HC Deb 03 February 2000 vol 343 cc1191-2
3. Mr. Andrew George (St. Ives)

What discussions he has had with his colleagues in other Departments about the budget for match funds for the United Kingdom's European objective 1 regions. [106883]

The Chief Secretary to the Treasury (Mr. Andrew Smith)

As part of the current spending review, I and my officials have begun discussions with all Departments on their spending plans, including those departmental programmes from which regions can draw match funding.

Mr. George

Does the Minister accept that the Government last year signed commitments to Britain's four poorest regions, and that Cornwall will receive £314 million over the next seven years from Europe? The Prime Minister will want and expect a warm welcome when he visits Cornwall tomorrow. In order to be confident that he receives one, can the Chief Secretary assure us that the Government will honour their financial commitments to the UK's four poorest regions?

Mr. Smith

I welcome the hon. Gentleman's thanks—I take it that is what it was—for the work of the Labour Government, in partnership with those areas, in winning the objective 1 status which, as he said, means a boost of more than £300 million for Cornwall. All departments and Government offices will work closely with the areas to benefit, to ensure that they get the match funding that they need.

The hon. Gentleman might not be aware of how many sources of match funding there are: the revenue support grant for local authorities; the regional development agencies; business links; the new deal for communities; the Foresight and Smart programmes; the national lottery; loans from the European investment bank; and the voluntary and private sectors. We are committed to making a success of regeneration and growth in those areas. The Government will succeed where the previous Government failed—in the regions which suffered the most.

Mr. Denis MacShane (Rotherham)

The Chief Secretary will be aware that south Yorkshire and the other regions have got objective 1 funding because their gross domestic product per capita sank to below 75 per cent. of the European level—an indictment of the poverty politics of Planet Portillo when the Conservatives were in charge. However, that massive lifeline from Europe—I do not know whether we will see the Conservatives converting to pro-Europeanism as well by the end of Question Time—does need match funding. The money is there, but is my right hon. Friend aware that there is great concern that departmentalitis is not allowing the money to be made available? Will he look at that matter and crack the whip over other Whitehall Departments? He has indicated the sources of the money. Will he make sure that this money is made available, and that we get the help from Europe that south Yorkshire certainly needs after 20 scandalous years of Tory control?

Mr. Smith

There is certainly no question of departmentalitis, red tape or anything else standing in the way of the help that those areas need to make a success of objective 1 status. As my hon. Friend recognises, that means a £750 million boost to the local economy of south Yorkshire. The day before yesterday, my right hon. Friends the Minister for Trade and the Minister for Local Government and the Regions met representatives from the area, including hon. Members from the constituencies affected, to ensure that they gain the benefits from the programme that they need and deserve.

Mr. David Heathcoat-Amory (Wells)

Instead of scrabbling around trying to increase the level of handouts from the EU budget for those regions, why do not the Government tackle the real issue, which is that for every £2 we pay into the EU budget we get £1 back? That is not a good deal for the British taxpayer or for those regions. Why did not the Government tackle that issue at the Berlin summit last year when, for the first time for many years, the entire structure of the EU budget and finances was up for renegotiation? Instead of renegotiating it, the Government accepted a continuance of that unfair mechanism, which is bad news for the British taxpayer and which has failed to release the additional resources for the regions that would otherwise be available from our own budget.

Mr. Smith

The truth is, of course, that we succeeded in doing what the right hon. Gentleman, and his right hon. and hon. Friends, said was not possible—we fought for and saved the British rebate in Europe. The people living in south Yorkshire, west Wales and the valleys, Cornwall and Merseyside, who will benefit from the European programmes, will remember that the Conservatives are more interested in attacking everything European than they are in securing the benefits of constructive engagement in Europe for those areas of our country.