HC Deb 03 March 1999 vol 326 cc1063-6
3. Mr. Ieuan Wyn Jones (Ynys Môn)

What discussions he has had with the Chancellor of the Exchequer regarding matching funding from the Treasury for objective 1 funding. [72455]

The Secretary of State for Wales (Mr. Alun Michael)

Once the European Commission and member states have agreed the new structural fund arrangements, the Government will consider the distribution of European receipts for wider programmes. In these discussions, I shall ensure that the interests of Wales are pursued vigorously. I hope that Plaid Cymru will support me in that endeavour rather than asking questions that it knows to be premature.

Mr. Jones

I am grateful to the Secretary of State for that stricture, but I have listened carefully to his public response on this issue. He has been remarkably coy. For us to assist him, now that he has discounted the reply that the Economic Secretary gave some months ago and says that the situation is different, does he expect the Treasury to be able to give extra cash under objective 1 funding?

Mr. Michael

Yes. The reply of the Economic Secretary was used in a reprehensible way by the Institute of Welsh Affairs. It was a letter that referred to the current situation, as Opposition Members acknowledged during exchanges last week. The reply to the hon. Gentleman's question is the one that I gave earlier. Once the European Commission and member states have agreed the new structural fund arrangements, and we know the dates and figures and so on, the Government will consider the way we meet the requirements of the European Union. The British Government have met those requirements, and I am certain that my Government colleagues will co-operate fully in trying to ensure that we get the best possible deal for Wales within the decision made by the EU.

I must say gently that the hon. Gentleman's party was not originally optimistic that we would succeed in getting objective 1 status. We are on the verge of succeeding in that, and I hope that we will have his support in ensuring that we get the best for Wales.

Mr. Ted Rowlands (Merthyr Tydfil and Rhymney)

What are the figures? Are there proposals to cut the structural funds in the European budget savagely? If so, will the Government oppose them?

Mr. Michael

My hon. Friend knows that the impact of enlargement, with the new countries that were not in the previous round, means that there are considerations that make it difficult to predict figures until we get to the end of the process. The discussions that are going on were mentioned earlier. We maintain a close interest in them and are very optimistic that we will have a positive outcome. We can then get on with the discussion necessary within government to turn the decision into practical action.

Mr. Lembit Öpik (Montgomeryshire)

Has the Minister considered where he would find the resources to match fund initiatives in areas of Wales that may qualify for objective 2 status?

Mr. Michael

There is much confusion between additionality and matched funding, which makes simple answers difficult. I assure the hon. Gentleman that one of the things that we are doing is considering the strategy for developing the economy of the whole of Wales during objective 1 status and also trying to ensure that there are opportunities for areas outside objective 1 status, which have their own needs, to ensure that the overall strategy works. I assure him that that is at the forefront of our minds.

Mr. John Smith (Vale of Glamorgan)

I hope that the whole House will support my right hon. Friend in his bid for objective 1 status, but I, too, am concerned about areas outwith objective 1, such as the coastal strip of Cardiff, the Vale of Glamorgan, and Cardiff international airport, which is a valuable strategic asset for the whole of Wales and requires development support.

Mr. Michael

Yes. My hon. Friend is right to point to the fact that, outside objective 1 areas, other communities in Wales have needs. Our aim is to do the best for the objective 1 areas that are objectively those in the greatest need in terms of low GDP and high unemployment, but also to be conscious of the needs of other areas in discussions on assisted status and in our economic strategies throughout Wales. I accept the point that my hon. Friend makes.

Dr. Liam Fox (Woodspring)

In the interests of clarity, will the Secretary of State tell us what discussions he has already had with the Treasury about potential matched funding, should this fortuitous situation come about? Should not such money be available from the Treasury, and would such funding be an appropriate use of funds within the Welsh block?

Mr. Michael

The hon. Gentleman is playing the tune that I asked Plaid Cymru not to play. He is asking questions that cannot be answered until we get to the point. I assure the hon. Gentleman that we will have discussions with the Treasury. Both my right hon. Friend the Chancellor and my hon. Friend the Economic Secretary are aware of the likely impact of a decision to give objective 1 status to large parts of Wales. There will then be discussions within the Government. The hon. Gentleman knows full well that that is the way in which these matters proceed, and they will. I shall make sure that we get the best possible deal for Wales in those discussions.

Dr. Fox

Does not that answer betray everything about the Secretary of State's position? It is a perfectly simple question. Has he already had discussions with the Treasury or not? That is hardly a difficult one for him to answer, but he could not give a commitment either on behalf of the Government or on behalf of the Welsh Assembly that it would be appropriate to use the Welsh block. He is not free to make that commitment, should he become the leader of the Welsh Assembly, because he does not have the ability to do so. Nor is he free from the collective responsibility of the Cabinet, which would enable him to be free from Treasury decisions. He is in an unworkable position and he cannot do what he initially said in response to the question that he would do. He cannot pursue Wales's interest vigorously because he has to pursue the interests of the Labour party first.

Mr. Michael

That rather confused question betrays the cynicism and opportunism that the hon. Gentleman brings to the Dispatch Box. He knows full well the way in which the discussions take place. He and his colleagues tried to cast doubt on the Government's ability to get the NUTS 1 boundary agreed in order to achieve objective 1 status. His cynicism then is followed through by his cynicism now. We will make sure as a Government that the best possible agreement is reached to enable the decisions that are made in Europe to flow through to action in Wales in the best interests of Wales.

Mr. Llew Smith (Blaenau Gwent)

The Minister will be aware that my constituency is one of the poorest in Wales, with some of the highest levels of unemployment, the lowest incomes and the worst health problems in the United Kingdom. He will also be aware that the future of the constituency is to a great extent dependent on obtaining objective 1 status. While I understand that my right hon. Friend cannot make a statement today about matched funding, is it possible to estimate the kind of moneys that would come from Europe should we obtain objective 1? Lots of figures are being bandied about.

Mr. Michael

Figures as high as £2 billion have been bandied around, but I have to stress that those are guesstimates rather than estimates until we have the final decision and until decisions are made on when the money will come forward. We want to make sure that the opportunity of objective 1 money is used strategically so that it changes the economy for the long term. We must not be in the position that money has come in, we have used it, and we have not changed the economy of Wales. I am certain that that will be one of my hon. Friend's priorities.