European Economic Area

Part of the debate – in the House of Commons at 5:38 pm on 17th February 1992.

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Photo of Mr Denzil Davies Mr Denzil Davies , Llanelli 5:38 pm, 17th February 1992

Like the other hon. Members who have spoken, I welcome the draft agreement and hope that it will be accepted.

I recollect the Minister saying that the countries of the European Free Trade Association would not have to bear the burden—perhaps those were not the words that he used—of the common agricultural policy. The thought crossed my mind that it was a very good agreement for EFTA and that perhaps we could consider applying for membership of EFTA so that we could have the benefit of not having to contribute to the CAP, but no doubt that is not possible.

I will raise two matters which are not connected. The first is the cohesion fund. The Minister did not deal with the matter thoroughly and was extremely brief, although it is important. The Minister said that the EFTA countries will contribute 500 million ecu in grants over five years to what is described in the jargon of the Community as a "cohesion fund". Perhaps that contribution is the danegeld that they have to pay for not being part of the common agricultural policy. The Minister then told us that Northern Ireland is the only region in the United Kingdom that will be able to benefit from the cohesion fund. The Republic of Ireland will also benefit, and we have no objection to either Northern Ireland or the Republic benefiting.

I make no apology for mentioning Wales, because it is the poorest region in Britain. On European Community figures for last year, and taking the average as 100, gross domestic product per head for Wales is 85. Scotland is exactly 100. The north-west, the north-east, Yorkshire and Humberside are slightly higher. The south-west, the east midlands and the west midlands are all higher. Wales has the lowest GDP per head in the whole of Britain.

Wales is located in the west of Britain. The hon. Member for Hastings and Rye (Mr. Warren) said that the agreement shifted the centre of gravity of the Community. As a result of what has happened in eastern Europe over the past few years, the centre of gravity has moved eastwards and, as a result of this agreement, it is now moving slightly northwards. The western areas of Britain will suffer. The whole of Ireland will be compensated to some extent, whereas Wales and the other western parts of Britain are in danger of falling between two stools.

The same is true of the Maastricht agreement, which set up a cohesion fund and an infrastructure fund. Both are based on the same definition of the poorer regions of Britain.