GRANTS FROM EEC FUNDS (Hansard, 23 October 1975)

§ Mr. Deputy Speaker (Mr. George Thomas)
I call the hon. Member for Barry (Sir Raymond Gower) to move the new clause.

§ Sir Raymond Gower
rose—

§ Mr. Deputy Speaker
Order. I have been guilty of a mistake. A new clause can be moved only by the hon. Member in whose name it stands, and I therefore call the hon. Member for Pembroke (Mr. Edwards).

§ Mr. Nicholas Edwards
I beg to move, That the clause be read a Second time.
We are having not only googlies but some fast balls bowled at us and this one is whistling past my head.
As the House knows, my hon. Friend the Member for Glasgow, Cathcart (Mr. Taylor) sought to include a similar clause in the Scottish Bill on Tuesday. The arguments that I shall advance are much the same as those that he put forward, and for that and other reasons I can be brief.
It is already necessary that the Agency's accounts should differentiate between moneys received from EEC sources and from our own Government. I do not think that the Government will quarrel with that. They will probably say that the Agency intends to do that, which is what the Scottish Minister of State said during the debate on Tuesday in respect of the Scottish Agency.
I hope that the Minister will say a little more about the moneys that may come from the Regional Fund. Will they be additional to Government funds? There was a debate on this question in the European Parliament on 25th September when my hon. Friend the Member for Bute and North Ayrshire (Mr. Corrie) 735 said there was a suspicion that Community money was being allocated not in addition to Government aid but instead of it, and this suspicion was confirmed this week during Question Time.
I understand that at the next meeting of the Regional Fund Committee each member State will report its views on this matter. The Minister should, therefore, take this opportunity to tell the House exactly how the matter stands, because local authorities and other bodies are busy preparing schemes for submission to the EEC and there are high expectations of the outcome. The Government should take advantage of this opportunity to outline the relationship between the Agency and the EEC institutions. I do not think we should be content with the Government saying that the clause is unnecessary and that there will be separate accounting for EEC funds. I hope that the Minister will be able to respond to the points that I have made.

§ Sir Raymond Gower
I hope that the Minister will regard this as a matter of the utmost importance. Great anxieties have been expressed not only in Wales but in Scotland and in regions of England that this money from the EEC will not be used to supplement the money that is granted by the Government to sustain the economies of the regions but will in some way be used in its place. I hope that that is not the case. The EEC subventions to Wales, in particular, are intended to confer a positive benefit on the Welsh economy, and if this money is not additional to the grants in aid under regional development and other programmes for Wales and other parts of the United Kingdom it will defeat the whole object of the subventions from the European Community.
This is an extremely important new clause. I do not think we can underestimate or understate the gravity of the situation if the suspicions and fears are justified in any respect. I hope that the Minister will accept the new clause not only in spirit but in fact.

§ Mr. Wigley
I agree wholeheartedly with what has been said by the hon. Members for Pembroke (Mr. Edwards) and Barry (Sir Raymond Gower). It would be a tragedy if the possible advantages to Wales from membership of the 736 EEC were lost because funds that were intended for developing the industrial infrastructure and industry of Wales were treated by the Government as miscellaneous entries in the Treasury account, using the argument that they spend enough on regional development.
At the time of the EEC referendum, on which there were divided opinions, the "pro" lobby made the point that there would be additional financial benefits to Wales from such things as the Regional Fund. When it was suggested some months ago that there was an attempt to avoid passing on funds to areas such as Wales, I understand that there was deep consternation in Brussels, and that concern was expressed in the German Government, who may have to find a large proportion of the money for the Regional Fund. They certainly did not regard the money as miscellaneous income to bolster the sagging coffers of the Treasury. I believe that it would be worth while including the clause in the Bill and that we should regard this discussion as more than a probing matter.
We have all seen in this morning's Press stories about the number of projects which will come from the EEC to Wales, and I am glad to see that European money will begin to flow into Wales. However, I hope that we shall be firm in requiring categoric assurances on the rôle of the Agency and in seeking information on how much money will come from the EEC and how much from the central Government. We shall also want to know the implications in regard to maximum borrowing requirement or ceilings which may affect the Agency as a result of the provisions of the Bill. Does the limit include or exclude money from European sources? I hope that the Minister will reply in detail to this important point.

§ Sir Anthony Meyer (Flint, West)
I wish to support what has been said about the desirability of ensuring that aid from the Regional Fund is additional to money provided by the central Government. Certain projects will be of great value in creating employment but some by their nature may be controversial. The fact that the projects have attracted a measure of European regional aid could swing the balance in their favour in terms of public support. I have in mind one 737 project which has not been widely publicised but which is a controversial matted that will eventually bring great benefits. The project is a matter of some dispute in my area, and if it were clear that European aid was to be given to that scheme it might tip the scale in favour of its acceptance.

§ Mr. Ian Grist (Cardiff, North)
I support what has been said by other hon. Members on this clause. Will the Minister say what standing the Agency will have in seeking funds from the Regional Fund. Will he also say whether the Regional Fund should lay down conditions for the use of that money so that the Agency would have to account for it separately?

§ Mr. Geraint Howells (Cardigan)
I, too, wish to support what has been said so far in this debate, but I believe that a little clarification is required in case any money that is to come from European funds goes directly to the National Enterprise Board rather than to the Welsh Development Agency. I hope that we shall have an assurance that the money will be spent in Wales and will not go to the Board.

§ The Under-Secretary of State for Wales (Mr. Alec Jones)
Having heard the contributions on the clause, I almost took the view that I was about to reply to the wrong debate. I would remind the House that the debate relates to new Clause 3, dealing with how funds shall be shown in balance sheets. It has nothing to do with the nature of funds, or anything of that kind. We cannot have a long debate at this point in our deliberations, but no doubt it can be raised later in the general debate.
Having said that, I should like to make clear that the provision of EEC funds will mean that we shall be able to carry out more projects and schemes for the benefit of the Welsh people than we would be able to undertake without the funds. But in our view the new clause is completely unnecessary for the reasons given earlier in the week when the House discussed the Scottish Development Agency Bill. It is clear that the Welsh Development Agency must identify in its accounts the receipt and expenditure of EEC funds. Paragrapuh 8 of Schedule 3 of the Bill requires the 738 Agency to keep proper accounts in such form as the Secretary of State may determine. I assure the House that within the guidelines issued by the Secretary of State it will be stipulated that these funds should be kept separate, as is the wish of the hon. Member for Pembroke (Mr. Edwards).

§ Mr. Wigley
Will the Minister clarify whether any loans from the EEC are additional to or within the loan limit provided in the Bill?

§ Mr. Alec Jones
I made clear that I was dealing with the new clause and that general questions can be raised in the later debate.