Select Committee on European Communities Twenty-Third Report


Letter from John Battle MP, Minister for Science, Energy and Industry, Department of Trade and Industry to Lord Tordoff

  Thank you for your letter of 27 March, concerning Sub-Committee B's enquiry into the Commission's proposal for a new EU shipbuilding regime.

  I am sorry about the misunderstanding that arose over the Government's timetable for reaching a Common Position on the proposal. However, as you will know, the pace of any EU negotiation is not in the gift of any single member state, even when that country holds the Presidency and the negotiations on the new EU shipbuilding aid regime are no exception. It emerged last December that a majority of member states wanted to reach a political agreement on the Commission proposals at the Industry Council in May. My Department fully supported this approach, as the House of Common's Select Committee on European Legislation made clear in their Ninth Report (paragraph 2.12) of 3 December 1997. I appreciate it would have been more helpful if we notified you direct of our revised timetable. I am sorry we did not do this.

  The Government believes that, in the absence of the OECD Agreement, the Commission's contingency proposals will provide a good basis for developing a more viable UK shipbuilding industry as they will eliminate contract aid, a major source of market distortion and provide support measures for improving competitiveness similar to those enjoyed by other sectors of EU industry. We consider that there is a real prospect of success at the May Industry Council, but we assess the chances of success as much lower if the proposal were to be deferred to the November Council as the momentum of support for the Commission's proposals could easily have dissipated by then. It would, therefore, greatly help the UK Presidency's negotiating stance of your Committee could lift its scrutiny reserve before 7 May.

2 April 1998

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