Future European Union Finances

Part of the debate – in the House of Commons at 5:23 pm on 7 March 2005.

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Photo of Mr Paul Tyler Mr Paul Tyler Shadow Leader of the House of Commons 5:23, 7 March 2005

I understand the point that the hon. Gentleman is making. I was not suggesting that England, or indeed Wales and Scotland, should join Ireland and benefit—simply Cornwall.

At present, there is a clear plot to undo some of the good work that Mr. Gummer and I agree is going on in some parts of the United Kingdom. The Library briefing shows that some real economic progress is beginning to come through from the objective 1 process. GDP per capita in Cornwall, for example, is up from 70 to 72.6 per cent. of the EU average in just two years. That is more than the whole of the previous six years. The situation is similar in other objective 1 areas although, of course, we all started from a low base and the improvement is painfully slow. To pull the plug on the objective 1 process in the period between 2007 and 2013 would deal a devastating blow to our economic and employment activity rates just when they are showing signs of sustained progress.

Unfortunately, UK Ministers constantly bad-mouth such programmes. In the debate in the House on 15 June last year, the Minister for Industry and the Regions said that she wanted

"to get away from the stifling effects of Commission bureaucracy on structural funds projects."—[Hansard, 15 June 2004; Vol. 422, c. 747.]

However, Members from all the objective 1 areas know only too well from our contact with the local communities, local authorities and their partners that the problem is not the bureaucracy in Brussels, but the bureaucracy up the road in Whitehall. We constantly face that problem. I accept that there is a trade-off because, of course, the bureaucrats say that they are monitoring and auditing everything that is going on, but to complain about the bureaucracy in Brussels is completely misplaced in this respect.

As a result of what is now proposed, there is a well-founded suspicion that the Chancellor has set his sights on the repatriation of regional support funding programmes, not so much to save taxpayers' money, but to gain control of the direction of such investment, first, to concentrate it where it can be of political benefit to the Labour party—regretfully that clearly will not be in Cornwall—secondly, to limit the Treasury's match funding commitments and, thirdly, to avoid longer-term investment in specific areas of the UK.

The Chancellor and his ministerial colleagues have done nothing to remove our fears, and almost all MPs from objective 1 areas have expressed serious concern about the complete lack of realistic guarantees. The objective 1 group in the House has, for example, pointed out that the EU programme lasts for seven years, but that the Treasury can promise only three years of assistance, with no commitment to match funding comparable with what we have experienced in phase 1. So are the savings sought by the Government, within the package and implicit in what we are considering now, real and realistic?

Incidentally, I find it odd that the Conservative spokesperson, the hon. Member for West Suffolk, assumed that we could do nothing about all this. He even seemed enthusiastic about what the Chancellor is up to in respect of objective 1 areas. It happens that Cornwall is a Tory-free zone—indeed, as are most of the other objective 1 areas—but to deny the useful contribution that objective 1 status has made to our economy and so on seems extraordinary.

My colleagues and I have met officials from the appropriate directorate of the Commission in Brussels who believe that such savings are neither real nor realistic. Unless the Chancellor is prepared to preside over a sharply reduced impact on regional development in the UK and is successful in persuading the majority of the other 24 member states to do the same, this attempt at a unilateral break-out is clearly doomed. Meanwhile, the effect of the Government's refusal to compromise is delaying vital decisions and leaving UK local authorities and their partners in a state of dangerous confusion—they simply have no idea what will happen or when—and the potential for avoidable waste and dissipation is immense.

We seek an explicit reassurance from the Minister. What will happen and when to such regional funds? What guarantee is he prepared to make? Frankly, given the Chancellor's obstinacy, there is little prospect of finding any solution to the problem before the end of June. If he thinks that he can bully his opposite numbers into agreeing with him during the British presidency, many MEPs, from all parties, are simply convinced that that is wishful thinking.

A great deal has already been said about the CAP. As I made clear at the outset, the CAP is the real meat of the EU budget. The 2002 deal, which was referred to earlier, struck between the French and German Governments has resulted in a continuation of many of the least satisfactory and least sustainable aspects of CAP expenditure. Reference has been made to the sugar and tobacco regimes, both of which are clearly undesirable in the medium to long term. The sugar regime is not finalised and could still be revised much more effectively.

I recall that the then Minister for Europe, now the Leader of the House, whom I shadow, said that the CAP's

"quick reform is imperative, and it will not bear the weight of enlargement without it."—[Hansard, Westminster Hall, 16 April 2002; Vol. 383, c. 121WH.]

We now have enlargement, yet the CAP is not fully reformed. That is unfinished business.

Where were the United Kingdom Government when the latest Franco-German CAP deal was struck? Did our Ministers, let alone the Chancellor, fight for effective restraint on that huge element of the overall Brussels budget? They seem to have been conspicuous by their quiet acquiescence.