§ Motion made, and Question proposed, That this House do now adjourn.—[Mr. Robert Ainsworth.]
§ 7 pm
§ Mr. James Cran (Beverley and Holderness)Having asked for this debate, I am well aware that every Member of Parliament, local authority and regional development agency will be making representations to the Government about the exclusion of this, that or the next area for the purposes of European funding. Normally, I would not wish to raise this issue in the House. However, I am moved to do so because a considerable wrong is being perpetrated by the Government through the exclusion from objective 2 funding of Withernsea and Hornsea in east Yorkshire.
The hon. Member for Brigg and Goole (Mr. Cawsey) and I have been co-operating on a non-partisan basis on the issue. I entirely support what he is saying about Goole and he supports what I am saying about Withernsea and Hornsea, simply because they mirror the same circumstances. All we wish is that they be judged on the facts. One is moved to say that, on the basis of the decision taken to exclude those three towns from objective 2 funding, someone somewhere just has not looked at the facts. I wish to outline some of those facts this evening.
The background has surprised me, in the sense that the whole of the Yorkshire coast was put forward for designation, and a map was prepared by the Department of Trade and Industry. I realise that that map, which was prepared in the summer, probably has no status. Nevertheless, the map indicated that the whole of the Yorkshire coast would be proposed and, we hoped, included for objective 2 funding.
Imagine our astonishment when the Government's proposals, which hopefully are not set in concrete, were published. Lo and behold, the Yorkshire coast was, by and large, included, but there were one or two quite artificial blips that excluded Hornsea and Withernsea. I am concerned, the hon. Member for Brigg and Goole is concerned and everyone else is concerned.
The European Commission has indicated to me and to the local authority that it has concerns over the exclusions. It is doubtful whether the Minister or the Government have heard that officially—I understand that. If the Government do not change their mind, the Commission will hopefully make its views known about this matter in the fullness of time.
The regional development agency—a Government creation with which I have to work and about which I have no complaint—has expressed its disappointment. The Minister will be perfectly well aware what the RDA has said in Yorkshire. If she is not, I will provide the letter.
The RDA is concerned, if for no other reason than that its economic strategy for 2000–06 identifies as one of the region's great weaknesses what it calls the "peripherality"—I word that I would not use myself—of the East Riding coastal areas. That is merely a recognition that these coastal areas—as is doubtless the case around most of the coast of this country—are in some difficulty, due mainly to the decline of the traditional holiday market.
233 Why am I—along with many other people and organizations—concerned about the exclusion? The decisions that have been taken and published are entirely illogical. The Minister will be well aware that Withernsea has an unemployment problem because of the decline in fishing and the traditional seaside holiday trade. In April 1999, unemployment in Withernsea stood at 15 per cent., while the average for Yorkshire and Humberside was less than 6 per cent and for the United Kingdom less than 5 per cent. There is clearly a problem by that measure alone.
There is no doubt, by the Government's own standards, that the town exhibits acute economic and social deprivation. The Government's index of local deprivation shows incontrovertibly that the two Withernsea wards are among the 20 per cent. most deprived wards in the whole country, and there is a ward in Brigg and Goole that is worse even than that.
There is a case to answer that the Government have demonstrably not yet answered, especially when we consider the astonishing fact that the two Withernsea wards are more deprived than any of the 51 wards that the Government proposed for objective 2 status in the north Yorkshire districts of Craven, Hambleton, Harrogate, Richmond and Ryedale. I do not challenge the hon. Members whose constituencies are involved, as they will obviously fight for their constituents, but the Minister must explain why more affluent wards are included for European funding while demonstrably less affluent ones are excluded.
The Government, the European authorities and everyone else have recognised Withernsea's problems in the past. It qualified for rural development grants, regional selective assistance, employment action zones and a health action zone. I pay tribute to the Government for listening, after an enormous amount of lobbying from me and others, and giving the town a single regeneration budget grant. I am grateful for that, but I fear that its exclusion from European funds may make that an extremely pyrrhic victory.
European funding is essential to match domestic funding. Without the European funding, the SRB grant is almost worthless. I am sure that that was not the Government's original intention. I was grateful to be invited by the hon. Member for Brigg and Goole to a meeting with the Minister for Trade, who said that he understood the problems and might be willing to consider them. I hope that the Government are so willing.
The other coastal towns with SRB funding—Scarborough, Filey and Bridlington—have been included in the Government's proposals. Why has not Withernsea? The town has not gone to sleep. There are a lot of hard-working people there who need a little help and a bit of wind in their sails. There is an active partnership and people are looking for regeneration solutions; in my opinion, they have found them. If they are excluded, I fear that considerable damage will be done to those people's confidence. The Holderness Gazette said yesterday that if we do not receive the funding, we shall be back to raising money through tombolas, raffles and coffee mornings. I regret that that is true.
I fear that Hornsea may simply become another Withernsea, another declining former seaside holiday town with no great future. Hornsea has not yet declined as far, but I fear that it will. It suffers all the same 234 problems—lack of access, lack of transport and lack of employment opportunities following the loss of fishing and traditional seaside holiday jobs. The town has been recognised in the past for all sorts of funding, and one must ask why it has not been so recognised this time. Any funding from any source will require matched funding. Without European funding, there probably will not be enough money for the town.
Hornsea has an active regeneration organisation that needs some support. I agree with Mr. W. E. Underwood, the president of the Let's Go Hornsea regeneration group, who wrote:
There has been and still is great concern that promises of regeneration in the town have been left in abeyance due to lack of funding. Our plans for the regeneration of the Town Centre"—he lists a series of projects that could have been funded—are simply awaiting funding. He goes on:These Schemes are not just improvement schemes, they are essential to the whole Social and Economic structure of Hornsea and its surrounding villages. Without some assistance now we are heading for real problems.I agree wholeheartedly with Mr. Underwood. I fear that if Hornsea's potential problems are not recognised, it will go the way of Withernsea.I should like to offer the Minister a possible solution. She may already have seen it for herself, but I should be glad to make all the necessary information available to her. Mr. Alan Menzies, head of economic development for East Riding council, wrote to the regional director of the Government office for the regions for Yorkshire and the Humber on 17 November. The crux of his letter was the population criteria that the Government must meet.
The current populations of wards in Yorkshire and Humberside are lower than shown in the figures used by the Government in their submission to the European Commission. The Government used figures from the 1991 census. Recently published evidence from the university of Oxford shows that there was a population decline in many proposed wards from 1991 to 1998. North-east Lincolnshire, Kingston upon Hull and Scarborough have had reductions amounting to 10,277 souls. The Minister will quickly see that if those figures are correct, the two wards in Withernsea and the one in Hornsea could be included without breaching European Commission population ceilings. Outward migration from other parts of the region would almost certainly give her the head room that she needs to include those wards.
I know that I have the support of the hon. Member for Brigg and Goole in asking not for a commitment to include those towns for objective 2 status—although if the Minister is prepared to give one this evening I would be delighted—but that, in the light of the deprivation figures that I have outlined, the Minister should reconsider the decisions that have been taken.
Those decisions are illogical and fly in the face of the facts as we understand them, and are therefore wholly wrong. I hope that the Minister will tell me that she will reconsider a decision that I think would cause the two towns to decline in a manner that none of us would want.
§ The Minister for Small Business and E-Commerce (Ms Patricia Hewitt)I begin by congratulating the hon. Member for Beverley and Holderness (Mr. Cran) on securing the debate. I represent a constituency in the east 235 midlands that includes some extremely deprived and disadvantaged communities. One of my wards is on the index that the hon. Gentleman cited, and is one of the most deprived in the east midlands, so I understand the depth of feeling with which he spoke, and the enormous difficulties faced by people in such communities. I respect the way in which the hon. Gentleman has put his case on behalf of his constituents—a case that my hon. Friend the Member for Brigg and Goole (Mr. Cawsey) has also put to me.
I am grateful to the hon. Member for Beverley and Holderness for recognising the considerable efforts that the Government are making to combat social exclusion, and to invest in disadvantaged areas and in the future of communities that have been left behind by industrial and economic change.
As the hon. Gentleman knows, we submitted our proposals for objective 2 coverage for the years 2000-06 on Friday 8 October, and they are currently being considered by the Commission. Before I deal with the detail of those proposals, and the specific issues that he has raised, it would be helpful if I said a little about the bigger picture.
At the Berlin summit in March, my right hon. Friends the Prime Minister and the Chancellor of the Exchequer secured an outstanding result for this country. The objective 2 aid that we secured will be worth some £2.5 billion over the next seven years, with an additional £0.5 billion for transitional relief. That makes £3 billion for objective 2 alone.
On top of that, we have the £3 billion already announced for our four objective 1 areas. Including the European social fund and objective 3 funding, we have been awarded more than £10 billion in structural funding. Indeed, there is more still to be announced in relation to various community initiatives. That money, rightly, will go to some of the neediest parts of our country and help to ensure that all parts of it benefit from our increased economic prosperity and the growth of the number of people in work.
In such a debate, the fact needs to be registered that, at a time when our economic performance was improving dramatically, the number of people out of work throughout the country was falling rapidly, and our prospects for receiving European Union structural funds were reduced—all factors that might have pointed to a cut in regional aid from the structural funds—we secured a safety net to cushion the reduction in numbers and population coverage proposed by the Commission. We secured more investment—more money from the structural funds than we had had in the past. It is in the context of that extremely good result that this debate takes place.
Within that very good result there are, I am afraid, hard choices to be made. It is of the essence of structural funds and investment in disadvantaged areas that not everybody can qualify. So the regional development agencies, the regional partnerships and the local partnership faced tough choices about the priorities that they put to us, just as we were faced with difficult decisions about the proposals that we put to the Commission.
The hon. Gentleman asked why Withernsea had not been included. As he acknowledged, parts of East Riding will be eligible for tier 2 support. Many rural wards will 236 also be eligible for the new enterprise scheme for small and medium enterprises. As he rightly said, significant funds have been made available through the single regeneration budget to help to tackle the specific problems in Withernsea. With respect, however, it is wrong to discount the impact of single regeneration budget funding, even in the absence of European structural fund money. Three areas in my constituency now benefit from single regeneration budget funding; none of them qualify for objective 2, let alone objective 1 funding from the European Union. There is no doubt that it is possible to secure real and lasting improvements in social and economic regeneration in disadvantaged areas through the single regeneration budget—and indeed through our new deal for communities—without having the additional benefits of objective 2 or objective 1 funding.
Looking at the proposals for Yorkshire and Humberside, we have proposed population coverage of more than 1.5 million people for objective 2 funding. In addition, 1.3 million people in south Yorkshire will be covered by objective 1 funding. That is comparable to the existing coverage of 2.7 million people under objectives 2 and 5b.
To fall within that objective 2 funding, we have proposed the whole of Hull and Richmondshire, parts of Bradford, Leeds, Wakefield, Kirklees, north-east Lincolnshire, the East Riding, Craven, Hambleton, Harrogate, Ryedale and Scarborough. North Lincolnshire will also receive transitional funding.
The difficulty is deciding in great detail which areas are included and which are not, within the overall population ceiling. I shall return to the statistics on population coverage in just a moment.
Under the new European regulation, objective 2 funding is divided between four strands: industrial, rural, urban and fisheries. The Commission has given us guidance on the indicative breakdown for each strand. We had to secure a fair and balanced distribution across the regions and across the different strands. At an earlier stage in the regional discussions, there was a suggestion that Withernsea should be included within the fisheries strand as part of a bigger area; but after regional discussions, it was not included in the fisheries strand covering the specific coastal areas to which the hon. Gentleman referred.
We also had to look at the index of local deprivation and the best possible consistent statistical information that we could get across all the proposed areas to help us decide, regionally and nationally, which areas should be put forward. Using the index of local deprivation for the urban strand of objective 2, the criterion is the worst 10 per cent., not the worst 20 per cent.—in other words, some areas are even worse off than Withernsea.
The hon. Gentleman also referred to an earlier map and a leaked document that deals with only one of a series of possible options, and which therefore has no status in the debate. I apologise, but I have not seen the letter to which he referred suggesting that population levels have changed, and that it would be possible to add Withernsea and Goole to our proposals.
The difficulty is that the 1991 wards have been re-rated to take account of 1996 populations. The Commission is working with 1996 data to assess our population ceiling. In any case, we must put forward a case based on data that are consistent across all our objective 2 areas. 237 To fiddle with the data in one area would not be an acceptable way in which to proceed, and might have interesting consequences for population ceilings in other parts of the country. Although I will double check, I fear that the solution proposed by the hon. Member for Beverley and Holderness will not allow us to proceed in the way he suggested.
We have tried to proceed in line with the consensus that emerged from the public consultation, and with the very strong representations about regional wishes that we have received. Our aim has been to develop broadly ward-based proposals, and they have allowed more accurate targeting of regional priorities than is possible by using data gathered at the level of the local authority district. Because population coverage is reduced from the level set in the last structural fund round, we have to accept that funding must be targeted as specifically as possible on the worst cases of real and identified need.
In the light of the results of the public consultation—and given the regional priorities identified by the regional offices in England and by their counterparts in the Scottish Executive and the Welsh Assembly—we developed criteria based on levels of unemployment, in combination with measures of high dependency on industry or agriculture and of the decline in those sectors. As I have suggested already, we also used an index of local deprivation for the urban strand.
The regional priorities identified by the consultation process gave us far more than could be accommodated in the proposals that we designed to accord with the population ceiling agreed at the summit. To help us find the best possible solutions, in many cases the regions refined those priorities as the proposals developed.
I regret that it has not been possible to include in those proposals Withernsea and the other areas to which the hon. Member for Beverley and Holderness referred 238 I know that he and my hon. Friend the Member for Brigg and Goole are to meet my right hon. Friend the Minister for Trade, who has direct responsibility for this matter. However, it would be wrong to hold out any great hope of further change. Our proposals were put forward to the Commission at the beginning of October and we cannot amend them now.
We look forward to receiving the Commission's response to our proposals. I have undertaken already to check the specific statistical point raised by the hon. Member for Beverley and Holderness although, as I said, I doubt that the answer that he will get will give him much comfort.
I hope that I have said enough to show, first, that we secured an outstanding result for the United Kingdom in the structural fund package. Secondly, I hope that I have shown that we have secured objective 1 and objective 2 coverage for Yorkshire and Humberside that more than matches the existing population under the equivalent programmes in operation now. In that context, in order to meet the overall population ceiling and to fit inside the four strands that the European Union's new regulation has mandated for the structural funds programme, we have had to make very difficult choices about the specific areas to be covered.
I shall end on a note of hope that echoes what the hon. Member for Beverley and Holderness said about investment from other sources. The Government have programmes that are directed to disadvantaged areas. I am sure that the single regeneration budget will bring hope and a better future to the hon. Gentleman's constituents, in what is a very deprived area.
§ Question put and agreed to.
§ Adjourned accordingly at twenty-nine minutes past Seven o'clock.