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Eu Regional Funds

Volume 401: debated on Thursday 20 March 2003

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If she will make a statement on her Department's policy on the future of EU regional funds. [103886]

My right hon. Friends the Deputy Prime Minister, the Chancellor of the Exchequer and the Secretary of State for Trade and Industry published a paper on 6 March that launched a joint consultation on the future of EU structural funds This set out the preferred approach, the EU framework for regional policy. It would focus EU regional assistance on the poorest member states. Richer member states such as the UK would finance their regional policy domestically and we would increase UK. Government spending to ensure that the UK nations and regions do not lose out financially as a result of reform.

I welcome the Government's commitment to ensuring that regions such as the northeast will not lose out, whatever the future of EU regional funding may be. I also encourage the Government to follow a policy of further economic decentralisation in the UK. What discussions have taken place with other European Union countries—especially the new countries that will be members by the time that the important decisions are made—and what support have they given to the proposals?

We have had a number of discussions. Commissioner Barnier kicked off a round of discussions last year but, as yet, not many EU member states have framed their objectives and policy. In fact, only the Netherlands, as far as I know, has said what it intends to do and what approach it intends to take. That approach is similar to our own. The document is a consultation document—now that other EU member states have seen it, we will, I am sure, get their reaction. As for the accession countries, my right hon. Friend the Secretary of State, Ministers in the Department for Work and Pensions and I have made a point of speaking to the accession countries about those issues. They will not be part of the decision, but they will certainly experience its effects.

The Minister will be aware that in the past North Yorkshire has benefited particularly from the old objectives 3 and 5. Is he aware that that there are now pockets of rural poverty in constituencies such as the Vale of York, where rural wages are 12 per cent. lower than urban wages? In the review, will the Department ensure that the moneys that come to regions such as Yorkshire and the Humber will be spread evenly between rural and urban areas?

We will ensure that our proposal is for a much more devolved and locally led allocation of European regional structural funds, which account for only a quarter of the money that we spend in the regions in this country. It is important to ensure that overarching principles govern the allocation of EU structural funds, and that they take into account the needs of rural areas.

However, to answer the hon. Lady's question, it is much more appropriate to look at the way in which regional development agencies and we allocate money domestically at the moment to ensure that rural areas get their fair share. We are doing so, and the Minister for Rural Affairs and Urban Quality of Life in the Department for Environment, Food and Rural Affairs is an active participant in discussions with the RDAs. The hon. Lady has made an important point that needs to be looked at, quite apart from objectives 3 and 5, which she mentioned.

Can the Minister tell us when he will be able to publish his proposals on areas such as Merseyside, which enjoy objective 1 funding at present? Can he give an assurance that he will discuss his proposals with organisations such as the Alliance for Regional Aid?

I met a delegation led by my hon. Friend, so he knows that we are willing to discuss that. We published the consultation document on 6 March. It is important to point out that because the 10 accession countries are all poorer than the poorest EU member states, if we did not change the basis of European Union structural funds, the whole basis for allocating funds would change. Indeed, it is calculated that the total of 83 million people who receive objective funding in the European Union now would be reduced to 35 million, including my hon. Friend's constituents. To those people, of course, nothing material has changed in their plight or conditions. The only change would be in the calculation because of the accession countries. That is why we put that consultation document out, and why we think that we are taking the right approach to the problem.