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Northern Ireland (European Community Non-Quota Aid)

Volume 978: debated on Thursday 14 February 1980

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Motion made, and Question proposed, That this House do now adjourn.—[ Mr. Cope.]

11.30 pm

The House has just completed an overdue debate upon EEC documents which were recommended for debate by the Scrutiny Committee in advance of decisions being taken upon them by the Council of Ministers. Ironically, the matter I wish to raise is exactly the reverse. I wish to deal with matters which have been in agitation in the European Assembly and in the Commission but which have not yet reached the stage of formulation as regulations and which have, consequently, not been to the Scrutiny Committee or recommended by it for debate.

The paradox is not as severe as at first sight might appear. Hon. Members are probably coming to realise that, especially as the directly elected Assembly increases its effective powers and influence, Ministers are more and more caught up in giving indications, and even in some degree commitments, in advance as to what they will or will not approve when eventually the matters emerge in the form of proposals put by the Commission to the Council of Ministers. It is such a subject that I wish to raise.

Non-quota aid—that is, regional aid over and above that governed by the quotas among the Nine—has assumed larger proportions and more importance in recent weeks. That is because of the change of position on the part of the Government on the £1,000 million net tribute which we are in course of paying to the EEC. The original notion, apparently, was that we should reduce the gross sum that we are required to pay out; but there has been a manifest change in recent weeks. The tack on which the Government are now sailing is that the EEC should increase the payments to be received by the United Kingdom, and that is where non-quota aid—additional projects for the payment of regional aid—is attracting increased interest.

That brings us to the subject of this evening's debate. I refer to the proposal by the Assembly's regional committee, which has now received the approval of the Assembly, for what are known as "cross-border" schemes of assistance to tourism and craft industries. The term "cross-border" is misleading. What is meant is schemes for expenditure on both sides of the international frontier for the promotion of tourism or craft industries. The proposal is that a payment for that purpose of £10 million should be made to the Irish Republic and of £5 million to the United Kingdom.

The first question to which I should like the Minister of State to address himself is that manifest disparity. These are indeed payments to the respective members of the EEC; but they are payments for the same purpose on either side of the international frontier—namely, tourism and craft industry schemes in areas adjacent to the international frontier. It is therefore impossible to see on what grounds twice as much can be allocated to one member of the EEC as to another when, after all, it is the same border viewed from opposite sides.

The Secretary of State, in correspondence with my right hon. Friend John Taylor, the Ulster Unionist Member of the European Assembly, attempted to find some justification for it. In a letter of 28 January this year to Mr. Taylor, he said:
"The Commission's financial proposal in respect of the border areas will give Northern Ireland parity with the Irish Republic on an overall per capita basis."
That is fairly obvious, because the sum proposed for the United Kingdom is half the sum proposed for the Republic, and the population of Northern Ireland is about half the population of the Irish Republic. Consequently, on a per capita basis, worked out over Northern Ireland on the one side and the Republic on the other, one does indeed get a fair approach to parity. But the comparison on that basis is nonsense. This is expenditure not for the benefit of the Republic as a whole or of Northern Ireland as a whole but on schemes for the border areas on both sides of the same border.

When the Secretary of State goes on to refer to aid for a completely separate project for shipbuilding, which is attracted by Belfast, as Belfast happens to be an important shipbuilding centre, and says that, if one adds that in, "Northern Ireland's share per head of the population will be higher than that of the Republic", that is an indication that the Government have found it impossible to justify the disparity of treatment between the two EEC members.

At this informal stage, before commitment has hardened much further, I should like the Minister of State to indicate that Her Majesty's Government will intimate and, when the time comes in the Council of Ministers, will insist that we have the self-evidently required parity on both sides of the frontier in these schemes. So much for the total amount.

Now I come to the respective areas on either side of the frontier in which that amount is to be spent. On the Republic side it is to be spent within any or all of the counties on the frontier. On the Northern Ireland side it is to be spent in the districts which abut on the frontier. That is a most extraordinary difference between the two cases.

As a Welshman, I find a certain perverse satisfaction in noting the dedication of the Irish Republic and of Irish nationalists to the Tudor administrative divisions of the island of Ireland. Counties have some atavistic effect upon the Irish nationalist. So I quite understand why the Irish Republic thought the Tudor counties appropriate for delimiting the border areas on which these schemes should be based. But when we come to the Northern Ireland side, surely the same should apply. After all, there are similar counties there, arising out of the same Tudor division of the island, and the expenditure should presumably be applied to the frontier counties in Northern Ireland as it is to the frontier counties in the Republic.

It is true that in Northern Ireland the counties are no longer administrative units; but these schemes are not to be administered by the district councils in Northern Ireland: many of the craft industry schemes will be dealt with directly with individuals and firms.

There is, therefore, no justification for a different basis of geographical allocation on the two sides of the international frontier. There again, I want the Government to understand at this stage how unfair it would be seen to be by opinion in Northern Ireland if aid available in the Republic on a county basis were much more narrowly limited in Northern Ireland.

In case it be argued that, nevertheless, the counties, such as County Down, which abut upon the international frontier are concerned with tourism and with craft industries only in those districts which adjoin the frontier, I can assure the Minister of State that there is no foundation in that and that the promotion of tourism in particular requires that county areas as a whole should be taken into account in drawing up the schemes.

Those are, then, two defects in these proposals, coming forward from the Commission to the Council of Ministers, which preferably require to be remedied at an earlier stage; but in any case we require the commitment of the Government that in the Council of Ministers these two inequities will be removed.

There is one further subject which I wish to take the opportunity of raising. It is again germane to the new-found anxiety of the Government to find extra objects for EEC expenditure to outweigh the deficit under which we at present labour. It is little more than six months since the new Government turned down flat the scheme for a gas pipeline linking the gas grid in Great Britain with customers in Northern Ireland. But in that six months there has been a considerable change in many respects, and the Government certainly ought now urgently to reconsider that decision.

I have already mentioned that the whole question of EEC assistance is now seen in a different light from six months ago. Here is a project of importance and of scope which is recommended by the regional committee of the European Assembly, which is commended warmly by the European Assembly itself for the consideration of the Commission, and on which the Commission expresses itself as anxious to receive from Her Majesty's Government proposals on the basis of which loans or grants could be considered between the Community and Her Majesty's Government.

The Commission was evidently impressed, and rightly so, by the study of the Northern Ireland Economic Council published in September last, which showed up the thinness of the reasoning on which the Government's rejection of the case for a gas pipeline had been based. I can assert—and it has been put almost in so many words by the European Assembly's regional committee—that there has as yet been no satisfactory comparison, certainly no published comparison, between the cost of a pipeline and the cost of discontinuance and replacement of the present supply and consumption of gas in Northern Ireland.

The rough estimate of £100 million for the pipeline was challenged effectively by the Economic Council—that ought to be reassessed—and a figure as high as £150 million has been put forward by the same source as an estimate of the total cost—not necessarily all cost to the public purse, but total economic cost—of discontinuing the use of gas in Northern Ireland.

This is a matter that needs to be reopened, and reopened urgently. After all, here is an irony. We have been told in Northern Ireland that we must face the complete discontinuance of a form of energy which in the rest of the United Kingdom is of great economic importance. The European Economic Community, at the level of its Commission, at the level of the Assembly, at the level of its regional committee, says that this is a project which, on the face of it, is worthy of support, a project which Her Majesty's Government have only to raise for it to be eagerly considered by the Community from the point of view of aid both by way of loan and as part of the regional schemes of grant aid.

There could not be a subject more germane to the current concern of Her Majesty's Government in counterbalancing our deficit with the Community. I hope that the Minister of State will tonight indicate that the Government are not going pigheadedly to remain with the decision that they took in the first weeks of office in a very different climate from that which prevails today but will reapproach with an open mind a subject that is of fundamental economic importance to Northern Ireland and on which the wrong decision taken now will have fateful consequences for many years ahead.

11.47 pm

I am grateful to the right hon. Member for Down, South (Mr. Powell) and my hon. Friend the Minister for allowing me to intervene very briefly. I have a particular interest in this matter because I have served on the regional committee of the European Parliament for the past five years. I am very anxious to see that the non-quota section is so fashioned as to help places such as Northern Ireland.

Although, as the right hon. Member said, there are, from our point of view, defects in the projects put forward—indeed, we tried hard in committee to alter them—nevertheless they are only a start and it is by no means an exhaustive list of what can and will be done with the non-quota fund.

During the committee stage of the regulation, we received a categorical assurance from the Commissioner, Mr. Giolitti, that he would consider in the next round both textiles and fishing, and we amended the original motion for a resolution to emphasise the need for including these sectors, both of which would benefit Northern Ireland incidentally and also North-West England.

Nor must we forget that the projects under consideration here today and in Strasbourg tomorrow take up considerably less than two-thirds of the money that was expected to be available under the first tranche—220 million units of account out of the 350 million units of account that it was assumed would be available on a "minimal forecast" for the first period.

Today, however, we have heard from Commissioner Tugendhat that the Commission is putting forward a much larger figure for the regional fund than that put forward in the Council's draft budget which was rejected in December—namely, 1,200 million units of account. Since the non-quota sector is 5 per cent. of the total, this means that if the enlarged regional fund is agreed, as I believe it will be, there will be a substantially large non-quota section from which Northern Ireland can indeed benefit.

Therefore, not only will there be 120 million units of account left over from the original estimate available for new sectors and projects—namely, textiles and fishing—but the whole sum will be substantially larger. As the EEC is genuinely anxious, as the right hon. Gentleman has said more than once, to increase United Kingdom receipts from the Community to offset our higher contributions, Northern Ireland should benefit considerably from the large non-quota sector. The harder the bargain that my right hon. Friend the Secretary of State for Trade manages to strike, the better those of us who serve in Europe will like it, and he can count on our most enthusiastic support.

11.50 pm

I am grateful to the right hon. Member for Down, South (Mr. Powell) for raising these matters and for providing the opportunity of discussing the benefits which Northern Ireland stands to gain from the non-quota section of the European regional development fund.

Northern Ireland, as a region, is an important beneficiary under the current non-quota proposals, and I should like to say immediately that the Government welcome the recognition of Northern Ireland's problems implicit in these proposals which once again demonstrate in clear terms the EEC's acute awareness of how it may help.

Hon. Members will be aware that the non-quota proposals are based on article 13 of the regional fund regulation. This permits the fund to participate in two types of activity—first, measures which are linked with Community policies and which are intended to take special account of regional problems and, secondly, measures which are intended for areas affected by particularly serious occurrences such as natural disasters. In addition to these, the Council of Ministers has decided that under article 13 measures could be submitted which are designed to improve economic and social conditions in the most deserving frontier areas.

Accordingly, the Commission drew up five proposed measures and submitted them to the Council in October 1979. The United Kingdom stands to benefit from three of these proposals—first, those to assist areas adversely affected by the decline in the steel industry; secondly, those to assist areas adversely affected by the decline in the shipbuilding industry; and, thirdly, the measure to improve economic and social conditions on either side of the Irish border, to which the right hon. Gentleman made especial reference.

As the cross-border measure is based on what is essentially an interpretative gloss by the Council on article 13, the Commission has been constrained in its choice of areas that may benefit from this measure. That is partly by reason of the legal limitations upon the extent to which it is permissible to stretch the interpretation and partly by the need to take into account what other member States would view as acceptable under the terms of article 13.

The Commission is accordingly of the view that the areas to benefit should have clearly defined current administrative boundaries and should be contiguous with the border. We have therefore put forward the seven district council areas adjacent to the border—Londonderry, Strabane, Omagh, Fermanagh, Dungannon, Armagh and Newry and Mourne. The Commission considers—the matter was raised with it—that the old county boundaries which are no longer adminis- trative entities in Northern Ireland would not have met the legal criteria.

I note from the intervention of my hon. Friend the Member for Lancaster (Mrs. Kellett-Bowman) that the European Parliament, of which she is a distinguished Member, is seeking to add a sixth or even a seventh proposal to the Commission's list, namely, one relating to textiles and the other to fisheries. Textiles are, of course, of great significance to Northern Ireland's economy. Manmade fibres in particular are suffering from a severe recession.

I apologise for intervening. I had not realised that the hon. Gentleman had moved on to a different subject. I trust that he will refer to the disparity in the total sums.

I am dealing with the additional issue introduced by my hon. Friend before turning to the proposals and the financial implications.

I was saying that textiles—especially man-made fibres—are suffering from severe recession. The Northern Ireland Office is fully supporting my right hon. Friend the Secretary of State for Trade in his endeavours in Europe to reduce unfair competition from imports from non-member States. I do not wish to say anything about possible further non-quota proposals, which might place in jeopardy the gains that we have made in the negotiations that are currently in hand. That applies also to some of the comments that the right hon. Gentleman has made. He sought assurances that we shall save this, that or the other in the negotiations. He will appreciate the difficulty of making a public statement from the Dispatch Box when negotiations are in hand. He is experienced in such matters.

I turn to the financial proposal that is on the table, as it were, in respect of border areas. The proposals allow an allocation of 8 million European units of account, or about £5 million, which is to be used mainly for tourism and artisan projects. The right hon. Gentleman made the point that the Irish Republic will receive double that amount. He has also provided the answer. The cross-border measure, by itself, gives Northern Ireland parity with the Republic on a population proportion basis. That matter is taken into account. The Republic has double the population and receives double the allowance, although I know that the right hon. Gentleman would rather look at the question of the population within the districts on the border.

That is what the aid is for—it is for border areas and not for the countries as a whole.

The entire population is taken into account.

While I consider that the cross-border measure is of considerable potential benefit to the Province, it must be emphasised that it should be seen in conjunction with the non-quota proposal which will benefit the Belfast area. The amount which will be allocated to Belfast under the shipbuilding measure, in order to make the affected area more attractive and to provide alternative employment opportunities, has not yet been settled, but I can assure hon. Members that we will argue strongly Northern Ireland's case for a generous share of the money allocated to the United Kingdom.

Moreover—and this is good news for the right hon. Gentleman—I am happy to be able to say to the House that, at a meeting of officials held in Brussels at the end of last week, the other member States and the EEC authorities agreed that the non-quota shipbuilding measure should be extended to cover not just the Belfast city council area but the much larger Belfast urban area. The final decision remains to be taken by the Council of Ministers, but this extension would bring a further 200,000 people within the scope of the proposed measure and thus provide greater potential for the establishment of small and medium-sized enterprises which the measure envisages.

I am satisfied that, when taken together, the two measures from which Northern Ireland would benefit under the non-quota proposals represent an acceptable package of aid to the Province. However, I am anxious that it should be widely appreciated that the non-quota proposals put forward by the Commission envisage the application of only modest sums as compared with the overall bene- fits which Northern Ireland receives from the EEC. As the House doubtless knows, only 5 per cent. of the total regional fund is allocated for non-quota measures. The £5 million for tourism and artisan projects in the border areas, plus the further sum which is not yet decided in respect of Belfast, is to be compared with commitments from the quota section of the fund, which in 1979 alone amounted to more than £27 million and which brought total commitments from the fund since 1975 to about £65 million. Indeed, even this latter figure itself is overshadowed by public expenditure in Northern Ireland, which in 1980–81 is expected to exceed £2,100 million. It is therefore clear that in non-quota terms we are speaking of relatively small amounts, although I would not wish in any way to underestimate their importance.

In passing, I should say that the total of £65 million committed to Northern Ireland from the quota section of the regional fund since 1975 represents about 16 per cent. of the United Kingdom allocation from the fund and is thus striking evidence that not only in the EEC but also within the United Kingdom the need for aid to Northern Ireland is clearly recognised.

Moreover, the projects which the fund has assisted also show a keen awareness of Northern Ireland's needs by the EEC. For example, in 1978 and 1979 the EEC gave a commitment amounting to some £7·5 million in respect of further developments at Aldergrove airport. What is more, the commitment was that the grant was made at a rate of 40 per cent., a level reserved for projects which are of particular importance to the development of the region in question.

I should have liked to mention the aid being given to the Northern Ireland electricity service, but the right hon. Gentleman is anxious that I should go immediately to the subject of the pipeline. I must make clear that the Government have always been aware that grants from the European regional development fund could be made available, and this fact was taken into account when the decision was announced last July. Before the Government could reasonably seek assistance at any level from the EEC towards the provision of a pipeline, they would have to be assured that such a pro- ject would be viable financially. It is not possible to give an assurance that the pipeline would be viable financially, and, accordingly, it would not qualify for assistance from the EEC. I understand that it is simply a recommendation at the moment from the regional policy committee, which has passed the matter to the committee on rules and procedure in the EEC. That committee has not yet considered the matter—

The Question having been proposed after Ten o'clock and the debate having continued for half an hour. Mr. Deputy Speaker adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at Twelve o'clock.