§ 10. Mr. David Kidney (Stafford)If he will make a statement on his Department's policy for giving grant aid to areas of England outside those with assisted area status. [111540]
§ The Parliamentary Under-Secretary of State for Trade and Industry (Dr. Kim Howells)Under European Commission law, regional state aid can be paid only in assisted areas approved under article 87. It is also possible to grant aid under other provisions. For example, the new enterprise grant areas have been proposed under the small firms guidelines, and SMART—the small firms merit award for research and technology—operates under the research and development guidelines.
§ Mr. KidneyI thank my hon. Friend for that answer. The Department closed the partnership investment programme at the end of the year. I was told that the reason was that the EC had decided that gap funding to private sector developers, outside assisted areas and above aid intensity limits, was in breach of state aid rules. That raises the alarming spectre that no state aid, however much it is justified, can be paid outside assisted areas. 544 Can my hon. Friend assure me that schemes such as those he described can be funded throughout the country when the circumstances are justified?
§ Dr. HowellsI can certainly confirm that the Government have a comprehensive package of measures to tackle need in the regions effectively. The proposals for new assisted areas are part of that package. The single regeneration budget, in particular, supports a wide range of regeneration schemes run by local partnerships in England to target pockets of deprivation in urban and other areas. I note that Partnership in Staffordshire was awarded substantial funding to promote the regeneration of rural communities. In addition, third tier is a flexible measure to aid regional development and to respond to local economic crises. That will be reviewed after an initial period of 12 months in conjunction with regional partners.
§ Mr. Richard Page (South-West Hertfordshire)I understand that the Secretary of State for Trade and Industry recently met the Commissioner in charge of assisted area status. Can the Minister possibly give us some idea of the representations that the Secretary of State made and what steps the Department of Trade and Industry will take to make sure that any distribution that comes from the European Union or the Government will be made fairly and equitably and—I look the Minister straight in the eye—on the basis solely of need?
§ Dr. HowellsI welcome the hon. Gentleman to his new post; it is always good to see him. My right hon. Friend the Secretary of State for Trade and Industry will meet Commissioner Monti this afternoon and will, no doubt, discuss these very matters.
§ Mr. Richard Burden (Birmingham, Northfield)May I ask my hon. Friend to ask my right hon. Friend the Secretary of State to impress on Commissioner Monti the fact that the issue of state aid to Rover-BMW at Longbridge has been with the Commission for several months? That state aid is of vital importance to retaining strategic production inside the European Union and it is not unreasonable to expect the Commission to come up with a positive decision on that aid by the spring, as has been indicated before.
§ Dr. HowellsI am absolutely sure that my right hon. Friend the Secretary of State heard those words and that that will be a subject for discussion with Commissioner Monti this afternoon.
§ Mr. David Heath (Somerton and Frome)Does the Minister recognise that, between the over-hyped and overheated regional shopping centres and the assisted areas, which are quite rightly receiving support, there are small market towns throughout the country that are dying on their feet? Will he target support at that sector? In particular, will he talk to the Department of the Environment, Transport and the Regions about the iniquitous uniform business rate and its effect on small businesses in market towns?
§ Dr. HowellsI am sure that the hon. Gentleman will himself want to make those points to Ministers in the Department of the Environment, Transport and the 545 Regions. We recognise very much the difficulties of isolated pockets of deprivation and need throughout the country and we are addressing them in all the proposals that we have for regional regeneration.