HC Deb 14 May 1986 vol 97 cc690-1
3. Mr. Knox

asked the Secretary of State for Trade and Industry what is the value of the grants allocated to England from the European regional development fund since its inception?

The Parliamentary Under-Secretary of State for Trade and Industry (Mr. John Butcher)

About £997 million.

Mr. Knox

Does my hon. Friend think that the size and extent of those grants has been sufficiently well publicised in this country? If not, what steps does he propose to take to ensure that the public are aware of the level of assistance that we receive from the fund?

Mr. Butcher

I think that there is awareness among the key clients of that area of expenditure, particularly among local authorities and those who bring forward applications for infrastructure investment. It is the major section of spending under this head of account. Obviously, we would look for methods of improving the publicity, particularly to the private sector applicants, but in the main we are satisfied that the volume of applications is being matched by the funds available.

Mr. Wrigglesworth

Does the Minister not agree that, in comparison with the scale of funds given out through the common agricultural policy, the funds given out for regional policy by the Community are very small indeed? What are the Government doing to seek to increase them, to help the regions where unemployment is so high?

Mr. Butcher

I do not think that the amount spent here is ungenerous. I accept the implication of what the hon. Gentleman is saying, that this area of spending has benefits for the United Kingdom which are greater than usual. I should inform the hon. Gentleman that the United Kingdom's share of the fund in 1985 was £345 million, representing about 26 per cent. of the total budget. In terms of applications, in 1986 the United Kingdom's share is about £376 million, which is about 19 per cent.

Mr. Hill

Will my hon. Friend confirm that applications will be made to the European development fund for the infrastructure that will be needed on this side of the Channel for the Channel tunnel? Is it not a fact that most of the funds seem to be earmarked for infrastructure? Would that not be a good thing?

Mr. Butcher

In the main, the areas that receive assistance from the fund coincide with our domestically identified assisted areas. My hon. Friend raises a particularly interesting point. The best thing to do at this stage is to agree to look at that, given that it is an especially European—I stress European—venture.

Mr. Gordon Brown

Is the Minister not aware that, despite the figures he mentioned, regional aid has been halved under this Government, and is to be halved yet again? Was it the EEC that insisted that access to the assisted areas grant be restricted to 35 per cent. of the working population, or was it the Government who made that decision? Will the Minister consider an urgent review of the assisted areas map? Will he bear in mind that 3 million people are now in areas with unemployment rates of between 15 and 26 per cent., yet those areas receive no regional development grants and no regional selective assistance?

Mr. Butcher

I am grateful for the opportunity to restate the circumstances against which the 35 per cent. area coverage was brought about. During the Government's review of United Kingdom industrial regional aid in 1984, we were given to understand that if we were to seek Commission approval for an assisted area map covering more than 35 per cent. of the working population of Great Britain, the Commission saw little likelihood that it would approve that. Reductions might have been forced upon us to bring the coverage down to 35 per cent., or even less, which was likely. In the circumstances, the Government decided to set the map coverage at 35 per cent., and that was accepted by the Commission.

Mr. Forth

Has my hon. Friend made any estimate of the likely impact of the enlargement of the EEC to include Spain and Portugal on the United Kindom's share of the regional development fund? Does he agree that to attempt constantly to move economic resources around arbitrarily where they do not want to go is a futile exercise anyway?

Mr. Butcher

Where possible, these forms of assistance should be coloured by the needs of market forces. I understand my hon. Friend's point, but hon. Members on both sides of the House voted for Portuguese and Spanish accession to the Community, and it was almost inevitable that our share of the budget would fall.