EC Cohesion Fund: Allocations (Hansard, 6 February 1995)

The Minister of State, Department of Trade and Industry (Earl Ferrers)
My Lords, the distribution of the Cohesion Fund between the four beneficiary states is settled by the Commission within ranges which were agreed by the Edinburgh European Council in 1992 and which were unanimously confirmed by the Council of Ministers.
The Cohesion Fund is included in the European Community budget, which is also approved by the Council of Ministers.

Lord Bruce of Donington
My Lords, I am most grateful to the noble Earl for that reply. I am sure that he will confirm to the House that the Cohesion Fund was established by Regulation 792 of 1993 and Regulation 1164 of May 1964. However, in view of the fact that our contribution to those funds for the past three years has totalled some £235 million, and in view of the Court of Auditors' comments on the administration of the fund contained in its recent report, do the Government agree that they should now 2 reconsider the whole question of allocation and the purpose to which the funds are put rather than acquiesce in their continuance for the political purposes of the Commission?

Earl Ferrers
My Lords, the noble Lord, Lord Bruce of Donington, is a bit hard on the Government in that regard. He asks the Government to reconsider, but they cannot reconsider. The matter was considered at the Edinburgh Council of Ministers and agreed. It was agreed that the United Kingdom should pay 15 per cent. of the fund unless there was an abatement. We received a two-thirds abatement under the Fontainebleau Agreement. Therefore, we pay only 5 per cent. of the total contribution that was agreed at Edinburgh. It was agreed by the Council of Ministers and we think it right that that should continue.

The Earl of Halsbury
My Lords, will the noble Earl come to my rescue and tell me what it is that "coheres"?

Earl Ferrers
My Lords, the Cohesion Fund was set up for two purposes: first, for transport infrastructure, which covers roads, railways, ports and airports; and, secondly, for environmental projects relating to sewage treatment works, urban waste treatment and drinking water supplies. Its aim is to enable the social structures of the less well-developed countries to reach the level of others. In that way, we "cohese" together as a Community.

§ Lord Ezra
My Lords, does not the noble Earl agree that in view of the fact that the fund is being used to develop transport and environmental projects in countries which could not otherwise finance them, that should be regarded as advantageous to the single market as a whole and, therefore, beneficial to all members?

Earl Ferrers
My Lords, the noble Lord, Lord Ezra, is quite right. The purpose of the fund is that all countries within the Community reach a reasonable level of social advancement.

Lord Morris
My Lords, in answer to the supplementary question asked by the noble Lord, Lord 3 Bruce of Donington, my noble friend answered as to the principle of the fund, but the noble Lord was asking about its allocation. Will my noble friend answer that point?

Earl Ferrers
My Lords, I thought that I had answered that question. I said that the allocation had been agreed at Edinburgh and subsequently by the Council of Ministers.

§ Lord Stoddart of Swindon
My Lords, will the noble Earl help me? It is difficult to understand what the Cohesion Fund is and what it will mean. First, does it mean that those countries which are now net beneficiaries from the European budget will receive even more money after the Cohesion Fund is operating? For example, in 1993–94, the Irish received £1,500 million from the European budget. That is equivalent to £35 per week for every family in that country. Will the Irish now receive even more?

Earl Ferrers
My Lords, I shall do my best to help the noble Lord, Lord Stoddart. The purpose of the Cohesion Fund is for the economic and social cohesion of the Community, and that is a Community objective. The Cohesion Fund makes provision for those countries whose GNP is less than 90 per cent. of the European average GNP. Those four countries are Spain where it is 75 per cent., Greece, 48 per cent., Portugal, 60 per cent., and the Republic of Ireland, 80 per cent. We are at the European average of 100 per cent. Therefore, all those countries which are below the European average have access to the Cohesion Fund.

§ Lord Peyton of Yeovil
My Lords, does my noble friend agree that, while not every proposal coming from Brussels is without blemish, nevertheless the constant nagging at everything that is done by the European Commission diminishes rather than increases our influence? Would it not be sensible if, from time to time, a little enthusiasm were to appear for an organisation to which we belong and from which we derive quite a lot of benefit?

Earl Ferrers
My Lords, if I may say so, my noble friend Lord Peyton has made an extremely important suggestion. I believe that we should all realise that we are part of the Community, which we all want to see succeed. It is a pity when some noble Lords—and, indeed, I can think of one in particular—table Questions complaining about what the European Community has done. The Community has actually done very well in this respect.

§ Lord Haskel
My Lords, does the noble Earl agree that we are all indebted to my noble friend Lord Bruce of Donington because, thanks to his Question, we have all learned that the Cohesion Fund is designed to even out the imbalances in the economies of various members of the European Community? In view of the conflicting statements from various Members of the Cabinet during the past few days, can the Minister say whether the Government are to take steps to seek abolition of the fund, or veto the UK's contribution towards it? 4 Alternatively, will they just let the money be paid as it is a contribution in smoothing the path towards a single currency?

Earl Ferrers
My Lords, I am grateful to the noble Lord, Lord Haskel, for so clearly explaining the advantages of the Question tabled by the noble Lord, Lord Bruce of Donington. He did so in a way that I was unable to do. Of course, as always, we are indebted to the noble Lord, Lord Bruce of Donington. However, the noble Lord's second supplementary was quite absurd, as I am sure he knows perfectly well. The European Community is a matter over which all sorts of people have many different concerns. It is quite right that such concerns should be expressed as, indeed, does the noble Lord, Lord Bruce of Donington.

§ Lord Wyatt of Weeford
My Lords, does the noble Earl agree that it is quite intolerable that the European Court of Human Rights continually overturns our laws? Is there some way of opting out of that damnable institution?

Earl Ferrers
My Lords, the noble Lord, Lord Wyatt, has expressed another forthright view. However, it has nothing to do with the Question on the Order Paper.

§ Lord Pearson of Rannoch
My Lords, will my noble friend be good enough to confirm briefly to the House that it is in fact the view of my right honourable friend Sir Leon Brittan that the cohesion funds, which many of us regard as being extremely wasteful, were in fact only dreamt up as a cushion against the hardships of monetary union with the so-called, "four poor countries"?

Earl Ferrers
My Lords, there are many different backgrounds to all sorts of decisions. However, the fact is that the heads of member states got together in Edinburgh and came to an agreement. That agreement was approved by the Council of Ministers and, therefore, it is part of the European Community's efforts and now forms part of our contribution towards that.