HC Deb 12 December 1991 vol 200 cc1184-95

5.7 am

Mr. Derek Enright (Hemsworth)

May I first thank Mr. Speaker for choosing my name in the ballot so that I may raise the apparently intractable problem of RECHAR and other European funds.

I begin by filling in a little of the background. The Hemsworth constituency is made up of a series of pit villages. The problem is that there is only one pit left in the constituency. When the communities lost their pits they lost their principal employment. It is no use telling the people to get on their coal tubs and go down the road. Many of them already have gone down the road. They have come down from Scotland and the north-east. Indeed, some of those who are now pensioners came from eastern Europe at the end of the war. But now there is no more road for them to travel. They have reached the absolute end of the line. It is a cul-de-sac. So they are left with a scarred environment, pit heaps rising to the sky and coal dust that has become engrained everywhere.

During the winter, when I worked in Featherstone, I could look out on the beauty of Featherstone Alps. But it was not the beauty of the Alps of Switzerland and the air was not so pure, and once one had taken a ski run, it was coal slurry and sludge beneath one's feet.

Terrible problems of the environment have been left with the departure of the coal. But they are villages with a proud history. Their solidarity has brought its own culture and customs, and I invite the Minister to visit Kinsley and view the historic photographs of the Kinsley evictions at the beginning of the century, when the private coal owners were in collision with the miners. The result was disaster for the miners' families. Children were cast out into the streets and wives were abandoned.

Matters such as that are still strong in the folk memory, as are the stories of the Featherstone riots at the end of the last century, when the military were turned on striking miners, some of whom were shot dead. In a way, that is being repeated in 1991, for there is a feeling of hopelessness as the mainstay of people's employment disappears. But on this occasion the feeling of hopelessness was accompanied by a glimmer of light. It came from the European Community, which recognised the difficulties faced by coal areas. Working with areas in Spain, France, Germany and the United Kingdom, the EC set about a programme to replace the missing jobs. It was a fitting programme for what was originally the European Coal and Steel Community.

That programme was not a solution imposed from above. It had nothing to do with what the other day were claimed to be terrible Brussels bureaucrats imposing their will on Britain. It was a co-operative effort, the local scheme having been suggested by Wakefield metropolitan district council. That suggested scheme was sensitive to the needs of the area. It had been carefully examined by the European Commission in accordance with the rules of the Council of Ministers to ensure that it accorded with EC criteria. All of that gave the area a glimmer of hope.

Wakefield metropolitan district council has lost 14,000 mining jobs in the last nine years. For a council with a relatively small population, that has been a large loss. Due to improved productivity, the one remaining pit in my constituency, Frickley, has suffered a job reduction of from 3,000 to 900, severely affecting three or four small villages. The programme that is being attempted, and hoped for by the locality, involves an EC grant of over £10 million. That sum, which might start to put things right, would go on environmental improvements. Unfortunately, the programme is being blocked.

The environmental improvements are specifically the reuse of land and buildings at six former collieries. One cannot get more specific than taking collieries that are no longer in use and attempting to bring them back into use and, over and above that, trying to take the scars away from the area. Putting these plans into action would, it is estimated by the district council, create 600 new jobs. It is not a great Toyota factory; that is not what we are asking for. We are asking for a series of small and medium-sized firms which can flourish. In this programme there will be spoil-heap reclamation and reconversion of the buildings that I have just mentioned. They will be cleared up and the whole outlook of the area will be improved. I should mention in particular the problem of subsidence from which we suffer in west Yorkshire generally. Where a pit has gone out of operation there are very specific and particular problems of subsidence which make it difficult for private operators on their own to start reconverting.

At the same time, under the environmental improvement programme there will be a cleaning up of the village and town centres. In particular I would draw to the Minister's attention the fact that housing estates in that area—not estates built by wicked Labour councils post-1945, but estates which go back to before the war —are in a terrible condition. They are not attractive places in which to live and it is very difficult sometimes to keep tenants in them. So the use of moneys there is very important indeed.

Secondly, we need the renovation of the social and economic infrastructure. Again, that is one of the proper headings that the Minister knows that these communities have put in. In this context, I should like to mention particularly the specific way in which pit villages are built. They tend to be ribbon development and therefore to be isolated to east and west or north and south, depending on which way the roads run. In Hemsworth in particular there is a tremendous problem of road links. We need new road links to bring us into the M62, the M1 and the A1. That is very important.

Over and above that, however, all the other infrastructure—sewerage, and so on—has been neglected for a long time. That, too, means that it is not an attractive proposition for even small and medium-sized firms.

Then we come to the construction of new, advance factory units and workshop premises—nothing very grand, again; we are not seeking a silicon valley or anything of that order, just small business which we can assist and maintain. Great emphasis has been placed in this programme on the creation or development of small and medium-sized enterprises. The sort of target that has been set is very reasonable—to create another 500 jobs.

The measures which are appropriate under that programme include better access to risk capital, the provision of common services—these are seedling firms setting up—assistance with market research, business networks, innovation in industry and, in particular, the establishment of small and medium-sized enterprises which can look to the new technologies.

The Minister should recognise that it is important in terms of planning the schemes that the district council has taken full account of the Government's central schemes. It is proposing to complement them, not to replace them, and to ensure that they fit together properly as a jigsaw.

A small element is the promotion of tourism. I am not suggesting that the Minister should respond to an advert of the sort that reads, "Come to sunny Fitzwilliam." He might be disappointed in sunny Fitzwilliam. More appropriate, perhaps, would be the Hemsworth water park. A huge area of derelict land was refurbished and turned into a splendid water park. It is an attractive facility for the region during the summer. It is not a national asset, but in many ways it is a sub-regional asset.

The parish council was strongly criticised when it decided to go ahead with the water park, but those who had lived for so long with muck on their doorsteps considered that it was a major achievement to get rid of it by creating a water park. Those who took the decision to go ahead with the water park were re-elected. That is the operation of local government at the lowest tier.

I recommend the Minister to give proper consideration to subsidiarity. We are always talking about it in Brussels, so let us give it proper consideration in the context of local government.

I have given the Minister the flavour. He has been good enough to stay up late, so I shall not go into further detail unless he has specific questions to ask.

I am sure that the Minister is familiar with the word "additionality" and has heard it used before, but hearing is not good enough. We want action. Everything that I have read on the topic includes a statement from the Government to this effect: "We have given additionality. We have included it in our general grants all over the place. Our local government financing is so complicated that we cannot show where additionality is." At the same time, non-Government organisations working in the third world can show additionality. Germany can show additionality, and it has demonstrated it clearly. Spain and France can show additionality, but the United Kingdom Government cannot. I know that additionality constituted a problem for all member Governments up to three or four years ago, and it was then that the Commission decided that it would tighten the rules. It decided that it would do something that the Government are always urging, which is to abide by the rules. It is not some nasty Jacques the lad who is telling member states to take that course. It is our beloved Bruce Millan, a former Member of this place, who is suggesting that the rules should be obeyed. Anyone who knows Bruce Millan—I am sure that this is the view of him in Scotland—will accept that he is a thorough administrator and that he abides by the rules. He looks to the book to get things done.

Bruce Millan gave the Government plenty of time to get their books in order, but they have not done so. So-called extra money has floated out from the Department of the Environment, but it has not gone to the coal areas, for which it was meant. On the contrary, I suggest that if extra money has left the Department, it has gone to Westminster and Wandsworth, areas in which people have not seen a pit, let alone worked down one. The money is being used to mask their poll tax. I can think of no other explanation. If Germany, Spain and France can show additionality, so can we, and so should we. We should be seeking to abide by the rules of the game.

As the Government seem unconcerned that money that has been properly allocated and bid for has not been received, I can only conclude that they are waging a vendetta against the miners. Will the Minister assure me that that is not so? I feel certain that, were Hemsworth a marginal constituency—God forbid—we would receive the money and it would clearly be regarded as going towards the Conservative party. One has noticed that happening in Sherwood, where the robbers seem to do well by the Government.

It is interesting, but it is appalling that, unless the Government act rapidly, the money will be lost to the United Kingdom. The United Kingdom was originally awarded the biggest slice of money under RECHAR, but we shall now lose it to Germany, which has the schemes and additional moneys ready and waiting. In the same way, Germany will take the European central bank now that the Prime Minister has decided at Maastricht that we shall no longer be part of EMU. One of the reasons why the Germans are ready and efficient is that their government is less centralised and more regionalised. The next time we debate this subject, we should also debate devolution, because action should be taken at the grass roots, not at governmental, level.

My final plea to the Minister is to show that he believes in the mining areas. The Government have done them enough harm in closing down their pits, but, now that they are closed down, the Government should ensure that we get the money straight away.

5.27 am
Ms. Joyce Quin (Gateshead, East)

I applaud the actions of my hon. Friend the Member for Hemsworth (Mr. Enright) in introducing this debate and I am happy to endorse his comments and agree with the arguments that he put forward. I know that he feels strongly about the matter and that he held meetings on it prior to being elected to the House. It was one of the important issues that he raised during his election campaign. He was right to raise it and, throughout that campaign, his constituents expressed great concern on the matter. They are aware of the issues involved, yet it is clear that they blame the Government rather than the European Commission for holding up the money. They applaud Commissioner Bruce Millan's actions in trying to put pressure on the Government to ensure that, when the money is released, it is properly used to the additional and direct benefit of the areas concerned.

The proper use of European funding is a long-standing interest of my hon. Friend. It is important because RECHAR and this specific scheme are the tip of a large iceberg, and the problem will get bigger rather than smaller if the Government do not act to resolve the problem at this stage.

I shall be brief because my hon. Friend has put forward all the arguments and the hour is very late. The Minister will have an opportunity to give his views and I should like to think that I am giving him an opportunity to tell us that the matter will be sorted out very shortly. However, I have a feeling that he has a job to find a common view even among his governmental colleagues because different Departments seem to hold a variety of views.

We have certainly gained the impression that the Department of the Environment is more flexible and more in line with the Commission's views than is the Department of Trade and Industry. There also seem to be differences of view between the Treasury and the Secretaries of State for Scotland and for Wales. The Department of Energy is also involved in the issue. Perhaps the Minister will give us some details on the different views held in government.

My hon. Friend the Member for Hemsworth was right: additionality is a vexed issue. Both he and I, as former Members of the European Parliament trying to obtain funds for use in our European constituencies, remember the discussions that we had on the subject over many years. We believe that RECHAR is being used as a test case to try to ensure that the problem of additionality can be solved. A Labour Government would discuss with the Commission ways of ensuring that European funding was much more transparent and that additionality could be demonstrably proved, which it is not now. That is the problem when we try to evaluate the Government's claims on the issue. Given the way that the Government account for their actions at present, there is no way of showing whether additionality exists. The Government's claim that they spend more in the regions than they would otherwise do because they know that they can retrieve moneys from Europe is difficult to prove one way or the other.

We have grave suspicions about the Government's claim, as, during their period of office, spending on regional assistance has fallen dramatically, while European structural funds have dramatically increased. That seems to be a paradox, which greatly fuels our suspicion that additionality is not being respected.

I pay tribute to the work done by the Coalfield Communities Campaign. It has produced an excellent booklet that describes the problems of additionality and how the Government prevent the money from being used as additional funds in the various districts. It describes how each local authority is given a 'basic credit approval'. This determines how much it may borrow to pay for capital projects. An authority may also spend a proportion of its receipts from the sale of assets such as land and property. Together, these set a ceiling on each authority's capital spending which the government will not allow it to breach, no matter how much money is coming from Brussels. My hon. Friend the Member for Hemsworth rightly referred to the various schemes in his district that would be able to proceed if the problem of RECHAR and additionality were solved. I know that in other regions of the country, including mine, similar schemes are ready to be implemented if that problem is solved. In my district the problem involves the RECHAR programme in the Tyne and Wear and south-east Northumberland region. The schemes being proposed there are similar to the ones that my hon. Friend outlined in his district.

Those problems represent the tip of the iceberg. Local authorities—I think that 75 of them are involved in the RECHAR programme—are determined to get the matter sorted out. Given the guidelines under which they are forced to operate, it has been difficult for them to use not just RECHAR but other European funding in recent years. Having dealt with local authorities over the issue of European funding for a long period, my impression is that they are more disillusioned now than at any other time They are finding it more and more difficult, particularly with the Government's spending cuts, which have been forced on them, to fit European schemes into their existing guidelines. As the money does not arrive in the form of extra benefit, the process is acting as a massive disincentive, not an incentive, for them to carry out important economic development programmes in their districts.

I hope that the Minister will take this opportunity to say that the matter will be sorted out quickly. Perhaps he can also say when the next negotiations with the European Commission will take place. I hope that he will not take refuge in the expression that I have heard many Government spokespeople use: "This is our money coming back and we can do what we like with it." This money is not a budget rebate. If it were, the Minister would be right to argue in that way. It is not a budget rebate such as that agreed in the 1980s, so it is not central Government money with which the Treasury can do what it likes.

RECHAR money is allocated to a specific scheme to help coalfield areas. As my hon. Friend the Member for Hemsworth said, the scheme was designed to help Britain. It was not designed to be British money coming back; it was a way to offset some of the negative aspects of EC budgeting. It was designed to go to specific areas, not into the central coffers. That is an important point and it is a reason why RECHAR money should be treated in the special way suggested by Commissioner Bruce Millan. I hope that the Minister will tell us that the Government are prepared to accept the Commission's point of view and to work with the Commission and our hard-pressed local authorities to make the best possible use of this important source of money.

5.36 am
The Parliamentary Under-Secretary of State for Industry and Consumer Affairs (Mr Edward Leigh)

I congratulate the hon. Member for Hemsworth (Mr. Enright) on obtaining this debate on the Consolidated Fund so early in his parliamentary career. The knowledge with which he spoke about his constituency is a tribute to the dedication that he clearly brings to his job as a constituency Member of Parliament. I listened to him with great care.

I shall outline the nature of structural funds and then deal with the problem of additionality. The structural funds are established under the European Economic Community treaty with the general objective of strengthening economic and social cohesion in the Community and redressing the principal regional imbalances. They currently operate on a five-year cycle and the present cycle is due to finish at the end of 1993. The European Regional Development Fund was agreed in principle in 1972 by the European Council in order to reduce the Community's excessive concentration on agricultural policy and expenditure and to provide a more equitable balance in the United Kingdom's net contribution to the Community's budget.

The structural funds are intended to help improve economic and social cohesion within the Community, but the treaty makes it clear that the pursuit of sound economic policies by member states is the prinicipal means by which greater cohesion within the Community can be achieved. The task of the structural funds cannot be more than to provide a considerable but secondary means of support.

During the present cycle—from 1987–93—there is to be a doubling of the structural funds in real terms. That represents an investment by the Community in the economies of the main recipient states comparable with the aid provided under the Marshall plan for post-war reconstruction. As the second largest net contributor to the Community budget, the United Kingdom is entitled to ask whether the funds are being put to good use. In 1991, they will amount to about £10,000 million throughout the Community but mainly in the least-developed regions known as the objective 1 regions. Within the United Kingdom, Northern Ireland is designated as such a region.

United Kingdom receipts from the funds, as a proportion of the total, amount to about 9 per cent., or £900 million. This compares with the United Kingdom's gross contribution of about double that. Two thirds of the difference is refunded through the Fountainbleau abatement, which means that this year about £300 million of taxpayers' money is being transferred by the funds from the United Kingdom to other member states.

I think that it is very important to keep this fact in mind. The hon. Member for Gateshead, East (Ms. Quin) foresaw that I might mention it; I must, as it is central to the debate. It is tempting to think of the funds as some kind of free gift from a European benefactor, but they are not that—they are what is given back to us out of our large contribution.

The amount of our receipts is a matter for negotiation. The Government try to maximise the benefit that the United Kingdom will receive, but we have to recognise that many other member states are less well off than we are and they tend to get relatively more out of the fund. I make that point because it is necessary to keep a sense of perspective when approaching the difficulties surrounding RECHAR funds.

As with other member states, the Government are paid the funds by the Commission. The Government then pass them on to their final recipients. They are paid as contributions alongside national expenditures on such purposes as economic infrastructure, vocational training, industrial and tourism development, environmental works, and all manner of other things, according to detailed programmes and consistent with framework documents which are drawn up and agreed between the Commission and the Government.

The Government take a strict view about the need to control expenditure. That applies as much to expenditure financed by money from Europe as to money coming directly out of the taxpayer's pocket. Indeed, as I have already said, the money from Europe is actually our taxpayers' money in any case.

So, for these general reasons of economic policy, much importance is attached to the need to keep a close watch on where the structural funds money is going.

However, there is no question, as I have heard it said and as I have read in the press, of the money not going to the purposes for which it is intended. It is clear—the Commission has not claimed otherwise—that the funds do end up where they are supposed to be, in the case of RECHAR, in the mining areas. The issue is much more complex than that, and I suspect that many more people like to talk about it than actually understand it. I do not level that criticism at the hon. Gentleman, who brings great knowledge to these matters.

The basic question that Mr. Millan has raised is whether the present system in the United Kingdom taken as a whole satisfactorily transmits the effective value of Community structural funds to the eligible regions. I have already mentioned that over the period 1987 to 1993 the total amount of structural funds is being doubled. I apologise now for having to spend a while on a legal document. I hope that it will be clear to the hon. Gentleman.

Article 9 of the relevant Council regulation 4253/88 states: In establishing and implementing the Community Support Frameworks, the Commission and the member states shall ensure that the increase in the appropriations for the funds provided for in article 12(2) of Regulation (EEC) 2052/88 has a genuine additional economic impact in the regions concerned"— I underline "concerned" and results in at least an equivalent increase in the total volume of official or similar (community and national) structural aid in the member state concerned, taking into account the macro-economic circumstances in which the funding takes place. That is the only place where any Community legislation currently in force mentions explicitly the requirement for additionality about which the hon. Gentleman has spoken.

The United Kingdom accepted that article when the regulation was adopted and we are bound by it. However, the Commission accepts that the doubling of funds will not benefit the United Kingdom. Receipts by the United Kingdom from the fund are expected to be lower in the current period than they were before. The evidence available to me suggests that we are the only member state in that position. The reason is that the main benefits of the increase have been concentrated on the less-developed southern member states. In those circumstances, article 9 has no practical impact in the United Kingdom. That is the legal point. Our legal position is clear. There is no doubt about it.

However, even though we believe that we are under no legal obligation to do so—by going through the article in detail I shall have convinced the House of our strong legal position—we have made provision for additional public spending to take account of the expected receipt of the funds.

In the case of RECHAR we had enough advance promises of the amounts of money which were likely to be involved to make provision for the grants to be used once they came through, and we did precisely that.

Mr. Enright

Will the Minister therefore identify the amount of money that was given to Wakefield metropolitan district council which was the additional money that he anticipated? That is a relatively simple request.

Mr. Leigh

It is not a relatively simple request, as the hon. Gentleman well knows. That is a question which he should address to an Under-Secretary of State for the Environment. If the hon. Gentleman were to do so, I am sure that the Under-Secretary of State would make it clear that additional funds have been given to local authorities in England to cover the amounts expected from RECHAR.

Mr. Enright

But that was put into the global figure, which is precisely my point and which militates against the legal argument that the Minister cited earlier.

Mr. Leigh

No, because the way in which the funding arrangements for local authorities are worked out for the hon. Gentleman's borough council, as for others, takes account of the borough council's circumstances. For example, it takes account of the amount of derelict land to which the hon. Gentleman movingly referred. So it is not simply that there is a global amount which is distributed equally throughout the United Kingdom.

Mr. Enright

There is a specific case here for the Minister to answer. With RECHAR, the derelict land is specified—it is related to coal—whereas the grants from the Department of the Environment in regard to derelict land make no such distinction. The result is that, for example, Manchester, which is not well known as being an ex-coalfield, gets more money for its derelict land than parts of west Yorkshire which are quite well known as being ex-coalfields.

Mr. Leigh

Although the point about derelict land was one that the hon. Gentleman made in his speech, and that is why I addressed myself to it in answer to the last question, it is a poor example for the hon. Gentleman to adduce in support of his case, because that is subject to 100 per cent grant from the Government. One of the arguments made by local authorities is that they are unable to match those funds when they are received. The hon. Gentleman cited derelict land, but that is not a good example.

I will try to explain the difficult and elusive concept of additionality, which understandably confuses many right hon. and hon Members and those outside the House, and gives rise to many problems. In essence, it is like saying that something would not have happened in other circumstances, and it is therefore impossible to prove from a logical point of view.

Another way of expressing it is to say that money from the structural funds should be used only to finance projects that local or national authorities would not have supported otherwise—presumably because they had higher priorities.

The paradox is that it is necessary to argue that a project is important enough to warrant support from the structural funds, but that it is not so important that it would have been undertaken without them. I hope that I have made myself clear to the hon. Member for Hemsworth. Additionality is a complex paradox, and it is important that the House understands it.

Another way of expressing the concept—which I have written out for myself—is that additionality means that one has done something additional to that which one would have done had one not received any money from the structural funds. It is impossible to say what one would have done if one had not received the money from the structural funds.(Laughter.] I am glad that I appear to have enlivened the House at this late hour.

Mr. Enright

Will the Minister clarify that explanation by putting it in Latin?

Mr. Leigh

I could certainly do so. That would be a mere bagatelle—but I would be ruled out of order.

I am not saying that we do not take the problem very seriously. The apparent paradox that I described is why we are especially careful to ensure that all projects approved for grants from the funds offer good value for money and meet the other general criteria that ensure that the taxpayer's money is put to appropriate use.

That condition, coupled with the global increase in public spending to take account of receipts from the structural funds, offers the best guarantee that additionality is respected, while ensuring that only worthy projects are supported.

I have said in Department of Trade and Industry questions that it is our money, and we want it. Commissioner Millan has been quoted as saying that that was a foolish and unhelpful statement. I make no apology to him or to anybody else for calling a spade a spade. It is our money, we contributed to the Community budget, we qualify for the RECHAR grants, and Commissioner Millan is withholding them on grounds that we believe to be spurious and unjustified.

I have received many letters from potential recipients of RECHAR money stressing how much difficulty has been caused by the Commission's refusal to release it.

Ms. Quin

If the Minister's explanation is correct, can he explain why practically all local authorities support Commissioner Millan's case, not his?

Mr. Leigh

Labour-controlled authorities—and they are those mainly concerned—have criticised the Government, but that is not entirely surprising. I am not sorry that Labour has chosen to make a political issue out of the matter, for that does not do it any good. We are not blocking the money. We give more to the structural funds than we receive and we want the grants to go to the regions concerned. The constituency of the hon. Member for Hemsworth would benefit from RECHAR money, and I had hoped that he and the hon. Member for Gateshead, East would use this opportunity to encourage Commissioner Millan to release it. I am sorry that neither of them has done so.

Mr. Enright

The Minister said that the legal arguments are crystal clear. If that is so, why did Commissioner Millan not accept them? He is a very reasonable man—even when he disagrees with me.

Mr. Leigh

I do not know why the Commissioner has not accepted our case. We have taken legal advice; our position is absolutely clear, and we are entitled to take that position. I do not know why Mr. Millan is taking his present attitude. I do not speak for him. He is a former colleague of Opposition Members, and I suggest that they ask him.

Schemes and projects are ready to go once the money has been released, but until that happens they cannot proceed. I do not know what better evidence of additionality Mr. Millan could have. I have been made aware of some concern among local authorities that are potential recipients of RECHAR grants that they may not be in a position to spend the money when it becomes available, because they have already reached their spending limits. That point was made by both the hon. Member for Hemsworth and the hon. Member for Gateshead, East. I am unable to comment in detail on such cases, but if any hon. Member knows of particular problems in particular areas, I am sure that my hon. Friend the Parliamentary Under-Secretary of State for the Environment would be pleased to make inquiries.

This is really a political dispute. Of course, some local authorities complain about Government-imposed limits on their ability to spend. They always have, so it would be surprising if they were to keep quiet in the present dispute. These authorities are encouraging Mr. Millan to stand firm against the Government, because they see it as a way of attacking the Government's general policies on local government finance.

Their position is in reality a false one. They are free to finance spending by a number of means, and within the limits of the law have considerable freedom to spend their resources as they decide. The hon. Member for Hemsworth mentioned a land reclamation project that one of his local councils had undertaken. It is for the local authorities themselves to decide on their priorities. That is the principle of subsidiarity to which the hon. Gentleman rightly referred. The Government have made additional spending power available in expectation of receiving structural funds money. There is no exact correspondence between this, in the form of credit approvals, and actual grants, because local authorities can finance their aided expenditure by a number of means, of which borrowing against credit approvals is only one. Moreover, basic credit approvals are not hypothecated to individual projects or even particular areas of expenditure. Why? I do not believe that local authorities would welcome being tied down by the Government. That is an important point: it goes straight to the heart of subsidiarity, in which the hon. Gentleman is clearly a great believer.

Another action that the Government have taken is the introduction of "top-slicing" credit approvals in England. This "fine-tunes" the allocation system towards European regional development fund authorities, and was intended to tackle a particular problem which might arise in particular areas where there might be genuine difficulties in utilising ERDF grant because of insufficient spending power. In taking that step, the Government demonstrated a willingness to act and take a positive approach to improving transparency.

I am sorry that, despite the initiative that we have taken to be flexible and to introduce top-slicing—which, I note, is never mentioned by Opposition Members—Mr. Millan has not seen fit to release the money. Despite our efforts to accommodate the Commission's objections and take positive action where needed, he is sticking to his call for changes that would, in reality, involve a considerable change in the approach to central and local government financial control arrangements. That is really a case of the tail wagging the dog, and we are not convinced that such a change is necessary or desirable.

Even more remarkable is the fact that we are not alone in having failed to convince the Commission over additionality, yet the United Kingdom is the only member state to have been singled out for this treatment by Mr. Millan. In the Commission's own very recent document entitled "Annual report on the implementation of the reform of the structural fund", it is stated that acceptable evidence—acceptable to the Commission, that is—of additionality has so far been received only from the Republic of Ireland, Portugal, Greece, Germany and Belgium: To be fair to Spain, it has submitted evidence as well, but the Commission says that it is having difficulty in interpreting it. I will spell it out. The hon. Gentleman did not appear to have his facts entirely right in his speech. In addition to Spain and the United Kingdom, the Commissioner still wanted to be convinced of additionality by Denmark, by France, by Italy, by Luxembourg and by the Netherlands.

Mr. Enright

I mentioned only three countries. The Minister will discover that what the Commissioner said was that France was making substantial efforts to move towards additionality. There were and always have been difficulties.

Mr. Leigh

We are making substantial efforts. The hon. Gentleman seems to accept that we are not alone. Why is it that, having made substantial efforts and despite the fact that we are not alone, we are being picked on? The answer is not clear to me. The hon. Gentleman should address that question to Commissioner Millan.

I have explained the position. We sincerely want RECHAR money to be released by the Commission so that it can be put to good use in constituencies such as Hemsworth. Mr. Millan has had his day in court. We have bent over backwards to try to accommodate his unreasonable views, but one can bend only so far. It is a about time that Mr. Millan showed some flexibility. We have shown flexibility. I hope that he can still be persuaded that it takes two to agree. I urge hon. Members who may have influence with him to try to bring him round.