EEC (REGIONAL POLICY)

HC Deb 03 July 1974 vol 876 cc531-60

10.10 p.m.

The Secretary of State for Industry (Mr. Anthony Wedgwood Benn)

I beg to move, That this House takes note of Commission Documents Nos. R/2055/73 and R/2474/73. I must ask the indulgence of the House for taking part in what is a new procedure for the House and for Ministers in that the Scrutiny Committee sought this debate. The object of the debate—[Interruption.]

Mr. Speaker

Order. We cannot have these groupings and discussions going on in the House.

Mr. Benn

This debate, like the earlier one, is being held at the request of the Scrutiny Committee, which wanted to give the House an opportunity to air its views, this time on two Commission documents relating to regional policy.

I understand that the rôle of a Minister at this stage is rather that of the impressario of the debate than the sponsor of the papers. The idea is that the Minister should simply present the documents and then listen to and note what is said.

The first document, R/2055/73, contains, first, a draft Decision by the Council of Ministers to establish a Committee for Regional Policy; secondly, a proposal for the establishment of a Regional Development Fund; and, thirdly, a proposal for a Financial Regulation for the Fund.

The second document, R/2474/73, contains the Commission's proposals for a regulation on the list of priority zones and for a regulation on the list of regions and zones eligible for aid.

Hence, from the point of view of the House, these documents are of some interest because they bear upon the boundaries of what would be assisted areas within the Community. I think it will be for the convenience of the House if I take these matters together and try to describe and present them simply.

I understand that the original idea of the Regional Development Fund goes back to a time when the Community, being made up of members whose main regional problems were in agriculture, concentrated on agricultural areas.

At the summit meeting in 1972 the proposal became much firmer in that the Regional Development Fund was proposed to correct regional imbalances. At that stage, as the right hon. and learned Member for Hexham (Mr. Rippon) will know better than me, the proposal was contemplated in pursuit of other objectives, including problems arising in areas of structural change deriving from the rundown of old industries. The summit communiqué also contained a reference to regional imbalances which might affect the realisation of economic and monetary union.

The report that was commissioned was designed to produce a Regional Development Fund by 31st December 1973. It was linked then, and remains linked, certainly in the minds of the Council of Ministers and of the Commission, to the development of an economic and monetary union.

A number of proposals were made in that connection which are described in the documents, but no agreement has been reached. With the change of Government and the fundamental renegotiation which is now in progress, the proposal for the Regional Development Fund still lies on the table.

I shall deal as quickly as I can with some of the aspects of the fund regulation, which is the central proposal, and I hope to answer questions which may be raised. It is not specified whether fund assistance should supplement national expenditure or reimburse all or part of such expenditure, although fund assistance would be linked to particular investment projects. It is contemplated in the draft documents before us, upon which the Government have not reached any sort of view, that the fund would assist only projects in eligible areas as defined in the separate regulation.

The fund would assist both industrial and service activities and infrastructure, though the term "infrastructure" is not fully defined, but would be limited to infrastructures required for development of industrial or service activities.

Larger projects coming within the contemplation of the fund would be assisted only after individual approval by the Commission, and only projects forming part of a coherent regional development programme would be assisted.

The financial regulations themselves would be intended to deal with the routine financial arrangements for the fund. There is a proposal for a regional policy committee which would consider policy under which the fund would operate and would advise the Council and the Commission. The fund map regulation lists the qualifying regions and areas, and hon. Members will find the United Kingdom list on pages 12 and 13.

The regions covered are all of Scotland, Wales and Northern Ireland, and, in addition, all the English development and special development areas, except Furness, together with all the intermediate areas other than the South Humberside, Mid-Yorkshire and South Yorkshire sub-regions of the Yorkshire and Humberside Region; the Manchester, South Cheshire and High Peak, South Lancashire and mid-Lancashire sub-regions of the North-West Region; and the Notts-Derby Coalfield Intermediate Area.

The explanatory memorandum explains that to qualify areas must be more than a minimum size with at least 100,000 inhabitants, be eligible for regional assistance from their own Governments, have a level of gross national product per head below the Community average, and suffer from at least one of the following regional problems—structural underemployment, industrial change, or agricultural predominance.

There is also reference to the agricultural priority regions, which are also specified.

We are concerned not only about the fund itself. We are able in the debate to consider the whole problem of the coordination of regional aids under Articles 92 to 94 of the treaty, designed to maintain competition within the Community. In October 1971—which was before the previous Government took Britain into the Community—there was an agreement on principles for the co-ordination of regional aid systems. This provided for a 20 per cent. ceiling on aids in central areas and a phasing out of what are known as opaque aids, which in the view of the Commission cannot easily be quantified and compared.

In Article 154 of the Treaty of Accession—as signed at that time—it was accepted by the United Kingdom that the principles of co-ordination in 1971 would be forming part of the conditions of British membership, and the intermediate and non-assisted areas in the United Kingdom are central areas within the Common Market definition, the rest being unclassified.

I wish to bring the House up to date with the position. The regional development fund proposals are on the table. They are being seen by the Government as part of the renegotiation procedure, and in view of the fact that they contain an element of reallocation of resources they are being seen as one of the budgetary aspects, though there are other reasons why further progress is not being made. The object of this debate, which the Committee thought it right and proper to have, is that there should be an opportunity for hon. Members to express their views upon these matters so that they can be taken into account by Ministers involved in the renegotiation.

I must make it clear that the details have not yet been worked out in any case, and the Government are engaged not in presenting proposals but in inviting discussion of proposals that are before the House and the Community.

Mr. Douglas Jay (Battersea, North)

Do we yet know the annual expenditure from this fund which will accrue to the United Kingdom? I think that a figure was promised by the previous Prime Minister about two years ago. Do we yet know this or is it still a pure hypothesis?

Mr. Benn

No, there has been no agreement by the Community on the fund. We do not know what the total sum would be, or what the contributions would be, except in so far as the "own resources" contributions can be calculated from the budgetary contribution that we would make, which was itself the subject of a special reference by the Foreign Secretary in his second speech. How much there would be for the United Kingdom, therefore, has not been decided, nor how it will be allocated within the United Kingdom. In effect, a broad framework is available for tonight's debate, but beyond that there is not much that I can tell the House.

Mr. J. Bruce-Gardyne (South Angus)

I appreciate that the Secretary of State is anxious to demonstrate his own personal complete disassociation from this occasion, but it would be helpful to our debate if we knew whether it was the Government's view that aids from the regional fund should be arranged additionally to or in place of aids which the Government themselves intended to give.

Mr. Benn

The hon. Member knows better than most, because he has followed these matters closely, that a decision of that kind has not been made and that the Government have responded by tabling the motion in the name of my right hon. Friend the Prime Minister and others, including myself, to the request of the Scrutiny Committee that the House should have an opportunity to express its view before the Government reach their view.

The hon. Member cannot have it both ways, on the one hand arguing that there is not a clear presentation of a clear position by the British Government and at the same time seeking to associate himself with the object of the debate, which is to give the House an opportunity to reach and express a view in some way—certainly to express a view—before Ministers do so. In this case I should be very much involved, as the regional and industrial Minister, in any discussions which may take place about these matters.

Dr. J. Dickson Mabon (Greenock and Port Glasgow)

While I agree that the Council of Ministers has not endorsed any regional development fund, is it not true that the Commission put up an original proposal, which it later amended, to present unanimously to the Council, under which, in the first instance, we should be a net gainer from the fund of £100 million under the original plan and of £85 million under the revised plan? Are not these quantifiable figures that the Commission has presented?

Mr. Benn

My hon. Friend also follows these matters closely. He will know that the view that the Foreign Secretary has taken on behalf of the Government is that the budgetary question should take pride of place and that one has to see this issue, including the transfer of resources, in a wider context.

My hon. Friend will also know that there have been three proposed levels—the initial one, the lower one, and now the intermediate one, to which I think he referred—but that the issue has been lying on the table of the Council of Ministers and is not likely to come up for decision for some time. Therefore, all that I am asking my hon. Friend to accept is that I am trying to provide an opening which will allow the House to give its view on the matter, and that I am not conveying my own view.

Mr. S. James A. Hill (Southampton, Test)

Is not the Secretary of State aware that the theme of the Regional Development Fund is that member States should keep their own regional policy programmes running, that the fund is a 15 per cent. back-up to programmes that are sent to the Commission for ratifying, and that only in an extreme case will a State receive as much as 30 per cent. of the fund? Therefore, it is surely obvious that one will not be able to cut one's own regional policy programme. The fund is meant to be a back-up service rather than substituting for member States' regional policies.

Mr. Benn

These are issues that I expect hon. Members will raise in the debate. If I conclude quickly, it may be easier for Members to make their points as points of substance.

In conclusion, I would refer to the communiqué at the summit meeting in 1972 concerning the relationship between the regional fund and economic and monetary union. My right hon. Friend the Foreign and Commonwealth Secretary has described that programme as overambitious, and has described the prospects for achieving it by 1980 as small.

But these are all matters which are the subject of the fundamental renegotiation now in process. I have referred to the budget. Discussions are going on in the working groups, and on these and other aspects of the Common Market the British people will be reaching a decision. Therefore, just as I, in presenting this matter to the House, present it in such a way as to allow the debate to take place, so Parliament in discussing these matters is contributing towards the moment when the British people reach their decision on these matters.

Mr. Deputy Speaker (Mr. Oscar Murton)

I would inform the House that Mr. Speaker has not selected the amendment in the name of the right hon. Member for Battersea, North (Mr. Jay) and his hon. Friends.

10.28 p.m.

Mr. Geoffrey Rippon (Hexham)

The Secretary of State for Industry has presented the Government's case in as neutral a way as possible. I think that he is right to say that this is an opportunity for the House as a whole to consider draft Community documents in advance of decisions being taken.

I wish the right hon. Gentleman had been present at the earlier debate to hear so many of his hon. Friends complain bitterly that Parliament and the country were being rail-roaded into decisions on policy simply because the draft Directives and the draft Decisions say that the Community and the Minister shall do certain things. That arises only if the Government of the day, in concert with the other members of the Community, reach agreement on the proposals. To that extent we can welcome the reassurance that the right hon. Gentleman must have given to many of his hon. Friends who were expressing anxieties in the earlier debate.

I wish in some ways that we had the benefit of the presence of the Minister of State, Department of Industry, who on previous occasions had warned the Government in dealing with these matters not to take too much notice of the "ancient Britons" in the House.

Mr. Benn

The right hon. and learned Gentleman will confirm, from his much greater knowledge than mine, that once the decision is reached it is not open for British Ministers, even if instructed in a contrary sense by a later Parliament, to change the decisions made by their predecessors.

Mr. Rippon

Once again I wish the Secretary of State had been present to hear his right hon. Friend the Paymaster-General explain the constitutional principles that were involved. I can only refer him to his colleague's speech, with which I wholeheartedly agreed and which explained the position clearly. There is a major distinction to be made between guidelines of this kind and regulations which can be made. The important point is that the Government in these circumstances have their vote and their view to be expressed in the Council of Ministers. I urge the right hon. Gentleman to read the Paymaster-General's speech on that aspect.

This matter has been raised by the Scrutiny Committee as one of political importance. There are no difficulties, I think, arising from any legal or constitutional peculiarities. I do not think that it is good enough for the right hon. Gentleman to say that he is little more than an impresario. It is important in discussions of this kind that the Government should give the House their view on a draft Directive. They should explain what attitude they will adopt in the Council of Ministers. That is something that the House is entitled to know.

There is already a distinction between this debate and the debate that was introduced by the Paymaster-General. They have been handled in different ways. That illustrates that in these matters we are feeling our way as to how the procedure should be followed. I should be reluctant to accept the Secretary of State's view that a Minister can come here as an impresario and say "I am not not expressing any views about the Government's policy, and, anyway, it was all started by the previous Government."

Mr. Benn

If the right hon. and learned Gentleman reads HANSARD tomorrow, if it is printed, I think he will recognise that I said that the rôle of the impresario in responding to the Scrutiny Committee's request is that the Government table the motion that permits the debate to take place. That is quite different.

Mr. Rippon

I do not think that the right hon. Gentleman in his capacity of Secretary of State acts just as an impresario. The Leader of the House may take note of what the Select Committee does and may make arrangements through the usual channels for the debate to take place, but I do not think that the right hon. Gentleman can evade his responsibility. The explanatory memorandum reads: Her Majesty's Government strongly supports the need to set up an effective Community regional policy. That presumably means the policy of Her Majesty's present Government. Equally the right hon. Gentleman referred to Article 154 of the Treaty of Accession. Presumably Her Majesty's Government accept the effectiveness of Article 154 as it is not an item for renegotiation. The Government have made clear the limits of their so-called renegotiation in the statement of the Secretary of State for Foreign and Commonwealth Affairs of 4th June.

The European Community has always recognised the vital importance of the rôle of regional policies in economic development. In the preamble to the Treaty of Rome reference is made to the need to: …ensure…harmonious development by reducing the differences between the various regions…". It has always been recognised that regional policy remains primarily the responsibility of member countries and that it should not be interfered with unless the economic development of another member State is affected unfairly. That is what gave rise to the controversy over regional aid in certain central areas of the Community to the detriment of other parts. Neither the treaty itself nor the Treaty of Accession precludes our carrying out our own vigorous regional policy, but it was envisaged that there should be complementary support from the Community and from its funds. It was always envisaged that such matters would affect the future size and shape of the Community budget. It is the size and shape of the Community budget in the years ahead that is of great importance to us all.

The Regional Development Fund and its listing of priority agricultural regions is in our interests. The two schemes, the explanatory memoranda point out, are unrelated except in the criteria employed in the selection of agricultural priority regions, which are similar to those used to identify regions with a preponderance of agriculture for the purpose of the Regional Development Fund.

I think that it is agreed policy, as set out in the explanatory memoranda, that the proposals for agricultural priority areas are not expected to be fully established in the Community until agreement on the Regional Aid Development Fund has been reached. I hope that the Secre- tary of State will agree that that makes speedy progress all the more essential. I say that particularly because among the proposed beneficiaries of the agricultural priority regions are the employment exchange areas of Haltwhistle, Hexham and Prudhoe in my constituency.

I am sure that the House will agree that the criteria for the priority agricultural regions seem very reasonable. They are set out in paragraph 2 of Document R/2474/73. This states that the Council of Ministers and the Commission shall adopt the list of priority agricultural regions taking account in particular of the following criteria:

1. (a) a percentage of the working population engaged in agriculture which is higher than the Community average;
2. (b) a gross domestic product at factor cost which is lower than the Community average;
3. (c) a percentage of the working population engaged in industry which is lower than the Community average."

This point was raised by the Foreign Secretary at the Council of Ministers, and it was one with which I expressed agreement—namely, without looking for a reallocation which applied simply to the United Kingdom, it was important that in framing budgetary proposals the Community should have regard to the relative wealth of the countries of the Community and whether or not a gross domestic product was below the Community average.

I did not go as far as the Government in their suggestion to the Community that, as far as they can envisage things under a Socialist Government, we should be half as well off as the average French or German family by 1980, but, in so far as there are disparities between nations or between regions, it is right in framing the budget that these factors should be taken into account.

Mr. Hill

My right hon. and learned Friend will not have overlooked the fact that one of the most important aspects on which we shall receive aid concerns the outward migration which has taken place from some of our areas like Ulster, Scotland and Wales. This is one of the factors that the Commission has taken into account, and we shall benefit greatly in dealing with the problem of outward migration.

Mr. Rippon

I am grateful to my hon. Friend for pointing that out. It arises more under the document dealing with the regional fund. It is clear from the document that the Secretary of State has put forward with such enthusiasm that we shall be great beneficiaries if these guidelines are in due course adopted.

It is interesting to note that no constitutional or legal difficulties arise for us as far as the European Regional Fund is concerned or in the creation of a committee for regional policy. Nor is the Industry Act 1972 affected. There does not appear to be any need at all for United' Kingdom legislation.

I am glad that the Government support the need for an effective regional policy, and I also hope that they accept the proposition put forward in the Community's own explanatory memorandum on the subject of the regional development fund. It points out: For the Community's assistance to be effective, it must meet three requirements: it should complement national regional policies, it should be flexibly managed and investments should conform to development programmes or specific development objectives. It goes on: The Community's assistance must complement rather than substitute the action of Members States because its purpose is to implement regional development policies "faster than Member States could alone… Later, it states: It is by providing these complementary resources that the European Regional Development Fund will contribute to accomplishing the task of ' promoting throughout the Community a harmonious development of economic activities' and the objectives of `the constant improvement of living and working conditions, and 'reducing the differences existing between the various regions and the backwardness of the less favoured regions' which have been assigned to the Community in the Treaty. Turning to flexibility, it is made clear that the Community's assistance must be implemented flexibly. It says: Regional problems vary greatly between different countries and different regions. The Community's aid should be available both in areas where the imbalances are agricultural in origin and where they are industrial in origin. Here again we see the Community showing a constructive view on a matter from which the United Kingdom is bound to benefit. Whether we are net beneficiaries to the extent of £100 million or £75 million we cannot say at this stage. The figures have not been agreed. It is important that the Government should press forward vigorously with the implementation of this Regional Development Fund, because once the principles are established it is clear that funds will be made available and we will be beneficiaries.

It has always seemed right that, as we are net contributors to the budget, we have certain cards in our hand. Before we agree to pay any percentage of the total of the Community budget there should be proper provision for the implementation of the provisions of the treaty dealing with regional policy. I would have hoped for more enthusiasm.

Mr. Tom King (Bridgwater)

Before my right hon. and learned Friend gets too carried away with the extent of the Government's enthusiasm, may I ask him whether he has noted the total lack of interest of the Secretary of State for Industry, both in his presentation of this proposal and in the comments of my right hon. and learned Friend? Is it not clear that the right hon. Gentleman is not interested in the European Development Fund or Europe as a concept, and is not very much interested in regional policy in the way it is spelt out in this document?

Mr. Rippon

It might be impertinent for me to suggest to the right hon. Gentleman that he is bound by the factors of collective responsibility. It might be sufficient for me to invite him to read what the Paymaster-General had to say on these matters. I hope that this, at any rate, is one area of Community policy on which there can be general agreement. There is great benefit for us and for Europe in pressing ahead with these proposals as rapidly as possible.

10.43 p.m.

Dr. J. Dickson Mabon (Greenock and Port Glasgow)

I am sorry that the hon. Member for Bridgwater (Mr. King) should have suggested that, somehow or other, my right hon. Friend had no interest in regional policy. My right hon. Friend was a very good Minister in the last Labour Government and has tried very hard, in his present capacity, to enhance regional development. The hon. Gentleman himself knows about the problems of such development. My right hon. Friend may occasionally have made errors, but on the whole he has been extremely effective as a Minister. I say that as a Member representing an area for which regional policy is extremely important.

Mr. Tom King

May I clarify this point? The reason I said that was that this European Regional Development Fund essentially supplements the type of system we have at the moment. The right hon. Gentleman has spent most of the past two months criticising the methods employed in regional development which this fund would supplement.

Dr. Mabon

If the hon. Gentleman reads the report of what he said he will find that he made three comments, to the third of which I take strong exception. My right hon. Friend has a good record in terms of trying hard to develop regional policy in the United Kingdom. He may have some reservations about the matter we are discussing, but it is wrong to attack him on the general score.

My complaint is that having been such a good Minister, in terms of regional policy in this country, he ought to see—I hope his colleagues see—that the European Regional Development Fund could be an asset to the policies he is seeking to establish. I shall not cross-examine my right hon. Friend but I am not happy about his speech tonight. My hon. Friend the Member for Watford (Mr. Tuck) spoke of the new mayor who promised to be neither partial nor impartial. That is the feeling I get about the speech of my right hon. Friend. He seemed to adopt the attitude that somehow or other he could be neutral in the debate.

He is moving a motion tonight in the name of himself and the Prime Minister I hope that if that motion is taken to a Division—and it may be—he will follow his voice with his vote. I feel that sincerely, because what we are doing is taking note of these matters. For example, let us ministerially examine what we are taking note of. It is the Minister's view—otherwise he must disown the departmental memorandum—that the additional aids to which the hon. Member for South Angus (Mr. Bruce-Gardyne) referred are not in conflict with our policy here. The memorandum says, in paragraph 3, under the heading "Impact on UK Law": The regional industrial development matters covered by the instruments are governed in the United Kingdom by the Industry Act 1972. My right hon. Friend has given great credit for what has been done under the Act and has saluted the right hon. Member for Knutsford (Mr. Davies) in that regard.

Paragraph 3 continues If adopted in their present form neither draft Regulation would require amendments of UK legislation. That, I hope, puts an end to the argument that these additional existing aids of ours are contradictory to or can be cancelled out by something that the Community does. That removes the second pillar of the major argument.

Mr. Bob Cryer (Keighley)

If we do not need amendments to United Kingdom legislation why is it necessary for us to be involved in discussing draft legislation?

Dr. Mabon

That is a fair point. I am lucky, in that being on the Scrutiny Committee I know that certain draft regulations could affect us, or could affect other countries without affecting us. It depends on the legislation in the various countries.

The Minister is obliged to tell us where there is a conflict between a proposed regulation and our own law. He is obliged to do that in an impartial way. We are asked to take note of these documents, and our Minister has told us that these additional aids are not in conflict with the Industry Act 1972, which was passed by the Conservative Government with our whole-hearted assent—

Mr. Bruce-Gardyne

Not all.

Dr. Mabon

With the exception of one or two primitives among the Conservatives. On the whole, the previous Parliament stood by the Industry Act, and the present Parliament also stands by it.

As a good Scot, I am interested in the money. We are for the present members of this club for better or for worse. As long as I am a member of a club and have to pay a subscription, even though I might want to leave it ultimately I want to get the maximum amount of benefit from the club. We have masochistically denied ourselves the benefit of at least £80 million over three years.

We fought the last Government over the ending of the regional employment premium because it represented £40 million a year to manufacturing industry in Scotland. We fought hard, and eventually the Government gave way. Now that we are in power we have said that we shall not end REP in 1974 but will continue to give £40 million for the benefit of industry in Scotland. That applies also in the north of England and to other parts of the United Kingdom, including Wales. The £80 million in one year—it could grow to that—represents twice as much money as that. If the fund had been agreed on time we should have begun to draw in moneys of that order this year.

Numerous proposals have been put forward by private industry and public trusts for Scotland, which could have been financed out of the Community regional fund. For example, we are anxious to develop the Hunterston Peninsula as a deep-sea port, which involves the reclamation of sand lands at a cost of about £15,000 an acre. Hon. Members may disagree about the merits of that proposal, but we could have got a grant for that reclamation through the European Regional Development Fund, and we could have been doing that work now.

We are not in the Common Market just for a short term. Even if my hon. Friends get their way and the referendum goes against remaining in the Community, we may still remain in it for two or three years more. Each of those years represents a lot of money in regional development.

I cannot understand why we did not get a clear answer from the Government in April. I remember that, among others, I asked the Foreign Office the direct question, "Why are we not progressing a regional development fund?" It is not true that other nations are blocking us. We are the ones who have not pressed this on the Community.

Mr. Benn

I was puzzled by my hon. Friend's reference to the explanatory memorandum from which he quoted and which he attributed to the Government. He is quoting from the Conservative explanatory memorandum. There has been no memorandum for the Commons, I understand, from the present Government. I understand my hon. Friend's confusion, but I would not want him to think that I was resiling from an explanatory memorandum presented by the present Government, because that is not the case.

Dr. Mabon

I cannot accept that—with the best will in the world. My right hon. Friend the Secretary of State for Industry has many virtues—one of them is that he works very hard and industriously—but if he thought that the memorandum did not represent the point of view of his Department he would not tonight be allowing Parliament to debate a matter that comes under the heading of the Department of Trade and Industry. He has made a rather remarkable statement. If he is saying that the passages I have quoted are wrong and that his Department has changed its view, he was in error in not telling us this in his opening speech. I cannot accept that his Department has changed its mind on two important points. I think that the points in the explanatory memorandum are fair.

Mr. Benn

I am sorry, but my hon. Friend has quoted from a memorandum submitted on 27th November by the Conservative Government and is claiming that I am not defending a memorandum prepared and submitted by the previous Government. I am not raising with him any of the merits of the issues, but if he chooses to quote Conservative memoranda and says that because I did not refer to it I was misleading the House, I think that he has accidentally made an error. My hon. Friend has been courteous to me and I want to be courteous to him, but it would not be fair to me, to the House or to the Government to imply that automatically memoranda submitted by one Government represent the policy of their successors.

Mr. John Davies (Knutsford)

On a point of order, Mr. Deputy Speaker. The orders which the Scrutiny Committee had were to consider certain papers. These included a large number of explanatory memoranda submitted at various times during the last 18 months. Surely the Committee is being told by the Secretary of State, if I understand him rightly, that all these should now be disregarded.

Mr. Benn

No.

Mr. Davies

I seek your protection for the Committee's work, Mr. Deputy Speaker.

Mr. Deputy Speaker

That is not a point of order.

Dr. Mabon

It may not be a point of order but it is a point of remarkable substance. We must now assume from what the Secretary of State said that all memoranda dated before 28th February or 3rd March have to be revised by Ministers. I do not expect my right hon. Friend to reply off the cuff, but is he saying that paragraphs 3 and 4 of the explanatory memorandum of 27th November 1973 are so fundamentally wrong that my argument and the arguments of other hon. Members are invalid? Is he denying the truthfulness of the wisdom of these subjective judgments, or otherwise, of paragraphs 3 and 4? I do not ask him to make a statement now, but he is on dangerous ground in a parliamentary debate of this kind, where we are able to argue only on the papers before us and not on papers that may come later. If the Secretary of State has fundamentally changed his view on this matter we should have known about it before this debate.

My view is that there is no fundamental change of view. I cannot see how the Industry Act 1972 is in conflict with these proposals; and I do not understand how my right hon. Friend can say that Her Majesty's Government do not strongly support the objectives of European regional development policy.

My hon. Friend is a great democrat. If those who are in favour of joining and staying in the Community win the referendum he will be the first to accept it. If he accepted being in Europe, would be not agree that in the context of Europe one would be sensible and wise, as a good Socialist, to have a regional development fund and a regional policy? Would he not stand by the statement that Her Majesty's Government would strongly support this policy objective as a good Socialist objective in the Europe of today?

Mr. Teddy Taylor (Glasgow, Cathcart)

Will the hon. Gentleman be so kind as to refer to the millions of pounds which may accrue to Scotland as a result of participation in the fund? Will he give us an indication of the payment that Britain may have to make to the fund, if established?

Dr. Mabon

I cannot remember the figures. If the hon. Member will refer to the debate in April he will see that we shall pay 14 per cent. and receive about 29 per cent. of the contributions. I am speaking from memory and those percentages may not be exactly correct, though the figures were given then.

I say without a doubt that we are the net gainers from a regional development fund, just as the French are net gainers from the Common Agricultural Fund.

I cannot understand how we are prepared to put up with a common agricultural policy and at the same time deny ourselves a regional development fund.

10.57 p.m.

Mr. S. James A. Hill (Southampton. Test)

It would be remiss of me not to say a word of praise for the Commissioner responsible for Regional Policy in Brussels—Mr. George Thomson, a late Member of this House, who has done a great deal of good in bringing forward these policies and whose department has great enthusiasm for the regional policy programme for the whole of Europe.

The idea of a complete regional policy programme for Europe—in other words, the watercan effect—was changed at the December meeting when the Federal Republic of Germany asked for a more concentrated form of fund. It applied its reasoning well. A concentrated fund obviously meant a smaller fund. The clash of principles was such that the Commission had to change its views on the water-can effect.

Now we have what I would call a regional policy concentrated fund which is meant to form a back-up fund to existing regional policy programmes in the nine member States.

Dr. Keith Hampson (Ripon)

Will my hon. Friend clarify that point? Is it not right to say that even though the Germans insisted on a smaller fund the criteria involved in the distribution of that fund would still mean that the United Kingdom would gain a disproportionate amount from the fund, compared with what it put in?

Mr. Hill

That is correct. The Federal Republic of Germany insisted that there would be three beneficiaries—the United Kingdom with Ulster. the Republic of Ireland and Italy.

Sicily, the Republic of Ireland and Ulster are three peripheral areas of the Community that will benefit greatly from the fund. In the two maps—one of the agricultural areas and one of the industrial decline areas—the United Kingdom was treated very generously. Indeed, the whole of Scotland, Wales, the North-West, the north-eastern part of the Midlands, and even the south-west of England were covered. That was probably the root cause why the maps covered the whole of the south-west of France. This made the Federal Republic of Germany think that the maps were too broadly based.

There is already a Regional Policy Committee in being, composed of two members from each of the member States and two members from the Commission. There may be a point of argument when the Minister discusses this in Luxembourg. Perhaps there should be a fairer spread of the number of members on the Committee. It is obvious that two members from Luxembourg and two members from the United Kingdom would seem to the observer to be unfair. Perhaps the Minister may make that point when he discusses this in Luxembourg. Apart from that, I think that the committee which will examine all the regional policy programmes put up by member States will be in being as soon as the fund is authorised.

When we talk of the fund, we talk, as the Commission talked and certainly as the Regional Policy Committee talked, of 2,250 million units of account. The German Federal Republic countered that by proposing a fund of 600 million units of account. Perhaps the United Kingdom went in far too strongly, because already the feeling was going against the water-can effect. The United Kingdom, lined up with Ireland, wanted 3,000 million units of account. It is now somewhere in between. But let there be no mistake: we shall do very well from this fund.

Mr. Teddy Taylor

May we have some further clarification of the 19 per cent. to which reference has been made? Is that a fixed percentage, or does it increase with our contributions?

Mr. Hill

The first-year fund will cover a three-year period. Whether or not the fund is used in the first year of that period, it will be cumulative. It will be a sum which can be worked upon to find out the percentages. The Council of Ministers has agreed that this should be a growing fund. It is not meant to stay at that amount. It may be that in the next two or three years it will double in size. It depends how the Regional Committee can get out the money and the programmes put up by member States.

Some member States are well organised on regional policy. Others, such as Sicily, have no regional programming at all. I found that even in Ulster there was a complete lack of regional programming for the day when the fund was created, whereas in the Republic of Ireland the regions are very well organised. The Irish Government are very keen to put forward their programmes as soon as the fund is arranged. The Minister will have to make sure that we are ready with our programmes when the fund is announced.

I want finally to refer to the problems of the trans-border areas. In the Community, a number of borders finish nowhere; there are borders with Iron Curtain countries, and there are problems with the Republic of Ireland and Ulster. Under the fund, these trans-border areas will receive a bigger percentage of aid for their definite specialised problems.

This is a step forward which is already being taken, even as we debate documents which are some months old and might almost be considered out of date. The renegotiation of regional policy documents is going on all the time. Nothing is static in regional policy.

I am sure that we are all very anxious for the United Kingdom to go ahead. The offer is on the table. It is in the region of 1,400 million units of account—at least, that is what we hear from the lobby back in the Community. I am sure that the Minister will find this out quite easily. Whatever be the sum, it will counter-balance some of the criticism concerning the money that we have to spend on the common agricultural policy. The sooner that we put forward our regional programming, so that we receive this back-up aid, the better.

11.4 p.m.

Mr. Arthur Blenkinsop (South Shields)

I join other hon. Members in welcoming this opportunity to discuss this proposal. In my right hon. Friend the Secretary of State for Industry we have a very effective Minister for the regions who has already given some evidence of it to my constituents in the action that he has taken with regard to Court Line. My constituents are delighted at his action.

That does not rule out the potential value of the Commission's proposal, however. Just as I am delighted with the action taken by my right hon. Friend over the workers on Tyneside, I am also naturally anxious, even from a purely constituency reason, to see that some of the potential benefits are used as rapidly as possible. Some Community funds, from ECSC sources, have already been used. A housing improvement scheme for millers has been financed with the help of Community funds. Limited training schemes have also been developed from the social funds of the Coal and Steel Community.

One of the major issues involved here is that any funds coming from these proceedings should be clearly understood to be in addition to the work that is already being done by the British Government. This question has been taken up by local authorities in the North-East and elsewhere. The document says that the assistance should not lead Member States to reduce their own total regional development efforts hut should be complementary. That must be clearly understood.

Dr. Hampson

Since the matter was dealt with by the Foreign Secretary in his speech about renegotiations, will the hon. Member acknowledge that the previous administration secured a commitment from the Commission that our proposals for steel areas would be highly favourably regarded, when necessary?

Mr. Blenkinsop

That may be so, but the question must be considered in the context of the much wider matters over which we all have doubts and anxieties. None of us can pretend that this can be considered in isolation. We are members of the Community and therefore we should seek such advantages as are available.

Not only should these funds be additional to funds that the Government make available; the Government should give an assurance that the regions will have a say in the detailed use of the money. That is a criticism I have of the proposals as they stand. I want clarification on that point. The authorities in the North-East are not happy that these decisions should be left with the Community, or even with the British Government. They also want a voice in the distribution of the funds.

I hope that these matters will be taken into account. I accept that this issue is not wholly within the competence of the Government, but that other Governments are involved. I hope for the sake of my constituents that this opportunity is not lost.

11.10 p.m.

Mr. Russell Johnston (Inverness)

I shall be very brief. Despite the fact that the Secretary of State for Industry indicated that the object of the debate was to gather views, as it were, it must be recognised that a considerable gathering of views has been going on since 1973, when the document was originally produced. Therefore, there will inevitably be an awful lot of repetition in the debate. I do not want particularly to add to that.

It must be remembered that regional policy, as conceived and as it appears in the document, was the reverse side of the coin of economic and monetary union. It is, therefore, very difficult to try to separate off, as it were, the whole general argument about the Community and its desirability or otherwise, from looking at regional policy in a compartment. I want to try to do the latter rather than get involved in any general argument, and to make two or three points briefly.

First, I underline again and again the point made by a number of hon. Members about what is called the juste retour. Any kind of meaningful European regional policy will not work if all that happens is that individual national exchequers reduce their own domestic expenditure on regional policy according to the amount of money they are getting from Community funds. The whole thing will be a waste of time. The whole object and intention of a regional policy is to correct the economic imbalances within the Community. These will not be corrected if individual Governments act in that way.

I regret to say that one hears rumours that already the Treasury, which seems to have a sort of will of its own, irrespective of who are the Government, is making its own arrangements to the effect that if we receive money for anything the same amount will be cut off the appropriate budget in future.

Second, I hope that the Secretary of State will press for the creation of as large a fund as possible. Figures have been bandied about, but we all know that the matter boils down to the fact that the Germans reckon that they would be paying too much. In the end, that is more important than the argument about the watering-can vis-à-vis the concentration. It was, after all, a surprise decision. We did not know about it until it was suddenly sprung upon us. But again, that overlaps into everything else.

Third, the Secretary of State mentioned infrastructure. He said that we do not know to what extent the regional fund can be spent on infrastructure development. It would be no bad thing for him to look at the debates in the European Parliament—or the European Assembly—to avoid contention. He would find that it was a consensus view of politicians from all over the Community that the concept of regional development should be as wide as possible and should not be confined simply to purely economic matters. After all, regional development is not just about economics. Surely, of all people, the Secretary of State must recognise that it is about the welfare of individual people in their various parts of the country.

Lastly, I pick up the point made by the hon. Member for Southampton, Test (Mr. Hill) about the composition of the regional committee, as and when it may be created. If and when it is established, it will not be sufficient or adequate that there be two members only from each of the existing member States of the Community. I should like to think that Scotland, Wales and the important regions of England would have some representation on the committee. I accept the point made by the hon. Gentleman about the ludicrous situation with regard to the Regional Policy Committee, on which Luxembourg has two representatives and the whole of the United Kingdom has two. A similar situation would not be fair in any way.

I could continue at great length but I shall desist from that temptation.

11.15 p.m.

Mr. Dennis Skinner (Bolsover)

We have been discussing this matter now for many years and we continually hear the same old story. If we go back to 28th October 1971 we shall find that the same old speeches were being made.

I am not one for examining Community documents, but when I was apprised of the situation I felt that I should look at this regional policy, and I did.

I do not know whether it is because I have been asking some very awkward questions about the Market or suggesting that those who represent us in the Assembly have been making money on the side, but, on examining the document on the regional fund—from which, according to my hon. Friend the Member for Greenock and Port Glasgow (Dr. Mabon), we are supposed to get back all that we put into the common agricultural policy, and more besides—I find that about the only area in the United Kingdom that has been excluded from any relief consistent with development, special development and intermediate area status is Bolsover—the Nottinghamshire-Derbyshire coalfield, to be precise.

I point to this matter not because I feel terribly upset about not have got my constituency further entangled in the Common Market, but because, over the years, several of my hon. Friends who represent North-East Derbyshire constituencies having been trying to get for the remaining part of my constituency, Chesterfield and other parts of North-East Derbyshire, intermediate area status consistent with the rest of the area.

The next time that we trot along to the Department of Trade and plead for the rest of the area to be included and given intermediate area status we shall no doubt be shown this document. It will be suggested that in view of the Common Market's regulations—

Dr. Mabon

No.

Mr. Skinner

My hon. Friend says "No". I wonder how he comes to that conclusion. He does not know how much money will be paid out.

Dr. Mabon

Any schedules specified in the Industry Act are unaffected by this legislation. As the Minister pointed out, the areas are not coincidental with the areas chosen by the European Community. Certain areas may get money from Europe but not from Britain.

Mr. Skinner

My hon. Friend is not following the argument. When we go to the Department of Trade and meet these bowler-hatted civil servants—even the advisers may be pro-Market—they will no doubt point out that these studious intelligent bureaucrats in Brussels, Strasbourg, or wherever, have come to the conclusion that, as the Nottinghamshire-Derbyshire coalfield is excluded from intermediate area status, it would be ludicrous to include the rest of my constituency, parts of that of my hon. Friend the Member for Derbyshire, North-East (Mr. Swain) and of that of my right hon. Friend the Member for Chesterfield (Mr. Varley). That is the kind of story that they will tell us.

I do not want to detain the House long on this matter, as other hon. Members want to speak and the Minister has to conclude the debate.

I am not terribly worried about the middle-term prospects. I say "middle-term", because there are one or two hurdles to be jumped in the meantime.

The Common Market is in a state of collapse. Only when the leaders of the respective countries of the Common Market, in plying for votes—whether in France, Germany, Belgium, Luxembourg, or wherever—are prepared to stand on a platform and say, "I want your votes not because I am going to bring home the goodies to people in my country but to support the peasants in Southern Italy and to help the people in the Highlands of Scotland and in South Wales", will the Common Market be a legitimate organ.

Ever since the beginning of the Community in 1958 there has not been a politician in Europe prepared to say that. We have seen successive elections during the past two years in Europe, but not one politician has argued on that basis. That is why I do not have any great fears about future prospects. I know that the British people will, in a referendum, throw out all this European policy, including the CAP. The British people are like the fellow who lost half a crown and found a tanner down the next street. The British people are sulking, and although they do not understand the technicalities, they know that in total the Common Market is no good for them, and they will throw it out lock, stock and barrel.

11.21 p.m.

Mr. Hugh Dykes (Harrow, East)

Notwithstanding the contributions from the Secretary of State and the hon. Member for Bolsover (Mr. Skinner), this has been a debate of high quality. The contribution by the hon. Member for Bolsover needs no comment from me, not merely because of lack of time, but because the House wishes to hear again from the Secretary of State. We hope that the right hon. Gentleman will give a clear indication of some of his thoughts on matters which have been raised.

The comments of the hon. Member for Bolsover do not stand up to scrutiny. They show yet again a total failure to understand what the Community is all about, both now and in the future.

Points made by some of my hon. Friends bear thinking about for the future, and not merely for this debate. In particular, the point by my hon. Friend the Member for Southampton, Test (Mr. Hill) that the Regional Development Fund in the future will be a growing fund needs repeating.

What a depressing contrast there was, at the beginning of this debate, between the attitude of the Secretary of State and the attitude, in the previous debate of the Paymaster-General, who seemed to me to reveal an understanding of the Community and of the purpose of these debates, as well as of the Scrutiny Committee's work, and the central problems being described in the Commission's documents. The Secretary of State, on the other hand—because he was pursuing extended conversations with colleagues on the Front Bench, and on the bench behind him, rather than listening to important points from this side of the House—showed that he is not in the slightest degree interested in the successful economic future of this country, in the Community, or in the complexity and relevance for Britain of the regional policy. In this regard the House should thank the hon. Member for Greenock and Port Glasgow (Dr. Mabon) for his comments.

The Secretary of State has his own personal prejudices about the Community—not only about the regional policy but all the other aspects—which will continue to dominate his attitude. Consequently, any potential British contribution to the arguments about regional policy and the future regional fund—bearing in mind the considerable and painful delays already experienced—will be a contribution of minimal size as long as a minority Government is allowed to remain in office.

I ask the Secretary of State to come clean a little more and not merely play the impresario, but give the House a more confident indication that he is prepared to press for what the hon. Member for Greenock and Port Glasgow insisted upon, which is vital not only for the regions of this country—some of which are experiencing considerable difficulties—but for the whole of the country as well.

11.25 p.m.

Mr. Benn

I asked at the beginning of my opening speech for the indulgence of the House, and properly so, because, despite the little bit of fun we have had from the hon. Member for Harrow, East (Mr. Dykes) and the right hon. and learned Member for Hexham (Mr. Rippon), we are now actually engaged in the first process of trying to make the Scrutiny Committee procedure work. The Scrutiny Committee looked at papers put before it and recommended that there be an early debate. The Government responded to that by arranging an early debate on the most neutral motion that they could make, namely, the motion to "take note", which I moved.

The House has to decide at an early stage whether it wants these debates to take place before the Government's mind is made up—in which case it will influence the Government's thinking but the Government's thinking will not be finalised—or whether it wants the Government to describe their attitude and then not be able to take account of the views of the House.

Mr. Rippon

Does the right hon. Gentleman agree that if the Government change their minds about a policy which is in the Government's name—the explanatory memorandum—they should say so?

Mr. Benn

I am coming to that. The right hon. and learned Gentleman knows better than most that the explanatory memorandum was submitted by the previous Government. It is not even in the name of my Department; it is in that of the Department of Trade and Industry, which was abolished in favour of a reallocation by the present Prime Minister. The memorandum quoted by my hon. Friend the Member for Greenock and Port Glasgow (Dr. Mabon) is not a memorandum submitted by me. It does not represent the view of the present Government—[HON. MEMBERS: "Oh!"] Of course it does not represent the view of the present Government. The view of the present Government, as I made clear in my opening speech, is the view that the Foreign Secretary expressed in his speeches in Luxembourg, namely, that we are engaged in a renegotiation.

It is no good the right hon. and learned Member for Hexham getting up in mock indignation because he discovers that this Government take a different view towards the Community—

Mr. Tom King

Say so.

Mr. Kenneth Clarke (Rushcliffe)

rose—

Mr. Benn

I am not prepared to give way. I do not have a great deal of time and I must try to get this on the record.

The position is very clear. The previous Government, on 27th November 1973, submitted an explanatory memorandum to the House, in conjunction with papers from the Community, in which they recommended them unhesitatingly and said that they created no difficulty in terms of Government policy at that time. They were succeeded by a Government who said in their manifesto that they would engage in a fundamental renegotiation and put the issue to the British people.

What we are now engaged in doing is exploring these issues with the Community, and we will then come forward with a recommendation. Anyone who is in any doubt about that simply has not been participating in this debate. What we are now doing—let us be clear about it—[Interruption.] It is no good hon. Members opposite shouting at me—[Interruption.] It is no good the right hon. Member for Knutsford (Mr. Davies) getting excited.

Mr. John Davies

If the right hon. Gentleman takes that view, is he really saying that every one of the explanatory memoranda which are now before the Committee and which antedate this Government are to be regarded as null and void?

Mr. Benn

I am saying that the right hon. Gentleman should take responsibility for his memoranda and I will take responsibility for mine. It is as simple

Whereupon Mr. DEPUTY SPEAKER declared that the Question was not decided in the affirmatve, because it was not supported by the majority prescribed by Standing Order No. 31 (Majority for Closure).

It being after half-past Eleven o'clock, the debate stood adjourned.

Debate to be resumed tomorrow.

Mr. Kenneth Clarke

On a point of order, Mr. Deputy Speaker. May we have some guidance in the extraordinary situation we have reached, in which the Secretary of State has succeeded in his aim of talking out his own motion? May I, through you, ask whether the usual channels will provide time for the debate to be resumed?

Mr. Deputy Speaker (Mr. George Thomas)

We have already been told that it is tomorrow—and "tomorrow" is a parliamentary expression.

as that. The memoranda submitted by the present Government will represent the view of the present Government and the memoranda presented by the previous Government will represent their view.

Mr. Tom King

rose in his place and claimed to move, That the Question be now put.

Question put, That the Question be now put:—

The House divided: Ayes 35, Noes 26.

Division No.66.]	AYES	[11.30 p.m.
Alison, Michael (Barkston Ash)	Faulds, Andrew	Rippon, Rt. Hn. Geoffrey
Benyon, W.	Fenner, Mrs. Peggy	Roper, John
Boscawen, Hon. Robert	Gray, Hamish	Scott-Hopkins, James
Brittan, Leon	Hill, James A.	Shersby, Michael
Buchanan-Smith, Alick	Howell, Ralph (Norfolk, North)	Skeet, T. H. H.
Butler, Adam (Bosworth)	King, Tom (Bridgwater)	Spicer, Jim (Dorset, W.)
Clarke, Kenneth (Rushcliffe)	Knox, David	Stanbrook, Ivor
Costain, A. P.	Lyons, Edward (Bradford, W.)	Whitehead, Phillip
Davies, Rt. Hn. John (Knutsford)	Mabon, Dr. J. Dickson	Winterton, Nicholas
Deedes, Rt. Hn. W. F.	MacArthur, Ian
Durant, Tony	Money, Ernie	TELLERS FOR THE AYES:
Dykes, Hugh	Pattie, Geoffrey	Mr. Robert Adley and
Eyre, Reginald	Rhys Williams, Sir Brandon	Sir Anthony Meyer.

NOES
Allaun, Frank	Lambie, David	Rodgers, George (Chorley)
Atkinson, Norman	Latham, Arthur (City of W'minsterP'ton)	Ross, Stephen (Isle of Wight)
Body, Richard	McNamara, Kevin	Sedgemore, Bryan
Cook, Robert F. (Edinburgh, C.)	Mikardo, Ian	Skinner, Dennis
Craig, Rt. Hn. William (Belfast, W.)	Milne, Edward	Spearing, Nigel
Ellis, John (Brigg & Scunthorpe)	Moate, Roger	Wise, Mrs. Audrey
Evans, John (Newton)	Ovenden, John
George, Bruce	Richardson, Miss Jo	TELLERS FOR THE NOES:
Jay, Rt. Hn. Douglas	Roberts, Gwilym (Cannock)	Mr. John Lee and
Johnston, Russell (Inverness)	Roderick, Caerwyn E.	Mr. Bob Cryer.