European Community (Regional Aid) (Hansard, 20 July 1982)

European Community assistance to non-assisted areas is as follows:

European social fund The fund operates under two budgets—article 4 and article 5. The latter relates to the assisted areas only. The article 4 budget aids training or retraining schemes for groups of workers with special difficulties in labour markets throughout the country. The groups at present assisted are young people, migrants, women, the handicapped, former agricultural workers and workers in or leaving the textile industry. The whole of Scotland is a youth priority area which enhances the prospects of article 4 applications relating to young people.

European Coal and Steel Community The ECSC offers grants to assist the resettlement of redundant coal or steel workers in coal and steel closure areas regardless of assisted status. Loans are also available in these areas for projects which contribute directly to improving efficiency or marketing in the coal and steel industries and for conversion projects providing new employment opportunities for redundant coal and steel workers.

European Investment Bank The EIB provides medium and long-term loans to finance investment which promotes regional development. The focus is 134W primarily on infrastructure and manufacturing industry and projects must be situated in the assisted areas. Outside the assisted areas, the bank may grant loans for energy projects or for projects which will benefit more than one member State.

New Community Instrument Under this financial instrument—often referred to as "Ortoli Facility"—the Commission raises loans in conjunction with the EIB for investment within the Community. The scheme is to promote investment projects which contribute to greater convergence and integration of the economic policies of member States. The loans cover energy, industry and infrastructure projects and are on similar terms to EIB loans but are available in both assisted and non-assisted areas.

European agricultural guidance and guarantee fund This fund is not limited to the assisted areas. It is divided into two sections: the guarantee section, which supports the market by helping to guarantee prices, and the guidance section, which is designed to improve processing and marketing. Under EC regulation 355/77, the guidance section may grant-aid 25 per cent. of the eligible costs for such projects which must involve investment in plant and machinery, must satisfy certain minimum cost requirements and must be able to attract a United Kingdom grant of some kind. For non-assisted areas, United Kingdom grants of up to 8 per cent. are available under the Agricultural Products Processing and Marketing (Improvement Grant) Regulation 1977 for projects which are eligible for FEOGA assistance but which are unable to attract grant from other schemes.

European Regional Development Fund Although the quota section of the fund, at present 95 per cent. of the budget, is restricted to the assisted areas, the non-quota section, at present 5 per cent. is designed particularly to aid areas adversely affected by the implications of other Community policies and is not restricted to the assisted areas. Of the first five schemes approved, two are of benefit to Scotland—those relating to steel and shipbuilding-closure areas. A scheme for textile areas is under discussion.

Applications The Department of Employment sponsors all applications to the European social fund and the Department of Industry is responsible for applications to the European Coal and Steel Community, the European Investment Bank and the New Community Instrument. Applications for FEOGA assistance are channelled through the Department of Agriculture and Fisheries for Scotland and applications for the non-quota section of the European regional development fund will be dealt with by the Scottish Economic Planning Department. Officials in SEPD will be very willing to offer advice on the procedures involved in applications for assistance from any European source.