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The Minister for Small Business and E-Commerce (Ms Patricia Hewitt): I begin by congratulating the hon. Member for Beverley and Holderness (Mr. Cran) on securing the debate. I represent a constituency in the east
midlands that includes some extremely deprived and disadvantaged communities. One of my wards is on the index that the hon. Gentleman cited, and is one ofthe most deprived in the east midlands, so I understand the depth of feeling with which he spoke, and the enormous difficulties faced by people in such communities. I respect the way in which the hon. Gentleman has put his case on behalf of his constituents--a case that my hon. Friend the Member for Brigg and Goole (Mr. Cawsey) has also put to me.
I am grateful to the hon. Member for Beverley and Holderness for recognising the considerable efforts that the Government are making to combat social exclusion, and to invest in disadvantaged areas and in the future of communities that have been left behind by industrial and economic change.
As the hon. Gentleman knows, we submitted our proposals for objective 2 coverage for the years 2000-06 on Friday 8 October, and they are currently being considered by the Commission. Before I deal with the detail of those proposals, and the specific issues that he has raised, it would be helpful if I said a little about the bigger picture.
At the Berlin summit in March, my right hon. Friends the Prime Minister and the Chancellor of the Exchequer secured an outstanding result for this country. The objective 2 aid that we secured will be worth some £2.5 billion over the next seven years, with an additional £0.5 billion for transitional relief. That makes £3 billion for objective 2 alone.
On top of that, we have the £3 billion already announced for our four objective 1 areas. Including the European social fund and objective 3 funding, we have been awarded more than £10 billion in structural funding. Indeed, there is more still to be announced in relation to various community initiatives. That money, rightly, will go to some of the neediest parts of our country and help to ensure that all parts of it benefit from our increased economic prosperity and the growth of the number of people in work.
In such a debate, the fact needs to be registered that, at a time when our economic performance was improving dramatically, the number of people out of work throughout the country was falling rapidly, and our prospects for receiving European Union structural funds were reduced--all factors that might have pointed to a cut in regional aid from the structural funds--we secured a safety net to cushion the reduction in numbers and population coverage proposed by the Commission. We secured more investment--more money from the structural funds than we had had in the past. It is in the context of that extremely good result that this debate takes place.
Within that very good result there are, I am afraid, hard choices to be made. It is of the essence of structural funds and investment in disadvantaged areas that not everybody can qualify. So the regional development agencies, the regional partnerships and the local partnership faced tough choices about the priorities that they put to us, just as we were faced with difficult decisions about the proposals that we put to the Commission.
The hon. Gentleman asked why Withernsea had not been included. As he acknowledged, parts of East Riding will be eligible for tier 2 support. Many rural wards will
also be eligible for the new enterprise scheme for small and medium enterprises. As he rightly said, significant funds have been made available through the single regeneration budget to help to tackle the specific problems in Withernsea. With respect, however, it is wrong to discount the impact of single regeneration budget funding, even in the absence of European structural fund money. Three areas in my constituency now benefit from single regeneration budget funding; none of them qualify for objective 2, let alone objective 1 funding from the European Union. There is no doubt that it is possible to secure real and lasting improvements in social and economic regeneration in disadvantaged areas through the single regeneration budget--and indeed through our new deal for communities--without having the additional benefits of objective 2 or objective 1 funding.
Looking at the proposals for Yorkshire and Humberside, we have proposed population coverage of more than 1.5 million people for objective 2 funding. In addition, 1.3 million people in south Yorkshire will be covered by objective 1 funding. That is comparable to the existing coverage of 2.7 million people under objectives 2 and 5b.
To fall within that objective 2 funding, we have proposed the whole of Hull and Richmondshire, parts of Bradford, Leeds, Wakefield, Kirklees, north-east Lincolnshire, theEast Riding, Craven, Hambleton, Harrogate, Ryedale and Scarborough. North Lincolnshire will also receive transitional funding.
The difficulty is deciding in great detail which areas are included and which are not, within the overall population ceiling. I shall return to the statistics on population coverage in just a moment.
Under the new European regulation, objective 2 funding is divided between four strands: industrial, rural, urban and fisheries. The Commission has given us guidance on the indicative breakdown for each strand. We had to secure a fair and balanced distribution across the regions and across the different strands. At an earlier stage in the regional discussions, there was a suggestion that Withernsea should be included within the fisheries strand as part of a bigger area; but after regional discussions, it was not included in the fisheries strand covering the specific coastal areas to which the hon. Gentleman referred.
We also had to look at the index of local deprivation and the best possible consistent statistical information that we could get across all the proposed areas to help us decide, regionally and nationally, which areas should be put forward. Using the index of local deprivation for the urban strand of objective 2, the criterion is the worst 10 per cent., not the worst 20 per cent.--in other words, some areas are even worse off than Withernsea.
The hon. Gentleman also referred to an earlier map and a leaked document that deals with only one of a series of possible options, and which therefore has no status in the debate. I apologise, but I have not seen the letter to which he referred suggesting that population levels have changed, and that it would be possible to add Withernsea and Goole to our proposals.
The difficulty is that the 1991 wards have been re-rated to take account of 1996 populations. The Commission is working with 1996 data to assess our population ceiling. In any case, we must put forward a case based on data that are consistent across all our objective 2 areas.
To fiddle with the data in one area would not be an acceptable way in which to proceed, and might have interesting consequences for population ceilings in other parts of the country. Although I will double check, I fear that the solution proposed by the hon. Member for Beverley and Holderness will not allow us to proceed in the way he suggested.
We have tried to proceed in line with the consensus that emerged from the public consultation, and with the very strong representations about regional wishes that we have received. Our aim has been to develop broadly ward-based proposals, and they have allowed more accurate targeting of regional priorities than is possible by using data gathered at the level of the local authority district. Because population coverage is reduced from the level set in the last structural fund round, we have to accept that funding must be targeted as specifically as possible on the worst cases of real and identified need.
In the light of the results of the public consultation--and given the regional priorities identified by the regional offices in England and by their counterparts in the Scottish Executive and the Welsh Assembly--we developed criteria based on levels of unemployment, in combination with measures of high dependency on industry or agriculture and of the decline in those sectors. As I have suggested already, we also used an index of local deprivation for the urban strand.
The regional priorities identified by the consultation process gave us far more than could be accommodated in the proposals that we designed to accord with the population ceiling agreed at the summit. To help us find the best possible solutions, in many cases the regions refined those priorities as the proposals developed.
I regret that it has not been possible to include in those proposals Withernsea and the other areas to which the hon. Member for Beverley and Holderness referred.
I know that he and my hon. Friend the Member for Brigg and Goole are to meet my right hon. Friend the Minister for Trade, who has direct responsibility for this matter. However, it would be wrong to hold out any great hope of further change. Our proposals were put forward to the Commission at the beginning of October and we cannot amend them now.
We look forward to receiving the Commission's response to our proposals. I have undertaken already to check the specific statistical point raised by the hon. Member for Beverley and Holderness although, as I said, I doubt that the answer that he will get will give him much comfort.
I hope that I have said enough to show, first, that we secured an outstanding result for the United Kingdom in the structural fund package. Secondly, I hope that I have shown that we have secured objective 1 and objective 2 coverage for Yorkshire and Humberside that more than matches the existing population under the equivalent programmes in operation now. In that context, in order to meet the overall population ceiling and to fit inside the four strands that the European Union's new regulation has mandated for the structural funds programme, we have had to make very difficult choices about the specific areas to be covered.
I shall end on a note of hope that echoes what the hon. Member for Beverley and Holderness said about investment from other sources. The Government have programmes that are directed to disadvantaged areas. I am sure that the single regeneration budget will bring hope and a better future to the hon. Gentleman's constituents, in what is a very deprived area.
Question put and agreed to.
Adjourned accordingly at twenty-nine minutes past Seven o'clock.
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