European Union Objective One Status: Wales (Hansard, 8 December 1998)

§ The Minister of State, Home Office (Lord Williams of Mostyn)
My Lords, EUROSTAT announced recently that the gross domestic product for the West Wales and Valleys NUTS II area over the period 1994–96 was about 71 per cent. of the European Union average. If the Commission's proposals for future eligibility criteria for objective one areas are agreed by member states, this will mean that West Wales and the valleys will receive objective one status for the period 2000 to 2006.

§ Lord Roberts of Conwy
My Lords, I am grateful to the Minister for that reply. Bearing in mind that three other United Kingdom areas qualify for objective one status under the GDP criteria—Merseyside, South Yorkshire and Cornwall—are the Government broadly content with this as a possible outcome of the final negotiations? Secondly, will the Government consider setting up special arrangements in the case of West Wales and the valleys—which, I think the Minister will agree, is a pretty disparate region—to ensure that there is an ample supply of projects over those years which are acceptable to the Commission and which will enable that region to have the full benefit of the resources available?

§ Lord Williams of Mostyn
My Lords, the noble Lord makes two extremely valid points. As regards his first question, objective one status would bring around £1.5 billion in structural funds to West Wales and the valleys. That would be a fortunate and justified outcome. On his specific question of having projects available, again he is quite right. I am happy to be able to tell your Lordships that the Welsh Office has already established a European task force to design a strategy 806 for the use of structural funds after 2000. So we will have detailed, well-worked and well-conceived schemes to put to the Commission.

§ Lord Islwyn
My Lords, does the Minister appreciate that as well as its immediate ill effects, heavy unemployment brings about ill health, an increase in the incidence of crime and a general down-grading of the community? The news that West Wales and the valleys are in line for objective one status is to be warmly welcomed. I wish the Government every success in their efforts to bring this about.

§ Lord Williams of Mostyn
My Lords, of course the social consequences—not least in poor health—are extremely important. We have done extremely well to negotiate this likely outcome. The NUTS II area includes no fewer than 15 Welsh local authorities out of a total of 22. These 15 include Anglesey and Conwy—to forestall further questions—and include two-thirds of the population of Wales.

§ Lord Elis-Thomas
My Lords, I have to disappoint the Minister in that I am speaking as a resident of the county of Conwy, although not specifically on the issue of that county. I would like the Minister to convey our congratulations to the Welsh Office and to the task force on the work that they are doing. I would ask: what are the implications of any additional European funding on the block funding—which will be the funding for the assembly—bearing in mind the deliberations on these matters of the noble Lord, Lord Barnett?

§ Lord Williams of Mostyn
My Lords, at present the position is that, normally, additional public expenditure for matching would have to come from within the Welsh block grant. Negotiations on the future of structural funds are under way within the European Union and the arrangements post-2000 remain to be determined.

Lord Bruce of Donington
My Lords, will the Minister give the House an assurance that he will bear in mind during the course of the negotiations that are taking place in regard to this matter that after all it is our own money that we are claiming?

§ Lord Williams of Mostyn
My Lords, if it comes to assist West Wales and the valleys—and bearing in mind what the noble Lord, Lord Islwyn, rightly pointed out—I do not care whose money it is as long as we get it.

§ Lord Dean of Beswick
My Lords, is it not the case that, apart from Wales—to which I wish every success in the review taking place—there are areas in England, such as the north west, the north east and South Yorkshire, that are every bit as disadvantaged as anywhere in Wales, south or otherwise? Will the 807 Minister ensure that the case for these areas in England does not go by default while these deliberations are taking place?

§ Lord Williams of Mostyn
My Lords, the criteria are general criteria and affect and relate to each relevant area within the United Kingdom. Therefore, curiously, Wales is not being unduly favoured on this occasion.

§ Lord Barnett
My Lords, will my noble friend clarify some of his answers? Does he mean that the funds received by Wales through the Barnett formula will not be reduced?

§ Lord Williams of Mostyn
No, my Lords. The position remains as I have indicated. There are negotiations under way within the European Union on the future of the structural funds for the United Kingdom as a whole. The future arrangements post-2000 therefore remain to be decided.

§ Lord Monkswell
My Lords, bearing in mind the timescale of the baseline and the per capita income levels as criteria, will the Minister confirm that it is a sad reflection on the stewardship of the country under the previous administration that we end up having to claim these particular categories for any part of the United Kingdom? Will he confirm categorically that unlike the previous administration, who would not make matching government funds available so that European moneys could be claimed, this Government will ensure that matching funds are available if necessary?

§ Lord Williams of Mostyn
My Lords, we are dealing with the consequences of the stewardship of the previous regime. There have been long-term structural problems in the Welsh economy. I am not sure that I want to point the finger at any particular regime, but we are dealing with the situation which we found. The Welsh Office is doing extremely well building on the work, if I may say so, of our predecessors. It is extremely gratifying that in an area of grave social difficulty we are managing to get funds to put things right.

Lord Renton
My Lords, is the noble Lord aware that under the 18 years of the previous government the Welsh economy prospered as it had never done before in this century?

§ Lord Williams of Mostyn
Well, my Lords, not really.

§ Lord Roberts of Conwy
My Lords, we are all very grateful to the Minister for the illuminating replies that he has given and for the quiet tribute that he has paid to the previous administration. In return, I can tell him that the real problem is the one touched upon by the noble Lord, Lord Monkswell—the problem of securing matching funds which may well fall to the assembly to achieve. Does the Minister agree?

§ Lord Williams of Mostyn
My Lords, the question of matching funds is critical. The funds will not be 808 released from Europe unless we have the matching funds. But my noble friend Lord Monkswell was not applauding the previous government; he was stigmatising them for their meanness of imagination and reflective thought in not providing matching funds. I was far too gentle to agree with my noble friend Lord Monkswell in that proposition—but I shall now.