§ Mr. Kenneth Clarke
The intensity of international competition generally diminishes as the size and cost of ships falls. It is therefore sensible to make assistance from the finite resources of the intervention fund variable according to the cost of ships. I realise that yards would appreciate some clear guidance about the support they might reasonably expect from the fund before they bid for orders. I am therefore informing the yards that, in future, offers of assistance from the intervention fund for smaller ships will normally be limited within a sliding ceiling related to the cost of build. Until further notice, the normal maximum for ships costing £10 million to build will be 20 per cent. This will fall by three quarters of one percentage point for each £1 million reduction in the cost of build below £10 million. Within the ceiling, offers will continue to be negotiated as the minimum necessary to secure orders for United Kingdom yards, always provided the rules of the sixth directive on aid to shipbuilding are met. I will look sympathetically at cases for which applications have already been received provided they are likely to result in early orders. This approach will apply both to the public and private sectors.