Objective 1 (Hansard, 19 January 2000)

§ 1. Mr. Elfyn Llwyd (Meirionnydd Nant Conwy)
What recent discussions he has had with the First Secretary of the National Assembly for Wales on additionality and match funding in connection with objective 1 European structural funds; and if he will make a statement. [103487]

§ The Secretary of State for Wales (Mr. Paul Murphy)
I meet the First Secretary regularly to discuss a range of issues, including objective 1. The provision of match funding will continue to be the responsibility of the grant applicant. That ensures local ownership and commitment to the projects. Additionality of European structural funds support is measured at the level of the member state, as set out in the structural funds regulations.

§ Mr. Llwyd
I thank the right hon. Gentleman for that reply. Will he, however, take this opportunity to assure all potential investors in objective 1 schemes in Wales whose projects are on hold because of the Government's lack of commitment to provide full match funding, in order that the projects can progress and the best be made of the funding?

§ Mr. Murphy
I have made the Government's position very clear in the House and to the hon. Gentleman on numerous occasions: the spending review that has begun will address the issue between now and July. My right hon. Friend the Prime Minister has already made clear his commitment to the success of the scheme. I remind the House that it was my right hon. Friends the Prime Minister and the Chancellor of the Exchequer who obtained objective 1 status for Wales in the first place. Anyone would think that the Opposition parties had gone to Berlin themselves and won the deal. They did not do that. The Conservatives never tried for objective 1 status 828 and the nationalists never thought that we would do it. Now, between them, they are using the success of our negotiations cynically to bring down the Assembly and wreck the devolution settlement.

§ Sir Raymond Powell (Ogmore)
I agree with what my right hon. Friend has just said to Opposition Members. Everything that we are trying to achieve on objective 1 is in support of what we promised in the general election and in the Welsh Assembly elections. I am sure that he will give sympathetic consideration to a development at the Bridgend paper mills in Llangynwyd. It deserves consideration, especially because of the high unemployment rate in my constituency. I am sure that he will look favourably at the application.

§ Mr. Murphy
My hon. Friend is aware that these matters are not for the United Kingdom Government but for the National Assembly, but I am aware of the problems to which he refers. I am a valley Member myself, and I understand the importance of the factory to his constituency. He may rest assured that I will raise the matter when next I have discussions with the First Secretary.

§ Mr. Richard Livsey (Brecon and Radnorshire)
Will the Secretary of State admit that, in the letter that the Prime Minister wrote to my hon. Friend the Member for South-East Cornwall (Mr. Breed), it is as plain as a pikestaff that there will be no additional funding from the Treasury to bring down objective 1 funding for Wales? Does not that mean that the Assembly's health and education budgets will be raided to provide the matching funds? How does he intend to overcome that problem?

§ Mr. Murphy
The hon. Gentleman must know something that I do not. I spend a great deal of my time—I shall do so later today and during the rest of the week—discussing with my Cabinet colleagues and other Ministers precisely the nature of the spending review and how much money will be involved for objective 1. We have to go through that spending process, as he knows. That is the way of government. My right hon. Friend the Prime Minister made clear our general commitment, which I repeat, but it will take between now and July for us to sort out the detail of the negotiations.
As I said, it was a Labour Government who obtained the funds for Wales and it is a great disservice to the people of Wales for Opposition Members to do nothing but criticise and whinge when they have not lifted a finger to secure those funds.

§ Mr. Barry Jones (Alyn and Deeside)
My constituency would be happy to accept objective 1 or objective 2 status, surrounded as we are by objective 1 both to the west and to the English east. When my right hon. Friend sees the First Secretary or travels to Brussels, will he say that we would expect at the very least a £25 million grant for the A3XX project, because if we do not get that, we in north-east Wales will not look kindly on the proceedings of the Welsh Assembly in Cardiff?

§ Mr. Murphy
I am aware that my right hon. Friend has spent a great deal of time and energy in the past month putting the case for that project very forcefully and robustly. He knows that because I have been with him in 829 his constituency to look at the project. He may rest assured that I will raise the matter once again when I see the First Secretary next week.

§ Mr. Robert Walter (North Dorset)
I am not whingeing, as the Secretary of State suggested, but the House and the people of Wales need some clear answers on this subject. Can the Secretary of State confirm that there is no money in his allocation to provide any match funding for 2000–01 or 2001–02 and that, if any money were forthcoming, it would have to fall within the departmental expenditure limit? I remind him of his answer to me on 10 November 1999, Official Report column 621W, when he said that the departmental expenditure limit was not being changed as a result of the negotiation of objective 1 status for west Wales and the valleys. That means that any allocations would have to be taken from education, health or roads in Wales. The Welsh Assembly has no confidence in the Labour Administration. The people of Wales do not believe the Prime Minister when he says that he will not let Wales down.

§ Mr. Murphy
The hon. Gentleman is wrong in his figures in that the allocations for the National Assembly for Wales and for my office are different. Obviously, it is for the Assembly to determine what happens in the first year of objective 1 funding. I am assured by my right hon. Friend the First Secretary that such moneys are there for the first year of that funding. As to after that, as the hon. Gentleman is aware, the Government normally fund all their projects through the spending review. The Chief Secretary has told me and other colleagues that the Treasury accepts the fact that objective 1 funding and the relationship between the block grant is different from previous years and that that will be dealt with in the forthcoming spending review.