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Mr. David Heath (Somerton and Frome): I am glad that my hon. Friend has touched on subsidiarity.

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Having read the Committee report and the Government's overall response, does he agree that the weakest part of that response relates to recommendation 13, which deals with subsidiarity? Does it not bode rather ill for the forthcoming informal European Council on subsidiarity if, at that conference, the Government are not going to promote the case for subsidiarity beyond national level?

Mr. Breed: I entirely agree with my hon. Friend. There has been much talk about subsidiarity, but little action to enable it to take place. That is perhaps the most frustrating aspect of the over-bureaucratic administration of funding packages.

The reforms will modernise the structural funds in advance of enlargement, and reduce the total funds available, which should ensure some restraint on funding. However, I suspect that, as with other funds, demand will always exceed the available resources.

I hope that there will be a fervent desire to tackle the bureaucracy and over-elaborate administration. If the red tape were cleared away, that would do much to ensure that economic development was quickly achieved in the regions of the EU, in all the objective statuses, and we know that time is critical to many parts of the UK and other EU countries.

7.30 pm

Mr. Bill O'Brien (Normanton): It is pleasing to be able to take part in this debate. The contribution of my hon. Friend the Member for Kingswood (Mr. Berry), who fully explained the national and European dimensions, means that my speech will be shorter because I can concentrate on local issues and plead with the Minister to take note of the problems suffered by coalfield areas.

Research shows that European funding is the largest source of finance for economic regeneration in many areas of the United Kingdom. For the five years from 1994 to 1999, the assessed total that we could obtain is about £3.2 billion for objective 2 funding to assist rundown industrial areas. Those include my constituency and the Wakefield area, where mining, textile and engineering jobs have been lost in their thousands. They were well-paid jobs which contributed substantially to the economy of the Wakefield area and the surrounding towns and cities.

European Union funding could contribute to the securing of 340,000 jobs nationally, which would help to create jobs for redundant mineworkers and provide job opportunities for our young people. The UK is the fifth-largest contributor to the EU budget, so we make a substantial contribution for the return that we obtain.

My fear is that the redrawing of the EU map for objective 1 and objective 2 areas which determines the availability of European grants will mean that my constituency loses out. I am concerned that areas such as West Yorkshire, and Wakefield in particular, will not qualify for either objective status if the negotiations currently taking place do not recognise their economic problems. Wakefield, which has lost its traditional industries, including coal, engineering and textiles, would suffer substantially.

I want to impress on the Minister and the European Commissioners the fact that the present criteria for awarding objective 2 status are narrow and sometimes inaccurate. They work against regions such as Yorkshire

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and the Humber. It would be cruel and dishonest to change the formula without taking into consideration the current economic conditions of regions such as mine.

The gross domestic product per head in former mining, textile and engineering areas is less than the EU average. The nature of jobs has changed: well-paid permanent jobs have been replaced by low-paid part-time jobs; and skilled jobs have been replaced by non-skilled work in retailing and catering. My area is becoming a supermarket jungle--out-of-town shopping is killing off town and city centres.

Training for skilled employment is a mere token in our area. High-tech jobs are difficult to find; high-tech industries are not attracted to the area, mainly because of the dereliction and closure of our traditional industries. Our damaged environment acts as a deterrent and a disincentive to investment. Local authorities that represent those rundown areas are working hard to combat that dereliction, but they have limited resources. That is a significant reason why areas that now qualify for objective 2 status should continue to do so.

The legacy of over-dependency on a few traditional industries is enduring, and local authorities are working hard to encourage industries and businesses to locate in their areas, but the going is hard and we need the support of EU structural funds. We also need the European Commission to take note of the problems in those areas. I ask that, in any redrawing of the structural maps, note be taken of all the economic conditions.

My constituents ask for fairness, not favours. I support the Government negotiators in pressing the European Commission to consider all economic and social aspects in our regions. In my lobbying for objective 2 status for the Wakefield area, I point out that it has a high proportion of derelict land, high levels of economic inactivity, a high level of dependency on income support, high levels of ill health, low life expectancy and declining male employment. On behalf of my constituents, I therefore plead with the House to be unanimous and impress on the European Commissioners the need to maintain objective 2 status in our area.

7.37 pm

Miss Anne McIntosh (Vale of York): I welcome the report and I am pleased to be able to participate in the debate. I congratulate the Minister on her generous and open-door policy and thank her for her generous replies to correspondence and my requests for meetings with her.

I join other hon. Members who have made special pleadings for their areas. As the Minister knows, there is concern in North Yorkshire that has not yet been allayed, particularly about the fact that two initiatives will be discontinued. The first is the Konver programme, which has had a positive impact on areas in my constituency. I am not convinced that those areas will continue to benefit under the new arrangements for objective 2, which is worrying.

I also make a plea on behalf of the farming community, which receives generous benefits from the 5b proposals. I do not need to remind the House of the present plight of farmers. Never before in my lifetime have I witnessed all sectors of the farming industry in such a crisis. Farmers in lowland areas such as the Vale of York, who would normally admit privately to being reasonably well off, have desperately low incomes this year. I make a special plea that those areas covered by the 5b provision not be forgotten.

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I am pleased that the Select Committee's report refers to some programmes specifically. However, I am concerned that, in the tussle for funds between rural and urban areas--such as those represented by hon. Members who have spoken this evening--places such as the Vale of York will lose out because the initiatives and the population number criterion are being reduced. I issue a plea on behalf of the rural community that it should continue to benefit from European funding.

Under the new proposals, the existing arrangements will obviously cease from 2000. Tourism, particularly in North Yorkshire, has suffered this year as a result of the strength of the pound and competition from package holidays to attractive parts of Europe and other world destinations. That crisis in the tourism industry must be recognised. Under the current proposals, most service sectors do not qualify for funding because the emphasis is very much on the decline in the manufacturing industry. I do not know whether the Government--even during the United Kingdom's EU presidency, when a vigorous campaign was fought over the transitional arrangements--have made a special case for funding tourism and other service sectors, including port-related activities. I hope that the hon. Lady will put my mind at rest this evening by assuring the House that tourism will benefit from the revised proposals.

I was struck by one important point in the Committee's conclusions: whether the Government have faced honestly the real impact of the proposals on the whole of the United Kingdom. I refer to new objective 2. Several million people currently qualify for funding under the former objective 5b and Konver provisions, and it is regrettable that there will be a dramatic fall in the number who will benefit under the new arrangements. The United Kingdom receives 9 per cent. of the total EU structural funds, but the amount will fall dramatically from 2000. There is no guarantee that people will continue to benefit to the same extent under the transitional arrangements. Will the hon. Lady confirm that the request for an extension of relevant objectives 1 and 2 to six or seven years will be agreed by the other member states?

The new arrangements will, rightly or wrongly, give more say to the national administration and the local Government offices for the regions on how the funds will be administered. We seek an assurance this evening that there will be a certain continuity in the allocation of moneys, which should not be jeopardised in the future.

I met the Minister in about May this year and I was struck by her reference to the new concept of pockets of rural deprivation. However, the Minister's replies in correspondence of 18 June were rather open-ended. She said, for instance, that the negotiations were still at an early stage. However, I understand that the Prime Minister has said that the new arrangements must be agreed by March next year. That is a very ambitious timetable. Will the Minister elucidate on the concept of pockets of rural deprivation and the other outstanding matters on which we touched earlier?

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