to all other EEA member states. Is that his intention ? Does he realise that there are no domestic powers to overrule rights defined under European law ? The Minister is creating a lawyers' bean feast, with the possibility of judicial review and cases being taken to the European Court.

Will the Government delete the rider to the definition of spouse in paragraph 2(2), so that it has its customary and normal meaning ? If the Home Office believes that the marriage is one of convenience and therefore that it is not conducive to the public good that the person be given a residency permit, it has the power to refuse a permit or to deport on that ground--as provided in sections 17 and 18 of the 1972 Act--and justify its allegation before the immigration appellate authorities. That is the course that the Home Office should take. Does the Minister acknowledge concerns about paragraph 3(1) and (2) which require proof of family membership ? How is that proof to be provided ? Who will make the decision, and what means of redress will be available to those whose claims are refused ? In that context, what is meant in paragraph 3(3) by a "family permit" ? That conflicts with paragraph 5(2), which in turn conflicts with paragraph 19. Those differences are hard to understand and virtually impossible to reconcile. They are yet another example of drafting that almost defies comprehension.

In the other place, my noble Friend Lord McIntosh raised a number of other issues that require further explanation, which one hopes will be forthcoming when debate is resumed there. Contradictory definitions of "family member" and of the immigration status of a family member who reaches the age of 21 are to be found in paragraph 2.

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Mr. Gerrard : Paragraph 4(2) deals with a person who ceases to be a family member of a qualified person. Does my hon. Friend agree that under existing immigration rules, a person who is a foreign national and the spouse or family member of a UK national, would normally acquire residence rights after one year's probationary period. It is far from clear whether that would be the case under the order.

Mr. Allen : My hon. Friend raises an important point. I shall be glad to give way to the Minister if he wishes to put his comments on record. Otherwise, I hope that that aspect will be put right in the other place because it is a source of great confusion. What will happen to such individuals ? There seems to have been little preparation, even though the Government had six years to pull the order together. I hope that they will re-examine that issue and will put on the record in the other place what will happen in such circumstances.

Their Lordships also queried the definition in paragraph 6(2)(h) of a student as a person on a vocational course. That was highlighted by my hon. Friend the Member for Stockport (Ms Coffey). The Joint Committee on Statutory Instruments commented that the matter was ultra vires, and even wrote to the Home Office to point out that provision was so contradictory and conflicting that the Committee felt that it might prevent the order progressing in its present form. Although only a passing reference to that was made in another place, the Minister should give clearer assurances.

Does the order's definition of a student mean all students, or are the Government sticking to the words of the European Union, to mean only students who are on a vocational course ? If so, that would be highly restrictive.

We seek further clarification of the difference between social security and "social assistance", in paragraph 6(1)(f). The provisions covering involuntary unemployment seem designed to exclude as many people as possible and also demand further clarification. Further assurances are sought in respect of paragraph 12, dealing with residence permits. Is it the Government's intention to get rid of or to limit the concept of settlement and permanent stay, and to replace them with time-limited residence permits that are subject to periodic review ? The order goes only as far as absolutely necessary.

My hon. Friends who have dealt with the Home Office in seeking written answers will know of the mentality that produces a lack of openness and generosity in its definitions. Nowhere is that more evident than in the order's failure to tackle third country nationals. The appalling treatment of domestic servants wholly dependent on employers has been passed by-- another opportunity missed. Equally, there is nothing in the order to help unify split families of third country nationals.

The order is a dog's breakfast and will produce a rich seam of cases for judicial review and the attention of the

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European Court. Unless it is withdrawn or substantially amended, it will pass tonight without the support of the Opposition.

As an aside, it is nonsense that under the affirmative procedure, even when it is obvious that an amendment is necessary, it is not procedurally possible to amend an order in this House or the other place. Either the order must be withdrawn and resubmitted or the House must pass a resolution stating that it acknowledges that the order is faulty.

I hope that the Minister will refer to our detailed criticisms of the order and those of my noble Friend Lord McIntosh and the Lord Bonham-Carter, as well as to the views of knowledgeable pressure groups. It is evident from the order that a more mature and professional approach needs to be taken to Europe than the Conservatives--riven by internal differences--are capable of providing. The order is the product of a tired, directionless Government who do not know what they want from Europe. I hope that the electorate will put the Government out of their misery, at least in respect of the European issue, on 9 June.

6.59 pm

Mr. Charles Wardle : With the permission of the House, I will reply. The preamble of the hon. Member for Nottingham, North (Mr. Allen) was entirely predictable. It was a chorus that we have heard again and again. The only thing is that it sounded more tired on this occasion. He raised a number of points. I said earlier--like him, I regret the shortness of the debate--that I would provide answers in writing, which I will make available to hon. Members.

The first point that I will address is about a marriage of convenience : a marriage entered into solely for immigration purposes, with neither partner having the intention of living permanently with the other as man and wife in a settled and genuine relationship. The hon. Gentleman referred to the primary purpose test. That test is contained in UK immigration rules, but not in EC law on free movement, which simply refers to a "spouse"--who may or may not be a EEA national

It being Seven o'clock , Mr. Deputy Speaker-- proceeded to put forthwith the Question necessary to dispose of proceedings on the motion, pursuant to order [29 April].

Question agreed to.

Resolved ,

That the draft Immigration (European Economic Area) Order 1994, which was laid before this House on 21st March, be approved.

Mr. Madden : On a point of order, Mr. Deputy Speaker. It is clear that the time available for the debate has been wholly inadequate. Hon. Members on both sides of the House wish to participate. May I move, therefore, That the Question be not put, to enable debate to take place on another day ?

Mr. Deputy Speaker (Mr. Geoffrey Lofthouse) : No. I comply with the order of the House.

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Italian Steel Industry

[Relevant documents : European Community Documents Nos. 6472/93, relating to the privatisation of the German steel company Sachsische Edelstahlwerke GmbH, Freital/Saxony, 9098/93, relating to the restructuring of the Spanish integrated steel company Corporacion de la Siderurgia Integral (CSI), 10074/93, relating to the future of the European Coal and Steel Community Treaty, 10167/93, relating to the restructuring of the Portuguese steel company Siderurgia Nacional (SN), 10276/93 and 10359/93, relating to the restructuring of the German steel company EKO Stahl AG Eisenhuttenstadt, SEC(93) 1434, relating to the restructuring of the Spanish steel company SIDENOR, and 5473/94, a Commission Report on state aid to the steel industry.]

7 pm

The Minister for Industry (Mr. Tim Sainsbury) : I beg to move, That this House takes note of European Community Documents Nos. 10166/93 and 11317/93, relating to the Italian state iron and steel industry ; endorses the Government's decision to support the agreement reached on the package of state aid cases discussed at the Industry Council on 17th December 1993 ; notes with approval the undertakings secured at the Council regarding the stringent monitoring of approved aids, which will help to ensure that they are not used to disadvantage unaided competitors, the commitment to the strict application of ECSC state aid rules to end subsidisation, the recognition that there will be no further aid to these companies if viability is not achieved, and the early privatisation of most of the companies involved ; and endorses this agreement as a useful step towards ending the distortion of state subsidies in the steel industry.

The debate is a welcome opportunity to comment on recent developments in the European steel industry and in particular on the package of proposals for state aid to restructure six steel companies, including the Italian company Ilva, agreed at the 17 December Industry Council. The other companies concerned are EKO Stahl and Freital in Germany, CSI and SIDENOR in Spain and Siderurgia Nacional in Portugal.

The House will be aware that the proposals were made under article 95 of the treaty of Paris, which requires the unanimous assent of the Council. Several of the proposals have been under discussion for more than a year, during which time some of the companies had continued to receive state support. The continued operation in the Community of inefficient companies propped up by massive illegal state aid has been directly responsible for preserving over-capacity and allowing uneconomic pricing, both of which have put great pressure on our own unsubsidised and highly efficient steel industry.

I should like to emphasise straight away that, throughout the lengthy and complex negotiations on the proposals from the Commission, I, and my officials, kept in close touch with the British Iron and Steel Producers Association and our leading steel producer, British Steel. I can assure the House that we shall continue to consult them, particularly on any reports or proposals that come from the Commission. The Government and the industry have a shared aim : a level playing field with fair trading in steel in the Community. It is, however, much easier to identify and agree on that aim than it is to achieve it.

For the Council on 17 December, the industry and I had four main objectives. First, we wanted an agreement that there should be an immediate end to running cost subsidies. The industry was prepared to draw a line under past unauthorised subsidies, if that was the price of agreement to strict observance of state aid rules in the future. Secondly, we wanted to see adequate capacity reductions at the companies concerned. Thirdly, we looked for explicit acceptance that there would be no "second

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helpings" for those companies, so that if the planned restructuring failed to restore them to viability, no further aid would be allowed, and further capacity cuts--or, indeed, total closure-- would follow. Finally, we were determined to get far more rigorous arrangements for monitoring how the approved aid is spent. We wanted, for the first time, a role for the Council, rather than, as in the past, supervision of the aid being given left entirely to the Commission. As I have already said, throughout the negotiating process we maintained close contact with the industry. Because the proposals had been brought under article 95, which requires the unanimous assent of the Council, I was able to take a firm line on the conditions that Britain would attach to any agreement. During the negotiations, I had to take account of the support for our proposals from fellow member states and the extent to which we could achieve each of our objectives. I had constantly in mind the consequences for our industry of failure to obtain agreement in the Council of Ministers. It was, I regret, clear that, if there were no agreement, illegal subsidies would continue, probably for at least another year, and we would have made little or no progress on essential capacity reductions.

As a result of our tough stance, our four objectives were substantially agreed. Working with industry advice, we were also able to negotiate the tightening up of aspects of a number of the specific cases, notably EKO Stahl, CSI and SIDENOR. However, I will not pretend to the House that the agreement reached on 17 December was ideal--far from it. I have to say that, during the final stages of the negotiations, we had much less support from our partners in the Community for a better deal than I would have hoped.

The terms finally agreed for Ilva, the Italian company, were not as good as we would have liked, especially on capacity reduction, but they do commit the Italian Government to total privatisation of the company at an early date. Privatisation should help to ensure that its future operations are carried out on a proper commercial basis. The Council did accept other points for which we had pressed--an agreement to end subsidies, no "second helpings" of aid, and stringent monitoring of authorised aid. So we achieved three of our four objectives. As to the industry response to the decision, I can do no better than quote Brian Moffat, chairman of British Steel, who said that the agreement reached in December was

"the best in the circumstances."

I attach particular importance to the agreement that we reached on stringent and effective monitoring--the text owes a lot to our proposals and is an important step forward. It is much stronger than those in previous restructurings. That monitoring will include visits to the plants to see what is really happening. With the involvement of the Council of Ministers, we can ensure that the views of our industry are taken into account.

The conclusions of the 17 December Council set out in some detail the rigorous monitoring procedures. For the first time, as I have said, the Council of Ministers has a role in the monitoring process. The Commission is required to report on its findings to the Council at regular intervals. Indeed, at the industry council on 22 April, the Commission gave an oral report on the first monitoring period--up to 15 March. The first formal written monitoring report was presented on schedule and discussed at an ECSC working group meeting on 3 May. It was

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prepared by a small team--established within the Commission--that has the assistance of specialist consultants as necessary.

The Commission describes the first report as providing, in effect, the base line against which future developments can be measured, as well as covering some developments since December. Our initial analysis is that, while it represents a useful starting point for future work, it is clear that much more needs to be done. It is evident from the report that, by late April, the Commission had still not received all the information requested from the six companies. There is a particular lack of information from Ilva.

Of at least equal concern, the report also shows that what information has been provided demonstrates that the financial position of some of the companies, notably CSI, SIDENOR and Siderurgia Nacional, has deteriorated further since their restructuring plans were drawn up. It is, however, encouraging to report that, at the ECSC working group meeting last week, Commission officials undertook to take infraction action against countries and companies that transgress the terms agreed.

The Commission has also confirmed that its monitoring team will do more than just examine its member states' regular returns on progress and report them to the Council--the Council previously did not have the benefit of such reports. The team will take, according to the Commission, a proactive role by seeking additional information that is relevant, inspecting plants and verifying--this is particularly important--the information provided and the financial performance of the companies.

At the working group meeting, my officials took a firm line on the need for full information and insisted that failure to meet agreed conditions should be punished. They also insisted that, in accordance with the agreement reached in December, there must be no attempt to provide additional aid to companies with worse-than-forecast results, even if that means further capacity cuts or, as I said earlier, even the total closure of a company.

My Department will also carry out some independent monitoring through our industry contacts and our embassies in the relevant countries. We shall watch carefully to ensure that the Commission team examines all the information that it receives with a critical eye and that any necessary action is taken to ensure that the terms of the article 95 decisions are observed in full.

The December agreement is not the only state aids issue occupying the British steel industry at present, and I took the opportunity of the Council on 22 April to raise two other cases, Klo"ckner and Saarstahl, which are causing grave concern and which I had already taken up personally with Commissioner Van Miert. The Government regard those cases as important tests of the commitment of the Commission and the Council to apply the rules of the treaty and the steel aids code against state aids to steel producers. I am pleased to report that I had strong support for our views on those cases from a number of colleagues in the Council chamber in April.

The 22 April Council also received an interim report on the progress of voluntary restructuring of the steel industry, as envisaged in the Braun plan. I expressed my disappointment at the slow progress of that exercise, but said that I understood the reluctance of the private sector, unsubsidised industry to commit itself to closures until it is certain that member states and the Commission have

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shown the political will to enforce the treaty and steel aids code and until it is clear that the conditions attached to the 17 December agreement are being observed.

The Council agreed to an extension of the supporting measures first agreed in February 1993 to facilitate voluntary restructuring until September of this year, but I made it clear that we would want to see firm evidence of restructuring by that time. Any decision to participate in the voluntary restructuring process, either by offering capacity cuts or by helping to finance closures elsewhere in the Community, is entirely a matter for the company concerned. The United Kingdom steel industry is now universally recognised to be highly efficient and capable of competing successfully anywhere in the world. It is the envy of many other countries. That is an achievement of which the industry can be justifiably proud, although it has sadly meant closures and job losses. It is now the turn of other countries and companies to take their share of the pain. To conclude, I can assure the House that the Council and the Commission are in no doubt about the importance that the British Government attach to rigorous implementation of the enhanced monitoring procedures agreed in December. I am not assuming that the battle has been won, but I see evidence of progress towards the creation of a fairer single market in steel, a market in which our highly efficient industry will be able to compete effectively and fairly. I commend the motion to the House.

7.12 pm

Mr. Derek Fatchett (Leeds, Central) : I fear that the Minister's speech could have been made on several occasions over recent years. I suspect that if we were to go back and examine copies of Ministers' speeches and ministerial press releases, we would find the same words and sentiments.

There is agreement about two points. First, it is abundantly clear that there is over-capacity in the European steel industry. Secondly, it is plain that the British steel industry is now Europe's most efficient steel industry. It is clear from the figures that our efficiency compares well with that of the steel industries of other countries.

According to figures published in "World Steel Dynamics" in February, Britain has a competitive advantage over the Japanese of nearly 42 per cent., over the Germans of 30 per cent., over the French of 17 per cent., over the Koreans of 17 per cent. and over Taiwan of 23 per cent. It may be relevant to the debate to note that "World Steel Dynamics" could not produce figures for the Italian steel industry. While the Minister may find that amusing, it is the heart of the problem because those figures are simply not available. The British steel industry is efficient, but it has not enjoyed the support of its Government in recent years. It is clear from the figures that the British steel industry has borne the lion's share of capacity and employment cuts over the past decade.

It is odd for a Minister of a Government who believe in free markets and competition to come to the House on behalf of the British steel industry to argue that the most efficient industry in Europe should be the industry that, in recent years, has been forced to lose jobs and capacity. That has occurred not because of the failure of the management or the work force of the British steel industry. According to all criteria, efficiency and productivity in the

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industry have increased. The deep problem facing the British steel industry is that the Government have not offered their support for the industry in the way in which other Governments have offered support to their steel industries.

If something is going to happen in the way that the Minister described it, and if real action is to be taken to deal with the subsidy problem, the British steel industry should not lose jobs or capacity. However, what does the Minister say ? He says that on 17 December he and the Council of Ministers set themselves four objectives, but those objectives are simply not being met. As I said earlier, the Minister's comments today could have been made at any time over the past few years. They clearly show the extent to which the Government have failed to deliver to the British steel industry. Let us consider those four objectives--the end of running-cost subsidies, capacity reductions in other countries' steel industries, no "second helpings" and no further aid, and rigorous arrangements for monitoring. The simple fact is that the Minister's speech shows that not one of those objectives has yet been achieved. Brian Moffat said that the Minister achieved the best deal "in the circumstances" when he went to negotiate on behalf of the British steel industry last December. However, I wonder what that really means. I suspect that it means that the Minister came back with exactly the same set of promises that he has returned with on every other occasion.

Does not the responsibility for the dilemma now facing the British steel industry rest wholly at the Government's door ? How can steel managers and steel employees be expected to improve their productivity and efficiency when they know that if they become more competitive in the marketplace, they will be undercut by companies and industries that are operating on a subsidised basis ? At the same time, they know that the British Government are so weak and so incapable that they are not delivering on promises to cut subsidies in other countries.

The Government are in a dilemma. We have a strong steel industry, but we have a weak Government. Our real problem is the weakness of our Government. The Government spend their time fighting and arguing among themselves instead of fighting and arguing in Europe for Britain's interests. If more energy, effort and commitment were devoted to fighting for the British steel industry instead of fighting for position within the Conservative party, those working in the British steel industry might have a better deal.

When the Minister goes to the Council of Ministers, he finds himself on this issue--as I suspect on many others--alone and without allies. Is that not surprising given that this Government, under this Prime Minister, claimed that they were going to be at the heart of Europe ? They are marginalised on each and every issue. When the Minister was trying to negotiate a tough new regime to remove subsidies, his Government were alienating every other European Government on the issue of qualified majority voting.

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