HC Deb 11 December 1985 vol 88 cc1027-38 11.41 pm
The Minister of State, Department of Trade and Industry (Mr. Peter Morrison)

I beg to move, That this House takes note of European Community Documents Nos. 9563/84 and 9506/85, the Ninth and Tenth Reports from the European Commission on the activities of the European Regional Development Fund in 1983 and 1984 and 8253/85, draft Regulation amending Regulation (EEC) No. 1787/84 on the European Regional Development Fund; and accepts the need to provide for an appropriate share of the Fund for Spain and Portugal but emphasises that an appropriate proportion of the Fund should continue to be allocated to regions affected by industrial decline, and in particular to the United Kingdom. The 10th anniversary of the European Regional Development Fund was last month. A new regulation governing that fund came into force on 1 January. It is opportune, as I am sure the House will agree, to review the operation of the fund at the end of its first year under the new regulation.

Both Houses of Parliament recently approved, without a Division, the Bill to facilitate the accession of Spain and Portugal to the European Community—

Mr. George Foulkes (Carrick, Cumnock and Doon Valley)

There was a Division on clause stand part.

Mr. Morrison

I apologise for my mistake.

A consequence of that accession on 1 January 1986 is that the regulation needs to be amended to provide for quota ranges for Spain and Portugal, and to adjust the quota ranges of existing member states.

The actual amount of money that the United Kingdom receives from the fund depends on the size of the fund's budget and the number and quality of applications from the United Kingdom compared with other member states. The budget of the Commission is a matter for my right hon. Friend the Chancellor and my hon. Friend the Minister of State, Treasury. The process leading to setting the 1986 budget is not yet complete, but the Government's overall view is that there is need for budgetary discipline in the Community budget, as there is in national budgets.

As regards applications to the fund, our policy is, and will continue to be, to submit as many good quality applications as we can. The United Kingdom has made a promising start under the new fund regulation. For example, we expect that formal Commission decisions will be made shortly in respect of three national programmes of community interests. In the Mersey basin areas there will be a £67 million programme that will be part of the campaign by my right hon. Friend the Secretary of State for the Environment to regenerate the Mersey basin through river quality improvement and the development of reclaimed land — [Interruption.] The hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes) laughs. I would have thought that he would not laugh at Mersey and Liverpool, but be concerned about what happens there.

Mr. Foulkes

Tell us more about it.

Mr. Morrison

It means cleaning up the Mersey. If the hon. Gentleman had a constituency close to the Mersey, as I do, he would know precisely what that means.

The Shildon programme is a five-year programme that will be worth about £18 million between 1984 and 1989. The money will fund a strategy devised by local and public authorities in county Durham to overcome difficulties caused by the closure of the local British Rail engineering works. The programme will support a wide range of activities, including road building, new industrial estates and advanced factories.

The package for Glasgow — the hon. Member for Carrick, Cumnock and Doon Valley may be more worried about Glasgow than he is about other parts of the United Kingdom—will relate to roads, public transprt, water, sewerage, industrial development, vocational training, energy, environmental improvements and tourism.

Mr. Gordon Brown (Dunfermline, East)

Now that the EC has awarded 50 per cent. of the costs of the Bishop Auckland programme, how will the other 50 per cent. be funded when the local authorities and public corporations in that area inform me that they will not be allowed to borrow beyond their rate support grant and capital control limits to fund their part of the scheme? Will the Minister at least say that the Department of the Environment will meet representatives of the local authorities to discuss their problems?

Mr. Morrison

The hon. Gentleman must realise that it is for the local authorities to decide their priorities.

Mr. Foulkes

Come on!

Mr. Morrison

Of course, it will be. If matching funds are available, it will be for the local authorities to decide how they should be spent. If they decide to do things purely for political purposes, it is up to them, but if they do that, they will not receive the matching funds from the regional fund.

Mr. Teddy Taylor (Southend, East)

Does the Minister accept that his delightful letter, which he is presenting to us with other papers, explains that, under the new regulation, we shall receive a smaller percentage of the regional fund than our national contribution percentage? Would there not be more money for the Minister to indulge in his public spending activities in Liverpool and Glasgow if we had no regional fund? As the letter also says that the new regulation, which cuts our regional money, is to be binding in its entirety and directly applicable to all member states, without any legislation or vote in the House, are we not wasting our time talking about it tonight?

Mr. Morrison

I do not accept everything my hon. Friend says. He mentioned the letter of intent that was placed in the Library last month. The position is now somewhat different. It looks as though, this year and next year, Britain will be a net beneficiary. It is impossible to tell at this stage. After 1986, it is likely that Spain and Portugal will be net beneficiaries of the fund. Hon. Members will have listened to our debate on the accession of Spain and Portugal. I accept that there has been only one Division, but the enlargement of the Community has been agreed pretty well without dissent throughout the House. This is one of the practical, pragmatic points that must be taken into account. The potential development in Spain and Portugal is to their advantage, and to the advantage of the entire Community.

Mr. Foulkes

Answer the question.

Mr. Morrison

I have answered my hon. Friend's question and stated what the position is. It is that this year and next year, the likelihood is that we shall be net beneficiaries. The following year, the likelihood is that we shall not. I accept what my hon. Friend said, but the enlargement of the Community will be to the long-term advantage of the United Kingdom, and the House has been agreeing that in the past two weeks or so, over which we have been debating that point.

Under the programmes that I mentioned, Merseyside, Shildon and Glasgow will have some £153 million of the ERDF. The money will be committed to the United Kingdom and without that fund, despite what my hon. Friend may say, it would not be available to us. The United Kingdom will be the first country to take advantage of the provision in the new regulation financing programmes as distinct from projects.

Another example of aid is the special measures of regional aid under the non-quota section, which were first adopted in 1979. These special measures are now helping to generate new business activity in parts of the United Kingdom which have been particularly affected by the decline of the steel, shipbuilding and textile industries. To date, the allocation to the United Kingdom for these special measures is some £118 miilion, which is helping to overcome the worst effects of decline in some of our older industries.

The final set of non-quotas is to be considered by the Council next week. The sums involved are modest as compared with the main fund, but the benefits are additional to our quota. The council of Ministers is likely to adopt regulations that will benefit Northern Ireland, and the fishery areas—I suspect that this will be of interest to Labour Members—of Hull, Grimsby, and probably also Fleetwood.

However, this will be the last set of non-quota measures under the old regulation. In many ways, the successors to the non-quota measures will be Community programmes. There are none as yet, but the Commission is believed to be about to submit proposals on telecommunications and energy. The allocations under the Community programmes will count towards the quota range of the member state concerned.

The Council will also be considering next week the Commissions's proposals in respect of the accession of Spain and Portugal. My right hon. and learned Friend the Secretary of State for Trade and Industry has emphasised to Commissioner Varfis the need to ensure that adequate emphasis is placed on problems of industrial decline, and the Commissioner acknowledged this problem in his speech on the 10th anniversary of the fund. However, we must recognise that it is unlikely that the Council will wish to depart radically from Commission proposals, and that the accession of the new and less well-off countries will inevitably lead to pressure to divert funds to them. The House has welcomed the accession of Spain and Portugal as being in the long-term interests of the Community and the country.

I move on now to the implications of the recent European Council at Luxembourg. The summit's provisional conclusions mean that the European regional development fund is to be written into the treaty of Rome on the basis of article 3 of the existing regulation—that is to say, equal status for areas of industrial decline as for underdeveloped regions. Secondly, the Commission is to put forward new comprehensive proposals to clarify and rationalise the tasks of the structural funds. That represents a reasonable deal for the United Kingdom. I hope that Labour Members will agree that the equal status for areas of industrial decline helps to guard our interests. The fund has grown and is now the biggest of the three structural funds. It is still growing and evolving. We shall contribute to the process of discussion and evolution, but I can assure the House that we shall continue to strive to ensure that there is an appropriate benefit for the United Kingdom.

On that basis, I invite the House to approve the motion.

11.54 pm
Mr. Gordon Brown (Dunfermline, East)

This is the first occasion for 18 months on which we have debated the European regional fund. They have been 18 months during which we have had legislation and new regulations from the Commission, particularly on the accession of Spain and Portugal, that affect the future amounts of regional aid that we can expect from Europe. They were also 18 months during which we have seen British legislation and regulations that will effectively reduce by £1,000 million the amount of regional aid that our most depressed regions can expect over the next five years. During those 18 months, the problems of the regions in Britain and Europe have deteriorated rather than improved as unemployment has grown — so much so that the 10th report of the European regional fund says explicitly that regional disparities within the Community have not narrowed in recent years and will widen significantly in the enlarged Community". It seems that the Secretary of State for Trade and Industry agreed with that statement when he spoke to the Conservative party conference, because he said that the problems of the regions now represents the gravest social and economic problem facing us as a nation. We ignore it at our peril". That is exactly the sort of statement that should have lead the European heads of Government to draw up a programme to mount a concerted attack on unemployment and deprivation in the Community's worst regions.

Of the 1.7 million manufacturing jobs that have been lost in Britain over the last six years 1.33 million have been lost in our depressed areas. Even in the last two years, when the Government boast that 700,000 jobs have been created, we have had fewer full-time jobs in the north-east, the north-west, Yorkshire, Humberside, Scotland and Wales. Manufacturing investment is still declining in many of our regions. Consequently, the Minister should have told us about what he is doing in Britian and the European Community to achieve the perfectly laudable objectives of the 1984 legislation, which state that the aim of regional policy should be the correction of regional imbalances, economic convergence and a more balanced distribution of economic activity.

The Minister referred to some of the changes that have taken place in the past 18 months, such as the moves towards integrated programmes, the new formula for upper and lower limits for deciding regional aid and—perhaps the most important development—the accession of Spain and Portugal, which will add 18 per cent. to the population of the Community but only 8 per cent. to the GDP and will double the number of people in Europe's depressed regions who can draw on the regional fund.

My first question—which the Minister skated over in answer to one of his colleagues—is, how much money will we receive from the regional fund next year, and how much can we expect to receive in subsequent years? When we debated the regional fund last year, we knew that there would be minor increases in the fund but that that would not compensate for the massive cuts taking place in British regional aid. It seems that this year the massive cuts in British regional aid will be compounded by cuts in real terms in the regional aid available for Europe.

In our last debate, the Minister of State, who has now been elevated to the Ministry of Defence, told us that he expected a 5 per cent. increase in the European regional fund budget every year, and said that Britain would remain a net beneficiary. In the public expenditure White Paper in January we were told that European funds from the regional budget would rise significantly over the next few years. Yet in the context of the regulation on the accession of Spain and Portugal, the Departmental note for tonight's debate states that the regulation would reduce the proportion of the fund received by the United Kingdom. It goes further and says that it would almost certainly be less than the United Kingdom's proportionate contribution to the Community budget". What does this mean in terms of the regional aid contribution that we can expect from the regional aid budget? The Commission wanted more money but the Council of Ministers cut the budget. The European Parliament raised it but the Council of Ministers has again cut the regional aid budget.

Britain will probably receive 339 million ecu in receipts from the regional fund this year, but we shall need 360 million ecu next year, merely to keep pace with inflation. If the Council of Minister's proposed budget is implemented, the best that Britain can expect is 380 million ecu. Britain would then receive one half of all the available free money after the quotas have been taken up, but that is unlikely. Britain can expect to receive about 285 million ecu. Therefore, this country can expect a cut in real terms next year in its allocation from the regional fund budget. Is that the result of the Prime Minister's hard bargaining in Europe and of all the efforts at Fontainebleau? Are we to expect a cut in real terms in the regional aid budget and in the years to come?

The problem is compounded by the backlog of regional fund commitments. Yesterday the Finance Commissioner told the European Parliament that The plain fact is that if present figures are not increased the regional and social funds will come to a halt next year. What will Britain receive from the regional fund if that happens?

Apart from what this country may expect to receive next year from the regional fund, inadequate funding is an increasing problem. The Minister of State referred to the vast increase in the budget of the regional fund in recent years. However the regional fund still receives only one tenth of that which is received by the agricultural fund. The agricultural budget has not diminished substantially during the past five years. In 1981 it was set at two thirds of the total budget. In the 1985–86 budget it is set at exactly the same level. The share received by the agricultural budget has remained the same, but the regional fund budget has improved only marginally, from 5.6 per cent. of the budget in 1980 to 5.9 per cent. in last year's budget.

I think that everybody accepts that a special allowance must be made to cover the accession of Spain and Portugal, in particular to deal with the problems in the depressed areas of those countries. However, according to the Council of Ministers, the regional fund budget is to be increased, as a proportion of the total budget, only from 5.9 per cent. to 6.8 per cent. — hardly a great achievement for regional aid, and hardly something which, if it benefits Spain and Portugal, is also likely to benefit Britain. How can this Government boast that they have achieved a fairer deal in Europe when 8 million farmers are receiving £13 billion in agricultural aid, while 20 million people in the economically depressed areas of the European Community are receiving only one tenth of that aid?

The Department of Trade and Industry's statement raises a further point. Last year the Minister said that the United Kingdom was a net beneficiary and that it was likely to remain so. However, the Minister of State says that we shall probably no longer be a net beneficiary of the regional fund. The House should be told why the Department of Trade and Industry says something one month and why the Minister of State says something different the following month.

If our receipts from the regional fund are to be smaller than our proportionate contribution to it, will Britain not lose out as the agricultural fund is increased and as the regional fund is also increased? We lose less if the agricultural fund increases than we do if the regional fund increases, but we lose either way.

Is that the Government's achievement in Europe? We lose out under the regional fund, be it in 1985, 1986 or 1988, and we lose out under the agricultural fund. We obviously need a fundamental renegotiation of the budgetary arrangements in the European Commission, and not the tinkering that the Prime Minister had been involved in recently.

Britain is high in the list of deprived areas in Europe. In the Commission index in the 1984 state of the regions report, we have two of the worst five regions for high unemployment and low gross domestic product in Europe. We have four of the worst 10 regions, seven of the worst 20 and 14 of the worst 30. Even with the accession of Spain and Portugal—half of Spain and most of Portugal are regarded as being within the ambit of the regional fund — we shall still have six of the worst 30 regions in Europe. There is no sign that the position has improved since the report was compiled.

The Minister spoke with pride about the special aid that he had won for the shipbuilding, steel and textile industries. But how can the £118 million aid for those three industries compensate for the loss of more than 50,000 jobs in shipbuilding, 781,000 jobs in engineering, shipbuilding and vehicles put together in the past six years and 1.75 million manufacturing jobs? There has been too little money from the Commission and too little money from the Government.

The Secretary of State for Trade and Industry told the Conservative party conference this year: I go so far as to say that in making all our economic and industrial decisions we should always ask ourselves this question: what impact will this decision have upon that gulf between the different parts of the country? It may not always be possible for that factor to be the decisive one, but on this I am convinced. It should each time be at the very forefront of our minds. Since then we have had the report on the inner cities, but the Government have offered no more new money and we have had the announcement of the go-ahead for the Channel tunnel, without any compensating attempt to get private investment in the regions. Regional aid is being cut in Britain and it appears that the real amount of regional aid from Europe will also be cut.

The European regional commissioner, Mr. Varfis, said recently: At present, those regions benefiting from ERDF operations are virtually the same as those which member states have put forward as candidates for regional aid. The Community however does not necessarily have to take action in all the regions laid down by the member states. He suggested that the area covered by regional aid should be reduced to about 30 per cent. of the Community's population.

The Minister is fond of telling us that 45 per cent. of our working population is covered by his assisted area policy and that those areas may get European grants. But will the Commission be allowed to enjoy the right of a blanket rejection of applications from some areas of Britain? What powers are the Government ready to hand over to the Commission?

The Minister mentioned the three integrated projects, in Glasgow, Merseyside and Shildon. He did not give an answer that will satisfy the Opposition or the people of Bishop Auckland and other areas of the north-east involved in the Shildon project. Unemployment in Bishop Auckland is now the third highest in England and is approaching 25 per cent. Obviously, that area welcomed the success of the application for an integrated programme. A junior Minister from the Department of the Environment came from Europe and said that The Government quickly stepped in to take advantage of the programme and that the local and public authorities … have been justly rewarded for their efforts. What does this mean and what does the Government's commitment to the north mean when the Council will be required to spend additional money to meet 50 per cent. of the programme?

I hope that the Minister will at least say that his Department will meet the councils to discuss their predicament. The problem is that much as the Government like to boast about negotiations in Europe, regional aid from the regional development fund is likely to be cut in real terms. We are likely to be net contributors, as we are net contributors to the agriculture fund. The Minister should be telling us how he fights in Europe to get the money that we need and how he will make up for lost funds by an active regional development policy.

12.12 am
Mr. A. J. Beith (Berwick-upon-Tweed)

The regional fund will certainly be in greater demand from the United Kingdom and the new entrants—Spain and Portugal. The division between the better-off and poor regions is increasing. That is made worse by higher unemployment and greater expectations. From every quarter comes the chorus "Are we getting our money back?" But that denies the notion that the Community is a co-operative venture.

Britain has a particularly strong case for taking from the regional fund and I welcome what the Government have done in some respects. However, some take the view summed up in the phrase "If it does not shave closer than a blade, you get your money back." We cannot expect to be net beneficiaries on every occasion.

A great deal of effort went into the negotiations to hammer out derogations from Community rules, transitional arrangements and the fishing issues, but little effort went into financial planning. The fund will not be able to make provision for Britain as it has in the last two years, given the new demands by Spain and Portugal.

Some of the things raised at the recent Council meeting have to happen. It will not be possible to sort out the regional funds' problems unless the fund is expanded. That involves a willingness to spend money. The problems in the agriculture fund cannot be resolved unless there is a change in the decision-making process and majority voting becomes more common.

A recent Council meeting introduced the new term "cohesion"—the ability to shift funds from one budget to another. There is not much sign that the agriculture fund will be able to release money into the regional fund. So the prospects are not good unless we make more rapid progress on the basic decision-making processes of the Community and accept that we may need higher Community resources to meet some of these claims.

There are domestic aspects to the problem which recur when we debate these issues. One that has not been mentioned this year but which is mentioned most years is the continuing difficulty that comes under the jargon word "additionality"—the way in which British Governments effectively claw back the European money, thereby negating the special treatment that the Community saw fit to give to a locality.

This is not a net loss to Government regional policy as a whole — we have seen that happening in other directions, as the hon. Member for Dunfermline, East (Mr. Brown) mentioned—but it represents a weakening of the special treatment being afforded to a locality. If the Community funds given to that locality are, in effect, clawed back because the Government reduce the amount that they are giving under other heads to that area—on the grounds that it no longer needs the money because it is getting it from Europe — that is negating the Community's decision to make a specific provision for that area to enhance its ability to deal with problems that are recognised as being serious.

Another key domestic problem that arises in considering this subject are the changes in the assisted area map which took place just over a year ago. There was considerable argument last night about whether the changes in the map had any effect on the total of regional fund disbursements in the United Kingdom. In general, it should not have an effect on the total, although it could if, by the drawing of the map, the Government reduced the number of viable and acceptable projects that were emanating from the United Kingdom.

But the redrawing of the map has had the effect of excluding from the benefits of European regional assistance a number of areas that meet the criteria which the Goverment mention in their amendment and which they set for redrawing the map, including regions affected by industrial decline". When they redrew the map, the Government saw to it that included in eligibility for regional aid were a number of relatively prosperous suburbs and excluded from regional aid were a number of inner city areas and small communities which were precisely those most affected by industrial decline, and in previous debates several of my hon. Friends — for example, my hon. Friend the Member for Leeds, West (Mr. Meadowcroft)— spoke about the inner city aspects.

I have talked at length about a community in my constituency, Amble, that is greatly affected by industrial decline. It has as high an unemployment rate as arty of the areas that were mentioned earlier. It has an effective unemployment rate of one in three, though that is disguised by the fact that it is in a larger travel-to-work area. The unemployment rate in the entire Alnwick and Amble travel-to-work area is now higher than that in the adjoining development area, at 17.3 percent., and is much higher than in many of the areas within, for example, the Newcastle upon Tyne development area.

When the assisted area status was taken away from a number of these communities, of which Amble was one, the main effect for them was not the withdrawal of British Government aid — which by that stage had reached minimal proportions—but the withdrawal of eligibility for European regional aid. The redrawing of the boundaries for most of the areas had little consequence from the point of view of British Government activity. It was all about the loss of the right to apply for aid from the European Community.

The Government must take one of two actions to tackle these problems. First, they must look again at the map to see whether it continues to satisfy the criteria. Hon. Members in all parts of the House have drawn attention to cases where the map does not meet the criteria, and in some of those cases the situation has worsened in the meantime. It has worsened in Amble, which is even more deserving of inclusion in the assisted areas than it was previously.

There is a second method that the Government could choose to deal with some of these problems. There is a whole category of assisted areas in the United Kingdom, and in England in particular, which do not qualify for European assistance. They are defined as development areas but they do not qualify for the development fund by decision of the British Government. They are the areas that are defined by the development commission, a Government agency, as rural development areas. These are primarily the rural areas that have suffered from decline, and often industrial decline affecting mining, coastal industries, quarrying and mineral industries. These areas benefit from the work of the development commission, but unless they come within another category of assisted area they cannot make applications to the European regional fund.

The Government could make all or part of these rural development areas eligible to make application to the development fund. There is no guarantee that all their projects would be accepted following application, but it would be a proper accompaniment to the development status that the Government have given them. Within these areas are a number of regions that are affected by industrial decline and excluded, by the Government's decision, from the European regional development fund and the help that the Government say, in their amendment, such regions should have.

The regions that have faced industrial decline are in a worse state than ever. They are looking more and more beyond the Government for help overseas in the form of European Community aid. They are at the mercy of the Government in qualifying for European aid and in receiving support and backing for their applications. The Government have expressed in their amendment a desire to see regional policy help these regions, and if they want that to happen they must ensure that the right areas qualify and that the fund is developed. These must be key features of their regional policy.

12.22 am
Mr. Peter Morrison

With the leave of the House, I shall reply. We have had two rather distinct and different contributions from Opposition Members. The hon. Member for Dunfermline, East (Mr. Brown) was patently against our membership of the European Community.

Mr. Foulkes

My hon. Friend the Member for Dunfermline, East (Mr. Brown) was not. That is absolute rubbish.

Mr. Morrison

That is precisely how the hon. Gentleman—

Mr. Foulkes

rose—

Mr. Morrison

No, I shall not give way. If the hon. Gentleman wishes to take up the matter—

Mr. Foulkes

Come on.

Mr. Morrison

The hon. Member for Dunfermline, East was patently entirely against Britain's membership of the Community.

Mr. Foulkes

Rubbish.

Mr. Morrison

He said that he accepted that it was correct that Spain and Portugal should be partners, but apparently he did not accept the need that they, as less well-off than the United Kingdom, should have special provision. That is precisely what he said.

Mr. Foulkes

Will the Minister give way?

Mr. Morrison

No. If the hon. Gentleman does not think that the hon. Member for Dunfermline, East is capable of responding for himself, he is not being very complimentary to him.

Mr. Gordon Brown

Was the Minister listening to what I said when he was joking with his hon. Friend the Member for Aberdeen, South (Mr. Malone)? Did he not appreciate that I was expressing concern that we faced a real cut in our receipts from the European regional fund budget? Does he accept that I was worried that we would end up, as the Department of Trade and Industry has said and as the motion hints, as a net contributor to the EEC budget? That is what I was saying. I hope that the Minister will respond to the fears which have been expressed by my right hon. and hon. Friends both yesterday and today about the future of the regional fund budget as a result of the Government's apparent failure in negotiations in Europe.

Mr. Morrison

The hon. Gentleman must have heard what I said to my hon. Friend the Member for Southend, East (Mr. Taylor). I accepted that there was a likelihood in the year ahead, and certainly the year after that, that we would be a net contributor to the fund. I hope that he accepts that Spain and Portugal have a long way to go before they catch up with us. As a good Socialist, a believer in trying to help others and a believer —apparently, from what he has said—in the Community, the hon. Gentleman must believe that there is a point at which one must help those who are less fortunate. I am glad that we have managed to reconcile our differences. I accept the likelihood that in the year after next, or perhaps even next year, we shall be net contributors to the fund because of the accession of Spain and Portugal. The hon. Member for Dunfermline, East would like that to happen because those countries are less well off in terms of regions and inner-city areas.

Mr. Gordon Brown

I hope that the Minister will accept everything that I said about Spain and Portugal—that we accept the needs of those areas and appreciate that the regional fund should be increased to meet the needs of half of Spain and almost all of Portugal. I hope that the hon. Gentleman will accept that that was said last night and tonight by the Opposition. What success can the hon. Gentleman claim for his Government in any negotiations on the EEC's future financial arrangements if we shall end up as a net contributor in terms of the agriculture fund and the regional fund? Does this not lay bare the Government's claims to have had successful negotiations at Fontainebleau and at other Community meetings?

Mr. Morrison

It seems that I went fishing for a mackerel and caught a ruddy great whale. I was saying that there is a point at which one helps one's partners in Europe. The hon. Gentleman has just said that the agricultural part of the budget is far too big and that we should give more in regional aid. I am 100 per cent. sure that, if he says that on behalf of his party, many voters —not just in rural seats in Scotland but in England, Wales and Northern Ireland — will listen to him carefully. Much of the agriculture fund goes to support industry in rural areas. If the hon. Gentleman is saying that the balance is wrong, despite the Fontainebleau agreement, that message will be heard throughout the land.

Mr. Gordon Brown

rose—

Mr. Morrison

I have already given way enough to the hon. Gentleman. That message will be heard in many parts of the country.

Mr. Foulkes

In Islay.

Mr. Morrison

Perhaps especially in Islay. The message will be heard throughout the land, and that is how people will discover how the Labour party thinks.

Mr. Foulkes

And the Government.

Mr. Morrison

Of course.

Mr. Gordon Brown

Is the Minister now making new policy for the Government? Is it no longer the Government's aim to shift the balance between the agriculture and regional funds? Does the hon. Gentleman accept that these imbalances will remain in such a way that our contributions to the EEC will increase substantially in future years?

Mr. Morrison

The hon. Gentleman was not listening to my speech.

Mr. Foulkes

He was listening keenly.

Mr. Morrison

He was not. In my opening remarks, I said that in terms of the regional development fund we were making moves in precisely the direction he would like. The hon. Member for Dunfermline, East expressed an anti-Community spirit against the agriculture fund, and so on.

Mr. Foulkes

Not at all.

Mr. Morrison

I am entitled to my reading of his speech just as much as he is entitled to his reading of his speech. The fund is being moved in the direction that the hon. Member for Dunfermline, East wants — it is a greater move towards reclaiming the industrial heartlands.

The hon. Member for Berwick-upon-Tweed (Mr. Beith) was kind enough to say that he was totally in favour of the accession of Spain and Portugal. He was generous enough to say that it was not always a one-way trip, that one could not always expect everything because one was part of a club or community. He suggested that we should change the regional map. I hope that he agrees that. as that map was drawn a little less than 13 months ago, it would be a mistake to do a complete redrawing. It takes time to work through. I listened carefully to the points that: he made about deprived rural areas. I do not know his constituency half as well as he does, plainly, but I know other rural areas well. I understand the point he made about rural areas not receiving the media spotlight, as the inner city areas do.

It is not possible for me to say this evening, and the hon. Gentleman would not expect it, that we have a deal and can do something. It will not be easy to do what he suggests. I appreciate how problems can arise in the areas to which he has referred. He is not knocking at a completely closed door.

Mr. Foulkes

What about Islay?

Mr. Morrison

The hon. Gentleman laughs and talks of Islay. I wish that I had the interest in Islay that he thinks I do. I am but the youngest son. It has nothing to do with me.

Despite the fact that the hon. Member for Dunfermline, East and I have had out little altercations over the Dispatch Box—

Mr. Foulkes

Answer the question.

Mr. Morrison

I have answered the question—about whether he is in favour of the accession of Spain and Portugal and whether we should be giving them some aid because they have perhaps more problems to resolve than we do. I hope that the hon Member for Dunfermline, East and his hon. Friend the Member for Carrick, Cumnock and Doon Valley, who is obviously in merry form—

Mr. Foulkes

Vivacious.

Mr. Morrison

Vivacious—what a good word. I hope that the hon. Member for Dunfermline, East and his hon. Friend agree with the motion.

Question put and agreed to.

Resolved, That this House takes note of European Community Documents Nos. 9563/84 and 9506/85, the Ninth and. Tenth Reports from the European Commission on the activities of the European Regional Development Fund in 1983 and 1984, and 8253/85, draft Regulation amending Regulation (EEC) No. 1787/84 on the European Regional Development Fund; and accepts the need to provide for an appropriate share of the Fund for Spain and Portugal but emphasises that an appropriate proportion of the Fund should continue to be allocated to regions affected by industrial decline, and in particular to the United Kingdom.