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Air Crash (Scotland)

10.12 pm

The Lord President of the Council and Leader of the House of Commons (Mr. John Wakeham) : With permission, Mr. Deputy Speaker, I should like to make a short business statement.

As the House may be aware, there has been a major air crash at Lockerbie, Dumfriesshire, involving a Pan Am Boeing 747 on route from London Heathrow to New York, reported to have more than 250 people on board.

The House will appreciate that, at the present time, there are very few facts available. My right hon. and learned Friend the Secretary of State for Scotland is flying to the scene tonight. The emergency telephone numbers have been given on television. My right hon. Friend the Secretary of State for Transport will make a full statement to the House tomorrow.

Mr. Frank Dobson (Holborn and St. Pancras) : I thank the Leader of the House for his courtesy in making this statement. I am sure that everyone in the House recognises that there is nothing that can be said by the Secretary of State for Transport at this time. I am sure that the whole House joins in offering sympathy to those who have suffered and who are grieving. [ Hon. Members :-- "Hear, hear."] We also offer our best wishes to the emergency services who are currently carrying out their desperately difficult tasks. I am sure that the whole House is confident that they will be doing so with the dedication and professionalism that we have come to expect.

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Hon. Members : Hear, hear.

Mr. Wakeham : I am grateful to the hon. Gentleman for the words that he has spoken.

Mr. Deputy Speaker (Sir Paul Dean) : I hope that the House will agree that we cannot carry this matter further, but I will call the hon. Member for Dumfries (Sir H. Monro) in whose constituency this accident happened.

Sir Hector Monro (Dumfries) : This terrible disaster occurred in the centre of my constituency, and the hearts of all hon. Members will be with those who have lost their lives, with the relatives and with the seriously injured--many of whom may be my constituents--as well as those who have been killed in the aircraft. I am fully confident that tonight the rescue services, the Health Service, the police, hospitals and the fire service will do magnificent work to help those who are still alive. I will be going north to the site with my right hon. and learned Friend the Secretary of State for Scotland, and I apologise for the fact that I shall not be present in the Chamber tomorrow for the statement.

Mr. Wakeham : I am most grateful to my hon. Friend for his comments. I know that he spoke for the whole House and I hope that he will reach Scotland as soon as possible to do what he can there.

Mr. Deputy Speaker : After these very solemn matters, we return to the business of the House and the debate on structural funds.

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European Community Structural Funds

[Relevant document : Framework Regulation on the Structural Funds described in the unnumbered Explanatory Memorandum submitted by the Department of Trade and Industry on 7th June 1988.]

10.15 pm

The Parliamentary Under-Secretary of State for Trade and Industry (Mr. Robert Atkins) : I beg to move

That this House takes note of European Community Documents Nos. 7397/1/88 and the Supplementary Explanatory Memorandum submitted by the Ministry of Agriculture, Fisheries and Food on 21st November 1988 on reform of the Structural Funds, 10025/86 on the activities of the European Regional Development Fund in 1985, 10308/87 on the activities of the Fund in 1986, 6969/87 on the application of the European Regional Development Fund Regulation, 7002/87 on the social and economic situation of the regions of the Community and COM(88)501 on the future of rural society ; supports the Government's aim of maximising receipts from the Funds while ensuring that they are concentrated on the regions and areas of greatest need and disbursed with due financial discipline ; and endorses the Government's aim of supporting comprehensive Community consideration of rural issues. In introducing this short debate I think it would be sensible for me to make a relatively brief contribution in explaining the documents with which we are concerned and then, if I am able and with the permission of the House, to direct my comments to the points that may be raised during the debate.

During 1988 the European Community has been conducting a major reform of its three structural funds--the European regional development fund, the European social fund and the guidance section of the European agricultural fund. The reform is due to come into force on 1 January 1989.

I regret that we have not before now been able to find time to debate the issue in the House. The main part of the negotiation on the four most recent regulations took place during the summer recess. The Community issued its proposals in French on 29 July and by 17 October they were being discussed in the Foreign Affairs Council. That timetable caused particular difficulties for our scrutiny procedure. The present position is that this week's Foreign Affairs Council agreed on the terms of the regulations, but of course subject, in the United Kingdom's case, to a parliamentary scrutiny reservation.

The principal documents then are the new framework regulation adopted on 24 June--

Mr. Tony Marlow (Northampton, North) : My hon. Friend is no doubt more aware than the rest of us of the vast amount of money involved and the vast import of the issue that he is discussing with the House tonight. Could he tell the House--I think it is the case--why it was that the House was not enabled to debate this issue before a common position was agreed with our Community partners? It is very difficult to influence a matter of this importance and magnitude if the Government have already agreed a common position with other Community members. What can the House then do about it?

Mr. Atkins : I appreciate my hon. Friend's concern, which he represents fairly frequently in the House. In my opening remarks, I endeavoured to explain that much of the activity occurred between 29 July and 17 October, when the House was not sitting. That is a particular problem of the scrutiny process. It may be that the

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authorities of the House will have to consider whether there are easier ways. Clearly, we cannot discuss matters when the House is in recess. That is a fact of life that we have to face.

Mr. Marlow : This is a vast amount of public money. Was there any rush to get this thing agreed? Would it not have been possible to delay coming to a common position? Do the Government want to steamroller all this stuff through the House? My hon. Friend will be aware of the fact that there is a complaint about a democratic deficit. There is a very significant democratic deficit when it comes to regional policies--policies which the Government in this country have thrown out now being thrust upon us by the European Community, involving vast sums of public money. Why could not the Government delay and bring it to the House before they agreed the common position?

Mr. Atkins : I am aware, as are many right hon. and hon. Members from all parts of the House, of my hon. Friend's position on European matters. That does not mean that his comment is invalid. I understand his point, but in essence we are asking the House to agree tonight to something that will be to the United Kingdom's benefit. I hope that my hon. Friend understands that it was in the interests of both my Department and those associated with us in arguing the case in Europe to press the case as strongly as we could.

That does not negate the fact that the scrutiny procedure, to which my hon. Friend and I have both made reference, took place at a time when the House was in recess. That is a fact of life. It may be that my hon. Friend will decide that, in future, he ought not to observe the long parliamentary recess from July to October so that such matters can be discussed. I have tried to make crystal clear the situtaion. I cannot gainsay the facts, however hard my hon. Friend presses me.

Mr. Frank Haynes (Ashfield) : The Minister is not kidding me. I shall tell him straight. He could have arranged for Parliament to be recalled. He can take the grin off his face. It is very nice for the Government to be doing things during the recess, so that we cannot get at them. Bearing in mind the amount of money involved for the people of this country, the Government should have taken the opportunity to recall Parliament so that the matter could be discussed before any decision was taken.

Mr. Atkins : The hon. Gentleman flatters me with a power that I did not think I had. It does not fall to me to recall Parliament. If Parliament had been recalled, the hon. Gentleman, like me, would not have found it easy to return, as we would probably have been on our annual holidays. Recalling Parliament to debate such a measure is not as easy as the hon. Gentleman would have us believe. As the debate progresses, I hope that the hon. Gentleman will understand, as will other right hon. and hon. Members, that much of the concern being expressed is from hon. Members who, quite legitimately and honourably, are opposed to our membership of the European Community.

Mr. Marlow rose--

Mr. Atkins : No, I must make progress. A number of right hon. and hon. Gentlemen wish to contribute. My

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hon. Friend has made two pressing interventions, and if he is able to catch Madam Deputy Speaker's eye, I feel sure that he will be able to persuade--

Mr. Marlow rose--

Madam Deputy Speaker (Miss Betty Boothroyd) : Order. The Minister has made it clear that he will not give way again at this stage.

Mr. Dennis Skinner (Bolsover) : This is taking Father Christmas too far--how much money?

Mr. Atkins : The hon. Member for Bolsover (Mr. Skinner) must wait. He will find out how much money is involved in due course. I have indicated the reasons for the problems surrounding the scrutiny procedure. I turn to the documents involved. The principal documents are the new framework regulation adopted on 24 June and the four further regulations that I have mentioned. They comprise one each for the three funds and a horizontal regulation applying to all three.

Two of the documents before the House, No. 7937/1/88 and the unnumbered one, are the Commission's proposals for these four regulations. These two documents are identical apart from an extra cover sheet on one of them. A third document, COM(88)501, is a Commission paper on the future of rural society. The other three documents before the House are more for background or reference and they are regular Commission reports, all of them now a year or more out of date. One of them, No. 7002/87, was controversial at the time it came out, in June 1987, because of a so-called synthetic index, which attempted to measure the relative severity of different regions' problems and gave some odd results. I can assure the House that that index has had no influence on the subsequent reform of the funds.

The funds are to be devoted to five objectives set out in the framework regulations. The first objective is promoting the development and structural adjustment of the regions whose development is lagging behind.

Mr. Skinner : Like Sunderland.

Mr. Atkins : The second objective is converting the regions seriously affected by industrial decline.

Mr. Skinner : Like Sunderland.

Mr. Atkins : The third objective is combating long-term unemployment.

Mr. Skinner : Sunderland again.

Mr. Atkins : The fourth objective is combating youth unemployment.

Mr. Skinner : Sunderland again.

Mr. Atkins : The fifth objective, with a view to reform of the common agricultural policy, is speeding up the adjustment of agricultural structures and promoting the development of rural areas.

The administration of the funds will lie in the hands of a former colleague of ours, Mr. Bruce Millan, and his new colleagues in the European Commission. In important cases, we have ensured that the regulations provide that the Commission is to act in agreement with the member states or after consulting the three new committees on which member states are to be represented. My right hon.

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Friends and hon. Friends, Secretaries of State and Ministers, and I will be in constant touch with the Commission throughout the five years the regulations are to run before the next review. I know that hon. Members will not hesitate to get in touch with me, as in the past, if they wish to take up particular points in Brussels. I invite the House to support me in accepting these regulations.

10.28 pm

Mr. Richard Caborn (Sheffield, Central) : First, I shall express our concern about the lack of consultation that has taken place on this extremely important batch of regulations. For the record, on 19 October the Select Committee on European Legislation strongly recommended that these regulations be brought before the House at the earliest opportunity. The manner in which the Select Committee and, therefore, the House have been treated is nothing less than contemptuous. The work done by the Select Committee in scrutinising European legislation on a weekly basis should, at least, have a little more priority given to it by the Secretary of State. The Opposition, like many others, wish to ensure that Members are consulted, either through the Select Committee or through the House itself.

Mr. Bowen Wells (Hertford and Stortford) : On the question of the House having these discussions at an earlier time, the hon. Member for Sheffield, Central (Mr. Caborn) said that the Committee recommended a debate on 19 October. The Select Committee took up the matter again on 25 November. It was not purely a matter of timing and the House being in recess made it impossible to have the debate. Does the hon. Gentleman agree? Does he also agree that Ministers are in considerable difficulty in bringing these matters before the House, given the current regulations governing the Select Committee? This requires consideration by the House as a whole.

Mr. Caborn : It is clear from the minutes of 19 October that provision could have been made for this debate to take place in the House before this late hour. This is just about the last opportunity to debate these regulations before they come into operation on 1 January 1989. Provision could have been made earlier. I was a member of the Select Committee and there was always a battle between Ministers about provision for debates on the Floor of the House. Before I deal with the main documents--

Mr. Marlow : Will the hon. Gentleman give way?

Mr. Caborn : No, because many hon. Members with genuine constituency concerns wish to take part in the debate. The hon. Gentleman may want to discuss the constitutional position, but he has plenty of opportunity to do that.

Before I deal with the regulations, it is only fair that I should put on the record the great fear that is felt around the country, especially in the less developed regions, about 1992 and the Government's attitude to the regions and to what is happening in member states.

I refer to a document that has been before the Commission, which was commissioned by Cambridge Economic Consultants, suggesting that the effects on individual regions will vary according to location and

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economic characteristics. There is therefore a danger that the already disadvantaged regions will become weaker with "overheating" occurring in those that are already well favoured. That analysis has subsequently been confirmed by the regional policy directorate of the EC in a paper calling for improved infrastructure, increased local development--including the small business sector--and the targeted allocation of the increased EC structural funds. Unlike France, Belgium and many other member states, the United Kingdom Government have published little further research on the parameters for individual region's economic attractiveness and projected sector activity. However, it can be assumed that the direct economic benefits will further accrue to those regions with effective road and rail links to the south-east and the Channel tunnel, thereby widening that discrepancy. That concern is real.

One conclusion reached by the report of the department of applied economics at the university of Cambridge, entitled "The Regional Impact of Policies Implemented in the Context of Completing the Community's Internal Market by 1992", was :

"Another important conclusion of this paper is that the regional effects of completing the internal market are likely to intensify the polarisation between regions enjoying cumulative growth and cumulative decline. In addition, market liberalisation could well precipitate certain vulnerable regions into cumulative decline. The implied scale of the problems indicates that regional policy needs to be significantly strengthened. Self -correcting market mechanisms"-- this is an important point as far as this Government are concerned--

"have been shown, in the past, to work either inadequately or not at all".

That view has been put forward by the Commission in the documents that we are considering. Unless the Government take note of those points, there could well be further devastation in many of the northern regions.

We should consider the lack of regional input over the past five or six years--during which there has been the abolition of the regional grant regime--in the light of yesterday's press conference by the Under-Secretary of State for the Environment, the hon. Member for Rossendale and Darwen (Mr. Trippier). Yesterday's edition of The Guardian contained the headline,

"Minister puts brake on urban aid".

The article states :

"In a gentle retreat from the central strand of Mrs. Thatcher's Action for Cities programme, launched six months ago, Mr. Trippier said yesterday it was more important to ensure the existing 10 urban development corporations are already up and running and established' than to designate any new UDC areas.

He was speaking at a Department of Environment press conference, where he launched an annual report on the department's inner cities programmes, which cost more than £500 million a year."

I ask the Government to consider the fact that about £22 billion has been removed from local government in reductions in the rate support grant since 1979, and that a further £700 million has been taken from the regions with the abolition of regional support grant. Those two factors alone clearly show that in the removal of resources the opportunity to try to effect some type of regeneration, rebuilding and restructuring in those areas has been missed by the Government.

The 12th annual report--one of the documents that we are discussing--has tried to develop the integrated operations programme. Page 37 outlines the effects of the

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integrated regional development operation. There has been co-operation with local authorities. Indeed, there was an announcement today in The Guardian --I gather that it will be in the rest of the press tomorrow--of a £600 million grant to Strathclyde and to Yorkshire and Humberside. That has come about because of the co-operation of the local authorities.

The same document also refers to the development of the region's endogenous potential. That was dealt with in articles 15, 16 and 27--the only parts of the grant regime that go direct to local authorities. Local authorities got together a package, but there was a delay because the Department of Trade and Industry would not submit to Brussels as there was to be a direct payment to local authorities under article 15.

There was a crisis meeting in November because the Commission was not prepared to concede that local authorities should be treated differently from national Government. There was a compromise--the three-year package for the whole of the integrated operations development programme would go ahead, but local authorities would be allowed only year one funding.

That has meant that the business initiative centre that Lord Young opened just a few weeks ago is now in jeopardy for financial reasons. Areas for small and medium-sized businesses that have been established are in jeopardy unless year two and three funding is available. Is the Minister prepared to give a commitment that year two and three funding under article 15 for the integrated operations development programme will be forthcoming?

It would be wrong of us to encourage small and medium-sized businesses to start using establishments created for them if we know that we shall have to shut them down for lack of funds in years two and three. The Commission has tried to press the Government to accept three-year funding, but because of their dogmatic approach the Government would accept funding only for year one.

We broadly welcome the more effective and co-ordinated approach to grant regimes, but there are several areas about which there is anxiety. We also welcome the increase in the structural fund's allocation. Many of us have argued for that for many years.

Mr. William Cash (Stafford) : Will the hon. Gentleman give way?

Mr. Caborn : No, we have only one and a half hours and several of my hon. Friends want to raise issues that concern their constituencies.

The package would have been considerably better if the Government had accepted what was proposed in the initial round of discussions, when it was proposed that all the money for structural fund development should be additional. The result would have been about £9 billion for the regions. I suppose that it was in splendid isolation that they fought the battle. We believe that they have now got that figure down to an extra £1 billion.

There is a consultation document out at the moment on local government in England and Wales entitled "Capital Expenditure and Finance : a Consultation Paper". Page 26, which deals with European regional development fund grants, says :

"The Departments have an open mind on the treatment of European Regional Development Fund (ERDF) grants. Local authority expenditure financed by ERDF grants is public expenditure (and such grants are paid for by the UK

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taxpayer). So at present an authority obtaining ERDF grant do not thereby obtain additional spending power. The present treatment could be mirrored under the new system by treating ERDF grants received as a form of credit, which would require use of a corresponding amount of credit approval. An alternative treatment, however, would be to allow ERDF grants to be a source of both finance and spending power for local authorities receiving them. But the implication of this is that there would be a reduction in the national total available for credit approvals."

If the first proposition contained in section A.31 of the consultation document were agreed, it would break the agreement that has been reached, under the structural fund arrangement, that additional finances would be additional to the capital spend that has already been determined. If the second proposition were agreed, we could top-slice and the poorer regions would benefit. But a penalty would be paid by the better off regions. The fairer proposition is the second one, but all the advice that I have received is that if the first proposition--to mirror what is happening now- -is achieved, the additionality will not be there and the agreement will be broken.

There is anxiety about the tighter criteria. If the £600 million announced today for Strathclyde and South Yorkshire had been evaluated under the new regime, not so much money would have been available. My hon. Friends the Members for Mansfield (Mr. Meale), for Bassetlaw (Mr. Ashton) and for other south Yorkshire constituencies will be trying to catch your eye, Mr. Deputy Speaker, so that they can talk about the implementation problems that they perceive in their areas. Today I received a document from Yorkshire which, although welcoming the new regime, said that there would be problems in the area.

Will the Minister confirm a quotation from European Information Service bulletin No. 92? It states :

"Departments will liaise with the Commission in the selection of areas and they hope that all present Assisted Areas and Urban Programme Areas will qualify."

We should like to know whether those are the criteria. If they are, it will create difficulties because selective assistance was last revamped in 1984, since when there has been an increase in unemployment and a decline in industrial activity in several places which are neither assisted areas nor urban development areas. I hope that the Government will change their attitude to local authorities to one of more co-operation. The changes in the criteria and the more flexible approach to the structural fund make it important to have more co-operation between the localities and central Government. If that does not exist, we shall not gain the advantages that the structural fund could mean, especially for less well off regions.

Unless the Government take seriously the fair body of opinion about the implementation of the Single European Act and promote some regional policy, instead of leaving the matter simply to market forces, there will inevitably be a further deterioration in the regions. During the next two or three years we have an opportunity to put right some of the problems in the regions so that we can take advantage of the fund, but unless the Government make available the finance, and unless there is confidence that at least a dialogue can begin so that we can remove the Government's dogmatic approach to local government, the norther regions will be unable to take advantage of the new structural fund.

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10.44 pm

Mr. Bowen Wells (Hertford and Stortford) : The Minister said that these matters were discussed in Europe during the summer recess and that, therefore, he was unable to bring them before the House. In our correspondence with the Minister's Department, members of the Select Committee on European Legislation stated as early as 19 October that these matters would require debate. The Minister's reply was that he could not recommend a debate, because no common position had been arrived at in European Community Ministers' meetings.

That brings me to the point of which the House should take note. Ministers believe that they cannot bring to the attention of the House serious matters that are being discussed in Europe and the various arguments and debates that are going on before a common position is reached. That common position must then be referred to the European Parliament for comment and amendment. It is referred back to the Council of Ministers, who adopt it, and it is then presented to the House. The Minister and his Department have found themselves in that difficulty tonight. The Greek president wanted the matter to be adopted on 1 January this year. According to advice from the Department of Trade and Industry, it would be to the advantage of the country if it were so adopted. The programme was accelerated at the last minute. The result is that hon. Members are here tonight, within 24 hours of the House rising for Christmas, discussing this extremely important matter.

The House, let alone the country, has not been able to absorb what these matters involve. Hon. Members must read a large number of documents available from the Vote Office to enable them to understand what is being proposed. We must co-operate with Ministers and understand their difficulties in bringing these matters before the House before Ministers agree them in the European Community. That is an important matter.

Sir Hal Miller (Bromsgrove) : It is a most important point. Not only are these matters before the House this evening--unlike some of my colleagues, I speak from a pro-European stance--but we are at a real disadvantage. We do not officially know what is proposed by the Commission in Brussels. A matter goes to the Council of Ministers, there is a political exchange, and positions are set as a result of negotiations. It is then too late for us effectively to influence it. Apart from our influence tonight, that has serious implications for businesses and firms that have new regulations and standards. Back Bench hon. Members have no means of being able to alert our constituents to what is going on or to bring pressure to bear on Ministers before they take a decision.

Mr. Wells : My hon. Friend is entirely right. That is the point that I have been trying to make. The House must take it seriously and help Ministers to bring such matters before it before decisions are made. We are discussing a regulation that has been agreed. There is nothing that the Minister can do to alter it.

I congratulate the hon. Member for Sheffield, Central (Mr. Caborn) on apparently doing a great deal of homework to understand some of the implications of the measure. The guidance from the clerks to the Select Committee on European Legislation states :

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"It is very difficult to assess the full implications of this proposal in the absence of the complete text."

That is our position. It is not good for Europe or the House, and it is certainly not good for our constituents.

It seems that we are getting co-ordination on a series of structural adjustment measures.

Mr. Marlow : There is just one other point I would like to put to my hon. Friend. The letter from the Department states :

"In view of the extent of the implementing powers that the Commission proposes for itself and in the absence of the supplementary proposals it is not yet possible to assess fully all the policy implications."

Here we are stuck with the wretched thing. There is nothing we can do to influence it. We do not even know what it is. The Government do not know what it is.

Mr. Wells : I endorse what my hon. Friend said. It is a matter of genuine regret for the Minister as well as the House.

This appears to be a co-ordination measure which will target areas of deprivation which need help from the European fund. That is to be welcomed. The Minister said that it would be to the advantage of the United Kingdom. When he replies, will he tell us how it will advantage us? What sort of sums of money can we expect? Why was he anxious to agree the measure and why did he agree it? He has not had time to tell us even that and I am sure that both the House and the country want to hear about that.

How will these matters be administered? Who makes the applications? How is it determined in Britain and how is it determined in Brussels? How can we tell people who stand to gain from this measure how they are to find out the details which clearly the House lacks tonight? 10.50 pm

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