EEC (REGIONAL DEVELOPMENT) (Hansard, 27 February 1975)

§ The Minister of State for Foreign and Commonwealth Affairs (Mr. Roy Hattersley)
I beg to move, That this House takes note of Commission Document R/2055/73, taking account of further developments brought to the attention of the House. For procedural reasons it will be necessary for the moving of the motion to be suspended from seven o'clock until ten o'clock. Therefore, the hordes of enthusiasts who intended to invade the House at 10 o'clock to hear the details of the regional development fund will, to their deep regret, miss the first few minutes of my speech. I intend to sketch in some of the background to the Community's attempts to create a regional development fund and then, at ten o'clock, describe the documents which the Scrutiny Committee has before it and which are the subject of the motion.
The European Economic Community has had as one of its principal aims since its foundation the encouragement of parallel development in the economies of member States—a policy clearly very much in the interests of those countries whose levels of economic growth and record of overall prosperity are well below the Community average. The regional development fund was intended to promote this end. Its creation was envisaged as long ago as 1971, but sadly, and I suppose inevitably, the practical application of the principles of the fund proved to be a great deal more difficult than the statement of its purpose.
Between 1971 and 1974 discussions about size and distribution made very little progress. Both the Paris summit in 1972 and the Copenhagen summit the following year failed in their established and publicised efforts to set up a fund. 779 Then, after three years of disappointment and frustration, George Thomson initiated a new set of bilateral discussions between the Commission and the member countries in another attempt to provide a scheme which would assist the Community's less favoured areas. The outcome was a dear indication that the will to establish a regional fund still existed. It was, however, equally clear that the countries of the Community, particularly those which would be net contributors to a regional fund, wanted that fund organised on a much smaller scale than was originally proposed and wished its benefits to be more narrowly concentrated on the areas of greatest need.
Last December, at the Paris meeting of the Heads of Government, the establishment of a regional fund was finally agreed. The Prime Ministers made the essential agreement in principle that was necessary to get the fund moving. They also made a series of practical decisions about its size and the distribution of its benefits. For the first three years the fund will amount to about 1,300 million units of account—about £550 million. Italy and Ireland are to be the principal beneficiaries, but the United Kingdom is to receive almost 28 per cent. of the fund's resources—approximately £150 million.

§ Mr. Neil Marten (Banbury)
It will perhaps be convenient if we delay the right hon. Gentleman's speech a little. Has the fund been agreed, or is it still in the proposal stage?

§ Mr. Hattersley
The Heads of Government, at their meeting in Paris in December, established the figure which they believed appropriate for the fund. They also established the distribution of the fund. But clearly that must go through a number of Community procedures. As the hon. Member for Saffron Walden (Mr. Kirk) will confirm, discussions have been going on in the Community on whether the fund should be adjudged on obligatory or non-obligatory resources and therefore be a matter for proper consideration and determination by Ministers or whether it should be subject to amendment and argument, and, I suppose some ill-intentioned people would say, interference by the European Parliament.

§ Mr. Marten
In other words, I presume that the sum is not final, it has not been fixed and, in our parlance, it has not passed through the legislative procedure.

§ Mr. Hattersley
The sum is final in the sense that the Heads of Government thought that that was what it should be and in the sense that control over the fund will remain with the Council of Foreign Ministers. It is final in the sense that the Foreign Ministers expressed the view that it was inconceivable that they would want to alter the calculations made by the Heads of Governments in December. Discussion continues, however, between the Council of Ministers and the Parliament on the legal definition of the expenditure.

§ Mr. Peter Kirk (Saffron Walden)
I am sure the right hon. Gentleman will confirm that this matter will be discussed next week between the Council of Ministers and the Parliament. Until we have discussed it, it is impossible to say whether or not the fund is in this form.

§ Mr. Hattersley
That is the point I was trying to make and the point that the hon. Member for Banbury (Mr. Marten) was trying to elicit from me. I want to confirm what I believe to be the reality—