EUROPEAN SOCIAL FUND

HC Deb 13 June 1977 vol 933 cc148-91

9.22 p.m.

The Under-Secretary of State for Employment (Mr. John Grant)

I beg to move, That this House takes note of Commission Document No. R/752/77 on the European Social Fund.

Mr. Speaker

I haveselected the amendment in the name of the hon. Member for Newham, South (Mr.Spearing).

Mr. Grant

The current decision of the Council of Ministers governing the European Social Fund requires the Council to review its operation by 1st May and, if necessary, to amend it on the basis of an opinion of the Commission. The document before the House contains the Commission's proposals for the amendment of the Council decision and the implementing instruments.

Since the United Kingdom joined the Common Market in 1973 we have been allocated £140 million from the Fund—about 27 per cent, of the total allocations in that period. There is no doubt that we have gained considerably from the Fund during our membership.

The bulk of assistance that we have received from the Fund has been for training and resettlement activities in assisted areas. We have a clear interest in securing that the Fund's efforts should continue to be directed mainly to helping regions in difficulties.

Most of our applications are in respect of overall national programmes such as TOPS—for training unemployed people in the assisted areas of Great Britain, for emergency measures for the training of young people, and for similar schemes in Northern Ireland. A list of current applications to the Fund was published in the Official Report on 18th January 1977. It is one of our primary aims in the review to secure the continuation of Fund support for overall national programmes.

The Commission proposes to retain the basic features of the present Fund, particularly the distinction between Article 5 aid, which is granted without further Council decision—mainly for operations in regions which are less developed or are suffering a decline in main economic activities—and Article 4 aid, which can be granted only in fields opened by specific decisions of the Council. The current basic Council decision requires at least 50 per cent, of the Fund's budget to go to Article 5, but also states that in the long term the resources available for Article 4 should overtake those for Article 5. The Commission proposed to remove both these provisions so that the allocation of funds between the two Articles would in future be determined annually in the budget discussions.

The present distinction between Articles 4 and 5 does not seem to us particularly helpful or relevant to the achievement of the purposes of the Fund. It reflects a political compromise among the Six when the present Fund was established in 1971—before we joined the Community. A unanimous decision in the Council is required to alter it now. If the status quo is preserved, we want to ensure that the present requirement that 50 per cent, of the budget must be preserved for Article 5 is kept, since we look to that article for our major allocations from the Fund.

The Commission proposes that in addition to the existing rate of grant of 50 per cent, of eligible expenditure there should be a new rate of 65 per cent, payable in regions where there is an especially serious and prolonged imbalance of employment or a decline of one or several economic sectors of vital importance. Regions to benefit from this proposal would be defined later by the Council on a proposal from the Commission, but no such proposal has yet been made. A 35 per cent, rate is also proposed for activities which at present are not eligible for Fund assistance, to promote better working conditions, or to contribute to the creation or maintaining of employment.

Mr. J. Enoch Powell (Down, South)

Can the Minister throw any light on the meaning of this extraordinary expression "imbalance of employment"? The Minister has repeated the words in the explanatory memorandum. "Unemployment" one can understand, but "imbalance of employment" is presumably a heavy preponderance of one type of employment over another. Why is that undesirable?

Mr. Grant

I am grateful to the right hon. Member. The word "unemployment" is a more sensible term to use. I have been guilty of slipping into Community jargon. I am talking of unemployment—purely and simply.

The Commission proposes that the Council—on a proposal from the Commission—should be able to authorise such new activities and assistance for income maintenance and employment, information and guidance services, although no such proposal is made at present. We think that retraining and resettlement are the areas in which the Fund can make its most useful impact on the problems of unemployment within the Community

Because of budgetary restraints, widening of its activities in these ways might lead to a dissipation of resources and complications in administration. This would be contrary to the Commission's own desire, expressed in its communication, for greater concentration of action on the most pressing Community problems. We do not think that we should risk a dissipation of resources.

I turn to administrative reforms. The Commission proposes a number of changes designed to meet widespread criticism of the cumbersome and time-consuming procedures of the Fund. At present applications for assistance have to be submitted at least three months before the start of the operations concerned but decisions are often not taken for another 12 months so that member States do not know which operations, or indeed part of operations, the Fund will support until long after they have started or even when they have finished. Actual payments from the Fund are often delayed even longer because of the detailed checks required by the regular tions. The Government have had cause for concern and I have made our anxieties known to the Commission and the Council of Ministers.

The main proposed changes are, first that member States should submit an overall programme of operations eligible for Fund assistance by 1st August followed by grouped applications by 1st October in the year before that to which they relate. The Commission should then be able to commit the major part of the available resources immediately after the adoption of the budget in December. Individual applications are to be accepted after 1st October only in exceptional circumstances.

Secondly, the complicated and detailed list of the types of expenditure which are eligible for assistance would be simplified. The proposal is to retain the present list of aid headings but to remove the sub-headings, which at present constitute a complete list of all types of expenditure which can be eligible for aid. This will both simplify and broaden the current provision.

Thirdly, when an allocation has been approved by the Commission, the member State could apply for an initial advance of 30 per cent, of the amount allocated on; certifying that the operation had started. A second advance of 30 per cent. is payable when half the operation is completed, and the balance is payable after the submission of the final accounts.

Fourthly, the present rules of the Fund require payment to be made on the basis of actual costs. The Commission proposes to specify a flat rate per beneficiary per unit of time at the time of the allocation decision; for instance, £100 per trainee week. The unit costs will be calculated on the basis of information from past operations of the same type in the same member State.

We welcome these proposed administrative reforms in principle, although a number of details still require to be ironed out. Although we like the idea of grouped applications, we consider that it should be made easier to submit individual applications after 1st October for operations that could not have been foreseen at that date. There are a number of technical questions on these advance payments and unit costs, and these are being clarified in discussions with Commission officials.

I now come to assistance for the disabled. The Commission proposes substantial changes in the system of aid for the disabled. At present the Fund can assist programmes for the disabled under Articles 4 and 5. Most of our allocations in the past have been made under Article 5. In 1975 and 1976 allocations under this article amounted to over £2½ million for each year. Article 4 allocations were only £250,000 in 1975 and about £1 million in 1976.

The Article 5 allocations were made in respect of a variety of schemes mainly directed towards employment rehabilitation and vocational training in the Employment Service Agency's employment rehabilitation centres or in independent residential training colleges through cources financed by the Training Services Agency. The smaller Article 4 allocations were for various demonstration projects in the field of rehabilitation and to some extent for the training of staff concerned with rehabilitation.

Under the Commission's proposals assistance for the disabled will in future be through the single channel of an expanded Article 4 scheme. The present Article 4 scheme provides assistance for staff training in rehabilitation and resettlement and for demonstration projects —that is to say schemes of an innovative character which might test some development in service. The Commission's proposal for a new scheme does not substantially widen this narrow scope.

As we all appreciate, disabled people are especially vulnerable at a time of high unemployment. I am conscious of this because of my departmental responsibilities for employment for the disabled. Our system of support services is based on general schemes capable of adaptation to changing circumstances, and we therefore attach great importance to securing that aid from the Social Fund should continue to be available for as large a number of the disabled as possible.

Our view is that Social Fund assistance should not be curtailed or limited in scope in the way in which the Commission's proposals envisage. We prefer to see the present provision for the disabled under Article 5 retained. Alternatively, if there is to be a new Article 4 scheme it will need to be wide enough to include all the activities at present assisted by the Fund.

I propose now to say something about the proposal for dealing with the employment of women. The Commission proposes that assistance under Article 5 should be available without restriction to particular regions to facilitate the employment of women, in particular for courses designed to help women over 35 to acquire basic skills or to refresh skills acquired earlier. We share the concern expressed at the European Council that steps need to be taken to improve training and employment opportunities for women, but we have reservations about the Commission's proposals to make assistance available under Article 5 to assist special and separate measures of training for women, and to limit it in certain circumstances to schemes for women over 35 years of age. We do not think that women are necessarily best helped by the provision of separate training classes or separate arrangements for employment advice and placement, and I doubt whether this squares with the equal opportunity policies which are aimed not at treating women differently, but at treating them fairly and ensuring that they are not placed at a disadvantage.

I now propose to say something about Article 4 schemes. At present, all the schemes approved by the Council under Article 4—except for agricultural workers—are due to expire this summer, and the Commission proposes to extend all these schemes till the end of the year and then to amend them so that they have an indefinite life. We think that the Council should have an opportunity, after a fixed period of time, to consider whether, in the light of changing circumstances, the schemes are fulfilling a real need and, if necessary, to modify them or substitute others. The scheme adopted by the Council in 1975 to assist unemployed young people—especially those seeking their first job—proved so successful that 28 per cent, of the 1977 budget of the Fund has been made available for it. I think that that illustrates the point that I am making.

Let me finally say something about the progress of the Commission's proposals. It is one of our presidency aims to obtain agreement on the basic texts at the Social Affairs Council on 28th June. The European Assembly adopted its opinion on the Commission's proposals at its session of 12th May. The Commission's proposals were generally endorsed, but the view was expressed that they could be effectively implemented only if the Fund was assured of adequate financial resources. The Assembly agreed with the Commission that the nature of the proposals was such that if the views of the Assembly and the Council were significantly different, it would be necessary to use the conciliation procedure between them. In that case, the formal adoption of the Council text would necessarily be delayed.

The changes proposed are of considerable importance. Allowing for the reservations which I have expressed, they should do much to ensure a better operation and a better use of the Social Fund to help to improve job prospects for workers throughout the Community, an aim which I trust the whole House will feel able to endorse.

9.36 p.m.

Mrs. Lynda Chalker (Wallasey)

The Opposition welcome this opportunity to discuss the European Social Fund. It is a rare opportunity of bringing together a series of often diverse groups whose common interest is steps to employment or steps to better employment, bearing in mind the necessary and continuing need for an extensive retraining in certain fields. I personally welcome particularly the unusual opportunity to be involved in the House in speaking about employment as well as about the European Community.

Very welcome though these constructive measures are to deal with our appalling level of unemployment, particularly youth unemployment but also employment difficulties in other areas—affecting younger and older workers, men and women, the able and the disabled—we note the Minister's words of caution in welcoming this review. We understand that the anti-Marketeers wish to use this debate for their own ends, but the fact that we have some European measures which may be available to us in addition to the necessary national measures in no way negates the need for the latter.

The Opposition view the European Social Fund positively. I should like briefly to consider the Fund, its problems and the steps that it has already taken since the revisions in 1971 and the proposals for reform. Our purpose to-night must be to say how far the proposals go, so far as the United Kingdom is concerned, to meet the real and developing retraining and employment needs of the Community.

The philosophy behind the Fund, like its partner, the European Coal and Steel Community Fund for Retraining, is thoroughly positive. This is something that we welcome. It accepts in its very inception that industrial change will mean human as well as economic upheavals. The Fund seeks to ameliorate those upheavals by clearly pointing a future for those whose regular employment is no more because of industrial change.

The House and the country should grasp that we are not in a world of no change. We are in a world of considerable change, and some of the fairly far-sighted proposals from different Community countries are well worth examination by this country as a clue to some of the future developments which will provide long-term lasting employment, rather than any short-term ameliorative that we might come up with.

It is therefore fair to say that the Fund seeks to direct money to crucial areas where retraining action will in itself lead to a positive advance. The House will know that the Fund's budget rose from £97.6 million in 1973 to £183.3 million in 1976. The United Kingdom allocation rose from £23.9 million in 1973 to over £27 million in 1976, and I gather that we are likely to receive about 28 per cent, of the 1977 budget of £257 million.

That is obviously a considerably advance, but we face some of the most incredible employment problems that this country has seen for over 30 years. In 1976, when we received 24.1 per cent, of the allocations, we made a contribution of 16.3 per cent, to the Community budget. It is important to note that in each year of our membership we have received a much greater proportion than we have given. I understand that this is likely to continue for several years to come, and clearly the review is not concerned with the question of equilibrium. In other words, we have a very positive contribution to the United Kingdom from the European Social Fund.

But it is regrettable that nearly all the European Social Fund intervention in the United Kingdom has been for public projects. We welcome those projects very much. Many are operated through the industrial training boards and the Training Services Agency. We do not decry them in any way, but there is scope for intervention with Government backing in private projects.

I am distressed that this matter is little known. This has been a prime problem of the Fund as it was for the Coal and Steel Fund which in the early days experienced difficulty in making known to British industry the assistance that it could provide. Our share of the European Social Fund might have been even greater had it been more widely known what was going on. It is not simply that Community finance is a means of recouping money already committed under national aid schemes. The Fund is there to be used as an important supplement, as an improvement, as a topping-up for the benefit of those people who, through the actions of the Council of Ministers, have found themselves in an unusual situation which several years previously they might not have envisaged.

Although some of the funding goes through the relevant training boards to private industry, there must be many schemes such as the Irish GWI Limited scheme in County Sligo. This new training programme is part of an expansion of training in an area of great need, but there have been very few such schemes in the United Kingdom, and therefore a great deal of publicity must be given to funds which might be made available to private industry for this purpose. In this instance, more than 6,000 people were displaced from agriculture between 1963 and 1971. Average income in the area was 25 per cent, below the national average for Eire and there was an exceedingly high level of unemployment. However, Merseyside, the North-East and many other areas, including parts of our city centres, are in situations equally as bad as those in County Sligo. In my researches for this debate I have found a terrible ignorance of the fact that these measures are available.

From a review of this area, and from considering the application of GWI Limited, we can see that the European Social Fund faces as its first major problem the complexity of the whole procedure. The second major problem is the complexity of the steps through which a company or a Government Department need go to get hold of the 50 per cent, funding which is currently available under Articles 4 and 5. On closer examination, we find that there has been a degree of limitation on applications and that this has been forced by the rigid division of expenditure between Articles 4 and 5.

The third major problem is that since the 1971 proposals, which are the basis of the changes that are now being proposed, the European economies have changed very greatly. In those days we were in a relatively satisfactory position in this country, as were the countries of the then Community. Times are now different, and one wonders whether a six-year review period is too long, considering the changes which beset those economies today.

Although there is high unemployment in each of the Community countries, we believe that these have exacerbated the needs for retraining which were already identified in the review six years ago. The needs for retraining which were already width of need for retraining that the Commission genuinely wishes to embrace in the new proposals.

The fourth problem we face has been the slowness of the allocation and the payments of the European Social Fund moneys. There have been difficulties in understanding the system in different member States. That is only part of the reason. Payments through the national exchequers, particularly ours, have often been considerably later than the time of scheme expenditure. This has often put many of the retraining proposals in dire difficulties from a cash flow point of view.

The fifth problem has been the slow adjustment, not only in this country but in others too, to demands of the labour market. Particularly in an area such as the United Kingdom, with over 1.3 million unemployed, we have to consider new methods of retraining and not just those with which we have been familiar for the past decade. Whereas the Community Regional Fund and various measures of industrial reform may help to restructure industry, no measure of reform or restructuring of industry will succeed if we lack the skills needed successfully to run those new and developing industries.

I suppose that the area where the skills must most stringently be redeveloped is among the young unemployed, of whom we have far more than our fair quota in this country. Whatever the Government's measures may be in the short term, all of this underlines the desperate need for long-term, lasting industries backed up by people who can work in them competitively. I think it was the present Secretary of State for Industry who talked about backing winners. That is what we need to do. The European Social Fund can certainly be made to be a winner in retraining if we seek to use it to its most positive ends

I would hate the House to think that in citing the problems that the Fund has experienced in the past six years—for us the past four years—I am being in any way negative. A clear examination of what has gone on is crucial to the improvement of the Fund if it is to be the dynamic factor which was envisaged by the Community at its inception. Since 1971 there have been many steps forward. In 1972 there was the addition for those leaving agriculture. In 1974 there were new proposals for migrant workers and there was also the proposal to deal with the handicapped. In 1975 there was the group of recommendations to cover regional problems, problems affecting women in employment and the young unemployed under 25. In 1976 there was a measure which affected this country greatly—the proposals for helping people who had worked in the textile and clothing sectors in this country and who were being put out of work by a great change in world markets.

Already the experience of the Fund, changing from year to year, shows that it has a dynamism of its own. There is no doubt that there was a need for this full review which was necessitated by Article 11 of the Council of Ministers of 1st February 1971. That is what is now before us.

The Opposition welcome the extension given for the four decisions under Article 4, covering those leaving the textile and clothing industries, migrant workers, the disabled and those unemployed under the age of 25. This extends the period of operation of the scheme to the end of this year and extends the help, with amendment, for the future, together with the help given in those schemes for the ex-agricultural workers.

We also welcome the new flexibility in deciding the division of the allocation of credits under Articles 4 and 5 on an annual basis under the normal EEC budget procedure. We firmly believe that this will allow the different competing interests of the member countries to be fully expressed in the debate in the European Parliament and so make the Fund more flexible for each of the member nations.

We also note and support the wish of Commissioner Vredeing to concentrate assistance to the under-25s. It should also help the Fund to respond to those applications which are arising rather more constantly now as a result of the dramatically developing unemployment problem. It ill-behoves us to forget that 65 per cent, of all unemployed women in the United Kingdom today are under the age of 25. Men fare a little better at 36 per cent., but the increase in unemployment of the under-25s generally is quite dramatic. It has risen in this country in three and a half years by over 240 per cent., and therefore we give a special welcome to this proposal. It is the crucial area in which the Gov- ernment, I hope, will push in terms of getting help from the fund.

The two new rates which have been proposed for intervention, of 65 per cent, and 35 per cent, for eligible expenditure, are also a most encouraging assistance. Where the regions in which the most serious unemployment problems exist face a change, the 65 per cent, will allow specific help to go to them in certain areas. Perhaps the Minister will consider persuading the Council to get the Commission to look at a new area where we have a specific problem arising from activity of the European Community. I refer, of course, to cane sugar workers. Partly because of the dominance of beet sugar in the European sugar provisions, we are having greater and faster changes in that industry than we would have envisaged from the gradually declining demand for sugar in the United Kingdom.

It is surely an area where the European Social Fund could be used to show not only that the changes have to take place but that the Community is solidly behind the retraining and the new opportunities that could be given to the ex-cane sugar workers in this country. The Minister is well known for his good faith in European institutions. Therefore I ask him what might be done in existing conditions under Article 4 for retraining the cane sugar workers. I believe that these, like other areas, will provide an excellent opportunity for the Social Fund to identify with retraining in an area which is very sensitive in this country, not least in Merseyside and the North-West at present.

We welcome the 35 per cent, new aids for better working conditions and the creation or maintenance of employment. We hope that if we apply from the United Kingdom for the 35 per cent, funding, it will be for industries which are, in the words of the Secretary of State for Industry, winners—those which will provide lasting employment. Continual upheaval is the one thing that workers regret more than anything else.

With regard to the handicapped, we need to be fully assured that consideration only under Article 4 will not result in a reduction of aid for the disabled. I noted the words of the Minister and, as he will readily appreciate, this is an area which personally concerns me very greatly. It seems to me that the existing Article 4 needs to be greatly widened if the handicapped are not to suffer. The Minister will perhaps know of some of the steps that I have personally taken to look at some of the rehabilitation plans of other Community countries and at how they assess and progress disabled workers from the situation in which they are totally State pensioners through sheltered employment into full employment.

It is this sort of programme that we have long wished to see funded through the European Social Fund, but which, as the Minister stated in answer to my parliamentary Question earlier this year, has so far not been possible. This is because the priority has always been given to that training which would take the disabled person directly into open employment. Those steps which would take a disabled person first into sheltered employment have received a lower priority in the scale of things.

Whereas I think the United Kingdom needs a new look at its own assessment of its capacity for rehabilitation of the disabled, I hope that we shall get a little bit of a push from some of the schemes taking place on the mainland of Europe. We might hope that something like the Havering Remploy scheme, reported in The Guardian last December, might become a recipient of Community funds from the European Social Fund. That scheme uses a nine-day assessment period followed by sheltered employment leading directly to open employment, as a means of progressing someone from being totally a State beneficiary to being a working earner. At the start of that particular scheme there was only a one-in-seven success rate on those assessed. In later months it has gone considerably better than that—down to one in three. In Europe, some similar schemes have a success rate of one in two, or even better. These are the new positive avenues for the handicapped which we should be pursuing through the European Social Fund. I hope that the £3.6 million spent on United Kingdom schemes in 1976 will be increased substantially.

Mr. Lewis Carter-Jones (Eccles)

Is the hon. Lady aware that, as far as we know, the only new money that has been forthcoming has gone to the Queen Elizabeth Fund? Where has it all gone?

Mrs. Chaiker

The hon. Gentleman is perfectly right. The only successful scheme has been that put forward by the Queen Elizabeth Fund in Dorking. One of the difficulties that has been faced by that Fund is that many of the voluntary bodies have not, first, known sufficient about it; secondly, they have not known sufficient about it to apply or have not sufficiently understood the situation; and thirdly, they have not had this natural progression from the state of being totally disabled and unemployed, through sheltered employment to open employment, which is the success that the Queen Elizabeth Foundation scheme has had.

The disabled are the one group in our society who currently do not pay tax, but they long to have the power to pay tax and to become earners. If there is anything that we can do as a national Parliament to make sure that the European Social Fund helps these people into open employment, the Government should be seeking to do it.

The Minister spoke very briefly about women. I have already referred to the fact that 65 per cent. of registered unemployed women are under the age of 25. Like the disabled—although they are perfectly able—it is absolutely crucial that the acquisition of basic skills and the pursuance of refresher courses enables women, particularly women on their own and unsupported by any menfolk, to become economically stable through employment and, therefore, not dependent on our benefit schemes. That is what they would wish, just as much as the disabled. Therefore, those measures which the European Social Fund seeks to enhance in this review are obviously welcome.

We look with some interest at the proposals from the Council about the self employed. We would welcome greater flexibility and look for small craft undertakings, but they are not spelt out very clearly in paragraph 43 of the Commission's document to the Council. The Minister might do well to look at some of the special steps being taken by the Action Resource Centre—those steps which, in Nottingham for instance, will lead to the use of a disused Lace Market workshop as premises for a number of small craft industries where people who have previously become unemployed will have the opportunity to start a business in which they have an expertise and to bring on young people to learn that craft. The job of the Action Resource Centre will be to provide the premises and the expertise to create work opportunities and to develop a craft. Similar schemes are proposed for Liverpool, Lambeth and Islington.

All these are very much the positive concept which is included in the European Social Fund to deal afresh with the industrial and the structural unemployment which is taking place in many of our industries, once great but now, with modern methods and modern materials, not creating the same opportunities for people in our nation.

Also, as the Minister said, we have to welcome the procedural and financial changes proposed in the review. The notion of calculating expenditure on the basis of experience with unit costs must be welcomed. It has always seemed to me rather false to wait until after all the expenditure has taken place and then to look at the situation when, in essence, the European Social Fund was supposed to be creating opportunities. One does not create opportunities if one leaves a difficult cash flow situation for many of the schemes, and that is what the organisation has often done hitherto.

I regard it as a sensible move also to make the advance payment of 30 per cent. of the funding on approval of a scheme once the national Government have certified that it has begun and then to pay over the next 30 per cent. when half the operation has been completed.

However, even if these procedural and financial changes go through, I foresee the time coming fairly soon when we may well need to reconsider how these matters should go in the next few years.

I should welcome the Minister's comments on one matter which is not covered in his helpful review of the Commission document. I refer to the question of grouping allocations, presumably by the Department of Employment. I can well understand that grouping allocations under the European Social Fund, since the committee meets some four times a year to consider applications, may be helpful, but I quote here the opinion of my hon. Friend the Member for Lancaster (Mrs. Kellett-Bowman) expressed in the European Parliament and reported at page 257 of its proceedings: Additionality plus a policy of grouping applications will increase the difficulty of identifying the projects and areas where Com- munity funds make a difference to the lives of ordinary citizens. In one sense, I agree with my hon. Friend because, as I said at the outset, we should be selling or promoting the positive nature of the Fund, and to group them all together—it is hard enough to get answers on this issue, as the Minister probably understands—may be to deny the detailed use of the Fund on a much wider basis which would assist its greater usage. I should, therefore, welcome the Minister's comments on how he envisages the grouping happening, and whether the Government will take a new attitude to selling the Fund so that any administrative grouping for the Department's convenience will in no way stop developments or inhibit knowledge about the way in which Fund allocations are actually made.

I come now to some general comments. I hope that the Council of Ministers will not reduce the schemes at all. One notes that the Council of Ministers is a little prone to cut down any proposal from the Commission. Perhaps, therefore, it would have been better to get the Commission to ask for a great deal more than it would be likely to receive from the Council of Ministers so that we could achieve positive advance in the European Social Fund.

I note also that there is no reference to expansion of the Fund, which by its selectivity can bring help to those areas where it is most needed. We note the changes in the regional allocations, but there is much more scope here than has been sufficiently explored or brought forward in the review.

In terms of the Commission's stated wish to bring greater aid to the poorest regions, I shall be grateful if the Minister will say how this can be done if the 65 per cent. intervention is limited solely to Government projects. This would seem to be somewhat self-denying to an area which has not so far taken off in retraining through the European Social Fund but in which we could have great advance in the near future.

I note also that there is no mention of expanding pilot projects and research studies under Article 7. If there are to be new uses of the European Social Fund, pilot projects and research will be of great importance. There is provision under the original article of the Treaty of Rome, and it seems to me that this should be utilised.

I note also that, despite the six years of use of the Fund, there is no mention of housing help as happens under the European Coal and Steel Fund. It may be that in these days of far greater change in employment possibilities, particularly in this country, but throughout the Community, this will be a necessary consequence of the mobility of labour and something to which the Social Fund will need to look in the coming years.

We have many miles to go. We welcome the review. We hope that the Minister will press for a much earlier review after this stage than previously. To go for six years seems a long time in this quickly changing world. I hope that we shall see a review in 1979 or 1980.

We realise that the Minister may need to take considerable steps towards conciliation in respect of Articles 4 and 5 concerning handicapped people. It is important to realise that we need this Fund to assist any national measures that we may take. It was Commissioner Vredeling who said: Unemployment costs the Community £10,000 million a year. If we can reduce the size of the problem by half, that will release another £5,000 million, though not immediately. Those are salutary words.

We welcome the reforms. We ask the Government to take a careful look at grouped applications, the needs of the handicapped, the lack of new areas for intervention under Article 4 and the need for a full review before 1983. We hope that the Minister will press these matters at the Council of Ministers.

Above all, the Government must today be crucially aware of the disservice which will be done if we do not publicise the width and possibilities of the European Social Fund in the coming years much more than we have done in the last two or three years. It is not good enough to leave it at paragraph 10 in the Press Notice on unemployment figures. We need to say more, more often and more loudly about it.

I hope that the Government will give real promotion to the positive retraining steps which can be taken through the European institutions of which the Social Fund is a small, but very constructive and, therefore, welcome part.

10.8 p.m.

Mr. Nigel Spearing (Newham, South)

I beg to move, to leave out from "House" to the end of the Question and to add instead thereof: 'declines to take note of Commission Document No. R/752/77 concerning the EEC Social Fund as it believes that assistance to persons or areas with particular needs should be the responsibility of national Parliaments and national Governments'. The words "Social Fund" exude good works, particularly in relation to unemployed young persons and the disabled. When we hear from the Minister that we receive a higher proportion of the Fund's outgoings compared with our contributions to the budget, people might say "In view of the fact that we gain and that it is all in a good cause, what is wrong with it? What are people protesting about?" But that is a relatively superficial approach.

Many things which at first look good politically must be examined in greater detail. Our objection is not necessarily to the purposes to which some of these moneys are put but to the origin of the moneys and the fact that the decisions on these matters are taken not in this House, not by our Government, but by the executive over the water.

Mr. Peter Bottomley (Woolwich, West) indicated dissent.

Mr. Spearing

The hon. Gentleman shakes his head. Although our Government have to provide some of the moneys to start with—this 50 per cent. additionality—it is an EEC fund.

Mrs. Chalker indicated assent.

Mr. Spearing

The hon. Lady nods agreement. I am glad that she agrees. Indeed, she said that the anti-Marketeers have their own views about it. I should have thought rightly so, because this is an EEC fund with a purpose. It could be criticised because it is relatively small. That is a common criticism of the Fund. But if it got bigger, the problem would be even greater, because a higher proportion of the aid to these worthy causes would be decided outside this House and beyond these shores. That is the crux of the matter. That is why this amendment has been put down. The Social Fund sounds good but on page 24 of the EEC document itself under the heading "Difficulties" the purpose is made quite clear. It says: The procedures for granting and paying aid from the Fund did not, in the first few years following the reform in 1971, fulfil their expected role as a Community instrument capable of improving the structure of the labour market. That is what the Social Fund was formed for, to improve the labour market within the Common Market itself. The hon. Lady the Member for Wallasey (Mrs. Chalker) referred to the upheavals caused by Britain's accession to the Common Market and mentioned sugar as an example.

Mrs. Chalker

With every respect, I should like to make it clear that I was talking about the upheavals in the ever-changing industrial and employment market. I cited one example where the Commission had been partially responsible—the cane-sugar refining industry—and said that it would be one way under Article 4 in which the Commission could show its good faith by making this another area, like textiles, where it might give specific help for retraining. It is an area which was already declining but which declined faster because of the beet situation within the Community.

Mr. Spearing

The hon. Lady has confirmed what I said. It was faster because of the action of the Community.

In the debate in the other place on 26th May Baroness Seear, in talking about this very document, said that in her experience of operating in the Select Committee of that place it was quite clear that this Social Fund was a by-product of the economic policy of the Treaty of Rome. That is its purpose. That is why it was set up.

The principle of free movement of capital and labour means, of course—the hon. Lady is quite right—that the upheavals that might be taking place anyway are likely to be accelerated by the very existence of the Common Market. The House of Lords 11th Report for the Session 1976–77 makes it quite plain. It says in paragraph 8: As a result of the Hague summit conference in December 1969 the new objectives of progression towards Economic and Monetary Union (EMU) and enlargement of the Community were adopted and it is in relation to the attainment of EMU that subsequent de- velopment of social policy should be considered The principal advance took place by means of a thorough reform of the European Social Fund in 1971. There we have it. Although it may operate rather more flexibly today, the objective and the reason for the creation of the European Social Fund was as a lubricant in the march towards economic and monetary union. The fact that it has not operated openly in the way in which the House of Lords Select Committee stated it was formed does not make any difference. That is the principle of the Fund itself. Indeed, the way in which it operates is not only very complex but it takes a very long time and the ways in which it operates appear to be arbitrary.

Mention was made of the disablement grant. Indeed, some of the grants for retraining at the moment tend to go beyond the purposes for which the Fund was founded. In a Written Answer on 18th January, in reply to the hon. Lady, and to which the Minister referred, we have a list of some of the applications, which includes unemployed workers from British Leyland and schemes for retraining the workers of the national newspaper industry.

I understand that in the debate in the other place it was said that over £2 million was being provided for the retraining of workers in the national newspaper industry.

Chrysler United Kingdom and British Leyland have applied for retraining grants under this particular Fund. Therefore, the Fund itself, while originated and created to ease the way towards economic and monetary union, and to fulfil the purposes of the Treaty of Rome, appears to go outside them.

I am not arguing that that is bad. I am saying that there is no reason why that suddenly could not change and revert to the purposes for which it was formed originally, which displaced the powers of this House and which to an extent could in the end displace the powers of the Government in this regard.

In quoting from the Official Report of the Assembly, the hon. Lady showed that the Assembly had discussed this matter and that in due course the Assembly—itself a rival to this House—might be able to bring influence to bear on this matter. [Interruption.] The hon. Lady seems to object to my referring to the Assembly in Strasbourg as a rival to this House. It is a rival to this House in the consultative aspects of documents such as the one that we are discussing. What is more, not only is the Assembly a rival in discussing in a consultative manner the documents which come from the Commission; it is within the constitution of the EEC and it has, under the Treaty of Rome, to be consulted, whereas this House has not.

Mrs. Chalker

Does not the hon. Gentleman accept, therefore, that it would save a great deal of difficulty if the people of the United Kingdom had their directly-elected representatives in the European Parliament who would be there voicing these views, alongside the views that we express here, so that there was a direct relationship? The hon. Gentleman seems to be concerned that the views of this country, which is after all what we are here for, are not directly represented in the European Parliament.

Mr. Spearing

I did not say that at all. I am objecting to the fact that the European Social Fund, whatever the reasons for its foundation to which we take theological objection and whatever its operations at the moment, is acting as a parallel fund for the granting of funds for retraining, for redeployment and for the assistance of worthy causes such as the disabled and the young employed in ways which are much better dealt with solely by the British Government and by this House.

What the hon. Lady and her right hon. and hon. Friends seems to forget is that this Fund is payable not only to this country but to Italy and France and to any region in any of those countries and that contributions by the taxpayers of this country go to contribute to whatever projects may be approved in Sicily or in the Massif Centrale of France. The Commission decides that money—not this House—although the Assembly will have powers of consultation in that regard. Therefore, that Assembly must be replacing what is properly for this country—the powers and the responsibility of this House and of our own Government.

Mr. Carter-Jones

There is a phrase which occurs 15 times in this document. It runs Done at Brussels for the Council". The people who are being done are the British people.

Mrs. Chalker

Nonsense.

Mr. Carter-Jones

The hon. Lady says "Nonsense". We are discussing the Social Fund. We have one piece of evidence. The only beneficiary has been the Queen Elizabeth Foundation.

Mr. Spearing

May I also bring the attention of the hon. Member for Wallasey to another aspect of this matter which possibly she has forgotten? So many of these projects about which we read in the Answer which the hon. Lady was given on 18th January are very localised projects dealing with local matters which even Whitehall can sometimes be accused of dealing with insensitively, yet these are being dealt with in Brussels.

In another context, the hon. Lady and her right hon. Friend the Member for Sidcup (Mr. Heath) are calling for devolution. Why, on matters which are very sensitive and which affect citizens in a given part of the United Kingdom, should the decision about whether large sums should be paid be made in Brussels? If they believe in devolution, why do they approve of funds of this kind in relation to very local schemes in this country being decided in Brussels and not in this House? There is a logical difficulty there which the hon. Lady cannot surmount. The hon. Lady and her hon. Friends who are not federalists had better begin to think very carefully about where they stand on these issues. They cannot have it both ways.

Mr. Peter Bottomley

Is the hon. Gentleman saying that some of these sensitive areas are denied funds from the national Government because of the existence of the Social Fund or that one or two of them may have received funds from the Fund which had the approval of the national Government as well?

Mr. Spearing

One of the conditions of payment from the centre is that the national Government provide a proportion of the money. To that extent, we have a measure of control. The central Government here can change, distort or influence the extent to which local government grants are made, and the same applies in this instance.

The basic decision-making on where the money shall go and to whom is carried out in Brussels on matters which are much more appropriate for national Governments and Parliaments to decide. That is the principle. The Fund is relatively small now but it could grow, to the extent of displacing funds and powers which should be the prerogative of this House and Her Majesty's Government, not the Commission "Government" in Brussels.

Let us see what could happen. We recently had trouble over pigs and pig farmers. Suppose that pig farmers were going bankrupt left, right and centre as a result of EEC policy, as may happen. Could they perhaps qualify for the Social Fund as long as our Government agreed to provide some funds for them? What about the dairy farmers? The activities of the Milk Marketing Board may be constrained and some of our dairy farmers may face the sort of problems that the hon. Lady has in Liverpool with sugar workers. Does that mean that they will be eligible? If not, why not? It will have happened through the action of the Common Market. The decision whether they will be helped will be made elsewhere.

Therefore, it looks as though the Social Fund is perhaps not as good as it sounds. If the Common Market is to create difficulties for people and then later to give them a certain amount of cash, it is acting like the robbers and the good Samaritan all in one. If, as we are told, the Social Fund is designed to deal with the upheavals caused by a movement towards economic and monetary union, it is providing assistance only to those who are in theory upset because of the move towards that unitary system to which some of us take exception.

We are not against the principle of assistance, particularly to these very worthy causes. What we oppose is the supra-national methods being used to provide it and the fact that the decision-making is carried out not here or by our Government but in Brussels, by an executive outside this country.

The hon. Lady says that she hopes that the Government will back a winner. We do not think that the Social Fund is a winner, because we do not believe that the EEC is a winner. That is why we have tabled our amendment, because we believe that it is time the EEC principle was challenged every time we have debates and documents come before the House, and it would be wrong to let the matter go.

10.25 p.m.

Mr. J. Enoch Powell (Down, South)

When I say that I support the amendment that has just been moved by the hon. Member for Newham, South (Mr. Spearing), no doubt that will confirm the opinion of the hon. Member for Wallasey (Mrs. Chalker) that this is yet another instance of these debates being used, as she said, for our own ends by those of us who believe that it is strongly to the disadvantage of the United Kingdom to be part of the European Economic Community.

I can assure the hon. Lady that there is no need for us to strain these debates—and certainly not this one—to illustrate some of the fundamental issues for the House and the country that our membership of the Community poses. It is noteworthy how greatly the background has altered against which such debates have taken place during the last three or four years. They now take place against a mood of general public scepticism at best, and in many cases, and increasingly, outright rejection of the proposition that there is net gain to this country from membership of the EEC.

The present debate is particularly important, for in it the whole principle of the European Social Fund comes up for consideration for the first time. When the Fund was first established in 1971 we were not yet members of the Community, and if the decision is not renewed during the course of this year, the purposes of the Fund will lapse. Therefore the House, whether it likes it or not, is obliged to consider in principle in this debate the significance, the effect and the desirability of the European Social Fund.

The Fund has two separate functions, functions that—as the hon. Member for Newham, South pointed out—have little inherent connection. They are distinguished respectively as Article 5 purposes and Article 4 purposes. I should like briefly to look at them separately.

Article 5 purposes are concerned, in a Community context, with what we are accustomed to know as the depressed or development areas. The hon. Member for Newham, South was entirely right in pointing out that the basic function of the European Social Fund is to be, he called it "a lubricant", but I should consider it more accurate to call it "a cosmetic", applied to one of the radical consequences of this country's economy being absorbed into the common market of the EEC as a whole.

Of course, the United Kingdom itself is a common market. No market is a perfect market, and most markets are a long way from being perfect; but as a common market it would probably be difficult to find in the whole world an area of like size and population where the internal common market works as efficiently, or has worked efficiently as long, as in the United Kingdom. Thus, in our own experience in the United Kingdom we can see the inevitable consequences, when, as economic change takes place and as one form of production, one market for production, suceeds another—sometimes dramatically and on a large scale—whole areas that were previously economically viable become less so and eventually cease to be viable altogether.

However, within a relatively small common market such as the United Kingdom, that centripetal effect of economic change is, to a considerable extent, offset by mobility of labour. Indeed, the Industrial Revolution in this country would have been impossible without massive mobility of labour—not only in terms of geographical mobility but in terms of adaptability, which itself is a kind of mobility.

Yet even in the circumstances of the United Kingdom, the mobility of labour that we have experienced, to which there are virtually no barriers of language, prejudice or any others of a social character, has proved inadequate to prevent severe and protracted depression in the areas of which we know all too well. In a geographical sense, they are, for the most part, peripheral areas—though not invariably so—and I speak as one who represents a peripheral area of an extreme character, where the exceptionally high unemployment is due, among other causes, to the one that I am now considering.

That being the position within a unitary economy—a common market of one nation such as the United Kingdom—consider the consequences when that economy is attached ever more firmly to a common market such as the EEC. The economy of the United Kingdom itself then becomes peripheral to the economy of the EEC as a whole, and the centripetal forces that operate to the disadvantage of certain areas produce their effects far more powerfully and damagingly. In this larger common market we have one of the aspects of a common market—the free exchange of goods and mobility of capital—without having to anything like the same extent its due accompaniment of free movement and mobility of labour.

Indeed, it is in the nature of the case that the deep and radical barriers that separate all the countries of Europe from one another, and this country perhaps particularly from the rest of the EEC, will ensure that the impact of the centripetal forces of a common market falls with the greatest effect upon the United Kingdom and especially upon those parts that are peripheral within the United Kingdom itself. That is one of the reasons that the Province of which I am one of the representatives has always been particularly fearful of the consequences to itself of our absorption into the economy of the EEC.

The philosophy behind the Social Fund was that it would offset artificially the depressant effect of membership of the EEC—that, at a time when the policies of the EEC were bound to magnify the effect of economic change, both general and particular, upon depressed areas in this country, there should be a sort of quid pro quo, that there should be—I repeat the word—a cosmetic applied, to which the Commission could appeal and say that while it appreciated that, by its nature, the EEC was placing disabilities upon large areas of the United Kingdom, that could be put right by the Community redistributing relatively trivial sums in order to give some measure of compensation for the effects of British membership.

In discussing this draft decision, therefore, we are examining the effects of British membership which, as the years go by, will become increasingly perceptible and increasingly resented by our people, especially the workers, but above all the unemployed, who will discover that the palliative effects of these negligible sums from the European Social Fund under Article 5 are more of an insult or a pretence than a practical alleviation.

I pass to Article 4 and the application of the Fund to specific purposes of which, considered in isolation, I expect most hon. Members approve. By his amendment, the hon. Member for Newham South has raised a crucial question: why should the decision to select certain forms of deprivation, difficulty or handicap for a certain degree or type of assistance be a decision that is taken, once for all, for the whole of the European Economic Community? Are not these matters which the national community is best fitted and entitled to decide for itself? The hon. Member for Woolwich, West (Mr. Bottomley) pointed out that in each case, in order to attract these funds, the Government of the country concerned has to put forward a proposal; but it cannot be denied that the purpose of the Fund is to place not merely the stamp of the EEC but the uniform pattern of the EEC upon the manner in which these needs are met in all parts of the Community. Otherwise, there would be no point in putting a premium on one method and degree of assistance rather than another.

We therefore contemplate in the context of the European Social Fund, an aspect of the inherent nature of the EEC as we are becoming to understand it—to arrogate to itself all the important functions of Government, internal as well as external, economic and social equally in all parts of the Community and thus to deprive this nation and others of the right, through our own representative organs and in our own circumstances, to decide and to debate amongst ourselves how we will recognise and meet specific needs. That is why it was necessary that the amendment should be moved and that the House should address itself to it.

Again, it might be said that we are only part of the way. Of course, we are only part of the way. But a very significant phrase was used by the hon. Member for Wallasey when, having drawn attention to the fact that in the last few years, upon the unrealistic separate accounting of the Fund, this country has drawn more than it has put in, she opined that this would continue "for several years yet." I do not doubt that; but the course of development means that it will eventually be the European Assembly, the European Commission, the European bureaucracy which will decide the entire pattern of social redistribution within the European Economic Community.

Mrs. Chalker

Nonsense.

Mr. Powell

The hon. Lady says that is nonsense; but after four years of experience she can surely see how in one area after another the EEC is asserting itself in the internal affairs of this country and ousting the decisions of this House. She has a lot yet to learn.

Mrs. Chalker

I am fully aware that I have a great deal to learn from the right hon. Member; but it would be wrong for any Government which was a member of an institution not to play its full part in that institution and to take up the opportunities afforded to each member nation. The right hon. Gentleman is saying that he never wished to enter the Community, that he is not prepared to abide by the result of the referendum and that he wants the whole situation up-turned. That is different from the review of the European Social Fund which is the purpose of the debate.

Mr. Powell

I hope the hon. Lady did not think that it was primarily from myself that I was expecting she would obtain enlightenment. I expected that she would obtain enlightenment from the same source as her fellow citizens are increasingly doing so, namely, by observing the effect on this country of our experience in the Community.

Briefly, in response to the precise point that the hon. Lady made, she will recall that at the time of the referendum two years ago the Government, with the full authority of the highest legal sources in this country, assured the public as well as this House that future membership of the Community would depend upon the continuing consent of Parliament. A proposition such as is before the House tonight, and which it is our duty to consider, is one of those matters that will assist Parliament and the people—who make and unmake parliaments—to come to their own conclusion whether they will maintain that position or will, as they are fully entitled to do, reverse it.

I am sorry, Mr. Deputy Speaker, that the warmth of the occasion has perhaps carried me as well as the hon. Lady beyond the immediate bounds of this debate, which is important enough in itself, because here we have, as the amendment points out, the clear evidence not merely of the effect upon this country's economy of membership of the EEC but of the claim on the part of the EEC, which always advances and never retreats, to render the whole of its area socially as well as economically homogeneous and to claim decision over areas of our social life which I do not believe should be taken out of the hands of this House of Commons.

10.43 p.m.

Mr. Lewis Carter-Jones (Eccles)

I declare myself to be not a European——

Mr. Peter Bottomley

The hon. Gentleman is a European. We are all Europeans.

Mr. Carter-Jones

—but I have been told from time to time that when I saw the social policy I should change my mind. I was told that when I saw the document I should be convinced of the error of my ways. This document has made me more convinced than ever that we ought to have the sovereignty of Parliament in this country, because it merely emphasises that we have little or no say in social policy.

In many respects the document is unreadable, and where one can read it one comes across some peculiar observations and statements that seem to be robbing us of any say in social policy. On page 3 one finds a classic example of what I mean. It says there: The administration of the Fund was, however, complicated by certain difficulties and one of the difficulties was the constant danger of dispersal of intervention". If I understand that phrase—and I doubt whether I do—what is being said is "We do not want Governments to interfere. We will decide their social policies." If it has a meaning at all, that is what that statement means.

Perhaps the most intriguing example is to be found in the note from the Vice-President.

Mr. Dennis Skinner (Bolsover)

How much does he get?

Mr. Carter-Jones

I have no idea.

Mr. Skinner

It will be a tidy sum.

Mr. Carter-Jones

If one of the Clerks of the House were to produce a document like this there would be a demand from both sides of the House to have him locked up in the Tower. The Vice-President says: In preparing its communication the Commission has followed three guidelines", and I shall quote the first two. The first is a greater concentration of the Fund intervention". The second is the possibility of extending aid to other sectors and widening the scope of the Fund's activities". Those guidelines are mutually exclusive. [Interruption.] The hon. Member for Wallasey (Mrs. Chalker) wants to read them more carefully; she will then find that they are mutually exclusive.

Mr. Peter Bottomley

Paragraph 58 of the document says: Taking into account the complex nature of these kinds of intervention and of the need to evaluate all their implications, the Commission does not consider it possible to apply these aids immediately having regard to their substantial budgetary implications. That, I think, deals with the inconsistency which the hon. Member mentioned, without perhaps having taken that paragraph into account.

Mr. Carter-Jones

If there were a case for intervention and if it were simply handled, why does not the document contain a statement of the need for a European car for disabled people? That would have been a good area of intervention: it would not have required four years consideration but could have been done now.

Mr. Skinner

Manufactured by British workers.

Mr. Carter-Jones

Exactly. The Commission has no sense of priorities. If it wants to achieve its priorities after four years, why can it not co-operate in research ventures such as the advanced work being done by the Orthopaedic Hospital, supported totally by an area health authority, with no help from this alleged Social Fund?

At the end of the day we should decide the priorities. We have done enough work in regard to the disabled to decide priorities. Europe can learn an awful lot from this place. This document would push us into second or third place, and I do not want it.

10.48 p.m.

Mr. Peter Bottomley (Woolwich, West)

I apologise for having interrupted the flow of the hon. Member for Eccles (Mr. Carter-Jones). I had not realised that he was going to mention the need for joint research into a vehicle for the handicapped, which would be of value not only in Europe but throughout the world. But the point that he was trying to make is not supported by his earlier remarks.

I assume from the tone, though not the content, of his remarks, that the hon. Gentleman supports the amendment. If so, he must be suggesting that the Government could have given much more suport to the design of a vehicle when they announced the phasing out of the invalid tricycle.

Mr. Carter-Jones

The hon. Member is young in the House. Some of us have been fighting for this vehicle for many years, including those years when his party was in government. Some of us have been aware of these problems, and have been pressing for their solution, for many years.

Mr. Bottomley

I am grateful for that reminder. Some of us have not been in politics as long as others, and we learn from those who have gone before.

Before I joined any political party, I used to read with interest the books of the right hon. Member for Down, South (Mr. Powell). One I enjoyed most was called, I think, "Income Tax at 4s. 3d. in the Pound". But we have come a long way since, and one learns different things from the right hon. Gentleman now. He says that four years' experience of the EEC should have educated us. I should have thought that the same was true of three years' experience of Socialism. At least the right hon. Gentleman stand accused, if not condemned—that is a question of judgment—because he voted for the Socialism, if not for the Common Market.

The European Social Fund is governed mainly by the Treaty of Rome and it does not cover the sort of things that a fund of this sort should cover. It gets part of the way there with its talk about training and schemes for women over the age of 35. Presumably women over the age of 35 are chosen because they are likely to have spent their time in raising a family.

There are discrepancies in the Common Market. One can discern regional discrepancies between, for example, the Province of Ulster and other parts of the United Kingdom and elsewhere in the Community. One can also see a growing discrepancy in terms of family income and employment possibilities for those with dependent children compared to those without.

We look more and more across the Community at the help given to people leaving school or leaving further education and trying to get employment. But we tend to ignore the prospects of young parents and their children who suffer from an inadequate income, and this affects the employment prospects of the children when they grow up. To a growing extent we see the burden of raising children falling on to a smaller number of people whose maintenance income, as a proportion of the average wage, is decreasing.

This can be demonstrated in simple terms in this country. The level of child support in terms of child benefit, family allowance and tax allowance is roughly the same in real terms as it was when the family allowance was introduced shortly after the war. The average pay of the person at work has doubled. It is in an area such as this that this country could have learned a lot from the independent action of national Governments elsewhere in the EEC with the possible exception of the Irish Republic.

This is an area in which there is no argument for the course of action which British Governments have taken over the last 25 years, grossly inadequate action which has been put to shame by the action of seven other EEC national Governments. Yet we are told by the hon. Member for Newham, South (Mr. Spearing) that we should ignore Community initiatives which would help to raise the level of provision for people in this country to the standards achieved by best provision in the rest of the EEC.

It would be wrong to follow the example of the hon. Member for Eccles and to level criticism at the EEC and the Social Fund for not doing things that our successive national Governments have not done. That is a criticism not of the EEC but of our national Governments. There are many people in this country who would like to see the EEC and the Social Fund used to try to create better conditions for the handicapped and for those trying to bring up families. We believe that we can learn a great deal from other member States and that we can use the EEC as a focus for increased effort both by national Governments and, jointly, as a Community.

Mr. Carter-Jones

Does the hon. Member not agree from reading the document carefully that "Social Fund" is a misnomer, and that it really should be called the "tinkering-with-employment fund".

Mr. Bottomley

I thought that we had established during the hon. Member's speech that I had read the document more closely than others in the House. At the beginning of my speech I said that the Social Fund did not cover some of the things that a social fund should.

Finally, I want to take up a point made by the right hon. Member for Down, South who made an unsupported assertion about the popularity and the benefit of the Common Market. It is important that these assertions should be challenged although I do not think that now is the time to do so in depth. I do not believe that the burning issue in the country at the moment is our membership of the Common Market. I do not believe that in a re-run of the referendum campaign we would find that a majority of people opposed our continuing membership.

Mr. Martin Flannery (Sheffield, Hillsborough)

We do.

Mr. Bottomley

If people have evidence of the unpopularity of the Common Market would they compare it with the obvious, glaring evidence—demonstrated in frequent by-elections—of the unpopularity of this Government? If they are willing to say "The people I meet in my constituency are against the Common Market" what are their friends and neighbours saying about the Socialist Government?

Mr. Flannery

What about Grimsby?

Mr. Bottomley

Where the Labour vote went up so much?

Mr. Flannery

There was an anti-Common Market candidate.

Mr. Bottomley

That is as may be. I do not think that that is in order in this debate. What is in order is to say that one of the tests of whether the Common Market is supported by the electorate—

Mr. Deputy Speaker (Mr. Oscar Murton)

Order. The Chair has been fairly tolerant during the debate, both with the speeches and interruptions. I request the hon. Member now to come to the point.

Mr. Bottomley

You are anticipating my final words, Mr. Deputy Speaker. I hope that those who say that our continuing membership of the Common Market should be challenged at every opportunity, as has happened tonight, will encourage the Government to bring forward the Bill for direct elections so that the people can give their view on our continuing membership by choosing candidates who want to support the EEC—not necessarily to accept all of the Commission's proposals, but to work within the Community. I think that in such an election those who oppose the EEC will receive the answer from the electorate that the Government have been getting.

Mr. Deputy Speaker

Order. We are discussing the Social Fund.

10.58 p.m.

Mr. John Grant

With the leave of the House I shall seek to reply to as many of the points that have been raised as I can. I begin by dealing with the matters raised by the hon. Member for Wallasey (Mrs. Chalker) in what I thought was a thoughtful and constructive contribution. She spoke of the size of the Community budget. This is decided by the Budget Council and it is a matter for the budget machinery. The Commission's formal proposals for 1978 have not yet been published. They should be discussed by the Budget Council next month and then considered by the Assembly, to be finalised in the autumn.

The hon. Member for Wallasey, and her hon. Friend the Member for Woolwich, West (Mr. Bottomley) among others, suggested a number of new steps that might be taken. It is clear—when we look at the operations of the Social Fund so far and recognise that it is over-subscribed with applications—that unless the size of the budget is increased it would be wrong to try to stretch limited resources still further by opening up new areas of activity. Since the size of the budget is not a matter for the Social Affairs Council but will be discussed by the Budget Council subsequently I do not think that I can be very helpful on that point.

The hon. Lady talked particularly about inadequate publicity. I think she has a point here, although I return to the remark that I have just made about over-subscription for applications. I do not use that to counter her argument. On the other hand, it is important that we do not over-publicise a matter of this kind and thereby raise false hopes. There is a god deal of summary information about allocations to the Fund coming through our own Department of Employment News, which is quite widely distributed throughout industry.

Our officials are ready to give advice to any organisation on the scope for making a successful application for assistance from the Fund. We are in regular contact with other Departments and agencies which might provide assistance towards eligible schemes. Having said that, I take note of the hon. Lady's point. It may be that we should do more to draw attention to the possibility of making applications to the Fund.

The hon. Lady also talked about complications in applications and slowness in payment. She mentioned slowness of payment frm the national Exchequer. It is the first time that I have heard of it, but if she has specific examples it would be helpful to have them. Whether she should refer them to one of my colleagues from the Treasury I do not know, but it would be helpful to have them. But much of this ought to be taken care of by the administrative reforms which the Commission is proposing and which in general we regard as sensible.

The hon. Lady mentioned the review period, which she felt was too long. I take her point, but it is not easy to get agreement on these matters. We are a Community of nine. To reach an agreed text at the next Social Affairs Council would not be a simple matter. There are still difficulties, which I have already outlined. It might be very difficult to achieve a review in a short period. Without ruling the point out, I would certainly offer that cautionary note.

The hon. Lady drew attention to the plight of the young unemployed. This concerns us greatly. It is a Community problem, which is not simply a matter for this country. There is a similar problem elesewhere, but in some respects we have it more acutely in this country. She will know that a lot of this is due to the birth rate bulge of the late 1950s and early 1960s. Many more people are coming on to the labour market. This will continue for some years to come and we have a very real and continuing problem here.

When I spoke at the beginning of the debate I mentioned the success of the 1975 scheme adopted by the Council. It is a problem which is very much recognised not just by ourselves but by the Council. It has been discussed quite recently in particular by the Standing Committee on Employment, which is the tripartite body representing the trade unions and the employers as well as Government. At the end of the month, within a day or so of the Social Affairs Council meeting, there will be a tripartite conference of people from throughout Europe, and then a European Council. I shall be very much surprised if the problem of youth unemployment does not figure again in those discussions.

The hon. Lady mentioned the possibility of a new area of difficulty and talked about cane sugar workers. She would not expect an answer on that tonight, but I take note of what she said.

The hon. Lady also dealt with the handicapped. So, of course, did I in my opening remarks. I am not sure whether my hon. Friend the Member for Eccles (Mr. Carter-Jones) was in the Chamber when I opened the debate.

Mr. Carter-Jones

I apologise.

Mr. Grant

I spelt out some very severe reservations on the Community proposals in regard to the disabled. We do not like the proposals and think that as they stand they would narrow the scope for helping the disabled. We cannot go along with them, and I made that quite clear when I opened the debate.

The hon. Lady talked about the rehabilitation plans of other countries within the Community and suggested that we can learn from them. I agree, but again I enter a reservation that we do a very great deal of good work in this country which is perhaps not sufficiently recognised. It would not be true to suggest that we are laggards in this respect; far from it. There are things that other Community countries can learn from us in this respect.

As to our own capacity and whether it should be enhanced, the Manpower Services Commission has currently before it a developmental programme to cover the next five to 10 years in the whole field of the employment of the disabled, and rehabilitation figures very largely in that programme.

Mr. Carter-Jones

I apologise to my hon. Friend for not being present to hear his speech. It was not really any fault of mine. The previous business was speeded up somewhat. I am not so sure about rehabilitation as my hon. Friend. Like the hon. Member for Wallasey (Mrs. Chalker), I have reservations on this issue, and I think that we could be doing much better than we are. However, as a large number of disabled people in this country are unemployed and as sometimes the only way in which they can obtain employment is by becoming self-employed, will they be given assistance under Article 4?

Mr. Grant

I do not think that I can answer that question specifically. All that I can say to my hon. Friend is, again, that we are thoroughly dissatisfied with the proposal that the Commission is making in relation to Article 4. We simply do not think that Article 4 would be anything like good enough—even a revised Article 4, as suggested—to deal with the kind of situation that we now face, with the very large and disproportionate number of disabled people who are unemployed at present.

The hon. Member for Wallasey talked about a grouping of applications and expressed some anxiety. There is a suggestion that the grouping of applications would inhibit applications from private bodies. I think that that is what was concerning the hon. Lady. That is not the intention of the proposal. The aim is to let all applicants know before the beginning of the year whether and to what extent they would receive an allocation. We think that that would help private applicants greatly and would help to avoid the cash flow problems that they have had, which she mentioned. The fact that the Department of Employment will have the actual responsibility for assembling and submitting the applications in appropriate groups does not mean—as it does not mean now, of course—that the Department will put forward only its own applications. The new arrangements would mean that people would be encouraged to think ahead about the arrangements they may initiate which would be eligible for Fund aid. I hope that the hon. Lady will feel that her fears on that score are not justified.

I think that I have dealt with the main points raised by the hon. Lady. I turn to the remarks of my hon. Friend the Member for Newham, South (Mr. Spearing). I think that it would not be unreasonable to couple the remarks of the right hon. Member for Down, South (Mr. Powell) with those of my hon. Friend, because they are both quite consistent in this matter. Indeed, my hon. Friend is quite frank about it. He said that he did not think that the Social Fund was a winner because he did not think the EEC to be a winner. Basically, his argument was a fundamental argument against our membership of the Community. I do not think that it was really an argument about the Fund as such, and I think that he would accept that.

The fact is that we are signatories to the Treaty of Rome, which requires a Social Fund, so for that reason alone I could not agree with my hon. Friend in his assessment or, indeed, in his amendment. I must say this to him: we are Community members. I do not know what sort of figure we would cut if we were to say to our Community partners "We are opting out of this one." My hon. Friend was not making that point really; he was making a more fundamental point. I do not think that we could conceivably opt out of the Social Fund. First of all, we are net beneficiaries under the Fund, and on practical grounds alone, for that reason it would be plain daft to consider opting out.

Mr. Spearing

The point that my hon. Friend makes is valid, but this is a procedural motion in the advisory capa- city of this House. It is a matter of declining to take note of the document. I do not think that my hon. Friend would stretch that by saying that just because the motion, as amended, was passed, it would necessarily imply withdrawal. It is a statement of independent belief by some of us that this particular means of overriding the views of this House is inappropriate.

Mr. Grant

I accept that point. Indeed, I happily accept it. I do not for one moment think that my hon. Friend's amendment would have that drastic result. Having said that, however, I think that that was the implication of his argument and that that, in fact, was what he would want.

Second, I must point out to my hon. Friend that we should be markedly unpopular with the TUC were we to take any step of that kind, because the TUC, through the ETUC, is now very much committed to making a sharper mark on European social policy. At the last meeting of the Standing Committee on Employment, which is a tripartite body, the TUC's spokesman paid tribute to the help which the Fund has given, particularly in training matters.

Third, I feel that we should be concerned, as partners in the Community, to maintain our interest in a matter of this kind, not least because the problem of unemployment is a common problem throughout the Community. Therefore, I do not think that we can talk about opting out of the Social Fund, and I am sure that it would be a retrograde step for us to do so.

As I say, what my hon. Friend really wants is that we should quit the Community, and I think that I had better not pursue that argument now. We have had a referendum to settle that question. Whether it should be reopened at some time in the future is another matter, and, however much some hon. Members may want to see that happen, it is not the subject of this debate.

I come now to a matter which my hon. Friend the Member for Eccles raised. I think that he put it in an intervention, but he wanted to know where the money had gone for the assistance of the disabled. Perhaps I may give a few examples. A great deal of it has gone to rehabilitation in the Employment Services Agency's own employment rehabilitation centres. There have been grants for specialised training by private agencies, such as the Royal National Institute for the Blind and the Spastics Society. There has been assistance for an experimental scheme for using closed-circuit television in the training of the partially sighted, in association with Moorfields Hospital. There has been assistance for some other hospitals which demonstrate the best practice in rehabilitation. There has been money spent on the training of disablement resettlement officers, and money spent also on staff at rehabilitation centres.

Those are some examples which I can give showing where the money has gone.

Mr. Carter-Jones

It is said by many researchers that this money would have been spent in any case, whether coming from the European Social Fund or not. Is that not true? Surely my hon. Friend is not saying that his Department would not have spent money on these worthwhile efforts.

Mr. Grant

That is simplifying the matter too much. I am not saying that a good deal of it might not otherwise have been spent, but it is a fact that when ventures of this sort are engaged in consideration is inevitably given to the question whether there might be a contribu-

Division No. 150]	AYES	[11.14 p.m.
Allaun, Frank	Lamond, James	Spearing, Nigel
Bidwell, Sydney	Leadbitter, Ted	Spriggs, Leslie
Canavan, Dennis	Lestor, Miss Joan (Eton ft Slough)	Thorne, Stan (Preston South)
Carter-Jones, Lewis	Loyden, Eddie	Wise, Mrs Audrey
Crowther, Stan (Rotherham)	Maynard, Miss Joan	Woof, Robert
Fernyhough, Rt Hon E.	Mikardo, Ian
Hooley, Frank	Molyneaux, James	TELLERS FOR THE AYES:
Kerr, Russell	Powell, Rt Hon J. Enoch	Mr. Max Madden and
Lambie, David	Skinner, Dennis	Mr. Martin Flannery.

NOES
Archer, Peter	Freeson, Reginald	Phipps, Dr Collin
Armstrong, Ernest	Golding, John	Rowlands, Ted
Ashton, Joe	Grant, John (Islington C)	Small, William
Bottomley, Peter	Hamilton, James (Bothwell)	Smith, John (N Lanarkshire)
Brown, Hugh D. (Provan)	Harrison, Walter (Wakefield)	Stallard, A. W.
Brown, Robert C. (Newcastle W)	Horam, John	Stott, Roger
Chalker, Mrs Lynda	Jackson, Miss Margaret (Lincoln)	Strang, Gavin
Cocks, Rt Hon Michael (Bristol S)	John, Brynmor	Taylor, Mrs Ann (Bolton W)
Coleman, Donald	Kaufman, Gerald	Tinn, James
Cooke, Robert (Bristol W)	Lester, Jim (Beeston)	Varley, Rt Hon Eric G.
Cox, Thomas (Tooting)	Lewis, Ron (Carlisle)	Walker, Harold (Doncaster)
Cryer, Bob	Luard, Evan	Walker, Terry (Kingswood)
Cunningham, Dr J. (Whiteh)	Lyon, Alexander (York)	Weatherill, Bernard
Davidson, Arthur	McCartney, Hugh	White, Frank R. (Bury)
Deakins, Eric	MacFarquhar, Roderick	Whitlock, William
Dormand, J. D.	MacKenzie, Gregor	Williams, Rt Hon Shirley (Hertford)
Douglas-Mann, Bruce	Maclennan, Robert	Woodall, Alec
Duffy, A. E. P.	McMillan, Tom (Glasgow C)
Dunnett, Jack	Marks, Kenneth	TELLERS FOR THE NOES:
Eadie, Alex	Murray, Rt Hon Ronald King	Mr. Alf Bates and
Ewing, Harry (Stirling)	Orme, Rt Hon Stanley	Mr. Joseph Harper.

Question accordingly negatived.

tion from the European Social Fund, and, if that is a possibility or a probability, in such circumstances a venture is more likely to go ahead.

I believe that I have answered the main points raised in the debate. I apologise if I have not done so, but this is a "take note" debate and we shall look carefully at the record of all that has been said. I simply close by saying that the new Commissioner—now the Commissioner for Employment and Social Affairs—Mr. Vredeling, has stressed the need for more co-ordination of Community economic and social policy and for a strategy aimed at reducing unemployment as quickly as possible. There are common problems, and there are things which we can learn from one another. We have to take account of the best in the social systems of the member States and of their varied histories. But one thing is certain. The Community will have a social policy, and we hope that it will develop and mature so that increasingly it helps working people throughout the Nine. The Social Fund's contribution to this end may necessarily be somewhat modest, but it has been and, I hope, will continue to be a worthwhile contribution.

Question put, That the amendment be made:—

The House divided: Ayes 23, Noes 59.

Main Question put and agreed to.

Resolved,

That this House takes note of Commission Document No. R/752/77 on the European Social Fund.