EU: Structural Policies (Hansard, 19 February 1997)

§ The Minister of State, Department of Trade and Industry (Lord Fraser of Carmyllie)
My Lords, the Government believe that the reform of the European Structural and Cohesion Funds should lead to a regime which is affordable, durable and fair to all member states. The funds should be transparent and efficient and 687 should provide value for money. Substantial administrative simplification is needed, while retaining effective appraisal, monitoring and evaluation.

§ Lord Hooson
My Lords, I thank the noble and learned Lord for that Answer. Is he aware that the published work programme of the European Commission for this year states that it is looking at the structural policies, which of course aid regional development. Bearing in mind the benefits that we have obtained from those structural policies in the past which have contributed to our now being net contributors, what suggestions are the Government making on that issue? With the noble and learned Lord's knowledge of Scotland—and appreciating my knowledge of Wales—does he agree that within those regions there are certain areas that particularly need help as opposed to the generality of the region? What, therefore, is the attitude of the Government to the suggestion that there should be local employment pacts in certain areas within those regions, so that the help is more selective?

§ Lord Fraser of Carmyllie
My Lords, with regard to the noble Lord's last point, I certainly believe that there should be greater simplification of the administration of those schemes. Indeed, post-1999, we should like to see a system in place which ensured that whatever money is available—we certainly do not want to see the amount contributed to those funds ever increasing—there is a desirability in ensuring that it is properly focused on those with the greatest need. At the present time something in the order of 51 per cent. of the population of the European Union receive funds out of those arrangements. It seems to us, without going into any precise figure at the present time, that we ought to allow for a greater focus.
Whatever has been the contribution of those funds, nothing should deflect us from the fact that it is the success of macro-economic policy in this country that has brought about unemployment reduction. The Republic of Ireland, Germany and Spain receive more per head from those funds, but in all three countries unemployment is moving in the opposite direction. The noble Lord, Lord Desai, who I am very sorry is not in his place today, seems to me to have put forward a set of extremely sound observations on the strength of the British economy,

§ Lord Shaw of Northstead
My Lords, does my noble and learned friend agree with the comments made in the recent report by the European Court of Auditors to the effect that it would like to see a much greater use, where possible, of loan facilities in the regions rather than grant facilities?

§ Lord Fraser of Carmyllie
My Lords, my noble friend makes a very important point. We want to see a wider range of opportunities for putting money into the regions. If such a device as resort to loans is used, one would hope that there might be greater appreciation of the cost of such an arrangement. We must ensure that there will continue to be grants and aid offered. As I said in my original Answer, we must ensure in those 688 circumstances that there is proper appraisal, monitoring and evaluation. That is an issue which causes many within the Union the greatest concern.

Lord Bruce of Donington
My Lords, is the noble and learned Lord aware that the European Commission itself already has detailed plans on how to deal with this matter? Those were made public as recently as last spring in an edition of the Political Quarterly. The Commission proposed to the Intergovernmental Conference a redistribution of powers, whereby the Commission would communicate directly with the regions, bypassing national governments, in order to establish the position more firmly aided by the regional committee that was established under Maastricht.
Is he further aware that the amounts payable to regions in the United Kingdom come wholly out of the Treasury? As the Treasury is a net contributor to the European Community, does he agree that all that happens is that the money goes out of the British taxpayers' pockets to the Commission and is redistributed throughout the various regions, provided always, of course, that the regions advertise that the money comes direct from the Commission?

§ Lord Fraser of Carmyllie
My Lords, the noble Lord is correct to say that the United Kingdom is a net contributor to those funds. A number of proposals are being put forward for reform of those funds post-1999. Indeed, there is a committee of your Lordships' House looking into these matters. We look forward with keen interest to the opinions expressed following the completion of that investigation.
However, I do not accept that it is desirable or the right way forward for there to be that direct link from the Commission distributing the funds to regions. We have now established that there should be a single Vote, which allows the proper distribution of the funds within the United Kingdom, instead of spreading it across four departments. I should have thought that, in the interests of simplicity of administration, even though the noble Lord may not care for those funds, he would agree that such action is desirable.

§ Lord Haskel
My Lords, does the Minister agree that regional policy is at the heart of the European Union and the creation of the single market? As the Prime Minister keeps telling us that he wants to be at the heart of Europe, can the Minister assure us that any changes that the Government recommend to the European Union will be supportive of regional policies?

§ Lord Fraser of Carmyllie
My Lords, it is difficult to envisage any circumstances in which there will not continue to be regional policy. We are bound to recognise that we do not wish to see with the prospect of enlargement of the European Union an ever growing contribution by this country or indeed any other country to that. We should like to see the figure fixed at something like 0.46 per cent. of the European Union GDP as the top limit. It should not be more widely extended than that. As our unemployment so satisfactorily declines, and if countries from central and 689 eastern Europe join the European Union, it must follow that, if we are to have a more precise and accurate focus, if anything, less would come to the United Kingdom than is the present case.