HC Deb 14 February 1996 vol 271 cc974-82

1 pm

Miss Emma Nicholson (Torridge and West Devon)

I am grateful for this opportunity to discuss the problems that I and my colleagues see as caused by the Government because of their weak approach to European funding for projects in the south-west. I shall refer first to a report called "No Go South West 1996, Bureaucracy Run Riot—How Whitehall Blocks Britain's Euro Funds". That Liberal Democrat document was produced by Robin Teverson, a Member of the European Parliament. His earlier document called "No Go South West 1995" was warmly received by business men in the south-west. Mr. Bell, the managing director of Curnow Shipping, said: I thought 'No Go South West' was an accurate, succinct situation report. Since its earliest days I have been a member of SWEL's Euro sub-committee so ably run by Paul Davis … At one of our regular meetings, about two years ago, there was a trio from Government Office South West. At the end of the meeting I voiced the suspicion that 5(b) funds were never going to flow our way because the Treasury saw them as being added to the PSBR. The reaction was volcanic: the sky duly fell in on me: It was very obvious that I had touched a raw nerve. It is sadly significant that Minister David Curry avoids any mention of the Treasury's attitude and the other three Departments beyond GOSW. I shall quote another brief comment from Mike Boxall, the chief executive of the West Country development corporation. He is one of the ambassadors for that corporation as are many of my colleagues. He said: I believe your paper 'No Go South West' has provided a very useful contribution to resolving an unsatisfactory situation and I also believe that lessons learned from the experience of the last two years or so should be remembered for future programmes … we are still awaiting the Guidelines for this involvement by the Private Sector and you can imagine the frustrations this brings. Alison Best, the senior policy adviser for the National Farmers Union, said: We share your disappointment that the Minister has failed to acknowledge the current problems of accessing European funding. According to our information only three projects have been accepted for submission to the next meeting of the EAGGF Working Group and there is a further eight or so which MAFF may regard as suitable for submission. There are at least 24 applications which we have been told will be delayed until the June meeting of the Working Group at the earliest … our suggestion here is obviously what are the facilitators supposed to be doing? I have many such comments, but a summary of the problem is that the Government simply do not care, despite the positive regional policy that is driven at European level and which has meant that Plymouth, Cornwall and Devon are in line for major funding for economic development. In the period 1994–96 Plymouth has been allocated £23 million of Euro-funding, and Cornwall has access to £170 million of projecting 5b funding earmarked for the south-west. Europe wants local and regional communities to decide for themselves how funds should be used, and it involves itself in administration and paperwork only for the largest projects.

Thanks to the Government, nearly two years into the programme, the south-west has seen very little hard cash. Of the £193 million of European money, only about £6 million has been received and 75 per cent.—three quarters—of projects that were approved by the working groups before November are still waiting for offer letters because of delays by Government Departments. It takes an average of six months for Government offices to approve a scheme. That is wholly unsatisfactory, and it is the reason for the debate.

The paper chase is the key. Under this Government, Departments use 100 words where 10 would do. We have only to look at the IACS form from MAFF. Our version is the biggest, the most pedantic and the most time-consuming in the whole of Europe. But when it comes to applying for Euro-funding for the south-west, our Ministers seem to have made the largest effort of all. The application form is brevity itself, but unfortunately, after it has been filled in, it is downhill all the way.

Understaffed and perhaps unappreciated by the Government, the Government's regional office in the south-west tries hard, but it requires completed forms no less than four months before the date of the working group meeting. Anyone who applies now will get in for the June meeting—if he is lucky. If the date is missed by a day or two, he can forget it until October, by which time perhaps there will be a general election. Even if the form gets that far, staff shortages in the regional office mean that many forms are sent to Scotland for assessment by consultants.

Probably because of "No Go South West" and our pressure, two secondees have been employed at the south-west office to help with applications. However, that does not seem to help, because the applications are not getting through to the European Commissioner. At the last working group meeting, the commissioner was targeted as the person who had held up the meeting. However, one of the problems was that the Commissioner, Mr. Oreja, had not received the papers in time to look at them properly. He received them so late that he could not examine them thoroughly. He asked to hold up some projects for a week to look at them further, but the Department of the Environment said that that was a matter for national Government, and there was no way that he could delay matters for a week. The DoE said that, although the Government gave the Commissioner the papers very late.

Neither the UK nor the Commission currently recognises regional or local influence or responsibility for 5b, and that means that we could have sent the papers ourselves. That meeting took three hours longer than normal and people left it disillusioned and annoyed. Some new time limits were set at the meeting and were sorted out by the Commissioner. First, it was decided that as soon as a project has been approved at a working group meeting the project has to start within 12 months.

Secondly, as soon as a project has received a proper offer letter it must start within six months. But that falls, for the obvious reason that projects cannot hold on to EU money while millennium or national lottery funds are applied for. However, that sensible possibility lapses because some projects that have been approved are still waiting more than 12 months later for an offer letter. No time limits are set on the Government between working group approval and an offer letter. For example, the county's UK and overseas tourism marketing project was promised fast-track approval at the November working group meeting. The offer letter is still currently stuck in the Department of National Heritage, as are more than 55 letters. When David Curry wrote, he said that nearly £23 million had been approved.

Madam Deputy Speaker (Dame Janet Fookes)

Order. I remind the hon. Lady that it is customary not to use a name in this House, but to refer to a constituency or to a ministerial title.

Miss Emma Nicholson

The Minister stated that nearly £23 million had been approved and more than 60 offer letters issued for European regional redevelopment funding alone. I am sorry to say that that was incorrect. When he wrote the letter, the £23 million represented the 192 projects that were awaiting offer letters. Indeed, 60 offer letters had been received from 192 projects, but 55 are still waiting for offer letters. The tourism budget is on hold until the end of 1996 as a result of the huge demand for the money. It is sad that the Government's incompetence is causing that astonishing shortage in funding.

Mr. David Harris (St. Ives)

While in no way arguing that there are not delays—indeed there are, and we should streamline the procedures—I should point out to the hon. Lady that someone came to see me a fortnight ago about a delay in an application. When I looked into the matter, I found that the proposal had been submitted late. When I went back, I was told that those involved had met the deadline. Does she accept that not all the fault lies with the Government, as she is obviously trying to suggest?

Miss Nicholson

I am happy to accept that comment. I do not know what has happened in the hon. Gentleman's constituency, but in my constituency—where I have problems with the Leader II project—everything that I said, alas, has been valid and accurate. I took the Leader II team from Holsworthy to see the Minister, but it made no difference at all.

The hon. Gentleman, whose work on the common fisheries policy is well known, might like to think about the money that is wasted by Whitehall on the fisheries investment programme, which should come back on track. Although Ministers were forced to take us back into the scheme to buy off a few Euro-rebels, it is sad that we still have not had money for any of those projects. I am sure that the hon. Gentleman would be sad to know that the money is available, but not for those who need it. It is such a small, sensible and well-targeted programme, and he will agree that it could make all the difference to fishing ports in the south-west which are struggling against the onslaught of competition.

I cannot imagine why the Government would not fund the project—they are guilty of typical penny-pinching that would make Scrooge blanche. It is avarice, and the Government are putting the tidiness of their accounts before the survival of vibrant and energetic rural fishing communities. I believe that that is a very important point that the hon. Gentleman will respect and honour. I cannot comment on his constituency, but I know from my constituency's problems that his comments are not correct.

Once a form goes through the Government office for the south-west, it wends its way through Whitehall. The gap between the approval of a project and the receipt of a letter could go into "Alice in Wonderland". Many Departments are involved. I have referred to the Department of Heritage, and there are cases in which three other Departments have been asked to comment. The result of such an interdepartmental spat will be that an application will go from Department to Department and—perhaps after about nine months, if one is lucky—an offer letter will be sent.

I have dealt with many of these funding issues, and I speak from the heart on behalf of my constituents. The misery is that by the time a letter is sent, the official start date for the project has gone. That is the real result of the Government's action. If a project is worthy of EU funding, it must be a real project and not make-believe. If those involved want a project to start, they either have to expect a delay—that is happening, tragically, in my constituency—or find some money to cover the appallingly long interim period.

The problem in my constituency and most other areas of the south-west—although west Devon and Cornwall are particularly affected—is that people cannot find that sort of cash anywhere, and that is why EU regional funding is critical for our future. We know that we need outside help—even if the Government do not—to overcome recent economic disadvantages. In many areas farming, agriculture and food production, processing and distribution are the primary economic engines. In my area, however, we have grade 3 or grade 4 land. One cannot make much money from culm measures, even if a fraction of the funding is provided by the Department of the Environment. The situation is tough—there are only two fields of grade 2 land in my entire constituency, for example—so the south-west will always require assistance.

What has happened to the European money that has been pledged to us—some £200 million for 1994 to 1999? Instead of funding hundreds of projects across the south-west, it is tucked away in the Government's bank accounts, earning a healthy rate of interest for the Chancellor. We believe that the Treasury has been sitting on at least £43 million-worth of European funds in transit from Brussels to Britain's most disadvantaged areas. By last autumn, a mere £6 million had reached the intended areas. When the remainder is finally wrested out of Whitehall—if we manage that—I am certain that it will not be inclusive of interest. In other words, the delays have not just inconvenienced the south-west, but short-changed us.

Every time Europe offers the south-west a hand up, the Government knock us down. When the south-west's fishing ports stood to benefit from the European structure investment programme, Ministers withdrew. When Robin Teverson, a Liberal Democrat Member of the European Parliament, successfully persuaded the Commission to include the Penzance to London railway line in plans for a high-speed network, he did so despite the opposition of Conservative Members of the European Parliament. Sadly, the Government have made it clear that they will continue to oppose the plan in the Council of Ministers. No wonder people in the south-west have lost all faith in the Government's ability or desire to help them.

Mr. Harris

The hon. Lady is going too far. She is now criticising the Government she wanted to join at the end of last year.

Miss Nicholson

Far from it. I can provide my former Conservative colleague with letters saying that I—as an ambassador for the south-west—supported that link. A number of former colleagues have plundered selected sentences from letters that I have written to constituents in the past four years. My two former Conservative colleagues from the south-west who are here today are honourable men, although some may not be. They are more than welcome to look through my entire filing cabinet at all my constituency letters. If they did, they would find that I have not short-changed my constituents, just as the hon. Member for St. Ives has not short-changed his constituents. I think it unlikely that the two Conservative Members who are here today would disagree with most of what I have said.

I am aware that it is imperative that I allow the Minister some time to reply, as I have put a number of questions to him. I despair, however, and I do not believe that the penny-pinching will be affected by the debate today. Good will, common sense and decisive action for the south-west are certainly too much to ask for from the Government.

When Robin Teverson sent his report to those consulted during its creation and to those affected by the delays, he received a sackful of replies, not one of which dismissed it as political propaganda. In fact, they all said that, if anything, the outlook was even darker than he had painted. All but one, that is. The response from the Minister for the Environment and Countryside stood out. From his vantage point, the outlook for the south-west was rosy, although I do not suppose that he has seen any of our recent water bills. Perhaps he did not listen at the meetings held in the past few years with the Prime Minister, which produced nothing. He found nothing to criticise, and proposed no remedial action at all.

All he has to do, it seems, is to sit back and wait for the smoothly oiled Whitehall machine to deliver bounty and prosperity across the south-west. I am sad to say that he must have a different south-west in mind. Perhaps he was thinking of the south-west of one of his addresses in Belgravia, where the part of London that he looks across is indeed part of the prosperous south-east. The south-west, alas, thanks to Government action, is missing £194 million of funding over the past two years. We could use that money.

1.19 pm
The Parliamentary Under-Secretary of State for the Environment (Sir Paul Beresford)

The hon. Member for Torridge and West Devon (Miss Nicholson) says that she is an ambassador for the south-west. If she really is an ambassador for the south-west, it is going to continue to sink. She has voiced a number of misconceptions, which I shall try to correct in the short time available.

The European programmes are a success and are combining well with our programmes such as the single regeneration budget, challenge fund, English partnerships and rural challenge. The hon. Lady has not shown a notable interest in European programmes until now; I certainly have had no correspondence with her. Her interest, if belated, is nonetheless welcome because it gives me an opportunity to correct misconceptions.

There has been little significant economic development in west Devon in recent years which has not benefited from a combination of funding, including European funding. The Pitts Cleave industrial estate at Tavistock and the West Devon business information project are examples of projects in the current 5b programme. I hope that the hon. Lady acknowledges the excellent Meadowlands leisure pool facility in Tavistock, which was aided by an earlier programme.

The Government have secured a very substantial increase in European funding for the south-west—more than £228 million of grant available from the structural funds up to 1999. With match funding, the total investment from the public and private sectors will be almost £460 million. The programmes include £170 million from the objective 5b rural development programme for Devon, Cornwall, the Isles of Scilly and west Somerset. It is by far the largest 5b programme in England, yet the hon. Lady says that it is one of the smallest.

Mr. Paul Tyler (North Cornwall)

rose—

Sir Paul Beresford

If the hon. Gentleman will forgive me, I will not give way, as I have very little time and I have a great deal to say and much to cover.

As I was saying, the programme includes £23 million for Plymouth, under objective 2, for areas of industrial decline; £8.9 million from the Leader II programme to help rural communities in Cornwall and Devon—almost half the total for England. This matter must be put in perspective. The hon. Lady is one-eyed in her view. As the saying goes, "There are none so blind as those who will not see." The programme also includes £13.4 million from the United Kingdom's Konver II programme for areas affected by defence restructuring, which has recently been approved. The whole of Devon and Cornwall, Wiltshire, Avon and parts of Somerset, Dorset and Gloucestershire are eligible—but the hon. Lady did not mention that. There is some £3.2 million from the PESCA programme for areas affected by restructuring of the fishing industry.

Those programmes often combine with other Government programmes where the south-west has also been successful—such as SRB challenge fund in which Devon and Cornwall have won some £34 million in the first two bidding rounds. Projects coming forward benefit in many cases from both European funding and SRB funding. The SRB often provides the match funding on which the hon. Lady touched.

Mr. Robert Hicks (South-East Cornwall)

I appreciate that my hon. Friend is in a robust and boisterous mood, given New Zealand's victory, sadly, over England in the first game of the world cup. For the benefit of the House, will he differentiate between allocations—which I suspect he is talking about—and actual take-up? Most of us are worried about the low take-up in response to the very generous allocations from the various project funds.

Sir Paul Beresford

I shall try to touch on some of the points my hon. Friend raised. I note his reference to my ancestry. I guess that he is insinuating that I have failed the Tebbit test. I usually cheer for one side but bet on the other. It looks as though I am not out of money this time.

Delays cannot be laid at Government's door, although the hon. Lady made a good attempt to do so. The objective 2 and 5b programmes were due to start in January 1994. However, the Commission's approval was not forthcoming until December 1994—one year late. So, the true picture is that these programmes have been running for barely one year. That explains some of the difficulties mentioned by my hon. Friend the Member for South-East Cornwall (Mr. Hicks).

In 1995, arrangements were set up for consulting local partners and inviting and appraising applications. Publicity and guidance were sent out and advice given to countless applicants on how to access the funds. The Plymouth objective 2 programme has largely been settled with about 75 per cent. of the money committed. In the objective 5b programme, more than £35 million has already been allocated,—rather more, in fact, than two years' worth of the total programme. Therefore, to a degree we have caught up on the delayed start.

Overall, more than 730 applications have been received-531 of those, 75 per cent., have been appraised and considered by local partnership working groups; 154 applications have been either rejected or withdrawn; 237 projects have received offers of grant totalling more than £36 million; and many more will shortly get offer letters. I note that today, to continue with the misconceptions, a letter has been received from Cornwall county council saying that 60 offer letters have been issued on which decisions have been made, and that there are 32 approvals outstanding. I am sorry about the counting—the correct figures are that 88 offer letters have been issued, with another 104 projects with the working group awaiting recommendations.

All that adds up to a remarkable achievement in one year, yet the hon. Lady apparently wishes to decry it as red tape. On the contrary, it demonstrates the considerable demand for the programmes, the effort organisations and individuals have put in to create worthwhile projects and the Government's commitment to the success of the programme. It also reflects the very hard work of our new Government office for the south-west in Plymouth. The money is getting through to the people on the ground. Almost £7.5 million of grant has already been paid.

Mr. Tyler

rose—

Sir Paul Beresford

No, I am not giving way. I have only four minutes and I need to cover millions of pounds of project money.

Surprisingly, many projects are failing to come forward with claims, especially in the first quarter. That is not to say that there is no room for improvement, especially in the south-west. My hon. Friends have been making these points and following them up for some considerable time, in contrast to Liberal Democrat Members. In the south-west, the Government office has already published some excellent guidance and targets have been set for dealing with applications within four months.

Miss Emma Nicholson

rose—

Sir Paul Beresford

The hon. Lady had better sit tight. She asked for figures and answers—[HON. MEMBERS: "Give way."] No, I will not give way. The hon. Lady took more than her share of the time available. She asked for answers and I am trying to give them to her.

The Government office will keep applicants informed of progress and will inform them, within eight weeks, of any issues which need to be raised, in order to keep matters moving forward. Additional guidance and seminars are planned, in particular about private sector involvement in applications. These developments reflect the commitment of the Government to ensuring the success of European funding programmes in the south-west.

The Leader II and Konver II programmes have also been crucially delayed awaiting the Commission's approval. Leader II was due to start in November 1994, when Leader I ended. The Commission's approval was not forthcoming until July 1995—we are talking not about weeks, but months—and this has placed a considerable strain on the on-going projects in west Cornwall and North Tamar, whose administration costs have had to be covered without European grant. I am pleased to say that grant towards these costs—some £68,000—will be paid by the end of this month.

Miss Emma Nicholson

rose—

Sir Paul Beresford

The hon. Lady asked for answers, but she has given me little time to answer.

There has been a complaint that the money has been held by Whitehall. That is nonsense and it shows how little some of the Euro experts understand about the system of funding. Money is paid from the funds to national Government in advance of local expenditure on projects. As the Government are a net contributor of funds, on balance we lose by that system. There are no so-called delays of Euro-funds from the Treasury.

There was also a comment about the time that it takes for the Government to examine programmes. Surely the hon. Member for Torridge and West Devon accepts that it is appropriate carefully to scrutinise funding and applications when utilising public money. We must receive value for money through those programmes and assess them before they are allowed to go forward. The systems that apply nationally for the appraisal of applications and the monitoring of projects are far tighter than for previous structural funds, and that is largely because the Government have pressed for more careful scrutiny. The money is working through the system, and the Government have exceeded themselves to ensure that the money reaches the people that it should go to in the south-west.