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11.42 pm
Dr. George Turner (North-West Norfolk): I congratulate the hon. Member for North-East Cambridgeshire (Mr. Moss) on securing this short debate, and thank him for allowing me to contribute briefly to it.
As the hon. Gentleman pointed out, the area that earlier had assisted area status included the fenlands part of my constituency to the west of King's Lynn, which forms
almost a separate travel-to-work area from the Wisbech area. The hon. Gentleman made the case very clearly with regard to the disappointment that will be felt by my constituents who live in that fenlands part of my constituency, who will feel the same deprivation as his constituency will feel over the withdrawal of support for that travel-to-work area.I must admit that there was some icing on the cake for us last summer, when we heard that the Government were taking to Europe proposals to extend the former area to include much of the rest of my constituency--in particular, some of the major areas of deprivation in the King's Lynn area itself. It is a part of the country that has lost many jobs as a result of the decline of fishing from the port and the loss of the food processing and canning works which were there historically, and one that suffers from a great portion of work being too low-paid and in non-growth areas of the economy. We were looking forward to the extra support that assisted area status would have brought to us.
Those constituents saw what they had thought would be some icing and some jam taken away from them. I suppose that they will reflect that, under the same Government in the past three years, unemployment has dropped considerably within the area. The economic development officer will have a harder case to make in pressing the need for assisted area status than he would have had three or four years ago, thanks to the Government's success in running the economy.
I should like to add two points to those made by the hon. Gentleman. First, could my right hon. Friend the Minister assure us that the case that is being drawn up will be considered carefully? The representations and the work being done now will be considered in a short consultation period, so will he assure my constituents that that does not mean, as some cynically think, that the representations will not be listened to? Secondly, will he assure us that the decision, which was pushed on us in large part from Europe, does not mean that the Government will withdraw other measures of support and that they will consider carefully the needs of the area? As the hon. Gentleman said, we have one of the worst funded--by almost a factor of two--regional development agencies in the country. There is concern that not enough measures are in place to support the economy if assisted area status is not given to us.
11.45 pm
The Minister for Trade (Mr. Richard Caborn): I commend the hon. Member for North-East Cambridgeshire (Mr. Moss) on the case that he has put forward on behalf of his constituents for assisted area status. I understand his disappointment and that of my hon. Friend the Member for North-West Norfolk (Dr. Turner). May I point out at the outset that--yes--the consultation period is short, but we will consider all representations very seriously?
The east of England region, even under the amended proposals, will have an increase in coverage on the assisted areas map, which was introduced in 1993. That increase has been made at a time when the overall population coverage has been reduced by a fifth. Overall, the amended proposals will represent a pretty good deal for the east of England region.
There is, I know, disappointment in King's Lynn and the fenland areas. However, there is a recognition and understanding of why the changes have been made.
Indeed, I was particularly interested to read last Tuesday's article on the assisted areas announcement in the Eastern Daily Press. In that article, the chairman of the development committee of King's Lynn and West Norfolk council is quoted as saying that, in comparison with other areas--including Yarmouth, Lowestoft and Luton--that area has not done too badly. Similarly officials at Fenland council are quoted as saying:
- The first time we applied for assisted area status in 1994, unemployment was three times above the national average and now it is only half of one per cent. above it. There are areas of much greater need than ours.
The Eastern Daily Press article clearly shows that, although there is disappointment, there is also an understanding of why we have made the choices that we have. Our objective for the new assisted areas is to target assistance on areas of need where such assistance will be effective in meeting that need. That remains the case.
However, we are trying to meet our objective within the population ceiling that the European Commission has set us. If we include King's Lynn and Fenland in our proposals, another area--either in the region or across the country--will have to come out to facilitate that. That is the hard choice that we have had to make.
We recognised the needs of King's Lynn and Fenland in our original proposals and I can assure the hon. Member for North-East Cambridgeshire that we fought hard to secure the July proposals that we submitted to the European Commission. However, ultimately the Commission holds the whip hand on assisted areas. Therefore, we were faced with the choice of amending our proposals or facing, as the hon. Gentleman underlined, a lengthy and uncertain investigation process, at the end of which we might still have been in exactly the same position as we are now.
The hon. Gentleman may find it helpful if I set out the background to the changes that we made last week. The Commission made it clear to us that it was concerned that our July proposals would have given the United Kingdom an unfair advantage over other member states. However, in view of the misconception that appears to be held by some people, I want to stress that the Commission did not decide that our July proposals were illegal. Also, I note that it has never accused us of gerrymandering them.
The competition directorate of the Commission was concerned that our approach to the July proposals might have allowed the UK to include employment sites within the assisted areas without including the population in surrounding areas who might benefit from aid given to the businesses on those sites. Within our population ceiling, that would have allowed the UK greater scope for securing mobile investment in competition with our European partners.
In view of those doubts, Commissioner Monti informed us that unless the proposals were amended, he would be required to open an investigative procedure under article 88(2). Under that procedure, the Commission would set out its concerns about the UK's proposals and invite comments from interested parties, not just in the UK but in every member state. It would then, in the light of those comments, decide whether to accept the proposals.
Even if our proposals were accepted at the end of that procedure, approval of the new assisted areas would be delayed by up to six months. The hon. Gentleman
recognised that there would have been a risk that our original proposals would not be accepted at the end of the article 88(2) procedure, given the Commission's concern that our proposals gave us an unfair advantage and given the scope for interested parties in other member states to put their case. The only alternative open to us, other than the article 88(2) procedure, was to amend our proposals to meet the Commission's concerns, and that is what we duly did.We are not alone in amending our proposals in response to the concerns raised by the Commission. The European Commission opened article 88(2) proceedings against the proposals submitted by Germany, France, the Netherlands, Belgium, Portugal and Italy. Germany, Belgium, France and the Netherlands have amended, or are amending, their proposals in response to the Commission's request. The procedure continues for the other member states.
With many other member states making changes and securing the Commission's agreement to their new regional aid maps, it would have been wrong to continue to press our case with no guarantee of success. The new assisted areas map will benefit some 16.5 million people in the UK. During the seven years that the map is in place, companies will be able to apply for grant aid from total expenditure currently in excess of £250 million a year. Further delay and uncertainty would have been damaging to those people and businesses.
We have had to make a number of hard decisions and as a consequence some areas have had to be removed from the map. Although that is obviously disappointing
for the areas concerned, I am confident that our new proposals present the best possible deal that we could broker with the Commission.I should, however, make it clear that the new assisted areas are only part of the Government's strategy for tackling regional and local needs. We are putting in place a comprehensive framework for ensuring that all parts of Britain can meet the challenges of the future. We inherited an unco-ordinated, disjointed set of regional bodies. Regional activity on inward investment, supply chains, rural development, physical regeneration and social and economic regeneration were all in separate organisations. There was no overall strategy to bring together regional activity. We have addressed those problems.
I am pleased that the hon. Gentleman pleaded for more resources for the East of England development agency, and I hope that he will continue to do so. I hope that, if the Conservatives ever get back into power--God forbid--he will argue that the development agencies ought to remain in place, because the official position of Conservative Front-Bench Members is that they will be closed down. It is therefore pleasing that the hon. Gentleman acknowledges the worth of the development agency in the lives of his constituents.
The hon. Gentleman will also understand that we have devolved power to Scotland and Wales and set up the regional development agencies in England to address the fragmentation to which I referred. Last October, each RDA produced, with local partners, a strategy for improving the economic performance--
The motion having been made after Ten o'clock, and the debate having continued for half an hour, Mr. Deputy Speaker adjourned the House without Question put, pursuant to the Standing Order.
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