EUROPEAN COMMUNITY (REGIONAL DEVELOPMENT FUND)

HC Deb 18 July 1977 vol 935 cc1266-320

9.16 p.m.

The Minister of State, Department of Industry (Mr. Alan Williams)

I beg to move,

That this House takes note of Commission Documents Nos. R/1611/76, R/1334/77 and R/1613/77 on the European Regional Development Fund.

There are three documents before the House. Two of them are retrospective: the Scrutiny Committee's report on the first annual report of the European Regional Development Fund, and the second annual report of that fund. Perhaps more importantly, the third document is the Commission communication concerning the guidelines for Community regional policies. As this looks ahead to proposals that will apply in the next phase of EEC regional policy on the basis of this third document, I think it reasonable to say that we may possibly be at a watershed in terms of the policy of the EEC. The first three-year period of the fund expires at the end of this year. The Commission is considering what changes should be recommended, and member Governments will have to consider those changes. The reports look back on what has been done, and the Commission's proposals raise many interesting and somewhat controversial issues.

I was in Brussels on Thursday last week to discuss certain aspects of regional policy with some of the Commissioners, and I shall be having further discussions with Commissioner Giolitti, the Regional Commissioner and Commissioner Vouel, the Competition Commissioner, in the next two weeks. It is, therefore, appropriate that we should have this debate today so that I have this opportunity of hearing the views of hon. Members on both sides and that I should be able to take these into account and relay them to the Commissioners when I meet them in the next 10 days or so.

It is useful to look backwards first to the two annual reports to put the discussion in perspective. The fund began operating in 1975, and I am sure that all hon. Members will commend the Commission on the efficiency with which it has operated the fund during that period. The fund operates through national Governments, and assistance must be coordinated with the national Governments' regional aid programme. Aid can be given, in somewhat different conditions, for infrastructure and industrial projects. To be eligible, industrial projects must fall within the framework of regional development programme projects of member States and must receive national aid. All applications have to be submitted by member Governments. Inevitably, as with our own Section 8 scheme, there is a difference between the rate of payment and the rate of commitments, because the commitments are for projects spread over several years, but at present our own commitments under the fund take up almost all our share of the quotas. There is a small amount still in hand, but we have half of this year left.

Payments from the fund are on a quota basis, and the United Kingdom's share is 28 per cent., which inevitably makes us net beneficiaries. With these additional funds in 1975 we were able to take the additional funds into account in devising advance factory programmes, for example. The announcement on 27th June of extra assistance to special development areas was able to take account of the receipts that we know are coming from industrial projects.

Hon. Members may wish to know that applications for fund assistance have been made in many instances for Government advance factories, so that so far the commitment of the fund in this respect amounts amounts to £5.8 million in England, £2.8 million in Scotland, £3.3 million in Wales and £1.2 million in Northern Ireland These are all commitments relating to advance factories.

Mrs. Winifred Ewing (Moray and Nairn)

Would the Minister care to comment on the principle of additionality?

Mr. Williams

I think that the hon. Lady must let me get a little way into my speech.

Mrs. Elaine Kellett-Bowman (Lancaster)

Is the Minister aware that, if local authorities and those best acquainted with regional problems could have their say, advance factories would be very low on their list of priorities? They would prefer the elimination of bottlenecks to these advance factories, many of which are unoccupied.

Mr. Williams

That is not necessarily the information that we receive from local authorities. It may be so, in the hon. Lady's experience, in relation to particular local authorities. I can only tell her that local authorities in general are eager to be participants in any advance factory programme.

Concerning additionality, the system that we operate, as the hon. Member for Moray and Nairn (Mrs. Ewing) is aware, is retrospective. This applies in most of the member States. What happens is that, because of the way in which the scheme works, there are projects on the industrial side that have been approved for assistance under our system of regional aid and subsequently are approved by the Commission. They have already received the incentive that has led to the investment. The investment is committed. Therefore, the additional funds that are now available from the Common Market are added to our resources for regional industrial development, and such things as extra advance factory programmes are financed out of these additional funds and․

Mrs. Kellett-Bowman

Will the Minister give way?

Mr. Williams

I shall give way in a moment. Perhaps the hon. Lady will let me finish a sentence. On the infrastructure side, as hon. Members will be aware, the system operates somewhat differently. I shall come to the question of infrastructure shortly.

Mrs. Kellett-Bowman

On the Minister's own admission, the incentive has already been given, in his estimation, by our own regional development programmes. Therefore, on his admission, there is no additional incentive by reason of the European Regional Development Fund. Will he admit that that is so? The money goes direct into the coffers of the Treasury and offsets the budget deficit rather than giving additional help to the regions, because the right hon. Gentleman's Government have prohibited local authorities from making any additional investment by reason of the fact that they have regional aid.

Mr. Williams

The hon. Lady is confusing two different circumstances.

Mrs. Kellett-Bowman

The hon. Lady is not.

Mr. Williams

The hon. Lady might care to listen, and others might care to listen if she gives them the opportunity.

The fact is that the regions are not deprived of extra assistance. If the hon. Lady follows the logic of what she is saying on the industrial front, she will realise that if the investment is already committed the regions are not losing any investment.

Mrs. Kellett-Bowman

They are gaining nothing.

Mr. Williams

Of course they are. They are gaining the finance that the Government use to build extra advance factories, for example, over and above those that are already in the programme. [Interruption]

Mr. Deputy Speaker (Mr. Bryant Godman Irvine)

Order. If the hon. Member for Lancaster (Mrs. Kellett-Bowman) is hoping to catch my eye in due course, perhaps she will restrain herself until that moment comes.

Mr. Williams

Therefore, on the industrial front the region has the benefit of the investment that originally gave rise to the funds from the EEC, and, secondly, it has the benefits of the projects that the Government are additionally able to finance from the fact that these EEC funds are available. There is, therefore, additional benefit to the regions.

On the infrastructure side, again the benefit is felt by individual local authorities, because what happens here is that the local authority receives the finance and is able to use that against its own borrowing requirement. However, Opposition Members are continually lecturing the Government about the need to keep within public expenditure programmes. As the finance that comes from the EEC counts against that same public expenditure ceiling, inevitably we must take this into account, and therefore, while it saves the local authority in terms of its borrowing requirement, it cannot become extra infrastructure in our total programme.

Mrs. Winifred Ewing

Is the Minister saying that our practice in the United Kingdom is the same as the practice in other member States?

Mr. Williams

It certainly is, on the industrial side. If the hon. Lady would care to look at the practices of other countries, she would find that none of them gives the finance to the project which has given rise to the EEC grant.

Mr. Kenneth Clarke (Rushcliffe)

Would not the Minister agree that some other countries, notably Italy, make a far more convincing demonstration of the additional benefit that European regional aid gives to their depressed regions? Although the right hon. Gentleman has given a clear exposition of the case, will he accept that it does not carry great weight within Europe and that some people feel that if the Government had given a more convincing demonstration of their acceptance of the principle of additionality, we might have had some further development of European regional policy?

Mr. Williams

I cannot accept that proposition at all. We can clearly point to projects which have arisen over and above original programmes as a result of the Government's policy in relation to industrial projects.

Mr. John Evans (Newton)

Will my right hon. Friend accept that Italy has a rather strange record of public expenditure in many areas? Will he take it from me that there is some suspicion about Italian public expenditure? Will he also accept that the most centralised country of all, France, will not publicly disclose where the regional allocation funds from the Community are going?

Mr. Williams

I am grateful to my hon. Friend. I am sure that if hon. Members would look at the practices elsewhere they would find that our practices are not out of step with those prevailing within the rest of the EEC.

Let me now turn to infrastructure and demonstrate some of the benefits we have received. The fund has provided £10.6 million towards the £90 million Kielder reservoir in the North of England. In Wales there has been redevelopment of the site of the Dupont steelworks at Briton Ferry by West Glamorgan County Council. There has also been an allocation of £1¾Q million for infrastructure projects in the Ebbw Vale area. A contribution of £1.2 million has been made towards the construction of the £10 million Hoscar sewage treatment works in the North-West. A contribution of over £3 million has been made towards the new marine terminal for handling iron ore and coal at Hunterston. In Northern Ireland there has been a contribution of £2.7 million towards the cost of connecting the new Kilroot power station to the national grid.

In addition, there have been various individual industrial projects and service industry projects which have been supported. Obviously all hon. Members, regardless of their views on the Government's role, will welcome the supplement which we receive from the Regional Fund. I was pleased that earlier this year the Regional Policy Committee was able to visit the United Kingdom to see some of the areas which are the recipients of these benefits. It is of paramount importance that those now trying to frame policy in the EEC, not only those in the Regional Committee but those dealing with competition, should understand the basic fact that our problem is substantially different from the regional problems of many other parts of the Common Market and that, as a result, our policies have to be tailored to deal with that situation.

Our problem is that we are the oldest industrialised country, which is now restructuring its industry․

Mrs. Kellett-Bowman

Will the Minister give way on this point of dereliction?

Mr. Williams

I am not on the point of dereliction.

Mrs. Kellett-Bowman

You are.

Mr. Williams

The point of considerable importance to the regions is that regeneration depends very much on our ability to regenerate the traditional industies—[Interruption] I wish that the hon. Member for Lancaster (Mrs. Kellett-Bowman) would let me finish a sentence. She does not need to bounce up and down. I have noticed that she wishes to intervene, and I shall let her do so presently.

I would like to get beyond a comma. A full stop makes a pleasant interlude every now and then.

It is important to us that we retain our ability to provide the regional development grant for replacement investment as well as for original investment. This will be of considerable significance in the future in relation to the competition directorate and, taken in conjunction with the document before us, it gives a very worrying view of how regional policy could develop if certain thoughts within the Commission were allowed to become paramount.

Mrs. Kellett-Bowman

I am grateful to the Minister for giving way. Although he may not have realised it, he was referring to the very considerable problem of dereliction which afflicts certain parts of the country, particularly my own area in the North-West. Is he aware that when we raised this crucial problem of industrial dereliction in the European Parliament his own colleague from the North-West, the hon. Member for Newton (Mr. Evans), voted against our attempts to get assistance for dereliction from the European Parliament?

Mr. Williams

The hon. Lady should watch the antics of some of her hon. Friends in this House. Only a week ago they were trooping into the Division Lobby against assistance under Section 8 of the Industry Act 1972. An individual speech and an individual vote against a particular policy which the hon. Lady supports is very little compared with some of the irresponsible antics indulged in by the Conservative Front Bench and by some of her colleagues.

The important point to bear in mind in approaching the new phase is that all member Governments have already indicated that they want the fund to continue. The Commission has put forward its policy proposals, and it is these which are, I suggest, of particular importance to the House.

Until now the fund has not acted as an expression of Community regional policy, because there is no Community regional policy as such. The policy document can perhaps be seen as the first step in this direction, and we need to be generous and recognise it as a first tentative step. It is a comprehensive survey and contains some interesting innovations. Obviously we shall want to give it careful consideration, but there are certain features of it that I feel I should spell out to the House.

First, let us look at the suggestion that there should be a biennial report prepared by the Commission on the economic and social development of the Community's regions, on the basis of which the Council would set priority objectives for regional development, to be followed at Community level, and the Council would then fix guidelines for both Community and national regional policies.

I am sure that it was put forward in the belief that it would bring about more quickly a degree of equalisation in the development of the various regions. Frankly, I am not convinced that the method is soundly based. The problems of the regions throughout the EEC are highly diverse, and in our own country they are very long-lasting by the nature of the industries which are already in those regions. The restructuring of basic traditional industries is necessary, and this can be achieved only over a longterm period.

I can see value, certainly, in the exchange of experience and information between member Governments and the Commission, but I am convinced that it would be over-optimistic to expect successful results from an untested, complicated and rather mechanical form of Community policy-making. There is no Community experience to back up the belief that its approach to regional policy would be better than the approach which successive Governments have pursued in this country.

I suggest to the House that it would be rash in the extereme to subordinate our own judgment, based on a great deal of experience of the particular problems of our regions, to that of the Council, in which our colleagues, although they may have long experience of the problems of their own member countries, have had experience of problems which are largely different from ours. In passing, I point out that the Council has never yet devoted as much as half an hour to the problems of specific regions.

I am also convinced that the proposal is unrealistic for other reasons. Let us compare the expenditure on regional assistance from United Kingdom sources with expenditure from Community sources. The net benefit to the United Kingdom from the first three years of operation of the fund is about £60 million, or £20 million a year. That is what the Community contributes to this country over and above our own share of expenditure. Our estimated net expediture on regional aid to industry in 1977‣78 is over £380 million. In addition, we spend at least as much—in some cases it is difficult to break the figures down—on infrastructure developments in the regions. Therefore, we are comparing a national rate of expenditure of about £800 million a year with receipts from the fund of £20 million a year.

There is no doubt, on any assessment of the scale of expenditure on regional policy, that the responsibility for regional policy rests now, and must continue to rest, with national Governments. It would not be sensible to give a power to make the decision on how we deal with the problem to those who are not meeting the costs.

Sir Anthony Meyer (Flint, West)

There is an enormous difference between sums that come from the Community and the sums which the Government devote. But is it not a fact that every £1 that the Government pay to regional aid is £l which has to be imposed on every industry within the United Kingdom, whereas every £1 that we get from the Community is a net benefit?

Mr. Williams

I appreciate the point that the hon. Gentleman is trying constructively to make, but I would point out that it is only this limited sum which is a net benefit. We make compensatory payments into the budget which offset any other receipts we have from the fund.

Mr. John Evans rose․

Mr. Tam Dalyell (West Lothian) rose․

Mr. Williams

I shall allow my hon. Friend the Member for West Lothian (Mr. Dalyell) to intervene in a moment.

Mr. John Evans

My hon. Friend's comment that the Council had not spent half an hour discussing regional policy is a condemnation of the Council and not of the Commission. Does he not also accept that the Commission's proposal to collate the statistics which apply throughout the nine member countries, in order to see what each is trying to do with regard to regional policy, is a worthwhile exercise? Does he not also agree that the power will rest within the Council and not within the Commission? If necessary, the power of veto still applies and the Council can veto any proposal.

Finally, does my hon. Friend accept that some of us are not all that happy with some aspects of the British Government's regional policy, particularly the policy which gives enormous handouts to oil companies to go and prospect for oil in the North Sea? Perhaps that policy is wrong also.

Mr. Dalyell rose․

Mr. Williams

It would be technically appropriate for me to interject at least half a sentence. Points of interjection on points of interjection are not normally accepted by the Chair. Having interrupted, my hon. Friend the Member for West Lothian is now welcome to make his comments.

Mr. Dalyell

I seek clarification on the half-hour point. Was my hon. Friend's argument that the Council had not spent half an hour discussing regional policy, or was it that the Council had not spent half an hour on a particular region such as Wales or Scotland? If that is the situation, I do not see why the Council as a Council should discuss specific cases. General policy, yes, but specific cases, no.

Mr. Williams

My hon. Friend is absolutely correct in his interpretation. That was what I was going to say in response to my hon. Friend the Member for Newton (Mr. Evans). I said that the Council had not dealt with the problem of specific regions. I am particularly pleased that we had the visit from the EEC earlier this year, because in devising regional policy it is essential that certain typical regions—so far as it is possible to devise a typical region—should be considered in depth before policy decisions are arrived at.

My hon. Friend the Member for Newton said that at the end of the day the Council would take the decision. That is absolutely correct. No one is criticising—

Mrs. Kellett-Bowman rose․

Mr. Williams

I have explained to the hon. Lady that it is helpful to allow the odd sentence to slip through before there is an interjection. I am still trying to deal with the previous two interjections. The hon. Lady has interjected three times now, not counting the various sedentary squawks that we have had to deal with during the debate. I am happy to conduct the debate in a reasonable manner. I have been speaking for 25 minutes, and I have hardly been allowed to develop a single argument. I am still dealing with only the first section of the proposal from the Commission.

I come next to one of the matters to which my hon. Friend the Member for Newton referred—statistics. I agree with my hon. Friend that it is a very good suggestion that we should have a better statistical base in the EEC. The Government want to co-operate in any way possible. But the fact that this is needed in itself suggests that we should be cautious of solutions which so far have been devised within the Commission and which clearly, therefore, do not have an adequate statistical base. For that reason, we shall co-operate in the development of adequate statistics. But we do not want to be landed with policies and priorities which are not based on a full analysis of the problems. We believe that the development of a communal regional policy must be more pragmatic.

The third matter concerns the greater co-ordination of regional aid. Here again we accept the need to avoid distortions of competition. We have to be careful, to the extent that the treaty was drawn up 20 years ago and that regional policy has become of much greater significance in the EEC—not just because of our membership but because of the economic developments in the EEC—than it was when the treaty was first drawn up. Therefore, I hope that those exercising control of the competition policy will bear this in mind. The June statement of the European Council echoed the call in March of the Council to encourage high levels of investment in member States. We certainly proclaim that regional aids are a very effective way to assist in encouraging new investment and that it is greatly needed, especially at present when unemployment is running at unprecedented rates here and in Western Europe.

There is a further proposal for a regional impact assessment. This is another innovation which is very interesting, and I am sure that it will gain the support of the House. The suggestion is that an assessment should be included in major Community policy proposals indicating the effect of the proposals on the regions. Therefore, this would apply even where the subjects under discussion were apparently and superficially completely separate from the regional issue. It would be sensible to go ahead with this, and we intend to encourage the Commission in its basic proposals.

There are certain amendments to fund regulations. Many of these are detailed, but some are important changes. First, the sums allocated to the fund in future will not be specified in the regulations but will be separate items in the Community budget. I shall not go into the details of the changes in units of account and European units of account, both of which are involved in these calculations. However, the net effect is that the fund allocations will rise from about £200 million this year to about £430 million in 1978. The United Kingdom has a 28 per cent. quota and, therefore, our receipts will increase from £56 million to about £120 million, though these are gross and not net figures.

In conjunction with this, the Commission put forward a proposition for a non-quota element. This is extremely important, and it is very difficult to assess how it should operate. I put forward a few thoughts on this because it is very important in the context of expanding the EEC when more Mediterranean countries, with their greater demands on the Community budget, become members.

At present the moneys allocated are on the basis of quotas, and these are specified in the fund regulations. The proposal is that the bulk should be paid on existing quotas but that there should be a 13 per cent. element of non-quota allocation available for distribution at the discretion of the Community. It may be that certain projects for which this would be used would be highly advantageous, but on the other hand it raises a difficult question in so far as this non-quota element does not reflect the priorities that are reflected by the quotas and, therefore, it undermines the regional priorities of the Regional Fund. In so far as it is decided that the non-quota element shall be allocated virtually in conformity with existing quotas, it becomes irrelevant and unnecessary. We remain to be convinced that a non-quota scheme is either practicable or necessary.

I was interested by the suggestion that it could be used for an interest rebate scheme, but there are technical problems in relation to this. I do not want to prejudge the issue, and I shall welcome the views of hon. Members on the various propositions in the document.

The document is basically one for consideration and further analysis by member States. There is ample opportunity for the views of hon. Members expressed here tonight to be included in the representations that the Government will make. I welcome further guidance from the House about the way in which hon. Members wish to see further discussions develop.

9.47 p.m.

Mr. Kenneth Clarke (Rushcliffe)

The Minister of State gave a very careful and matter-of-fact description of the history of the Regional Fund and his first thoughts about the proposals for developing the fund that have been put forward by the Commission. But his review was cautious and guarded. He invited comments from hon. Members, but his own comments were heavily tinged with scepticism.

I have had a certain sense of disappointment in listening to the Minister. I am disappointed with the development of regional policy in the EEC so far. If the Minister's guarded and sceptical approach is carried through in the Community, we shall be further disappointed about the rate of development in the foreseeable future.

When we joined the EEC and then confirmed our membership in the referendum a great deal was made of the benefits expected to accrue to us from regional policy. I was not alone when campaigning during the referendum in making a considerable point about the advantages of this once we confirmed our membership. Although we have had a new regional policy since 1975, the rate of progress and the benefits so far have not been overwhelming.

The first Commissioner in charge of this field of policy was an excellent British Commissioner, now Lord Thomson of Monifieth. The policy he initiated in 1975 comprised a modest three-year budget for the Regional Fund and a general policy which consisted only of hints of what might develop in the long term. Looking back briefly over the documents and reports of the first two years of its operation since 1975, one cannot expect a great deal because of the general economic atmosphere, which has not been conducive to rapid development of regional policy. The Community was plunged into a deep recession and a major symptom of that throughout Europe was the great increase in the level of unemployment—more than 5 million individuals in the Community as a whole.

In some ways over the last two or three years the most rapid increases in unemployment have taken place in the developed areas. As a result, there has been less pressure to give regional aid to under-developed areas in some countries and where there has been pressure in areas in need of assistance, national Governments at a time of recession are only too anxious to demonstrate to their own electors what they are doing for them rather than to see a rapid development of Community policy.

If there is a revival of the European economy, we may expect the traditional disparities in unemployment levels between regions—to reappear fairly quickly, in this country and elsewhere. With the changes that the recession may have caused, there may be new areas with new pools of lasting unemployment that need special attention. I shall only touch on the disparities in growth that have persevered throughout the recession between individual member countries. But once we have a revival of the economy, the problems of great disparities in economic activity between different regions will remain to be tackled on a serious scale.

In deciding how we go forward in European regional policy, one has to decide the basic question whether we are satisfied that this regional problem should be tackled increasingly at Community level and not just at national level, and whether it should be tackled in an increasingly supranational way or appended to the individual national policies. Although we have been a member of the Community for some time, the problem is unresolved. It certainly is unresolved in the Minister's mind. Whenever the debate moves into the area of supranationality, he is obviously a considerable sceptic.

Mr. Alan Williams

indicated assent?

Mr. Clarke

The Minister nods in approval. He is clearly not satisfied that there is great scope for tackling this problem on a Community level much beyond the present position. There will be a great variety of opinions among my right hon. and hon. Friends as well, hut my personal opinion on that key question, which determines one's approach, is that this area should be tackled increasingly at Community level and that there is considerable scope and advantage to everyone in a silghtly more supranational element.

The problem of disparities between the regions is a Community-wide problem. The Minister is tight to point out that the causes may be very different in different places. Many of the other member countries have predominantly agricultural areas where there is a decline in employment on the land, no tradition of industrial activity and a need for such activity. The pattern in this country is of declining or temporarily depressed industrial areas where necessary changes have to be made from traditional industries.

I shall consider and re-read the Minister's attempt to distinguish our problems totally from those of any other member country, but I am not sure whether our problems are so drastically different from those of parts of industrial Belgium, Holland or Germany. Although the causes of regional disparities may be very different in different parts of the Community, one can say that the symtoms of different regions are very much the same. What the member countries all have in common, from Greenland to the Mezzogiorno, with Clydeside on the way, is pockets of territory with persistently high unemployment, lower rates of increase of earnings compared with surrounding areas, inadequate levels of investment in new industries and a great need for resources to be applied to the problems to reduce disparities with surrounding areas.

Mr. John Evans

Does the hon. Gentleman agree that the three major recipients of Community aid are Italy, Ireland and the United Kingdom? Surely he will not attempt to compare the problems of rural deprivation in Southern Italy and the West of Ireland with the problems of Clydeside, Merseyside, Tyneside and the industrial regions of the United Kingdom, which have a specific and different problem.

Mr. Clarke

The hon. Gentleman has chosen two countries where, I accept—Italy in the Mezzogiorno and Ireland as a whole—problems are entirely different. But I cited others. Although the causes of disparities in regional economic activity may be different in individual countries, the effects are basically the same and we can identify our depressed regions with other areas where there is persistently higher unemployment, a slower rate of increase in earnings and a need to bring those areas in line with the level of economic activity in the rest of the Community, if possible.

The problems are the same throughout the Community and this is one of those matters where it may be more beneficial to use the greater resources that can be applied by the Community as a whole. However, there must be more to it than that. Uppermost in my mind—with my views on the development of Europe—is that it is essential that there should be some reduction in the disparities between economic activities in different regions of Europe and a reduction in the disparity in economic activity between different member countries before we can make worthwhile progress with economic and monetary integration —and I regard that as desirable.

Even if one does not share that aim, there is an advantage to be had by all member countries if by co-ordinating their approach to the common problems of regional disparities they can stop the competition in inducements and subsidies to investment that tend to take place between member countries if they all continue to tackle the matter individually. The Minister talked about the competition policy of the EEC and the importance of regional policy to it. In a supposedly free and open market where we are trying to remove barriers to competition, there is understandably a tendency for member countries to compete with each other in the levels of subsidy and inducements to investment which is totally inimical to free competition and is mutually harmful. That will continue if member countries keep bidding themselves up in an attempt to induce the transfer of mobile employment from one depressed area to another in a different member country. If one could stop competition in inducements in a supranational way, that might also make Governments less vulnerable to the political lobbying that leads to the support of such investment projects as the one announced earlier today, although that was in a non-regional context. Selective regional assistance has also been used by this Government, and no doubt by governments of other member States, to support projects for political rather than economic reasons.

Although I am not over all as alarmed or sceptical as the Minister about the idea of tackling the problem at Community level or even looking at a degree of supranational activity, which was always the intention professed by the Government at the time of our entry to the EEC, I concede that there are dangers. One of the main dangers is that, if one builds up great Community activity alongside national activity, there are great dangers of public expenditure being driven up to intolerable levels by the duplication of effort. If European regional policy were to be developed and built on top of the present expenditures, of individual national Governments, the massive public spending that would result would probably mean a disproportionate amount of resources being devoted to regional policy—an amount unacceptable to all members, including us, at a time when all member countries are concerned about levels of public spending and the need to keep it under restraint.

I realise that this gives rise to the point raised by the hon. Member for Moray and Nairn (Mrs. Ewing) about additionality which has greatly vexed the Community, because if we carry on increasing the size of the regional fund the principle of additionality could lead to massive increases in public expenditure. If one deals with this problem at a Community level, or even a supranational level, the amount of resources channelled through the European Regional Fund must ultimately mean a corresponding reduction in resources expended by national Governments.

The one point of the idea of additionality that ought to survive is that, if we are to have a European regional policy developed, it should more clearly be seen to be providing funds to the depressed areas of this country. The Minister does not argue that we are not deriving considerable benefits from the Regional Fund, even though it is operating on a disappointingly small scale. If we develop a European regional policy, it is important that its application to European funds is clearly identified. Where its benefits in new industrial development are going to parts of this country, there is no reason for the population of those parts not to be given a direct appreciation of the benefits that the fund is bringing.

Mr. Dalyell

What the hon. Gentleman says will be read widely in the Commission and elsewhere in Brussels. When he spoke of what happened earlier today, was he referring to the decision on the Drax B power station? If so, is he aware that many people believe that this was the right decision on technical grounds and that it is unfair to say that it was taken on political grounds?

Mr. Clarke

I do not accept that I was being unfair, but there are more appropriate debates in which we could discuss this matter.

Mr. Dalyell

The hon. Gentleman should withdraw what he said.

Mr. Clarke

I shall not withdraw. I do not share the hon. Gentleman's opinion that it was the right decision on technical grounds. Whether technically right or wrong, it was arrived at because of crude political lobbying that overrode all technical considerations. However, Drax is not strictly a regional matter and I shall not allow myself to be drawn into debating those other instances in which regional funds have been applied for reasons that had little to do with economic policy or industrial strategy.

Having given my reactions and views on how I should like to see the European regional policy develop—and my views are different from those of the Minister —I should like to review what is happening and proposals for developments. Since 1975 the problems, as opposed to the smooth advances, have turned largely on the problem of additionality and whether the British Government and others could satisfy the Community that the money being spent from the European Regional Fund was a bonus being spent as additional aid over and above national measures and not used simply as a substitute for expenditure by the Governments themselves.

My hon. Friend the Member for Lancaster (Mrs. Kellett-Bowman) and the hon. Member for Moray and Nairn have expressed doubts about whether the British Government have been using the money as additional aid over and above their own effort. There is a reasonable suspicion on the part of the Germans and others that the British Government are using taxpayers' money from other member countries and spending it on regional development projects on which they intended to embark in any case.

Mr. John Evans

The hon. Gentleman is making a fair point that I hope to develop later. Is he aware that the previous Commissioner with responsibility for regional policy, the present Lord Thomson, is on the record as saying that the British Government's attitude to additionality was in accordance with the common wishes, principles and proposals that had been outlined?

Mr. Clarke

I do not have that reference and I look forward to hearing it if the hon. Gentleman can turn it up. I have read the speeches of Lord Thomson when he was a Commissioner, and there have been times when he has expressed considerable doubt about whether the British and other Governments were accepting the principle of additionality which they had adhered to in theory but which seemed difficult to identify in practice.

Mrs. Kellett-Bowman

Will my hon. Friend accept that the observations of the hon. Member for Newton (Mr. Evans) are misleading in that Lord Thomson has always alluded to the fact that the British Government were within the letter of the law but that other nations and the Commission were convinced that they were outside the spirit of it?

Mr. Clarke

I am obliged to my hon. Friend, because what she has said has always been the thought at the back of my mind and has been my understanding of the position. Perhaps the hon. Member for Newton (Mr. Evans) will provide Lord Thomson's words rather than his interpretation of them.

It may be that the Government have complied, but there has been considerable scepticism on the subject. The Italian Government, who have a 40 per cent. quota and are therefore under a heavy duty to identify what they are doing, gave convincing evidence that their expenditure in Southern Italy was clearly additional to resources that would otherwise have gone to that area. The Danish Government followed suit over Greenland and elsewhere, but in Britain the position is less clear.

All applications are made by member Governments. In every member country infrastructure grants are paid over directly to the public and local authorities, as the Minister has described. In the case of infrastructure grants, there seems to be some clear and welcome addition to the resources which the local authorities would otherwise have, although they have been somewhat affected by the cash limits which my hon. Friend referred to which have been applied by local authorities.

When it comes to investment by private companies, all applications are made by the United Kingdom Government and all the proceeds received from the fund have gone to the United Kingdom Government. The Minister of State has put forward the Government's consistent line that this has been taken into account in assessing national expenditure on regional policy.

The British Government, as a bookkeeping exercise, have always identified their advance factory building programme as the area to which these extra resources are going. I believe that has been queried in Europe, and I am not sure whether the matter has been made clear.

There are doubts even though the Minister has consistently put forward the case that he has put forward today. Those doubts have inhibited the development of regional policy in Europe. If the British Government, which had a great deal to gain from the development of regional policy, had been clearer in applying the principle of additionality, we might have seen a more rapid development of the Regional Fund. When looking at this matter from a selfish national viewpoint, the Regional Fund and policy seem to be one part of the Community's activities from which we are bound to, be net beneficiaries. There would be a little less to fear in this country than in some others from its rapid development.

Mr. John Evans

The hon. Gentleman will see in Document 1611/76, at page 23, paragraph 57, that Commissioner Thomson in his annual report on the European Regional Development Fund deals with the question of additionality and makes it clear that the United Kingdom has stated that its receipts from the fund will enable it to go ahead with a greater level of regional investment than otherwise would have been possible. Will the hon. Gentleman also accept that, as chairman of the Regional Policy Committee of the European Assembly, Commissioner Thomson made a statement accepting the British Government's position in front of that committee in answer to questions from the hon. Member for Lancaster (Mrs. Kellett-Bowman) on two or three occasions?

Mr. Clarke

I cannot easily find the reference. I shall look at it in Hansard tomorrow. I hear what the hon. Gentleman says. If the British Government had been in breach of their obligations, no doubt further steps would have been taken by the Commission.

It seems to me that the application of the principle of additionality by the British Government was not of the clearest. We were intended to be the second major beneficiary under the national quota system. We would have benefited if the Government had made the point clearer.

Mrs. Kellett-Bowman

My hon. Friend will see from paragraph 57, that Commissioner Thomson said only that the United Kingdom had "stated", not that he accepted that fact. I was present when these points were raised in the Regional Policy Committee. The Commissioner is a very polite man but he has not yet expressed his conviction that the British Government accept the spirit of this law. He merely accepts that these are the statements that they made.

Mr. Speaker

The hon. Members for Newton (Mr. Evans) and Lancaster (Mrs. Kellet-Bowman) are among six hon. Members who have indicated their desire to speak in this short debate. I am beginning to get worried that if there are too many interruptions somebody will not be called.

Mr. Clarke

I am obliged to my hon. Friend for giving me a second chance to find the reference, and I see that she is quite right. The document states that: All member States have declared themselves in favour of the principle involved and have already taken certain steps to implement it. These are described briefly and the Commission is looking forward to further developments in the course of 1976 which it will follow closely. However, that does not seem to me to indicate a raptured endorsement of the Government's adoption of the principle of additionality. I am not saying that a Conservative Government would have gone much further. I am only saying that one of the consequences of the attitude of the last couple of years is that we have not seen much development of the Regional Fund.

I turn now to the part of the debate dealing with proposals for the extenson of the fund and the development of the policy. An increase of 88 per cent. is proposed in the budget for the disposal of funds through the Regional Fund. That is a greater increase than in any other area of Community policy. The Minister of State gave his reaction to the proposed increase in the non-quota area. He did not give any indication of the Government's official reaction to the proposed increase in the overall size of the fund. Since the Minister seemed sceptical about everything he commented upon, I hope that his silence on this matter indicated that in the Council of Ministers the British Government will not be totally averse to an increase of resources for the regional policy.

The EEC budget is not a budget as we understand it. It is more of a bid for political resources put up for decision by the Council of Ministers. It is not a firm guarantee that the money will be expended. The Ministers will decide in that respect. I welcome the fact that the Commissioners are directing their attention to expansion on the industrial front rather than agriculture.

An important part of the increase is that concerned with non-quota aid. It is proposed that 13 per cent. should be outside the existing national quotas and should be applied to particular areas by the Council on proposals from the Commission. There are certain areas where this could help in this country. Specific aid could be channelled to industries such as steel and shipbuilding. Other suitable candidates would be areas which were affected by policy changes in the Community, and that seems to me to include areas dependent on the fishing industry.

My first reaction is to be totally hostile to some parts of what is proposed. The Commission is looking at the possibilities of a system for taking shares in the risk capital of companies through existing national regional development bodies. I do not expect any Conservative to be enthusiastic about projects of that kind.

The Minister seemed sceptical overall, not so much about increased Community expenditure but at the suggestion that there would be more Commission and Council control and less national control of what was going on. This is all a bit of a long-term bid. I doubt whether the Commission is expecting this part of the budget to be adopted straight away, and no doubt it is experiencing considerable difficulty in getting the non-quota part of the budget accepted.

I am disappointed however that the Minister turned this increased Community control down out of hand, and for the reasons I gave earlier I would not be totally adverse to the idea so long as there seemed to be considerable advantage in dealing with the problem at Community level. Let me underline my two reservations, however. First, I do not think that there is any way in which the British Government can consider such increased expenditure without contemplating it against a background of some corresponding reduction in expenditure on regional policy at home. One cannot allow the European regional budget to double while maintaining the same regional effort at national level without inevitably incurring greatly increased expenditure. Therefore, any increase in the resources channelled through the Community's regional policy must imply a hard look at our own national expenditure in an attempt to find a corresponding reduction.

I am also worried at the way in which non-quota assistance might be handled in these circumstances. That might lead not only to increasing expenditure but to some increase in bureaucracy and administration. I am not clear whether applications for non-quota aid will still be submitted through member States. Those are applications for aid in areas that fall within whatever priorities have been chosen by the Council. I think that it is right to continue to channel applications for aid from the European Regional Fund through member States. Member Governments should make the applications. My principal reason for saying that is that if it were otherwise we would be bound to develop a huge bureaucracy in Brussels administering various applications for aid in respect of projects pouring in from different member countries.

It is said that the EEC is a bureaucratic giant in its present form, but only 40 people or thereabouts are employed in the administration of the entire regional policy at Brussels. In this respect, as in one or two others, Brussels is something of a model in how to avoid bureaucracy and excessive administration compared with many Departments of State in this country. I trust that application through member Governments will be continued in any expansion, even for non-quota aid, the member Governments providing the initial sifting.

Subject to that, surely the whole idea of expanding the budget and having a non-quota system is worth some reasonable and friendly discussion. The whole quota basis of dividing up the proceeds of the regional policy derives from a rather basic piece of horse trading when the fund was set up. The whole quota system is a difficulty that tends to inhibit development of the policy.

What do I think about the regional policy itself? I speak of the policy as opposed to the fund. The Minister referred to moves towards co-ordination and monitoring. What have we had so far? The so-called "regional programme" from 1975 has not amounted to a row of beans. Each country has had to submit a regional development programme before the end of 1977. The one submitted by our Government is a general description of the United Kingdom's regional policy, which is not worth reading by anyone who has read the journals or followed the subject in this country.

Mr. Alan Williams

Will the hon. Gentleman take it from me that we have been assured by the Commission that it is one of the best programmes submitted by any of the national Governments?

Mr. Clarke

I accept the right hon. Gentleman's assurance. However, that underlines the case that the regional development programme has not taken us very far. I accept that others have been even more sketchy.

We have had the Regional Policy Committee of the EEC for some time. A number of senior officials and experts sit on it. It is supposed to compare and co-ordinate regional policies and define Community objectives. The committee does not seem to have gone very far either. It seems that there is some point in having a more effective monitoring system, a system not exactly in line with what is proposed by the Commission but something in that direction with some priorities and guidelines being proposed from the Council on proposals from the Commission.

My personal reason for being interested in that approach, although the Minister of State has clearly rejected it, is that it seems that it would minimise competition in lobbying for subsidies and the susceptibility of national Governments to parochial regional lobbies or firm political lobbies in favour of projects that, if favoured by one national Government, could be expensive for other industries under other national Governments.

The Minister rejected this concept. His response to the idea of guidelines for national policy was rather to imply that they would inhibit the growth of United Kingdom regional policy. He pointed to the massive expenditure by United Kingdom Governments on regional aid that might be inhibited by European guidelines. However, we have had no indication as yet about the form of the guidelines that would be laid down by the Council. I do not expect guidelines to operate in the way that the right hon. Gentleman anticipates.

I should not be surprised if guidelines coming from the Council tried to curb excessive expenditure by United Kingdom Governments on regional policy where there was suspicion that some United Kingdom assistance for investment smacked of being an internal subsidy for investment producing unfair competition for other member States. Those are my first reactions, and I look forward to hearing the reaction of hon. Members in considering where we should go from here.

As we continue to discuss these matters, we shall come across many important problems in respect of regional policy. As the Minister said, we are now at something of a watershed. I find it astonishing how little discussion seems to have taken place within the Council and within the European Community on these problems. It is worth bearing in mind that Britain has had the Presidency of the Community for the past six months. It is astonishing that during our Presidency no meetings have been held of the Council of Ministers to discuss industrial policy. It is important to the United Kingdom to get the industrial side of the Community moving more quickly.

I was told in an answer on 11th July that progress in European industrial policy in a number of areas was carried forward at official level. I have no idea whether we shall ever hear what progress was carried forward. I am glad, however, that the Minister had meetings this week with the European Commission to consider taking industrial policy matters further. I hope that the Government's scepticism will grow into downright lack of interest. If we can only agree to a further development and expansion of European regional policy, this country will, in my opinion, be a beneficiary.

10.20 p.m.

Mr. John Evans (Newton)

I welcome the opportunity to participate in the debate. As chairman of the Regional Planning and Transport Committee of the European Assembly, I am entitled to draw attention to the unsatisfactory way in which the House debates important European legislation. The two Front Benches have taken over one hour of a two-and-a-half hour debate. The document is dated 23rd June 1976. We have not debated regional policy for over 12 months. The House should find more time to discuss such important matters.

Mr. Alan Williams

My hon. Friend will recognise that I was interrupted at least 10 times in my speech. I was asked about details which took time to explain. He will recognise that the impact of these proposals, if they go forward in their present form, is so profound that I felt it right to take time to explain to the House.

Mr. Speaker

The two Front Benches took 44 minutes. I hope that no one else will imitate them.

Mr. Evans

I am not criticising either my hon. Friend the Minister or the Opposition Front Bench. I criticise the management team for allowing so little time for important debates on European matters. The Scrutiny Committee does a tremendous job but the amount of time that it can give to a number of documents limits its action, so that it can give them only a cursory examination. It then recommends that they be debated on the Floor of the House.

We have had three short two-and-a-half-hour debates—on energy policy, the Community budget and now the development of the Community regional policy. One cannot help but recognise the futility of the exercise. Back benchers must ask themselves what they are supposed to be doing. Are we supposed to be influencing Ministers and arming them with views to express in the Council of Ministers and the Assembly, or are we making speeches that we hope will be read by our constituents? I am sure we are doing the latter, whereas we should be doing the former. Only time will tell whether we influence Ministers.

Regional policy is one of the most important subjects for debate. President Jenkins said in February: We must see regional policy not just as a matter of renewing and spending a tiny Regional Fund, but as one of the main dimensions of Community economic policy as a whole. If the Government and the Opposition Front Bench believe that regional policy is one of the main dimensions of Community policy, more than two and a half hours should be given for debate.

The European Assembly could teach the House in that respect. The Assembly has specialised committees which consider in depth the proposals which come from the Commission on a wide variety of subjects. The Commissioner responsible and his director-general visit these committees, and we can participate in the formulation of policy.

The House of Commons could look at the question of appointing specialist committees to cover the same general areas as are covered by the European Assembly specialist committees so that we could discuss Commission documents in depth. My committee will begin consideration of the document on regional policy in December, and we shall spend about 10 times as long on that consideration as the House is spending on it in this debate. I am sure that most hon. Members appreciate that this is of considerable importance to the development of Community regional policy but that under the present system there is no way in which we can influence the attitude of the House of Commons in this respect.

But we can at least impress upon Ministers that we are determined to ensure that Mr. Jenkins' aims are taken seriously and that we believe that regional policy must become the main plank of the Community's economic policies. What is important about Mr. Jenkins' statement is that, whilst in the past we may have had funds but not a regional policy, this latest document of policy, slender though it is —and one must accept political reality, just as the Commissioner responsible must do so—is the embryo of a regional policy which, given political will, determination and influence, could develop into a policy with profound implications for the future.

With this in mind, we should have had more time to consider the important point made by the Commission about the necessity of ensuring co-ordination of Community funds which have a regional impact. In the past, various funds of the Community have not been used in the best interests of the regions of the Community, but if we can get the co-ordination that is needed we can get a much bigger impact.

My hon. Friend mentioned the regional impact certificate. This again could have significance. I have a classic case in my constituency. When the Commission decided that the Community should be self-sufficient in cane sugar, 1,000 beet sugar workers on Merseyside stood to lose their employment. If we had then had a regional impact certificate based on that decision to become self-sufficient in cane sugar, there might have been second thoughts. It is nonsense on the one hand to grant aid from the Community to Merseyside but on the other hand to take decisions resulting in over 1,000 workers losing their jobs. It is, therefore, important that the Government should inform the House of their reaction to certain important innovations that the Commission is proposing and which will give a new dimension to effective Community regional policy.

Do the Government accept that from 1978 the Regional Development Fund will be budgeted annually? Because it is non-compensatory expenditure, the Assembly will have greater say over it. I am sure that we all recognise the significance of that development in that the Assembly will, not by stealth but by natural progression, acquire further powers.

Do the Government also accept the principle of fixing the amount of money available annually? While next year's sum of 750 million units of account is an increase, do the Government share the opinion of many of us that it is chicken-feed, especially compared with the amount of money available for agriculture? Do the Government intend to fight in the Council of Ministers to increase that sum substantially?

While it is proposed that the national quotas should remain the same—28 per cent. in our case—there is the new proposal that the Commission should have 13 per cent. of the total for Community projects. My hon. Friend attacked this concept, but will he not recognise that it has been welcomed almost unanimously in the European Assembly because the idea behind it deals with the problem of additionality? If the Commission were in a position to look at various significantly important regional problems in certain areas, it could fund direct 100 per cent. Does my right hon. Friend recognise that this is the first step on that road? I agree that it is complex and controversial, but nevertheless it is part and parcel of an answer to the European Assembly.

One other important amendment is proposed to the present Article 4(1) (b), which provides that assistance to infrastructure is confined to those infrastructures directly linked with industrial, handicraft or service activities. The Commission proposes removing this restriction and allowing assistance to infrastructures which contribute to the development of the region in which they are allocated.

As I understand it, this would mean that Community funds could be used for the clearance of derelict industrial land in certain areas. I am sure that the Commission will appreciate that this is something of considerable potential significance to areas such as the North-West of England which have vast areas of industrial dereliction. Does my right hon. Friend appreciate and support this point? Will the Government back this in the Council of Ministers? Again, this is something for which we have called constantly within the Regional Development Committee of the European Assembly.

I also ask for my right hon. Friend's views on the rather controversial issue of the raising of funds for regional development on the international market. As I understand it, this has had a rather lukewarm reception, but the proposal is that, because of the considerable budget difficulties that we are likely to have over the next few years, this is an area in which considerable sums for regional development could result. Although certain Governments, as I understand it, are watering this down, will my right hon. Friend appreciate the political significance of tapping this new source, which could have a tremendous impact on the regions?

I turn briefly to the question of additionality. This is something that we have long discussed, in both the Parliament and the Regional Policy Committee of the European Assembly. I want to make my point clear. Certainly Commissioner Thomson made clear that the British Government were acting within the guidelines laid down, but in this respect may we be informed that the Government accept the new Article 18, which is designed to ensure that member States clearly identify receipts from the fund in their national budgets?

I stress this to my right hon. Friend. I recognise that the problem is complex and that it is easy to make political capital at the expense of the Government concerning this matter. My right hon. Friend has cleared the point about constraints on public expenditure, but will he appreciate that it is essential that we make clear to the citizens of the more prosperous countries within the Community that the money that they are putting their hands into their pockets to provide is being used quite clearly to assist in the problems of certain regions of the EEC? Ultimately, if we cannot prove that conclusively to those citizens, they will say to their politicians "We shall not agree to any increase in the European Regional Development Fund."

I accept that this is a complex and difficult problem and that as far as possible the British Government have clearly demonstrated that they have used the additional resources to provide better facilities, but the Minister must accept that there is some dubiety and some doubt in the minds of some of our colleagues. We must clear that up completely, otherwise we shall never win the argument about increasing the fund.

As regards the distribution within the United Kingdom, I should like to point out that in the past three years the Northern Region of England has received in excess of 100 million units of account, Scotland has received in excess of 81 million units of account, Northern Ireland has received in excess of 52 million units of account, Wales has received in excess of 45 million units of account and the North-West Region of England has received just over 30 million units of account. That is not a fair distribution within the United Kingdom. The North-West of England has considerable problems. We have a greater population than any of those other regions, and I put it as strongly as I can that after 1978 the North-West must receive a fairer share of the Regional Fund.

Mr. Alan Williams

Is my hon. Friend referring to infrastructure funds or to industry funds? If he bears in mind the point I made originally, he will remember that the Industry Fund allocation is purely nominal and goes into the kitty for use in other ways. The figures are not very meaningful.

Mr. Evans

I am talking of global figures in all the accounts. I am pointing to the disparity between the North-West's allocation and the amount allocated to the other regions. This is a view which is shared by all hon. Members representing the area, irrespective of party.

I ask my right hon. Friend to appreciate that there is considerable concern, not only in the United Kingdom but throughout the regions of the Community, over the lack of consultation which takes place with regional bodies. This is a complex problem. Might I suggest that he has discussions with the regional authorities in the United Kingdom about next year's allocations? If we get an elected Assembly in Wales and Scotland, there will be no way in which he will be unable to discuss with those two bodies the allocation of funds from the Community to those countries. If there are to be discussions, I hope that my right hon. Friend will ensure that they will be equitable and will be held in advance of the applications to Brussels. There is strong feeling about this throughout the Community countries. On many occasions I have spoken to delegates from various countries who have made this point to me.

We are embarked on a new procedure. The regional policy is in an embryo stage. We can talk about economic and monetary union and about common defence, foreign transport and energy policies, but unless we tackle this problem of eradicating difficulties within the regions all the rest is so much eye-wash. The people of the regions want to improve the quality of their life. They want to get rid of dereliction and to beat unemployment. Unless we can work on these matters, all the rest will fade into insignificance. The dreams of so many will become nonsense. The regional policy, as Roy Jenkins said in February, should be the cornerstone of the Community's economic policy. Unless we get a worthwhile European regional policy, the whole thing will collapse like a pack of cards.

Mr. Speaker

I must correct a statement I made earlier. The two Front Benches took 64 minutes, not 44 minutes. I appeal to hon. Members who catch my eye to remember that it will be difficult to enable everyone who wants to speak to take part in the debate unless there are shorter speeches.

10.38 p.m.

Mrs. Winifred Ewing (Moray and Nairn)

It is a pleasure to follow the hon. Member for Newton (Mr. Evans), who is the chairman of the European Regional Committee, on which I too serve. I have a great admiration for the work that the hon. Gentleman does. In Commissioner Jenkins' opening speech he said that we had to have a Community with a human face. There seems little doubt that it is the regional policy which, if anything, will give the Community that human face.

The United Kingdom delegation comprises both pro- and anti-Marketeers. I am in a rather special position because of my Scottish connections. We have a wide range of opinion on the delegation which is unique, because most of the other delegations are made up of those who support the Community. There is talk of greater centralisation in the Community and of economic and monetary union. It is rather like the Australian emu, the bird that runs in circles and never gets off the ground because it is too heavy to fly. If we are really to look at the Community with a view to its harmonisation in our terms, we have to look to the regional policy of the Community as a counter-reaction to its natural centralisation tendencies.

At the height of the Roman "common market," Jesus of Nazareth, according to the reports in the New Testament, said: To him that hath, there shall be added; from him that bath not, there shall be taken away even the little that he hath. That may be quite a good summary of the problem facing the Community, because, to change the metaphor to ragtime, the rich get richer and the poor get poorer. The gap between the average per capita income of people in Ireland, the United Kingdom and Italy and that of the other member States has been divorcing them from the rest of the Community over recent years, according to the Delmotte Report, which is accepted as being full of veracity. This trend in Europe is not really assisted by the free movement of men and markets. It speeds up the trend. This is the great problem for the Community.

My party went on record at an early date, before Britain agreed to stay in the Community, as warning that the efficient enterprises of the Hamburg-London-Paris axis would expand while the less efficient and less sophisticated industrial enterprises on the periphery would fall and go into still greater decline. This causes certain problems, because the people in the areas which are declining are aware, perhaps because of the Community's interest in them, of their decline and are aware of the greater expansion elsewhere. There is a resentment which builds up from this.

As a result of some of the measures that we are up against, member States find themselves in conflict with the treaty law, as did Belgium when she tried to assist certain of her regions. Others find that, while there is nothing in conflict with the treaty, the sheer fact of the existence of the Community has certain consequences. For example, if France decided that she would like to encourage a certain industry to come, that industry, because of the existence of the Community, would have other choices open to it down the road a few hundred miles away in other populous areas. We have a new situation to some extent because of the existence of the Community.

Then, of course, some of the policies work against the underdeveloped areas. A large share of the FEOGA grant payments has gone to the farmers in the cereal and dairy produce sector. The inequalities are therefore more exposed to publicity in a democratic sense. If there is an awareness of an attempt to be just to the 250 million people, and injustice is still staring them in the face and getting worse, a vacuum can sometimes arise, such as we have seen in Italy, where there is great discontent on certain matters and a possibility of Communism and Fascism holding greater sway.

The British Government, along with the Governments of all the member States, have the responsibility of putting forward the carefully researched applications. There are many regions in my part of the world—for example, the Highland Region—which are very much on the ball in regard to making applications and researching them very ably.

It is said that instead of considering the applications the British Government sifts them according to the existing United Kingdom regional objectives. The West of Scotland suffers from a great deal of urban deprivation. It is the most urban deprived area in Britain, perhaps one of the most deprived in Europe. England also has areas of this kind. It is natural for the United Kingdom Government to set as their first priority the curing of, or the attempt to cure, these problems.

Areas like the Highland Region feel that they have put forward perfectly reasonable projects within the criteria that are laid down, yet they do not seem to meet with much success. We must face the fact that the United Kingdom Government administer the fund according to their own existing political objectives. One may say that that is fair enough, but it might not be in accordance with the greater ideal of the Regional Fund of the Community. It is saying that rather than look at the number of applications or what a particular member State may put forward, we should consider the actual question of need.

It is well known that with regard to applications local authorities cannot deal directly with the Community. They must have their application approved by the member State. I would take an example which is perhaps not so extreme. Let us imagine that the United Kingdom Government decided that a certain region, or part of a region, were to be abandoned to the sheep and the summer visitors. There would be very little that the local people, or the elected representatives of the local people, could do because they cannot deal directly with those who administer the fund. They must always pass through the sifting process of the member State.

I am not attacking the Government. There is nothing unique about the United Kingdom. This is the system which obtains. Across the board, however, among all Members of the European Parliament, there is a growing desire that local authorities should be able to deal directly with their causes, applications and projects.

No one can suggest that the United Kingdom's record of making applications places us in the top 10. Ireland, France, the Netherlands and Italy have beaten us into the ground by the skill with which they have put forward projects. It is, therefore, galling to a region which goes to the immense trouble and expense of researching very good causes to find that other member States are more prepared to put projects forward. If one puts forward a lot of projects, one feels that the Regional Fund will at least have a choice. But if one puts forward a few projects one feels that whatever the Government sift through will be accepted. I therefore believe that we are under-using our application strength.

I shall not delay the House with regard to additionality. I have already referred to this and the Minister has replied fully. However, it is my experience from going to the European Parliament that the British Government are looked upon as regarding this not as an addition but as a replacement.

I refer right hon. and hon. Members to the Highland Region's excellent paper, which it supplied to me, the Commission and the Regional Committee. It says that, to a local authority, the aid from the fund is advantageous only in reducing the local authority's liability for loan charges, not in creating extra projects and extra work. That is a severe blow to the interests in the Community. It is certainly a source of antagonism towards it from the civil servants engaged in the Highland Region, who are very well informed about which regions of the United Kingdom have put forward projects, and they are able to give chapter and verse of the projects put forward. I should like the Minister to give me some indication of the number of applications made by the Grampian and Highland Regions which have been turned down. I should like that information, because I have found it impossible to acquire it otherwise.

I want next to make a point on a subject which is of burning concern to my regions—I have two; I am rich in that way, having two counties. They have pointed out that Big Brother, in the shape of the EEC, decided to ask national Governments to submit programmes for their own regional aid plans and that the British Government submitted to the EEC a draft regional development programme. It is interesting to note that this document has not had much publicity. It is as though the Government would like to keep it very quiet.

Mr. Dalyell

Secret.

Mrs. Ewing

It is not a secret entirely, because it has been published in the Trade and Industry, published by the Department of Industry. Anyone who writes for a copy can get one. It is a lengthy document. It is important. Perhaps I might be allowed to quote briefly from it; I cannot quote more than a few lines, because time is short. It says: regional development in the United Kingdom is concerned primarily with the attraction of new modern industry into the traditionally industrial areas, rather than with fully co-ordinated programmes directed to the industrialisation of particular rural areas. Similarly, the section dealing with Scotland places emphasis on the special problems of Strathclyde and the need for industrial regeneration in other central areas such as Dundee and parts of Fife It says, very generously, that the Highlands are not entirely ignored but that it is plain that they will have to wait on all the other priorities. That may be fair. It may be unfair. But I can tell the House how the highly sophisticated Highland Region faces grave peripheral problems of unemployment, depopulation and, possibly, the total destruction of the fishing industry round its shores.

The new Regional Fund is due to end at the end of this year and it is, therfore, very important in this debate that those of us taking part should put forward our suggestions for improvements now. Probably October is about the realistic month for improvement suggestions to be too late, in our experience of the workings of the EEC. So any suggestions will have to be taken on board by the Minster tonight. That is the problem for us, unless we are to reconvene early in October, and I have heard rumours that we are not coming back until the end of October. This is possibly the last chance that we have to ask our Government to put forward formal suggestions for improvement and to fight for them.

I urge the Minister to take note of some suggestions. The emphasis on manufacturing leads to a bias in favour of urban or semi-urban areas. If we accept that infrastructure should be supported in rural areas, of whatever category, I suggest that a limit of 30 per cent is too low. Perhaps we should consider a possible increase to 50 per cent. or even 60 per cent.

The artificial requirement that infrastructures should be granted aid when it is to help more than one industry has no realism when applied to Scotland and, presumably, to other parts of the United Kingdom. Take oil, for example. People who have benefited from having oil have only that one industry. Maybe they are very glad to have it, but it is unrealistic to require that there should be more than one industry.

Then there is the small project rule. There is to be an upward limit of a certain amount of money, or of 10 jobs. But 10 male jobs on the Isle of Barra, in the village of Dallas in my constituency, or even in Lossiemouth—a town with a population of 8,000—are very important and worth having. They may save a shop or a local garage. This is a matter of considerable importance, and the small project attitude is something that the Government should consider if we are looking at the question of the Regional Fund helping the peripheral areas.

When there is an influx of people into an area that is doing well, there is also an inflow of problems. This has been the case with the oil boom. A situation has developed in which local trades cannot get apprentices in local skills because of the opportunities created by the new industry. For areas like Scotland, the rules of the EEC Fund do not make any sense.

One of the problems is that some of the member States tend to have one Minister to deal with this whole field. I am not necessarily saying that this is good or bad, but we have a problem in channelling the best information to get the most out of the fund because we have not just one Minister but many Ministers responsible over a wide range of subjects. That does not help us to be as efficient as Italy or Ireland.

I agree with the hon. Member for Newton, who is chairman of the Regional Committee, in his remarks about the size of the fund. The fact that the fund for the common agricultural policy is so large has discredited the Community in the eyes of many people, and I doubt whether this fund will work at the end of the day. Had the Regional Fund been a big spender, the man in the street would have felt so much more that this was something to do with him. Farmers in Scotland do not like it. The French farmers may like it because they are the inefficient ones. It is not a success story. Without change, it will mean the disintegration of the Community. Admittedly, the fund works in a different way, but it is a drop in the bucket compared to what successive British Governments have spent, without being able to solve Scotland's Regional problems. Without a total reappraisal of the fund, the Community deserves to disintegrate.

The Prime Minister reappraised it recently in the light of food prices. People who say that that is due to world prices should consider Norway's experience and the growing animosity of the man in the street. The pro-Marketeers said many misleading things during the referendum campaign about fishing, prices and so on.

There is good motivation in the Community. To have a human face, however, it needs a different and bigger Regional Fund. It is extraordinary that the Community should allow the regional death of towns around the coasts of Scotland and Ireland. These communities are simply asking for what any maritime nation would consider a normal proportion of the sea. Thy Community cannot have a human face while it talks about the Regional Fund and yet countenances regional death.

11.3 p.m.

Mrs. Elaine Kellett-Bowman (Lancaster)

I was particularly interested by two comments of the hon. Member for Newton (Mr. Evans), who said that we have not been able to discuss regional matters in this Parliament. He will note that this debate, being on a Supply Day, has been arranged by the Opposition. I was even more fascinated by his statement that he committee of which he is chairman will be considering these policy guidelines in September. As I pointed out to him with some feeling at the last meeting of the Regional Policy Committee, that will be action after the horse has bolted and the decisions have been taken. I tried to get that across to the hon. Gentleman so that we could bring the matter forward when it really counted, before decisions are made. I was also interested in what the hon. Gentleman said about industrial dereliction, because he voted against those proposals when I made them in the European Parliament.

Although I shall be criticising some aspects of the Regional Fund, particularly the way in which the Government manipulate it for their own political ends, it can be a success story if we have the will. I see no reason why we should not, because on this depends not only the future of the Community but the future and the cohesion of the United Kingdom, by which I lay great store.

That the fund got off the ground at all and then kept up to schedule in the face of almost overwhelming odds is due to the driving force of George Thomson, who is now, alas, a Member of another place. I say "alas" not because he does not deserve that honour but because our House is the poorer for his absence. With his tiny team of only 44 "A" grade staff —which was referred to by my hon. Friend the Member for Rushcliffe (Mr. Clarke)—and a total complement, including secretaries, of only 130, he managed to pay out the whole amount due to be expended by the Regional Fund in the first year of 1975 to within a matter of pence.

Unfortunately, the fund as envisaged by the Commission and by the Regional Policy Committee—of which I was not then a member—was a very different animal from the one that emerged after the so-called Wilson renegotiation.

Mr. John Evans

Will the hon. Lady give way?

Mr. Speaker

Order. The hon. Member is not fair. There are other hon. Members who wish to speak in the debate.

Mrs. Kellett-Bowman

The hon. Member for Newton has had his chance. The original proposals passed by the European Parliament in 1973 were for a Regional Fund based on impartial criteria—namely, a low per capita product, a high rate of unemployment, a high rate of outward migration—from which my area of the North-West has suffered devastatingly and which has led to an unbalanced population structure—a high percentage of workers engaged in agriculture or a declining industry such as textiles or shipbuilding. Unfortunately, these sensible criteria fell victim to the Wilson renegotiation and the Government obtained carte blanche to decide which regions should benefit and to what extent. All applications had to be channelled through the Government, who, unfortunately, sent aid to politically sensitive areas such as Scotland and the North-East.

Nobody in his or her right senses—not even the hon. Member for Moray and Nairn (Mrs. Ewing) could have believed that the whole of Scotland, including Aberdeen with its vast oil activity, should be a development area, but so it was until the Grimsby by-election persuaded the Government to downgrade Aberdeen and to upgrade Grimsby to full development area status—although the problems of the intermediate areas in the North-West were worse than those of Grimsby. Unfortunately, I am still alive and there was no by-election in Lancaster or there might even have been a change there to development area status.

The net result has been that, whereas for every unemployed person in Scotland there has been a regional development grant of £97, and £128 for every unemployed person in Northern England, the grant in the North-West has been only £33. I forbore to mention Wales in deference to you, Mr. Speaker.

Another undesirable feature of the present application of fund rules is that there is no guarantee that the money handed over by the fund will, in fact, provide the additional help to the regions which is so badly needed and for which the fund was created. The fund should be, as Lord Thompson said, a bonus over and above national expenditure to help to overcome the regional imbalances which are getting worse. However, in the case of the United Kingdom—and in the United Kingdom alone—the money from the fund simply goes straight into the botomless pit of our Budget deficit, and that is extremely disheartening for the regions.

The problem is that, under the fund regulations as at present constituted, it is permissible to use the money to reimburse national spending provided that overall national spending is increased by that amount. The snag is that it is impossible to prove how much the Government would have spent had there been no fund, so that the United Kingdom Government are now able to use the cash simply to finance our own Budget deficit. All our partners know and bitterly resent that.

Local authorities are particularly frustrated by the Government's reduction of aid to any project by the precise amount of the Regional Fund money which has been allocated to it. They arc also frustrated by the Government's absolute prohibition of a local authority undertaking any additional work as a result of regional aid being given to a project in its area. The only tiny benefit that local authorities receive—the Minister did his best to blow it up into a gigantic benefit—is that they are saved interest on the amount of money that notionally comes to them from the fund. What a puny reward for the amount of effort that goes into making applications to the fund, and what a gigantic con trick perpetrated by the Government on every development area.

The case is even worse for an intermediate area such as my own which has a substantial tourist interest. Grants for aiding tourism can be given only to projects eligible for national aid. This is a point that we discussed with the Minister not long ago. Unfortunately, under our national rules such aid is not available for tourist projects in intermediate areas. They are therefore doubly disadvantaged. They get no national aid and no Community aid.

Yet the Government cynically put forward such projects, raising hopes locally, in the certain knowledge that the Commission will be obliged to turn them down under the existing rules. Then Ministers, some of whom do not particularly like the EEC, can blame the Community. They reckon that they have done their part; others think otherwise.

I hope that paragraph 29 on page 19 of the second report of the Regional Fund indicates that the rules will soon be changed, because it is high time that the Government changed their rules or that the rules of the EEC were changed to accommodate the chicanery of the Government that we have to endure.

Many hopes have been pinned on the revision of the fund rules that is taking place. I was astounded to hear that we shall be discussing this matter in the Regional Committee in September. My colleagues and I are great believers in getting in what is known in the North-West as the "first blow". We therefore produced a booklet some months ago indicating the ways in which we thought that the fund should be reformed.

I am happy that the Commissioner has taken on board some of our points and has accepted our view—this is vital—that one of the cheapest and most effective forms of regional policy in this country is our system of industrial development certificates. He is bringing forward ideas for Community-wide regional IDCs and taking that strategy further by proposing congestion taxes. He has also taken on board our idea of introducing an ex-quota sum into the fund so that, if there is something that a regional authority believes is of vital importance, it will not be stymied by the Government and prevented from bringing it forward. In the past, although the Commission could say "No" if it disagreed with a proposal, it could not make positive proposals of its own. With a 13 per cent, ex-quota sum—though we should have preferred 20 per cent—projects of vital importance to a region will be able to be brought forward.

If local authorities had been consulted, they would not have asked for the vast advance factory building programme that has sprouted up all over the country with no industries to fill those factories. The councils would have gone for eliminating the bottlenecks.

That brings me to the problem of industrial links. In my region we had a problem with the building of the Brier-field link road. We were able to obtain assistance for building an advance factory and the servicing of the site, but the requirement for a direct link with industry held up the project because we could not get a road to the site. That problem has now been resolved, but it is ludicrous that it should have occurred at all.

There are points that the Government should be taking on board. They should know the desperate longing of the regions. The regions do not want always to be the recipients of handouts, but they want to be given a hand so that they can stand on their own feet. These are the things that intermediate areas such as mine want desperately. We want to make our contribution, but unless we have some assistance we cannot do so. We bitterly resent the Government's collaring the cash and not giving us the benefits. We ask them to have a change of heart and give us greater help to help ourselves.

11.15 p.m.

Mr. Tam Dalyell (West Lothian)

Can we establish a question of fact on an issue which has been running through this debate? Various hon. Members have asserted that we are under-using our application strength. Are we? It is about time that some facts and figures were given on this topic.

Mr. Alan Williams

Perhaps I can enlighten my hon. Friend. Our total entitlement is about £150 million for the whole period. We have already received or had committed to us £137 million. There is no problem in finding sufficient applications.

Mr. Dalyell

So we ought to get that hare out of the way. It is simply not true that we have been under-using our application strength.

Mrs. Winifred Ewing

I think that the hon. Member for West Lothian (Mr. Dalyell) is referring to a point that I made. I am grateful to the Minister for answering it. However, Italy and Ireland have submitted a greater percentage of applications than we have and, therefore, the fund has had a wider choice of applicants. We have received our entitlement but on the basis of fewer applications than some of the other member States.

Mr. Alan Williams

The hon. Lady is probably accurate. The result depends on the method adopted by individual Governments. We try to work according to a well-established set of priorities, and we try to make our applications conform to those priorties.

Mr. Dalyell

I turn, then, to the question of the local authorities. The Central Region seems to have been very successful in its direct approach proposals. I am surpised that the Highland Region has found difficulties. In his meetings with Mr. Giolliti, will the Minister raise the question of help for the steel areas? Viscount Davignon has appeared before the Budget Committee to explain that the Commission has now devoted, as a priority, considerable sums to steel areas, though not necessarily to the steel industry itself. What is the Government's view on that? How do they see the role of the European Investment Bank, which is apparently to produce matching funds? I ask this because my right hon. Friend the Chancellor of the Exchequer and other Finance Ministers are governors of the Bank. To what extent will the Bank's policy be integrated with that of the British Government and the policies of other nation-States?

Mr. Alan Williams

Already the steel industry has received just over £8 million from the fund. We are major recipients of funds from the EIB. Because of the peculiarities of the requirements of foreign exchange protection, nearly all of this support goes to the public sector and, therefore, to the nationalised industries.

Mr. Dalyell

In spite of all the criticisms that are made about using European funds for national objectives, my view is that it would be silly not to do that. At least we should integrate those policies, or two separate organisations would be trying to do the same job.

I turn now to the speech of the hon. Member for Rushcliffe (Mr. Clarke). I take part of his argument that there is a feeling in Europe that not sufficient credit has been paid for what is being done. Therefore, while I agree with my hon. Friends that the two policies must be integrated to avoid people tumbling over each other doing the same thing, where European money is being used we should make the effort, acknowledge it and use it not just for chores but for some fairly attractive political objectives. We must be careful to give credit where it is due. As my hon. Friend the Member for Newton (Mr. Evans) said, one notices that the French give no credit at all for getting considerable European funds. On the other hand, the Germans and the Benelux countries take a different approach.

Mr. Michael Marshall (Arundel)

Does the hon. Gentleman agree that the loans now coming to the British steel industry are being fitted into the Davignon arrangement, so that money is increasingly geared to get some sort of agreement on rationalisation within the European steel industry? Does he agree that that approach has some promising overtones given the threat from external sources such as Japan?

Mr. Dalyell

It is very promising that considerable sums are allocated not only to the steel industry but to the steel areas. One gets the impression that a real effort is being made to help those areas. It is perhaps on that basis that the objectives should be sifted.

This is my third bite at the cherry and I shall restrict myself to one other question which I put to the Chief Secretary and the Under-Secretary of State for Energy after his experience of the Presidency of the Council of Ministers in another area. Do my right hon. and hon. Friends feel that it is sensible to have a revolving Presidency? Now that there is the prospect of Twelve instead of Nine—if the hon. Member for Moray and Nairn (Mrs. Ewing) had her way it would be Thirteen—can we accept any automaticity as hitherto in the membership of the Commission, the Council of Ministers and the various organs of the Community? Given enlargement, do we not have to think once again whether in the technical sectors the institutions are right and whether the revolving Presidency is a sane way of getting rational policy?

11.22 p.m.

Mr. John Corrie (Bute and North Ayrshire)

As one sits here one contemplates the differences between this place, the Mother of Parliaments, and the European Assembly. Although this place may have been in being much longer, it could certainly learn a lesson or two from its younger sister in Europe with its timed speeches and different working hours.

There have been many grumbles in the EEC about the CAP, but the problem can be solved only by structural changes. We cannot buy ourselves out of the problem in the agricultural sector. We cannot continue spending 68 per cent. of the Community budget on the agricultural sector and about 6 per cent. or 7 per cent. on the Regional Development Fund. Thousands of small, inefficient units must disappear in the agricultural sector if we are to make it plausible. That will cause further major problems in the rural areas. Added to that, as the hon. Member for Moray and Nairn (Mrs. Ewing) said, the fishing industry is in ruins. There has been severe over-fishing by all nations, including Britain. Unlike the hon. Lady, I do not think that EEC policy alone can save it.

All these factors mean immense changes within rural areas and in areas of industrial dereliction. Sadly, it appears that it is easier to build on green field sites than to return to areas in which industry has been previously. The Regional Development Fund will undoubtedly play a major part in the rebuilding of Europe in the coming years. In the past three years Great Britain has done especially well from the fund.

In one or two respects, however, I cannot agree with the Minister. I cannot agree that advance factories are the answer to areas of dereliction and unemployment. I pass one factory daily which was built six months ago. It is slowly being demolished brick by brick and pane by pane. It has never had anyone in it. Only last week the Secretary of State for Scotland said that in the past three years 50 per cent. of the advance factories built in Scotland had been unoccupied for some time and that 25 per cent. of them are unoccupied at present and have never been occupied. I suggest that we look at the sites, find the jobs and build the factories afterwards.

Another matter that worries me is that because the money is paid into the national Exchequer no credit is given to the European fund although many jobs and schemes are paid for or helped out by European money. No credit is given to the European fund although, the money has come from Europe and the fund. I do not want to go back into the problem of additionality, which has been covered already.

My local authority suggests to me that any money that it gets from the Regional Development Fund is taken off its rate support grant. Is that right? If that is the situation, I wonder how it will fit in with document R/ 1334/77, which states on page 46: Member states shall repay to the Com-mission the amount of the Fund's assistance that has been paid in relation to a national aid that has been repaid by the investor". Does that mean that money will have to go back to Europe, or is my local authority wrong? A number of problems must be examined. There is no point in spending money from the Regional Fund on projects that would be built anyway. That is why additionality is so important.

More co-ordination between the Regional Fund, the Social Fund and FEOGA is needed. It is pointless to pour out money to prop up inefficient farming when at the same time the regional policy tries to persuade the same people to move to different jobs in the same area.

I have a particular interest in the Regional Fund. I am rapporteur of the committee examining the coastal regions of the Community and their problems. I am also a member of the fisheries subcommittee which is run by the hon. Member for Durham (Mr. Hughes). He does the job well. Our job is to report back on the problems of these areas. Britain has the longest coastline of the Community. There are hundreds of islands, Britain also has the largest fishing industry. We stand to gain most.

The problems break down into four categories. First, there are areas that are running down because of the collapse of industry in them, particularly the fishing industry. Secondly, there are areas which have never had industry, such as the outer isles where jobs must be created. Thirdly, there are the most difficult areas where short-term, high-employment industries have moved in and then ceased, such as oil rig construction. An example is Ardyne, which had 3,600 workers last month and now has only 300 and there is no prospect of further work. Fourthly, there are areas of natural beauty that should not be spoilt by industrialisation. Creeping pollution is the problem in such areas. Compensation should be paid to those who live in them.

All these areas face increasing problems. Families that are born and bred in these areas want to stay; that is their right. Help must be given to them to do so. The help that is given in areas requiring job creation must be labour-intensive rather than capital-intensive industrial development. Transport structures must also be assisted.

There should be more contact between the regions and the Commission so that a region can press its case if a border line decision has to be made at national level. There must be some playback on how the fund is working, how the money is being spent and whether it is doing the job that it is supposed to do. Perhaps the Government should look at that. There should be more publicity about what is coming out of the Fund and on every project that received money from it.

It is also to be hoped that in future it will be possible to return to the Commission's 1973 concept— that the criteria of eligibility for assistance should be laid down on a Community-wide basis and not necessarily reflect only national priorities. Most of us in the House are Europeans first and nationalists second.

11.29 p.m.

Mr. Michael McGuire (Ince)

I came into the Chamber part way through the speech of my hon. Friend the Member for Newton (Mr. Evans), who is chairman of the European committee which deals with regional affairs. He was arguing a point which, like all North-West hon. Members, he made before he was a Member of the European Parliament—that the North-West Region has, by whatever measuring stick one uses, been treated badly under the regional aid policy as adopted by the United Kingdom Parliament. Judging by the documents before us, the imbalance and unfairness towards the North-West are not changing. I feel it in my bones, although I have not the analytical competence to prove it conclusively.

One can see mirrored in the documents the same imbalance in the total that the United Kingdom receives and disburses as was originally perpetrated. Yet the North-West has a population about the same as Scotland and Wales together, being a region of 7 million people. It has been and continues to be badly treated. Is there any way in which the Government intend to get this situation rectified so that the North-West gets its fair whack?

I have had the impression for a long time as a Back Bencher that we are at the stage where one has to be a Phila- delphia lawyer, an economist and an accountant and everything else in order to be able to digest, or even briefly glance through with some understanding, the multitude of documents from Brussels. Perhaps we need to have regard not so much to reforming the European Parliament but to making its Regional Affairs Committee a more refined body so that it can respond more accurately to the sensitive needs of regions within regions, such as we have in the North-West. How we can do it I do not know.

I think that we in this House must reform our own procedures. I do not think that 635 Members dealing with everything and anything are equipped properly to digest these detailed matters. In that sense we give a big advantage to Members, like my hon. Friend the Member for Newton, who sit in the European Parliament in that they can study these specialised subjects in more depth, although I know that in doing so they are having to neglect, although they do not want to, some other subjects in which they were once engaged as Back Benchers.

We have to look at this as a House of Commons problem and find out how best we can deal with the whole question of the legislation and all the paper we are getting from Brussels, thereby making ourselves more usefully employed. We are kidding the public if we give the impression that we can absorb, interpret and then speak our minds about all these things, making a useful contribution to the thought about them. A Committee is now sitting under the chairmanship of my hon. and learned Friend the Member for Warrington (Sir T. Williams) considering how we can more usefully do our job, and we must take the subject on board because the job is getting more complex all the time.

I return to my point about the Regional Affairs Committee of the European Parliament disbursing regional aid within regions—in this case, of the United Kingdom. As I have said, the imbalance and unfairness to the North-West are continuing. Do the Government accept that reading of the situation? Perhaps they think that we are being treated as fairly as we could be. Document R/1613/77 states on page 29: The Northern Region of England received most from Fund assistance in 1976••In 1975 the North was in third place. There is also a breakdown in the document showing the various regions of the country, and there we find that the Northern Region, Northern Ireland, Scotland and Wales got about 90 per cent. of the share. I repeat that the population of the North-West Region is approximately that of Scotland and Wales combined. If those other four regions receive, as they do, about 88 per cent. of the total, the North-West must do very badly, and I do not see any sign of our doing better in the months to come.

Unemployment on Merseyside, part of which is in my constituency, is twice the national average, and in my constituency itself it is slightly more than three times the national average. What tool do the Government use to isolate the problems within the North-West? I think that the hon. Lady the Member for Lancaster (Mrs. Kellett-Bowman) will agree with me that not all the picture of the North-West is black and that there are areas where unemployment is less than the national average. But in others it is three times as much. I do not think that the Government have a tool sufficiently sensitive to respond to the needs of the regions.

I think that the hon. Lady the Member for Moray and Nairn (Mrs. Ewing) demonstrated that we still largely battle for our own corners irrespective of whether by any measuring stick a region can justify special help. We are continuing with a system that is a bad system. I know that it will be said that the hon. Member for Ince is indulging in these tactics as much as anyone else, but I am trying to point out that we are dealing with sensitive problems and that the instruments that we use must be equally sensitive. The European Parliament is in exactly that position with national bargaining, with each Member making the best case he can for his own country instead of his own region, as in this House.

I am not saying that the neglect of the North-West is the fault of my right hon. Friend the Minister. I believe that the fault lies with Parliament generally. It lies in having these competing interests, which in the European Parliament are nationalistic in tendency rather than regionalistic. Thus the North-West and other areas with above-average unemployment have done very badly. I refer especially to Merseyside. It is a distressed region.

From leading delegations to him and from conversation that I have had with him, I know that my right hon. Friend has demonstrated a sense of urgency, which has been lacking in the past, but the proof of the pudding is in the eating and our position is worsening. I hope my right hon. Friend can assure me that he has taken on board our special problems and that the Government have an instrument to give us some relief quickly.

We shall otherwise continue the charade of discussing regional policy, whether in the European Parliament or in the Mother of Parliaments, as we call this place. Incidentally, tonight I met a delegation from Iceland who reminded us that our Parliament is 340 years behind that of Iceland. I hope that our Parliament can do the job that I believe it should do, and that is to make regional policy far more sensitive to the needs of the regions. Within the regions there are extra-special problems, and I am not convinced that our Government have yet come to grips with them.

11.40 p.m.

Mr. Richard Page (Workington)

In the couple of minutes at my disposal I should like to make two points.

Whatever hon. Members' feelings are towards the Common Market, I think that there must be agreement that the European Regional Development Fund operates and gives tremendous opportunity to overcome a lot of longstanding regional problems. If it can provide aid for our regions and overcome the traditional areas of poverty and deprivation, it can act like a crutch and after a period it can be thrown away, the outside aid can be withdrawn and the region, then firm on its own economic two feet, can achieve some self-sufficiency.

The official handout says that the fund is to correct the major regional imbalances within the Community. As the Member for a northern constituency, I cannot really complain. We have had a very fair share of the cake from the Regional Fund. I understand that it is running at an even higher proportion this year. Obviously, I must commend it and hope that it continues. That is the theory of the scheme. However, I share the suspicions of my hon. Friends that this aid is not, as it should be, subsidiary extra support to regional aid but is being used instead of Government support which should be put into the regions.

I am also very curious to know whether we are really achieving these strides towards regional self-sufficiency or whether in many cases the fund is merely providing temporary work, in very similar vein to our own job creation schemes. When the support is removed, will the region be left, hopefully with a better environment and some improvements in its infrastructure but with no lasting increase in job prospects? That is the point that concerns me.

I wanted to develop that point a little more, but I must move on quickly to talk about the relationship of the regions with the European Regional Development Fund. I believe that we must develop a very firm line here, and it must be agreed with the direction and administration of the fund. If that is not done, I can foresee that the fund—it has the potential in this case—could link up directly the regions to the Community centre. The fund could create a linking of the regions with the EEC centre, if that were allowed, over the heads of central Government. We should consider now whether any such development is desirable or whether we should keep the controls firmly in the hands of the Ministers responsible.

Possibly I am being just a little dramatic and this sort of development may not occur. It may also take a slightly different form, with the projection of the present two Commission information offices, in Cardiff and Edinburgh, which would bring an expansion of information offices into the regions. With co-ordination and a little natural communication, a network of Commission offices could soon be operative. In turn this would ensure co-ordination of Community policies, with the European Regional Development Fund being very much viewed as the linchpin, to make it go one way or the other.

The Minister mentioned impact groups. These should be carefully tied down, because we could be losing control of our regional funds to the EEC.

I have been very brief because I know that the Minister is waiting to make one or two comments. On these points I do not want to be considered to be critical of the EEC fund. It has tremendous potential for the nation and I want to see it succeed. If by early action we can ensure that it is more effective, so much the better for our country.

Mr. Alan Williams

I have less than two minutes in which to respond to the debate. It has been helpful to me to hear the views of hon. Members. At the outset I gave my views on the areas of controversy. The hon. Member for Workington (Mr. Page) touched on a key point when he asked whether we want to lose control of our regional policy. Before we rush too quickly along the supranational course advocated by the Opposition Front Bench, I would point out that 43 per cent. of our population is in assisted areas. It is, therefore, a matter of considerable politicial importance if the economic welfare of those areas is to be determined other than in this House.

My hon. Friend the Member for West Lothian (Mr. Dalyell) asked about the problems of the revolving Presidency. I know that he would not expect me to answer that now. If he expects me to do so, he will be disappointed. I will certainly try to follow up the matter in correspondence. My hon. Friend the Member for Newton (Mr. Evans) raised the question of derelict land. As I am sure he is aware—

It being two and a half hour after the commencement of proceedings on the motion MR. DEPUTY SPEAKER put the Question, pursuant to the Order of the House this day

Question agreed to

Resolved

That this House takes note of Commission Documents Nos. R/1611/76, R/1334/77 and R/1613/77 on the European Regional Development Fund.