§ Mr. BlunkettTo ask the Secretary of State for the Environment what proportion of European regional development fund grant received by area in Britain has gone to(a) finance debt redemption and (b) establish projects; and if he will make a statement.
§ Mr. LeighI have been asked to reply.
I take it that the question relates to grants for local authority capital projects, which form the majority of ERDF grants in the United Kingdom,
Section 63(4) of the Local Government and Housing Act 1989 requires local authorities in England and Wales in effect to apply capital receipts from the ERDF to debt redemption. The immediate effect of receipt is therefore a cash benefit.
However, local authority capital programmes are, by virtue of ERDF grants, larger than they otherwise would be. Indirectly, therefore, ERDF grant finances additional capital expenditure.
The issue raised by the hon. Member's question, seeking to distinguish between debt redemption and investment, does not therefore arise.