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2.51 pm
The Parliamentary Under-Secretary of State for Trade and Industry (Mr. Michael Wills): In the relatively short time that remains, I shall do my best to address all the points that have been raised. First, I congratulate the hon. Member for Southend, West(Mr. Amess) on securing today's debate on assisted area status for Southend. He raised this matter in a recent question to the House, and he has eloquently put the case for his area again today. The hon. Member for Rochford and Southend, East (Sir T. Taylor) has also brought the problems of Southend to the attention of the House and of Ministers on some recent occasions. We are certainly aware of their concerns.
Many hon. Members share the hon. Gentleman's interest in the assisted area review. Since I became a Minister, I have met some 50 hon. Members from all parties who wished to discuss the importance of assisted area status and I have corresponded with many others. So far, the hon. Gentleman has not taken advantage of the open door policy that I operate in this matter, but I would be more than happy to see him.
Let me set out where matters stand on the review. As I mentioned on Monday night in a similar debate sponsored by the hon. Member for North-East Cambridgeshire (Mr. Moss), the coverage of the new assisted areas map will be reduced from present levels and inevitably there will be some hard choices to be made in designating areas. We have yet to take final decisions. The Government are considering their proposals for the new assisted areas and we will put them to the Commission as soon as possible.
Our review follows the publication last year of new European Commission guidelines on regional aid, which require all member states to propose new assisted areas to operate from 1 January 2000. The guidelines are part of efforts by the Commission to control the overall level of state aids in Europe. As a result, the UK faces a reduction in the population coverage of its map, as does the EU. The figure for the UK is about three quarters of our current coverage. Inevitably, that will mean hard choices and some areas will be disappointed.
However, we should also bear in mind the wider picture: the UK has traditionally been one of the lowest providers of state aids in the EU. Removing distortions to competition by reducing levels of state aids will help UK firms both inside and outside the assisted areas. The lower aid limits that the guidelines will introduce are expected to bear down particularly on other EU states, and that will be good for British firms, not just those in the assisted areas.
The hon. Gentleman mentioned timing. Let me try to set his mind at rest. I am not sure that I will be able to do so, as he seems determined to be discontented, but I shall do my best. The Commission had asked for proposals by 31 March. That was always an ambitious deadline, and about half the member states have not yet submitted their proposals to the Commission. We are working to complete the map as soon as possible, and the Commission is aware of that, but our overriding objective must be achieving the best outcome for Great Britain. We cannot rush the task. We could quickly draw a map that followed the Commission's rules, but we want to draw a map that uses our reduced population coverage most effectively--the right map for Britain.
We want to do some more work on our proposals. We must also respect the purdah periods before the local elections and the elections in Scotland and Wales on 6 May, and again before the European elections. That makes it unlikely that we will be able to make an announcement before mid-June.
As the hon. Gentleman is aware, a public consultation exercise is under way on European structural funds objective 2 areas for the period from 1 January 2000. The consultation period ends on 25 May, and in the early summer we shall draw up our proposals for the new objective 2 areas. The two maps have different purposes and do not have to be identical. Taken together, however, as I hope the hon. Gentleman will agree, they should provide a coherent approach to regional development. Our announcements of our proposals for the two maps should therefore together set out a coherent strategy for tackling regional needs.
Let me say a few words about the Government's approach to the review. In reviewing the map, we are attempting to identify areas of need where there are opportunities for creating jobs and for investment by industry--in other words, areas where regional selective assistance will be effective in tackling need.
In the review we are considering all areas, and we have been keen to listen to local views on all matters. I assure the hon. Gentleman that the points made by Southend borough council in its submission for the public consultation are being carefully considered.
The task that we have been set is not easy. As I have said, United Kingdom population coverage under the new map will be about three quarters of current levels. We must make our proposals on the basis of the rules set out in the guidelines. I am conscious of the lack of time, so I shall not rehearse them now, but I am sure that the hon. Gentleman is aware of them, and of some of the difficulties that we face in drawing up the right basis for the geographical units in the map.
The review has demonstrated the wide variety of needs faced by areas throughout the country. As I am sure the hon. Gentleman will realise, assisted area status cannot
address all those needs; nor will it always be the most appropriate answer. There are other measures to help development.
In England, we expect the regional development agencies--for Southend, that means the East of England development agency--to help in drawing up strategies for developing their areas. The agency that covers Southend is already preparing its economic development strategy for the east of England, which I am sure will take account of the needs of Southend.
As part of its regeneration function, the agency administers the single regeneration budget. Current activities funded from that include an eight-year scheme, which began in 1997, to regenerate the area of Shoeburyness in Southend. It includes projects aimed at providing training for employment and initiatives to help prepare school leavers for life and work.
In addition, as we said in the White Paper on competitiveness, which was published in December, the Government are looking at new measures to support the growth of smaller businesses in selected areas with particular needs. We are especially keen to support and promote high-technology small firms and other small firms with high growth potential, such as those that the hon. Gentleman mentioned earlier.
The hon. Gentleman spoke about unemployment in Southend. Unemployment is a matter for concern wherever it occurs, and I sympathise with his concerns. However, I understand that firms are investing in Southend. Olympus has moved its research and development centre there, creating more than 100 jobs, and the Rowellan Group has built a £5 million hotel complex in the town, creating almost 150 new jobs. That is encouraging and I hope that Southend will see more such investment.
The hon. Gentleman mentioned European funds. As he rightly guessed, I shall write to him about the broader question, but let me try to set his mind at rest by drawing his attention to a couple of things of which he may not be fully aware. He mentioned the funds that the Southend travel-to-work area received for three projects under the Konver II Community initiative and three under the PESCA Community initiative. European money has also supported projects in the area under structural funds objective 3 to assist the unemployed, and under objective 4 which helps with reskilling the work force.
Under the current programme for European structural funds, the Southend travel-to-work area will receive £1.5 million. I will write to the hon. Member for Southend, West in answer to his broader questions, but I hope that he is sufficiently reassured that Southend has not been ignored by the European Union. Indeed, Southend is doing well from the EU. We are consulting on the objective 2 map and we hope to receive a submission from the hon. Gentleman and from Southend borough council.
I hope that the hon. Gentleman is reassured by my comments today. I urge him to take advantage of the open door policy, which I have operated for all colleagues, to come to see me to discuss the needs of Southend. He is welcome to write to me if he would prefer not to confront me in person, but he would be welcome to a cup of tea in the Department of Trade and Industry at any time. He need only give my office a call. I hope that he will not be as shy in the future as he has been in the past three or four months, and that he has received some reassurance to pass on to his constituents in Southend.
Question put and agreed to.
Adjourned accordingly at one minute past Three o'clock.
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