Regional Aid

Oral Answers to Questions — Trade and Industry – in the House of Commons at 12:00 am on 31st July 1997.

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Photo of Alan Beith Alan Beith Shadow Spokesperson (Home Affairs) 12:00 am, 31st July 1997

To ask the President of the Board of Trade if she will make a statement about the Government policy on the future of European aid to regions of high unemployment in the United Kingdom [10037]

Photo of Margaret Beckett Margaret Beckett The Secretary of State for Business, Innovation and Skills

As part of its package on EU enlargement and Agenda 2000, the European Commission has published proposals for reform of the structural funds. The Government will be working to ensure that the detailed arrangements for the funds take due account of the United Kingdom's disadvantaged regions, including those with high unemployment.

Photo of Alan Beith Alan Beith Shadow Spokesperson (Home Affairs)

Does the President of the Board of Trade recognise that serious unemployment remains a desperate problem in areas of older industries such as the coal mining industry in Northumberland, and that therefore objective 2A remains extremely important to the United Kingdom? Is she finding that the case that we hope that she is putting forward is being undermined by the use of the discredited claimant count, which dates from the previous Government and which does not give an accurate picture, comparable to that used by other countries, of the level of unemployment in such areas?

Photo of Margaret Beckett Margaret Beckett The Secretary of State for Business, Innovation and Skills

We share with the right hon. Gentleman the view that it is important that proper account is taken of high levels of unemployment and that those levels should be accurately and consistently measured across international boundaries. One of the things that we are urging on the Commission is the use of internationally comparable statistics, not the discredited statistics produced by the previous Government.

Photo of Mr John Gunnell Mr John Gunnell Labour, Morley and Rothwell

One of the ways in which the Department of Trade and Industry helps areas of high unemployment is through regional selective assistance. What plans does my right hon. Friend have to review the map of regions to ensure that regional selective assistance goes to those areas which most need it?

Photo of Margaret Beckett Margaret Beckett The Secretary of State for Business, Innovation and Skills

I know of my hon. Friend's long record of concern about and interest in those issues. The matter must be considered not just across the United Kingdom but across Europe as the reform of structural funds is considered. We shall be looking at those matters, but we are very much at the beginning of that review process now.

Photo of Eric Forth Eric Forth Conservative, Bromley and Chislehurst

If the right hon. Lady believes that aid from Europe can reduce unemployment at all, would that not show that the great bulk of aid should come to London, which, regrettably, now has a much higher unemployment rate than many other regions of the United Kingdom?

Photo of Margaret Beckett Margaret Beckett The Secretary of State for Business, Innovation and Skills

We are bound by the criteria which existed under the previous Government, within which aid does flow to some parts of the United Kingdom. However, as I said earlier, we shall be looking at what is happening in the south—in London and elsewhere—in the proposed review.

Photo of Andy Reed Andy Reed Labour/Co-operative, Loughborough

I am sure that my right hon. Friend is aware that Leicestershire is one of the most textile-dependent counties in Britain and throughout the European Union. Is she also aware that Leicestershire did not receive Retex funding under the Community initiatives programme during the 1980s and 1990s because it did not have objective 2 status? Will my right hon. Friend assure me that, during the consultation period up to 2000, the existing Community initiatives such as Retex and RECHAR will be maintained to ensure that places such as Leicestershire, particularly Loughborough, benefit from European Union assistance?

Photo of Margaret Beckett Margaret Beckett The Secretary of State for Business, Innovation and Skills

As my hon. Friend will know, we do not wish to see the type of changes that would pre-empt any results from the long-term and fundamental review. We are anxious to ensure that, under this review, across Europe and particularly in the United Kingdom, we receive fair treatment for different areas. I understand and sympathise with the points made by my hon. Friend about the impact on areas such as his own which has been affected by textiles. I am sure that my hon. Friend will recognise that one thing we do have going for us is that at least we now have a Government who are prepared to speak up for Britain in Europe.

Photo of Andrew George Andrew George Shadow Minister (Environment, Food and Rural Affairs)

To ask the President of the Board of Trade if she will make a statement about her Department's efforts to secure EU objective 1 status for the UK's poorest regions. [10038]

Photo of Margaret Beckett Margaret Beckett The Secretary of State for Business, Innovation and Skills

The Commission's Agenda 2000 package includes proposals to reform the structural funds after 1999. The Commission will now need to make detailed legislative proposals, which will then have to be negotiated and agreed. The Government will then put forward those United Kingdom areas that meet the prescribed criteria.

Photo of Andrew George Andrew George Shadow Minister (Environment, Food and Rural Affairs)

I thank the right hon. Lady for her reply. Does she acknowledge that Cornwall has a high level of unemployment, the lowest wages in the country and the lowest gross domestic product per head? If so, will she give Cornwall and the Isles of Scilly top priority in her negotiations with the European Union so as to secure objective 1 funds for those regions?

Photo of Margaret Beckett Margaret Beckett The Secretary of State for Business, Innovation and Skills

We shall do everything we can to assist, and to press the case for all eligible regions. I very much welcome the implications of the Commission's proposals and review, which are to simplify the administration and contain costs. We believe that that will release more funds for worthwhile projects.

Photo of Mr Dale Campbell-Savours Mr Dale Campbell-Savours Labour, Workington

Is there not a real need for the European Commission to undertake a revaluation of all indices that it takes into account when deciding not only objective 1, but objective 2 support? In reality, when looking at individual areas throughout the European Union—not just the UK, but countries such as Italy and France—can we not clearly and rapidly identify mistakes in the way that the work is being carried out? Those mistakes are being carried forward to the Commission's decisions on the allocation of funds to individual regions. It is a matter of ever-increasing concern to hon. Members.

Photo of Margaret Beckett Margaret Beckett The Secretary of State for Business, Innovation and Skills

I am very well aware of the many occasions on which my hon. Friend has raised those issues and expressed concern, especially on behalf of his constituents and his locality. I share his view that it would be wrong for any mistakes in the existing regime to be carried forward into future decisions. We are consistently pressing the Commission to ensure that there is a thorough statistical and geographical basis for any decisions that underlie the scheme. It is partly for that reason that there is a fundamental review, and we shall continue to press those matters.

Photo of Anne McIntosh Anne McIntosh Conservative, Vale of York

Does the right hon. Lady accept that the Government are not bound by the criteria? The whole purpose of Agenda 2000 is that the criteria can be negotiated between the Government and the Commission. Will she consider widening the criteria to cover areas currently not covered, such as unemployment in port-related activities and, in particular, in the tourism sector?

Photo of Margaret Beckett Margaret Beckett The Secretary of State for Business, Innovation and Skills

The hon. Lady is right to say that the criteria are not yet set and will have to be negotiated. That is partly why I told my hon. Friend the Member for Workington (Mr. Campbell—Savours) that matters were at an early stage. In all my answers, I have said that levels of unemployment must be taken into account. We are mindful of the different sorts of areas and the impact of those issues on different areas. We shall bear those matters in mind during the review and the negotiations.