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European Funding

Volume 402: debated on Thursday 3 April 2003

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To ask the Secretary of State for Trade and Industry when the Government will publish its proposals for replacing European structural funds with its own regional funding system; whether the Government will ensure that all Objective 1 and 2 areas receive the same level of funding as they receive under the Objective 1 and 2 programmes; whether all Objective 1 and 2 areas will continue to receive pound for pound matching funding for regeneration programmes; whether the Government's proposals will offer the same seven-year guarantee of funding as that offered by the Commission's proposals; whether the Government will maintain the same level of non-structural regeneration funding to Objective 1 and 2 areas over this period; and whether money will be targeted at Objective 1 and 2 areas whose economic performance is below that of the national average. [106233]

The Government set out their proposals for the future of the European Structural Funds post-2006 in "A Modern Regional Policy for the United Kingdom" which was published on 6 March; a parliamentary statement was issued on that day. This paper puts forward a new EU Framework for Devolved Regional Policy, and launches a consultation on the proposition that this should form the basis for a UK negotiating position in the debate in Europe. The consultation period ends on 4 July.It is not possible at this stage to be precise about the details of how the Framework and funding will operate in individual regions. However, approximately three-quarters of UK regional development funding already comes directly from the UK Government. And, if the Government's proposals for the future of the Structural Funds were accepted, the Government would guarantee that regional spending would be increased so that the nations and regions of the UK receive a level of resources which ensures that they do not lose out from the UK's proposals on Structural Funds reform, for example from the transitional funding they would automatically have received from the application of the eligibility criteria to EU 25 instead of EU15.

The Government have already introduced three-year multi-annual budgeting to encourage long-term planning. And the Government guarantee on future regional spending would extend over the entire seven-year period of the next EU Financial Perspective. As part of this guarantee, the Government would commit to ensuring that the nations and regions have sufficient resources to continue to be able to promote regional productivity and employment from increased UK Government spending on regional policy, targeted on those areas of high unemployment and low GDP.

The Government have also committed to a new PSA to

"make sustainable improvements in the economic performance of all English regions and, over the long term, reduce the gap in growth rate between the regions, defining measures to improve performance and reporting progress against these measures by 2006".