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Ms Oona King (Bethnal Green and Bow): It is important to stress that 70 per cent. of Britain's most deprived wards are in the capital, which people often do not realise. Although my constituency has been fortunate to receive funding, in some wards unemployment is now rising. In addition, no structural funding money hit the ground until 1996, whereas every other British ERDF area has had funding over a much longer period. It is critical that we do not lose the objective 2 money, and that other areas of London are able to benefit from it.

Mr. Colman: I agree with my hon. Friend; I was about to discuss the wider indicators that need to be taken into account.

The partner of my hon. Friend the Member for Hammersmith and Fulham (Mr. Coleman), Councillor Sally Powell, has fought successfully within the Committee of the Regions and the EU generally to ensure that "urban areas in difficulty" qualify under objective 2. The criteria should include the points made by my hon. Friend the Member for Bethnal Green and Bow (Ms King)--first, a high level of poverty, including precarious housing conditions; secondly, poor housing conditions; thirdly, a degraded environment; and fourthly, a low level of education. All those criteria are met in a number of wards in the constituencies of my hon. Friend the Member for Bethnal Green and Bow and other London Members, especially those representing the Lea valley and east London. It is important that my hon. Friend the Minister remembers that.

The London research centre-Peabody Trust document "A Capital Divided", prepared in February last year, gave information at ward level which clearly showed the needs of London.

Under the draft regulations for objective 2 funding, the particular strand covering "urban areas in difficulty" is seen as applicable to only 2 per cent. of the population. I urge my hon. Friend the Minister to convince her colleagues that the urban industrial reconversion strand should be significantly increased, if possible up to 10 per cent., which is the level of the other strands. My hon. Friend the Member for Bethnal Green and Bow made that point well.

I listed a number of new areas that Wandsworth had been able to access and those areas outside objectives 1, 2 and 3 that will not be available. There is particular concern that the urban initiative will be cut. While the funding for that initiative is modest--£12 million for the

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period 1994 to 1999--the benefits have been real.In evidence to the Select Committee on Trade and Industry, the Local Government Association endorsed the continuation of the initiative.

The proposals for Community initiatives outside objectives 1, 2 and 3 will now have to be extremely limited. I understand that there are just three, of which only one is directly relevant to London--although it is highly relevant: the new initiative on transnational co-operation to fight discrimination and inequality preventing access to employment. I commend that initiative to my hon. Friend the Minister. I know that not just London but many other areas will want to have a strong say in it.

The new proposals around objective 3 are very much needed for London. The divide in London between those who are out of work and those who are in work is widening. Those who do not have the right skills--the new deal provides a way to acquire them, and I applaud the fact that the scheme has now been widened to include the over-25s--can fall further and further behind. It is specifically a London problem.

Mr. Jimmy Hood (Clydesdale): Structural funding is meant to help regions and economies through difficult times. It is intended to help economies to pick up and for the regions to benefit from that. The problem is that the more successful the scheme is, the greater is the risk of those regions losing continued support. Regions that already get funding argue to hold on to it, while others argue their need also to benefit from it. That is one of the problems with enlargement of the EU. Our Spanish colleagues are arguing against enlargement because they do not want any institutional reforms that would threaten their structural funding.

Mr. Colman: I agree with my hon. Friend. However, one piece of good news that we received last March was that Commissioner Kinnock had proposed a safety net, under which no areas would face a funding reduction of more than one third. That may be cold comfort to the Spanish, but it is important to UK regions in terms of their success compared with London.

In the 1970s and 1980s, London was booming while other regions were undergoing major industrial decline. London's nemesis came in the late 1980s, so we have had to face that problem later than other regions. It is important for those in areas such as Clydesdale, which my hon. Friend represents, to realise that the success that that area has achieved needs to be replicated, in particular, in the Lea valley and east London.

We need objective 3 to deal with retraining. We want London to get its full share, especially for areas that promote social inclusion, lifelong education and training, facilitation of economic change and, in particular, improving the participation of women in the labour market. London should be accessing those areas under objective 3. I know that other hon. Members will explore these issues in their speeches and will be urging the case for London.

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For the remainder of my speech, I want to deal with NUTS. I am not insulting the House with that acronym, it stands for the nomenclature of units of territorial statistics--

Madam Speaker: Order. It is nice of the hon. Gentleman to spell it out.

Mr. Colman: NUTS provides a single uniform breakdown of territorial units for producing regional statistics across the whole of the European Union. Almost all the sub-national statistics collected and disseminated by Eurostat are based on the NUTS structure of regions. The statistics deal with topics such as population, birth rates, employment, unemployment, gross domestic product, transport and energy. I am sure that they also deal with other matters.

Since 1988, NUTS regions have formed the geographical basis for determining distribution of structural fund expenditure. Currently, objective 2 funding is based on NUTS level 3 regions.

On 29 June, the Chancellor of the Exchequer answered a written question from my hon. Friend the Member for East Ham (Mr. Timms) about the new United Kingdom NUTS map. I know that some changes, such as splitting Cornwall and Devon at level 2, have been welcomed on both sides of the House. That change may help to ensure that Cornwall receives its fair share as an objective 1 area. However, it seems strange, at level 2, to divide London into inner and outer London, and the borough groupings at level 3 seem stranger still.

The statisticians seem to have no appreciation of the sub-regional partnerships that have been developed in recent years with the help of the Government office for London. The partnerships include the Lea valley partnership, which stretches up to Enfield; the east London partnership; the Park Royal corridor; and, in my case, the Wandle valley partnership, which covers Wandsworth, Merton, Sutton and Croydon. The partnerships of boroughs, and of the business and social partners in those boroughs, have been recognised in the past four single regeneration budget rounds and are increasingly successful in delivering solutions to areas with considerable industrial decline in those parts of London.

NUTS also do not relate to TEC areas. I therefore ask again whether the classification system will be re-examined. Alternatively, could each borough be designated a NUTS level 3? I remind the House that current objective 2 funding is agreed on the basis of NUTS level 3. Moreover, the population of individual borough often exceeds the population of other NUTS level 2 units. The population of some London boroughs, for example, is greater than that of Cornwall. A re-examination of the system is necessary.

As my hon. Friend the Member for Bethnal Green and Bow said, the current objective 2 map is drawn at ward level. I think that level 4 should be composed of wards within boroughs, rather than--as at present--of boroughs. As hon. Members will know, some wards--of which I have examples in my constituency of Putney--have a very high deprivation level, whereas others do not. It is extremely important that the objective 2 status map should

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deal with that fact. I believe that the NUTS classification system proposed on 29 June is not helpful to London, and perhaps not to other parts of the United Kingdom that share the same problem. I look forward to the Minister confirming that the matter will be re-examined.

In Putney and at Wandsworth council, we are concerned about the need for support in making objective 3 bids. It has been possible in previous years to make them, but it has been a problem this year. We want to ensure, first, that areas such as Wandsworth that have been successful when operating on a level playing field and on a case-by-case basis are not squeezed out.

Secondly, we have to ensure that as much pressure as possible is brought on Brussels to operate a more positive urban policy--which, as I said, would reflect London's priorities.

Thirdly, it is important that we work to decrease bureaucracy and simplify the approval process. Currently, there are many criteria assessment processes. Whereas some bids are approved directly from Brussels--via GOL--others are approved via Departments. We need clarity in the matter. We need quicker decision making and prompter payments, and greater emphasis on outcomes and outputs rather than--as currently--on inputs.

London as a whole has lost out on the Euro-gravy train of the past 18 years, during which the previous Government ignored the pleas of local government leaders and of the community of London. The fact is that 18 per cent. of the United Kingdom's unemployed live in London, but they receive only 4 per cent. of the EU resources provided to deal with the problem here.

Once the Greater London authority is established, we will have a doughty fighter to ensure that London's voice is clearly heard. Meanwhile, I ask the Minister--who is a London Member--to discover how that great economic injustice can be righted, and to ensure that the right thing is done for London, so that we receive a fair share of resources.

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