Wales: Regional Aid (Hansard, 29 June 1998)

§ The Parliamentary Under-Secretary of State, Home Office (Lord Williams of Mostyn)
My Lords, the Commission's draft regulations for the structural and cohesion funds which are part of the Agenda 2000 431 package were published on 18th March. The regulations must now be agreed by all 15 member states and approved, where appropriate, by the European Parliament.
Our concern is to ensure that the draft regulations should be affordable and durable. We do not expect the regulations for the structural and cohesion funds to be adopted until early 1999. Therefore, it is not possible to estimate before that time the amount of any aid which Wales might receive once the new regulations come into effect.

§ Lord Islwyn
My Lords, I thank my noble friend the Minister for that Answer. However, does my noble friend appreciate that west Wales, Holyhead, north-west Wales, together with valley areas like Blaenau Gwent and Merthyr, all have high unemployment levels? In addition, Welsh gross domestic product is only 80 per cent. of the European Union average, with some areas having a level as low as 55 per cent. Therefore, as negotiations with the EU Commission proceed, will my noble friend ensure that those basic facts are fully aired so that those deprived areas can have the appropriate objective status and the resources that they so badly need?

§ Lord Williams of Mostyn
My Lords, the points that my noble friend makes are indeed well based. A concept has been established by Eurostat, the Commission's statistical office—namely, NUTS (Nomenclature of Territorial Units for Regional Statistics). The question of what divisions should be applied in respect of NUTS to Wales is presently under review. The points which my noble friend made have been very much borne in mind in the negotiations which have taken place.

Viscount St. Davids
My Lords, can the Minister go a little further in that respect? Can he assure the House that some areas of Wales will qualify for Objective 1 status?

§ Lord Williams of Mostyn
My Lords, I wish to be as helpful as I can both to the noble Viscount and to noble Lords generally. I understand that my right honourable friend the Chancellor of the Exchequer will be providing a Written Answer in another place today dealing with the agreement of the new classification of United Kingdom areas for European statistical purposes. As the noble Viscount will know, that is a necessary precondition as regards Objective 1. In all the circumstances, I do not believe that it would be appropriate for me to go further than that bearing in mind the pending Written Answer to be given in another place.

Lord Bruce of Donington
My Lords, in order that noble Lords may form some evaluation of the reply of my noble friend the Minister within its context, and bearing in mind the fact that the UK contributes 12 per cent. of the amount made available in the structural funds, can my noble friend give the House some indication of, first, what the total UK contribution to those funds is; and, secondly, the amount in total that the Government expect to receive from those funds? Perhaps my noble friend will also indicate the difference.

§ Lord Williams of Mostyn
My Lords, in the time available to me I am not able to indicate the difference. However, I can specify the different funds involved. There is a European Regional Development Fund (ERDF); the European Social Fund (ESE); the European Agriculture Guidance and Guarantee Fund (EAGGF); and, finally, the Financial Instrument for Fisheries Guidance (FIFG). All those funds are targeted towards specific geographical regions and at various objectives. The critical objective is the one which I believe was referred to by my noble friend Lord Islwyn, and indeed by the noble Viscount; namely, regions where development lags behind that taking place elsewhere. It is our hope that the NUTS areas for Wales will be redefined and that, therefore, at least one of them will be favourably placed to qualify under Objective 1.

§ Lord Elis-Thomas
My Lords, without anticipating the Written Answer to be given in another place, perhaps I may warmly welcome in advance what I believe will be contained in it. I should like to stress the importance of the designation of the whole of the western coast of Wales as a potential recipient of Objective 1 in view of the crisis in agriculture, manufacturing industry and income per head in that region. Perhaps I may also congratulate the Secretary of State for Wales and, indeed, colleagues in other parties who have campaigned on this issue.

§ Lord Williams of Mostyn
My Lords, that was a particularly Delphic question to which I can only offer a Delphic answer. It is a fact that Wales is presently split in the way outlined by the noble Lord. Some hold the view that that is perhaps based on historic rather than changed economic circumstances. A sound case was put forward forcefully by my right honourable friend Mr. Ron Davies and his junior Minister Mr. Peter Hain. I am hopeful that the outcome will be what the noble Lord desires and, indeed, what many other people in Wales hope for.

§ Lord Pearson of Rannoch
My Lords, further to the answer that he gave to his noble friend Lord Bruce of Donington, does the Minister agree that, as we are in fact net contributors to the European budget, it is not true to say that the European Union really gives this country any money at all? Indeed, the EU merely gives back about 30 per cent. of what we give it for projects which are largely designed to enhance its own image.

§ Lord Williams of Mostyn
My Lords, up to a point. If there is a reconfiguration of NUTS 1 and 2, I do not believe that most people in Wales would accept that any benefits from that, both financial and otherwise, would be designed to enhance the image of the European Union. On the noble Lord's first point, there is a certain amount of virtue in what he says. In the same way, if any taxpayer pays to the central government, it is a misconception—as the noble Lord, Lord Tebbit, has pointed out on many previous occasions—to think that he is being given something when it was his own money in the first place.

§ Lord Dean of Beswick
My Lords, in reply to an earlier question, my noble friend the Minister referred 433 to a Statement to be made by the Chancellor of the Exchequer in the other place which will indicate the areas that will be more favourably looked on than others. Is my noble friend aware that some areas in England which are already receiving subsidy from Europe because of deprivation are concerned that this announcement may threaten their positions and take away from them benefits that they currently receive? Therefore, does not the concern in this respect relate to a much wider area than the part of the UK covered by the Question?

§ Lord Williams of Mostyn
My Lords, I should be careful. I did not say that a Statement would be made by my right honourable friend the Chancellor of the Exchequer; I said that he was answering a Question in another place. It did not seem either courteous or proper for me to go into too much detail. However, what my noble friend says is quite right. Although Wales is of significant importance in the UK, it is not of paramount importance—at least, not when I am out of Cardiff—and, therefore, those reclassifications will have repercussions in all parts of the United Kingdom as indeed they should.

§ Lord Roberts of Conwy
My Lords, important though Objective 1 status is, will the Government ensure that other categories such as Objectives 2 and 3—indeed, I believe that there is now an Objective 4—are well and truly considered for parts of Wales? Will the Minister give an assurance that some kind of comparative study will be undertaken as to the potential value of applications for inclusion by different parts of Wales in these different categories?

§ Lord Williams of Mostyn
My Lords, I have mentioned Objective 1 and defined it. Most of Wales is presently covered by Objectives 2 and 5(b). Objective 2 covers regions seriously affected by industrial decline and Objective 5(b) covers rural areas. The points made by the noble Lord, Lord Roberts of Conwy, about internal comparisons are extremely valid. Those are considerations which I know my honourable friend Mr. Hain has very much in mind and which he has constantly pressed in appropriate quarters.