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7.56 pm

Mr. David Prior (North Norfolk): I am pleased to follow the hon. Member for Kingswood (Mr. Berry) with whom I served on the Select Committee for a few months. I am particularly pleased to follow a Labour Member who still believes in the redistribution of wealth, which is something of a surprise these days.

The debate is important because we receive £11 billion a year from the structural fund which represent 45 per cent. of the European budget. We badly need reform, not just because of the enlargement of Europe, but because as everyone agrees--and the Committee certainly agreed--the system has become hugely over-bureaucratic and needs simplification. Let me quote one item from the Committee report:

Very few normal people can understand a word of that and it illustrates just how complicated and difficult the system has become. I agree with the Committee report when it refers to the results as arbitrary and capricious.

Worst of all is the political horse-trading in the background and we have heard something about it this evening. Even with Agenda 2000 determining the criteria by which parts of Europe should qualify for the new objectives, there is already horse-trading over those criteria.

It is nonsense that the criteria are determined at EU level and I am glad that the Committee recognised that and stated in its conclusions that in future they must include

I was also pleased to see conclusion 24 which states:

    "The extent to which Objective 2 arrangements allow for funds to be targeted if necessary below local government ward level will be a measure of the Government's success in negotiations."

My own view is that that does not go nearly far enough. It is hard not to agree with Lord Pearson of Rannoch, who asked whether it would be more sensible for us to take

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control of the whole £11 billion and spend it wisely on our real needs, no doubt saving several billion pounds along the way. The more decisions that can be made locally, the better. If we carry on as we have in the past, we shall merely bring the European Union into disrepute.

Representing a rural constituency, I have a particular concern that objective 5b will be subsumed into the new objective 2, and that the rural areas will be squeezed. They will have to compete directly with industrial and urban areas, and historically they have had far less clout.

The indicators chosen by the European Commission to decide which areas qualify for support clearly discriminate against rural areas. The Commission decided that to qualify, rural areas must have a population density of less than 100 people per square kilometre or a high percentage of agricultural workers. In the United Kingdom that will have a serious effect on our ability to qualify for objective 5b.

Part of my constituency does qualify for objective 5b. It has been successful in attracting new industry and there has been a fruitful partnership between the local authority and private business. Indeed, the Select Committee report includes a letter from my district council which states that it believes that

The loss of objective 5b funding will have a serious impact on Fakenham and the surrounding area.

Mr. Bob Blizzard (Waveney): The hon. Gentleman will know from that section of the report that parts of his district felt that they did not obtain objective 5b funding because Lowestoft in my constituency was granted objective 5b, although it is a town of 60,000 or 70,000 people. The case for help through structural funds for Lowestoft was overwhelming, but it was not large enough to qualify for objective 2. In answer to my hon. Friend the Member for City of Durham (Mr. Steinberg), may I say that there are small areas with structural, not just cyclical, unemployment?

Because the only way to help Lowestoft was through objective 5b, it had to be redefined as rural. Is that not an argument for reform of the funds, so that areas such as Lowestoft can get what they deserve, without having to be designated as rural at the expense of other rural areas?

Mr. Prior: Indeed, the hon. Gentleman presents an argument for ensuring that decisions are taken locally, so that such considerations can be taken into account.

I shall conclude my speech with a further example. Alongside North Norfolk is a coastal strip where there are several fishing communities. They would have qualified under objective 5b, but for the fact that the travel-to-work area in which a number of fishermen were assessed included Fakenham, Cromer, North Walsham and other towns, so there was not a high enough percentage of fishermen to qualify. Along the coastal strip, however, the percentage is sufficiently high.

I hope that when the Minister negotiates the qualifications for objective 2, she will support the submission to her from the North Norfolk district council that the North Norfolk coastal strip should be designated under the fisheries strand of the objective 2 programme.

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I believe strongly that the structural funds should be allocated and spent locally, as near as possible to the ground, and that rural areas such as North Norfolk and other parts of Great Britain should be safeguarded.

8.3 pm

Ms Candy Atherton (Falmouth and Camborne): I am grateful for the opportunity to speak in tonight's debate. To us in Cornwall, objective 1 is more than an opaque piece of bureaucratic jargon. To many, it is like the holy grail--a recognition that distinct regions such as ours on the periphery of the European Market need assistance to overcome chronic structural disadvantages. Indeed, I would not be going too far if I said that in Cornwall, European structural funds are exceedingly sexy.

It came as a terrific boost in June to learn that the Select Committee on Trade and Industry had recognised the inherent logic behind Cornwall's case for recognition as a distinct region at NUTS level 2. Whereas most people in less hard hit regions might repay the mention of objective 1 with a glazed expression, in my constituency even the eyes of schoolchildren light up.

I should not want my hon. Friends to think that we have been pleading emotionally for special treatment. The merit of Cornwall's case rests partly on its distinct regional identity. Cornwall has a unique cultural and economic history. In its heyday it was the powerhouse of British industry, but today it could easily be described as a backwater. The Select Committee agreed in its report that

I should welcome a visit to Cornwall by my hon. Friend the Member for City of Durham (Mr. Steinberg), so that I could show him myself the structural problems that we face.

The merit of Cornwall's case also rests heavily on statistics. Recent figures--I believe that more have been published today--show that gross domestic product in the county is only 68 per cent. of the EU average. That is well below the 75 per cent. cut-off for objective 1. I understand that we have come bottom of the table in today's statistics.

For years the truth about Cornwall's problems has been masked by amalgamation with relatively prosperous Devon. We have received objective 5b grants, which are highly constructive. However, they do not offer the fundamental help that the county desperately needs.

The Prime Minister recognised our strong technical case, which also had strong backing in all political parties, in the county and through the wider south-west. The first action of the regional chamber of the south-west was to support unanimously Cornwall's case for objective 1. We were delighted to learn this summer to learn that Eurostat had agreed that Cornwall should be separated from Devon at NUTS level 2.

Cornwall now satisfies all the technical criteria for gaining objective 1 funding. As we approach the next round of objective 1 allocations, we in Cornwall were encouraged that, in discussing the flexibility of the 75 per cent. threshold, the Select Committee suggested that

I look forward to the county council producing an irrefutable package of proposals, based on widespread consultation throughout the county, which will put the seal on our bid. Next week the movers and shakers of

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the county meet to thrash out the first phase of our plans to spend. Over the next few weeks a consultation document will be delivered to every door in the county asking for direct input from the grass roots.

I particularly agree with the Committee's analysis of the complexity of the process. It is indeed complex, and that is compounded by the jargon. We encounter terms such as Eurostat, Leader, state aids, objectives 1 to 6, the European agricultural guidance and guarantee fund, and my favourite term--NUTS. It would be fair to say that most people in Cornwall are becoming comfortable with the terminology, if sometimes a little confused. A man came to my surgery recently and asked me, "Well, then, Candy, are we going to get this objectionable 1?" I hope and believe that we will.

In Cornwall we have a true partnership between the public and private sectors, central and local government, and from voluntary organisations to the health authority, all headed by the county council. If we succeed in achieving objective 1, we shall have the opportunity to redefine our county, create a new university, tackle our infrastructure problems and, perhaps, as a predominantly small and medium-sized business centre, become the leading light across the EU in supporting and developing this sector.

The opportunities are there for the taking, and Cornwall stands at a crossroads. I hope that the county that currently stands on a par with the poorer regions of Portugal and Greece will be able to reorient itself into the future, with all its people pulling together.

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