To ask the Chancellor of the Duchy of Lancaster what action has been taken by the European Commission on the state aid offered by the French authorities to secure a contract to build a ship for Brittany Ferries in a French yard.
In January 1987 we asked the European Commission to investigate any state aid the French authorities might offer to secure an order for a cross-Channel ferry for Brittany Ferries from Chantier Navales de L'Atlantique. The opportunity for this was article 4(5) of the new sixth directive on aid to shipbuilding. British Shipbuilders Govan yard was bidding for this order, as was a Dutch yard. French entry late in the competition followed the loss of another order by its yard.The Commission has now written to the French authorities to say that the aid that they proposed to make available in support of this order contravenes the sixth directive and must be trimmed to the level that would have been available in support of an order from Holland. The result is that the French yard is set to suffer a significant loss, since it decided to proceed with building in advance of the Commission's decision. Although the Commission is not in a position to prevent orders being taken, the result is a salutary warning to other yards of the dangers of contracting in advance of decisions on cases referred to the Commission. I welcome the decision as an important step in securing fair competition among Community shipbuilders.