§ Mr. Ken Hargreaves (Hyndburn)I apologise to my hon. Friend the Minister for keeping him here at this late hour. I am not sure that, if the situation were reversed and I were the Minister, I would automatically be well disposed to pleas for help made to me at this time in the morning.
I wish to speak about the problems faced by former textile areas that are eligible for benefit from the European Regional Development Fund. I am grateful for the opportunity to speak at last about this important matter. I say "at last" because not only have I applied unsuccessfully for an Adjournment debate in the past five weeks, but the hon. Member for Burnley (Mr. Pike), whom I am pleased to see here, has been equally unsuccessful in such applications. Questions from me and from my hon. Friends the Members for Halifax (Mr. Galley) and for Batley and Spen (Mrs. Peacock) put down to the Department of the Environment were transferred to the Department of Trade and Industry, which then transferred them back to the Department of the Environment. I was beginning to despair.
The ERDF was established in 1975 as an instrument of European Community regional policy to help to correct regional economic imbalances, arising in particular from agricultural preponderance, industrial change and structural unemployment. In the United Kingdom, regional problems arise mainly from industrial obsolescence, geographical remoteness, and the need to replace outworn infrastructure. Assistance given by the fund falls under two main headings— grants for industrial, handicraft or service activities and grants for infrastructure works carried out wholly or in part by local and public authorities.
EEC regulation 219/84, which covers the textile measure, adds demolition and redevelopment of disused industrial sites to the list of eligible activities. The guiding principle behind the allocation of finance from the European Community is that it should provide an additional element to the activities undertaken by member states. The term "additionality" can be viewed in two ways. The Community assistance should be additional to the level of spending already undertaken at national level, or the Community aid should enable additional schemes to be carried out that would not have taken place without Community funding.
As a result of discussions on the textile measure, the Commission received assurances from the Government that expenditure on the reconversion of premises and the reclamation of derelict land, financed by ERDF grants, would allow local authorities to extend their expenditure limits by an amount equal to the ERDF aid without penalty.
The Government, in response to numerous approaches on the matter, maintain that anticipated ERDF receipts are taken into account in setting the levels of local government spending, which are, therefore, higher than they would be without those receipts. However, that is never quantified.
I share the concern of the Association of District Councils about the Government's position and, like the association, I believe that ERDF aid should be genuinely additional to other resources and that the degree of additionality must be clearly visible. I believe that the 342 Government's present practice is unfair and illogical and affects areas such as Hyndburn detrimentally. If a local authority is eligible under the non-quota textile measure and receives a grant from ERDF, no corresponding increase is permitted in its capital allocation.
Although the estimated receipts from ERDF are apparently taken into account when the national aggregate for local government expenditure is determined, no allowance is made for the fact that only a prescribed number of authorities are going to be eligible to receive ERDF grants when annual capital allocations are made to individual authorities. Consequently, the potential benefit of ERDF grants in terms of increased capital spending ability, is spread over all United Kingdom authorities rather than directed solely towards those areas that the EEC, and presumably the Government, intend to assist because of their serious economic problems. In that sense, therefore, there is no additionality at local level.
The potential benefit, therefore, of additional investment in economic revitalisation of particular areas is lost, the additional finance being dissipated throughout the nation to needy and not so needy authorities alike, rather than being allocated specifically to the authorities which are judged, by reason of the textile measure, to need it. That seems to be illogical, and I cannot believe that the Government intend to penalise us in that way.
The only financial benefit a textile authority receives is on revenue, since it will be paying interest on only 50 per cent. of the total cost if a grant is received. However, in terms of tangible works to revitalise the local economy, there is no net gain in the amount of work the authority can afford to carry out. That should be, and surely is, the primary aim of the textile measure. The present measure severely limits the number and sizes of schemes that can be financed, with or without ERDF assistance and economic benefits are lost.
The effect of those constraints is serious for Hyndburn and the other textile closure area authorities involved. Take-up under the textile measure is currently biased towards those authorities that are fortunate enough to be designated under the Inner Urban Areas Act 1978, since that gives them substantial capital allocations. Hyndburn, despite repeated requests and a strong case, has no such status and is experiencing real difficulties in putting forward eligible schemes, given the current capital expenditure controls.
Mill conversion schemes, as envisaged by the measure, are generally out of the main stream of many authorities' capital programmes. Hence, accommodating such a scheme to obtain grant may be difficult because of the scale of expenditure involved, or it can mean deferring or deleting another scheme. The grants may therefore only create a substitution effect.
Authorities are also seriously concerned that the original intentions for the grant moneys are not being maintained in an effort to distribute the finance available in the time scale available. Although schemes of environmental improvement can be important, they were clearly stated to be a low priority. The amount of grant being allocated to such schemes appears to be substantial and that must be attributable to the lack of suitable mill conversion schemes being put forward. It is of concern that the main objective of the measure is apparently not being realised, since one of the major problems in those 343 areas is the lack of modern, efficient industrial buildings and the substantial numbers of under-used former textile mills.
I am concerned that many grants under the non-quota textile measure are gravitating to the inner urban area authorities, particularly programme authorities, and are being allocated, in a number of instances, to schemes offering less economic benefit.
My local authority of Hyndburn feels strongly that the system should be changed soon. I share its view that the amount included in local government expenditure for ERDF receipts should be eliminated from that calculation and a system introduced which would direct the grant receipts only to those authorities that are eligible.
As the Government know what assumptions are made about ERDF receipts, when they determine the national total for the block five—the other services block—of the capital allocation, I would have thought that it would be a simple matter to isolate that element from the rest of block five. It would then be possible to issue approvals for additional capital allocations, specific to approvals given to local authorities for ERDF schemes. That is the system currently employed for the urban programme, urban development grants and derelict land grants. If an authority receives grant, it also receives the necessary allocation to cover that grant. It would be acceptable for only the EEC grant element to receive an additional capital allocation, thus achieving the additionality that authorities are seeking. The Department of the Environment administers non-quota grants and the process would appear to be more straightforward than for quota grants.
If deemed necessary, as with derelict land grants, the capital allocation could be made after a return of expenditure is submitted at the end of a financial year because formal approval of allocation is retrospective. That would overcome the problem of divergence between planned and actual expenditure.
The logic of such a system is extremely powerful. If such systems are felt to be adequate for allocating grant under the urban programme and derelict land grants, which involve substantial sums, there seems to be a strong case for a similar system to be introduced to deal with ERDF grants. It seems odd that ERDF grants continue to be treated as a general benefit vis-a-vis capital allocations, whereas other aid to tackle urban obsolescence and economic decline is excluded and targeted on precisely those authorities that need it.
As a possible alternative, that proportion of the national allocation that relates to ERDF grants could be reserved for distribution to eligible authorities by certain criteria before the remainder is divided among other authorities. That method would be less accurate and more cumbersome than the first, but would still be preferable to the present arrangements.
In previous correspondence or meetings, Ministers have indicated a reluctance to reduce the allocations to the local authority associations, since there is a general desire to allow the associations to decide their own priorities. As that freedom does not extend to key expenditure programmes, such as the urban programme, it is somewhat difficult to accept that the Government would in any way create a precedent by removing ERDF grants.
344 The Minister scarcely needs to be reminded of the dramatic decline in the textile industries, from which stems much of our urban decay. I am sure that he recognises the concern of the local authorities involved and their commitment to local industries and employment.
Like other textile closure areas of Lancashire, Greater Manchester and West Yorkshire, Hyndburn covers an area which is proud of its record of self-reliance and productivity. ERDF, properly allocated, would greatly help our efforts to revitalise local industry and stand firmly on our feet once again. Hyndburn has the will, the expertise and the capacity to augment the role of the Government and the EEC in economic recovery, but we need to be given a realistic opportunity to do so.
I am grateful to the Government for the extra money that Hyndburn has received for housing, derelict land and for the town centre redevelopment, but we can spend wisely in Hyndburn every pound that we receive. I urge the Minister to act to change the present system of ERDF allocation so that we benefit fully from it.
We are especially concerned that the Government's attitude as seen by the European Commission, may discourage the EEC from directing special assistance in future to the needy regions of the United Kingdom. That would be a tragedy for many areas, not least for Hyndburn.
§ Mr. Peter Pike (Burnley)I am pleased to speak in this debate, and I certainly note the endeavours of the hon. Member for Hyndburn (Mr. Hargreaves) to achieve a debate on this subject for a considerable time. He has coordinated Members of Parliament covered by the non-textile measures which apply not only to Lancashire, Merseyside, Greater Manchester and Yorkshire, but to other areas. Hon. Members representing those areas are equally worried about the problems of the ERDF non-quota measures as hon. Members present. I am sure that it is only the early hours of the morning that have prevented others from being present.
I wondered which Minister would reply and I am pleased that it is the Minister of State, Department of Trade and Industry, because he will listen to our case and, if he cannot answer all our points because the matter covers more than one Department, he will have them considered fairly. Even if the answer is not favourable, they will be responded to. Obviously, we hope that the response will be favourable.
The hon. Gentleman mentioned the problem of tabling questions on this subject. There is a tendency to transfer them from one Department to another. Not only is the DTI involved but the Department of the Environment and the Treasury, which likes to stick its fingers into all Departments. That only makes the matter more complex. In addition, the fund originates from the EC, so that that further complicates the matter.
The two problems are the complexity of getting schemes approved and money committed for them, and additionality. The DOE is responsible for the administration of non-quota measures for the infrastructure. Only last week the Parliamentary Under-Secretary of State, the hon. Member for Surbiton (Mr. Tracey), in a written answer, made it clear that, of the £21,529,000 originally available under non-quota measures, £11,218,235 is still to be allocated and that the measures expire in 1989. There is grave anxiety that approvals are taking so long.
345 I intended to make many of the points made by the hon. Gentleman and certainly I agree with most of his remarks. Points of difference would be only minor. It is important to recognise the joint political approach and great similarity of view on this subject in all the areas affected.
If the EC makes funds available, clearly they are additional resources. It is important to be clear that they are not a substitute for resources that the Government would have made available in any event. The hon. Gentleman rightly made that important point, and I intend to spend some time on it.
It is difficult to get schemes approved. A scheme in my constituency relates to Slaters terrace, which is on the Leeds-Liverpool canal. It is a terrace of cottages overlooking the canal which was built at the end of the 18th century when the canal was built. It is standing derelict. It was visited on 23 April last year— St. George's day—by Prince Charles; and Rod Hackney of Hackney Associates has produced a report which refers to what is known in Burnley as the "weavers' triangle". It is an area of great importance in the industrial development of this country. Britain's wealth in the last century, in the great industrial revolution, was based on the growth of the cotton industry and on the coal and other natural resources in the area. That revolution has greatly changed civilisation throughout the world. Lancashire played an important role in the early stages of that revolution.
We have been waiting for a decision on Slaters terrace for some considerable time and we are still awaiting that decision. The Parliamentary Under-Secretary of State for Employment, the hon. Member for Rossendale and Darwen (Mr. Trippier), said only recently that that item was still on ice following his inquiries. At one time Burnley, Hyndburn, Pendle and Blackburn were dominated by the old large cotton mills, with their chimneys belching out smoke. That has completely changed. There are still some mills working, but the position is now very different from that which even I knew as a boy when I was evacuated to Burnley during the war to my mother's home town which she had had to leave during the recession in the 1930s. We want to see those areas thrive once again.
In a letter sent by Burnley borough council to the Association of District Councils on 27 November 1985—and I have been pursuing the issue since then, so this dates back some time now— Mr. Brian Whittle explained to Gordon McCartney, the secretary of the ADC, that he would be aware that Burnley borough council was
one of several Districts in the North West which together with a number of Metropolitan Boroughs, are eligible for ERDF assistance under the Non-Quota Textile Closure Area measure. Growing concern has been expressed that, because of the Government's controls over capital and revenue spending, the take-up of assistance available under this measure has been seriously inhibited.Mr. Whittle went on to refer to the ADC's economic document to which the hon. Member for Hyndburn referred. That sets out the ADC's view on additionality. As that point has already been dealt with, I do not intend to go into detail on it again. However, the document makes it clear that the ADC's view is the same as that expressed in the debate tonight, and therefore that view has a considerable measure of broad support.On 3 July 1986 I received a letter about a delegation meeting the Minister for Environment, Countryside and 346 Planning. That delegation discussed the problems of additionality. The hon. Member for Hyndburn was also fully involved in that process.
At that stage, the council stressed a particular problem of additionality affecting Burnley. In the last paragraph of his letter to me dated 3 July 1986, Mr. Whittle states:
The Council was recently informed that the provision of the industrial units at Queen Street Mill would qualify for grant assistance from the ERDF Non-Quota Sector in the sum of £85,223. However, as a certain element of this grant relates to works already grant aided under the Industrial and Commercial Urban Programme, the sum of £53,000 will need to be returned to the Department of the Environment. Furthermore, the Department of the Environment is not prepared to transfer this sum to other Urban Programme Schemes".The letter then gives some of the other schemes that have been rejected.Having been able to get additional resources from Europe, it seems that, as the Government do not have sufficient money to approve all of Burnley's urban programme submissions, they should at least allow funds to be switched among those which have been rejected, but no, the money has to go back to the Department.
Lancashire Enterprises Ltd. raised the issue with the Chief Secretary to the Treasury on 18 September. Its letter says:
It is understood unofficially that it is likely to be October/ November before an announcement is made. I am therefore writing to you with the unanimous support of the Directors of the Company and with all part y support from the County Council to ask, in the light of the Government's knowledge of the way in which LEL is funded and the acceptance, referred to in your letter, that companies appropriate to the situation should be encouraged, that LEL should be immediately freed from the general freeze".The letter says that the company was awaiting approval for £1,712,542 worth of schemes. It says that they are in line with the Government's priorities as they are designed to encourage the development and expansion of small firms. One of those schemes would have lapsed if other sources of funding had not been found. Projects have been put in jeopardy, however, and that has job implications.The Chief Secretary finally sent a reply saying that it was no longer a Treasury problem and that it was now with the Department of the Environment. The hon. Member for Rossendale and Darwen got involved and tried to push the schemes along, but they were simply pushed from one Department to another. They still have not been sorted out and we are within sight of the end of the financial year.
I have a mass of correspondence which shows the difficulties that Lancashire county council and Burnley borough council have had. I know that the same is true of Hyndburn, Pendle and other areas. In its most recent document, the Association of District Councils, which is not Labour dominated, repeats the principles of additionality. The latest information we have is that the delays are due to the lawyers in the EEC. So the ball is back in Europe. The EEC, on the other hand, tell us that the British Government are at fault and that it is not Europe's problem. The matter has been raised with the MEP for Lancashire, East, Mike Hindley, who has taken it up.
We have different Government Departments blaming each other, the Government blaiming the EEC and the EEC blaiming the Government. The situation is defeating the whole object of the fund. We deserve assistance. We have overcome many of the problems that have arisen 347 locally because of the decline of industries in the Lancashire area. We have fought to survive. We do not expect everything to be done for us.
I hope that as a result of this debate the Government will take the necessary action to abolish the unfair principle of additionality as it is operated now and will ensure that steps are taken to deal more speedily with applications when they are made, from wherever in the country they come. I hope that the Minister will give us a ray of hope for the future.
§ The Minister of State, Department of Trade and Industry (Mr. Giles Shaw)I wish at the outset to congratulate my hon. Friend the Member for Hyndburn (Mr. Hargreaves) on raising these issues, and I assure him that whatever the time, be it 1.30, 3.30 or any hour of the night, it is a pleasure to respond to a debate which he has initiated. I assure him that there is no question of awkwardness in having a ministerial colleague here at this hour on a matter of this importance.
I appreciated the contribution of the hon. Member for Burnley (Mr. Pike). My hon. Friend and the hon. Member, representing Lancashire seats, will recognise, having a Yorkshire Member responding to them, that there is much more about which we agree than disagree when it comes to dealing with problems associated with areas of textile decline.
But the issue which my hon. Friend has raised supersedes the question of textile decline areas. He and the hon. Member for Burnley have raised the subject of additionality, which is a feature of the policy currently applied in particular in local government capital expenditure. It spreads right across local authorities, all of which benefit in many ways from the ERDF set up by the European Community.
My hon. Friend will recognise that the essential policy is a matter of local authority expenditure and that that is primarily a matter for the Secretary of State for the Department of the Environment. Indeed, my hon. Friend and the hon. Member might look somewhat charitably on my appearance here to answer a debate the major component of which has been a discussion about local authority financing, for which I have no ministerial responsibility.
But the fact that my hon. Friend has raised problems facing the European regional development fund in non-quota former textile areas I hope still entitles me to respond to the points raised in the debate, certainly as they affect directly the operation of my Department's responsibilities in the textile area or former textile area schemes which are under discussion.
I shall first address the central issue of additionality. Having made it clear that the central Department which deals with this issue is the Department of the Environment, my first task is to say that I shall see to it that my right hon. Friend the Secretary of State is fully apprised of the views expressed by my hon. Friend the Member for Hyndburn and by the hon. Member for Burnley. I know from my direct involvement with the Department of the Environment some little time ago of the burning issues which are raised on additionality in relation to capital expenditure programmes. This has been reviewed from time to time, and I think that my hon.
348 Friend is well aware of that. Indeed, it was reviewed last year when there were discussions between the Government and local government representatives on possible routes through what is clearly seen as a major bone of contention.
The Government's view is clear. It is clear that local authority expenditure is a very large slice of total public expenditure. I am sure that my hon. Friend, although he did not say it, would subscribe to the importance of containing public expenditure as a matter of national economic management or at least being able to assess it in relation to what the economy can legitimately be said to afford. It follows, therefore, that when discussions are held on European schemes, there is inevitably an element of potential double counting. They are schemes which are well known in advance and by which local authorities— I am sure that those hon. Members who are present would agree that each of theirs is one such authority—are able to take into account some of the benefits that would arise in their areas, should they be eligible for certain receipts from the European regional development fund. In essence, the Government have been seeking for some years to ensure that the regional development funds are taken into account when local authority capital expenditure programmes are set and, therefore, have already been taken on board when the final decisions are taken on the total local authority spend through the rate support grant system.
During the discussions last year, there was a proposition that an amount sliced off the top of the other services block might be allocated as the payment for ERDF money and that that would be a possible formula. But, as I think my hon. Friend the Member for Hyndburn and the hon. Member for Burnley recognise, that was not found acceptable in the discussions between the Government and the local authority. Therefore, the situation remains that expected receipts for the ERDF are taken into account when capital allocations are set. So long as that is the case, if separate sums are available, there would obviously be a form of double accounting.
I accept that the problem cannot be allowed to rest there. My right hon. Friend the Secretary of State for the Environment has agreed that this issue should be addressed in the discussions on the Green Paper on local authority financing, which he published last autumn. I hope that my hon. Friend will take heart from the fact that, because there is a major disagreement about the allocation and additionality consequences of the ERDF receipts, this matter should be so addressed. The discussions on the Green Paper, which was published last year under the title "Paying for Local Government", deal with that issue. I have little doubt that local authority associations and individual authorities will cover in their responses this issue of additionality which has caused such concern for so long.
Local authority associations play a part in the decisions on the size of the capital allocations. My hon. Friend will know that after consultations the final decision on the capital allocations is made. Therefore the present policy of determining the total capital allocation, when those allocations come before my hon. Friends in the Department of the Environment for final decision, reflects the collective view of local authorities.
I accept that there are many areas in the country where the local authorities may not feel that the collective 349 decision and national determination adequately reflect what they want to do in the areas that are affected by industrial decline.
I have broadly referred to the issue of additionality and I shall now turn to the question of dealing with the areas of decline. Those hon. Members who are present have raised the issue of additionality in the context of their desire that funds be made available to assist the regeneration of areas that are suffering as a result of the decline of the traditional industries in their areas.
There are aspects of the ERDF that are directly the responsibility of my Department, that is the use of funds to assist industries in the specific areas, defined by the ERDF as being non-quota measures, that have been affected by the decline of textiles, shipbuilding, steel and so on. My hon. Friend the Member for Hyndburn and the hon. Member for Burnley are aware of that.
In recent times there has been much interest in making use of the additional opportunities for expenditure and additional funding made available by the European Community. There has been a feeling that the northern parts of the United Kingdom do not receive a sufficient amount to deal with the declining traditional industries such as textiles. I assure my hon. Friend that it is the Government's determination to ensure that, although we are one of the wealthier nations in relation to the entire Community, we fight firmly for our share of additional funds for assisted areas, especially those suffering structural decline.
As the Community has enlarged and taken in countries in the south, there is a need for the maximum degree of effort to ensure that the northern parts of the Community are considered with equal intensity as those countries in the south. However, it must be accepted that there is an obvious difference between the quality of the infrastructure and industrial activity in those countries compared with the countries in the north of the Community.
The ERDF non-quota measures provide the opportunity to maximise our efforts. The total amount that has been spent through non-quota measures to alleviate problems in the textile areas is £134 million. The relief for textile areas is part of the composite policy to assist shipbuilding and steel areas. The measures cover both aid to small firms and assistance to improve the physical environment.
My Department is the lead Department in deciding how those measures are administered in the areas represented by my hon. Friend the Member for Hyndburn and the hon. Member for Burnley. Out of the £134 million the Government have provided £74 million. It is a characteristic of the schemes that there must be a national as well as a community commitment to spend money on the problem. My hon. Friend made it clear that the textile areas in question are not just the parts of Lancashire represented by the hon. Member for Burnley, but all of Northern Ireland, Tayside, parts of west Yorkshire other parts of Lancashire and greater Manchester.
The measures for small firms were announced as a programme that would run for five years, but it was hoped that the funds would be taken up at a quicker rate than that. In some instances this has been the position. We expect that we shall be able to deliver the full amount of non-quota aid to the areas concerned well before the end of the programme.
I am aware that there have been variations in some of the textile areas, including parts of Lancashire. When there is an apparent underspend — on for example, the 350 business improvement services scheme, which is part of the Department's repertoire of assistance—the issue arises of possible switches from one location to another. This arises when there are underspends in one area and overspends, or higher demand, in others. The Manchester area is one example. There has been a keenness to see that there is a redistribution between Manchester and Lancashire, and a decision must be made at a time when we know that there will be an under-expenditure. My latest appraisal is that there is likely to be one, and I hope very much, therefore, that we can make a transfer. It will probably happen within the next six months, and I shall be considering carefully the benefits that that can bring to areas such as the one that is represented by my hon. Friend the Member for Hyndburn. I am aware that certain projects have been put on ice pending clarification of whether there would be room within the scheme to allow further expenditure to take place. I give my hon. Friend the assurance that it is not a matter of saying that there are no further funds available within Lancashire to deal with textile issues. The prospects of transfer — we have to make application to the Commission — will be taken into consideration. I hope that I shall be able to make further pronouncements in a few months' time when we are certain about what the level of under-expenditure will be.
That is a reference to the expenditure that we hope to be able to make under the Department of Trade and Industry's promise, but there are infrastructural expenditures as well. I recognise that infrastructure is as important in improving the industrial environment as it is in improving the social environment. The hon. Member for Burnley has referred to Slaters terrace, which is an example, at least in part, of an improved infrastructure project. It is a demonstration of the importance of dealing with the historic consequences of the textile industry.
We have not yet decided whether we shall be able to extend the operation of BIS in more general terms. It is fairly clear from the take-up of the schemes, however, that they are of real value in providing assistance to smaller firms. The scheme is designed to ensure that the firms that are assisted are not textile firms. It embraces firms that need assistance to diversify out of textiles or to provide increased job opportunities and improved capital investment while a firm trades in other ways.
There is a real need to continue to provide assistance of this sort in textile areas, and we shall be examining closely the future of the schemes to ensure that they are refined in the light of recent experience. The schemes have attracted a great deal of support and my hon. Friend and the hon. Gentleman can rest assured that we shall examine closely the way in which they have been used. Should there be underspend, we shall be seeking to redistribute moneys to other applicants.
§ Mr. PikeI am sure that we all welcome the measures that the Minister is describing and that we are not ungrateful for them. If we are looking for improvement, however, will he consult the authorities that are involved in the running of them? Will he seek their views on what is going wrong?
§ Mr. ShawIt is essential that we gain all the information possible from those who are affected directly, such as industries and companies, and from those who should have a say in the way in which their areas are developed.
351 I must make a distinction between Department of Trade and Industry funding and infrastructure funding. The latter is exclusively a local authority matter whereas DTI assistances are directed through my Department solely for the use of companies. Nevertheless, I accept the point that in areas of structural decline it is important that local authorities should consider that the schemes that we provide under the heading — particularly as it is European-funded—are acceptable.
Other aspects of textile structural assistance were raised, such as the whole amount of money, how it is made up, and whether it is refined and directed accurately. My hon. Friend the Member for Hyndburn was critical. In his view, an insufficient amount reached the most affected areas. He was concerned that there would be a dissipation of assistance that is primarily directed towards industrial development in areas affected by structural decline and that it might find its way too much into inner urban area schemes that do not have that component. As the hon. Member for Burnley said, there are differences of view about whether money should be spent on one or the other. I fear to say, as my hon. Friend the Member for Hyndburn said, that this is where we cannot always meet what local authorities wish to do.
My concern and that of my hon. Friend and the hon. Member is to see that the schemes that relate to industrial activity and the generation of new industrial activity, such as development grants and assisted area status grant, combine with the ERDF to provide proper chance for new industrial employment developments in areas affected by structural decline. Therefore, I am less involved with the infrastructure or urban centre regeneration issues. Primarily, they are matters for my right hon. Friend the Secretary of State for the Environment and, indeed, for the local authorities concerned.
In addition to schemes funded under the ERDF, many schemes on the ground relate directly to joint endeavours in inner city areas. One thinks of the city action groups and the urban development corporations that have been 352 established in some parts of Manchester and, indeed, the big development areas of Merseyside and Salford and so on, in which there is a major industrial generation as well as a major infrastructure improvement and regeneration of urban centres.
I have taken on board the remarks made by my hon. Friend expressing his concern about additionality. Although attempts have been made to resolve the matter between Government and local authorities, they have not yet borne fruit. The issue is part of the review of local authority financing as a whole. With the release of the Green Paper last year, my hon. Friend can at least take some comfort from the fact that the issue is being centrally exposed once again and, I hope, will be resolved.
On the aspects affecting the Department of Trade and Industry using this fund, I give an assurance that we certainly shall examine the possibility of redistribution from those parts of the north-west where underspends are taking place and whether those projects that are eligible, either in Hyndburn or Burnley, can still be put forward on the ground that there may well be further funds from such a redistribution. I assure my hon. Friend that I accept fully the need to ensure that there is a many-faceted approach to the areas that have suffered from structural decline. With the policies that the ERDF provides and the policies that we have put in place in other ways to assist the areas, I am sure that there will be a lot of opportunity for growth and jobs in the area.
I remind my hon. Friend and the hon. Member for Burnley that, although there has been massive decline in the textile industry over many years, the actual industry that remains today is a massively successful performer. My hon. Friend will be aware that textiles now provide about 9 per cent. of manufacturing employment. Their track record in relation to performance in export markets — I think £3 billion was the last figure for the full year, 1986 — is a major achievement. Many British companies, operating either in Lancashire or, dare I say it, in west Yorkshire, are now able to look to the future with considerable confidence.