HL Deb 22 April 1998 vol 588 cc1153-6

3.4 p.m.

Lord Islwyn

asked Her Majesty's Government:

Whether they have been notified of any proposed changes in European Union aid to regions of the United Kingdom.

The Minister of State, Department of Trade and Industry (Lord Clinton-Davis)

My Lords, as part of the Agenda 2000 package, the Commission published its proposed draft regulations for the structural and cohesion funds policies for the years 2000 to 2006 on 18th March. It is not possible at this early stage to make detailed estimates of the financial consequences of the Commission's proposals for the UK receipts from the structural funds, as the Commission has not yet published its plan for per capita receipts in different regions and member states under the various objectives and other measures it is proposing. We are at the beginning of a long negotiation on the proposals during which we will seek a fair and affordable outcome for the United Kingdom and its regions.

Lord Islwyn

My Lords, is the Minister aware that while the UK has 96 per cent. of the European Union GDP per capita, the share for Wales is only 80 per cent.? Does he recognise that in west Wales and the valleys there are areas of extreme deprivation? They are areas like Merthyr, Blaenau Gwent and the Rhondda which have only 60 per cent. of the European Union GDP per capita. While taking into account the needs of other areas, will the Minister ensure that in presenting their final petition the Government protect the needs of Wales?

Lord Clinton-Davis

My Lords, my noble friend makes a strong point as regards Wales, or certain areas of it at least. However, in our negotiation we must take account of the requirements of the United Kingdom as a whole. That is what we seek to do in trying to ensure that we get an affordable, durable and fair outcome in what are bound to be difficult negotiations which are at a very early stage. I do not believe it would be helpful at this stage as regards the negotiations if I were to give further and better particulars of our negotiating position.

Lord Pearson of Rannoch

My Lords, is the Minister aware that the United Kingdom pays about £11,000 million annually to the European Union under this sort of heading? Of that, the EU is graciously pleased to give us back about £7 billion. Would it not be more sensible for us to take control of the whole of the £11,000 million and spend it wisely on our real needs, no doubt saving several billion pounds along the way?

Lord Clinton-Davis

My Lords, I may have been mistaken but I thought that the noble Lord was a supporter of the enlargement of the European Union. He shakes his head. That is another sensible proposal that he dismisses.

Most noble Lords believe that the burgeoning democracies of eastern and central Europe need recognition. That is a difficult negotiation. Therefore, the review of the structural funds must take it into account. There is a cost to be met on the enlargement of the European Union which is vitally connected with the present issue.

Baroness Williams of Crosby

My Lords, the European Union has been of great value with the regional funds, especially to peripheral parts of the United Kingdom. Does the Minister accept that there is a problem, as the period of time between the allocation of funds and their actual use in the regions is considerably longer in the United Kingdom than, for example, in the Republic of Ireland? Will he address the responsible Ministers and ministries to ascertain whether the process could be speeded up?

Lord Clinton-Davis

My Lords, the noble Baroness has a point. I argued it myself when I was chairman of a non-governmental organisation in relation to the social fund. I am not in a position today to compare the situation affecting the United Kingdom with that of other member states. However, I will draw the position to the attention of the appropriate Minister.

Lord Stoddart of Swindon

My Lords, will my noble friend confirm that enlargement is bound to lead to a reduction in the funds from the regional account which Wales and other regions of the country will enjoy? Those countries of the east will be given priority.

Can the Minister further confirm, following the question put to him by the noble Lord, Lord Pearson of Rannoch, that if the net contribution which this country makes to the European Union were shared out on a per capita basis, Wales would receive an extra £150 million each year?

Lord Clinton-Davis

My Lords, I have already indicated that I do not believe it to be helpful in what is a difficult negotiating position to single out specific parts of the United Kingdom. I do not intend to depart from that at this stage. When the negotiations are over, we will reflect on that position.

I have already indicated that enlargement involves bearing costs in relation to the whole of the EU membership. But the prize of enlargement is such that that is unavoidable. We should make sure that we can embark upon this ambitious programme recognising the enormous benefits that the countries seeking accession see from membership of the EU. There are huge political and economic benefits to be gained, not least in extending the single market to another 100 million consumers.

Lord Young of Graffham

My Lords, does not the Minister agree that the best way in which the European Union can assist the regions of the United Kingdom will be not to impose its employment regulations upon us? Furthermore, we should resist the purported intent of the Government of France to harmonise its excessive taxation with ours so that at the end of the day we do not have to harmonise our unemployment rate with theirs.

Lord Clinton-Davis

My Lords, I am somewhat chary of accepting advice on questions of employment from the noble Lord. However, I am delighted to see him back in his place.

Lord Barnett

My Lords, can my noble friend emphasise that it is not just the United Kingdom that is affected by the proposal? The media and some in your Lordships' House seem to assume that it is only the UK that is affected.

Further to the point in relation to the enthusiastic support by many for enlargement, does my noble friend agree that we should recognise that there are bound to be cuts throughout the whole of the 15 member states if that enlargement is to be successful?

Lord Clinton-Davis

My Lords, my noble friend characteristically puts his finger on the spot. I have already said to the House that if enlargement, which the Government prize enormously as an objective that ought to be attained, can be attained, it will be of enormous benefit to the whole of the European Union. However, there is a cost to be borne. Our intention is that it should be borne equitably between the member states of the European Union.

Lord Lang of Monkton

My Lords, does the Minister agree that if regional aid is to have any value, it must be capable of change to take account of changing relative circumstances? Also, does he consider that the creation of an assembly in Wales and a parliament in Scotland will make it easier to handle such aid in this country? If so, how?

Lord Clinton-Davis

My Lords, the noble Lord is right in regard to the need for flexibility. One must accommodate change, not least within the EU as a whole, to take account of enlargement. The creation of an assembly in Wales and a parliament in Scotland will not impact severely, as the noble Lord appears to believe, on the allocation of regional funds. It is a matter for delicate negotiation within the EU, as he well knows having held office in the Department of Trade and Industry. The noble Lord's additional point is not relevant.

Viscount Waverley

My Lords, notwithstanding the Government's previous replies, will they do what they can to ensure that grant aid goes directly to Cornwall and so breaks up the Devon-Cornwall relationship and corrects a regional imbalance?

Lord Clinton-Davis

My Lords, with great respect, I have already indicated that it is not helpful at this point in the negotiations to embark upon a sectoral appraisal of the position. All these questions are bound to impact upon the Government's thinking. Representations are made by all areas in the United Kingdom and we will listen to them.