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Ms Atherton: I will always work to secure the best deal for Cornwall, and I hope that the hon. Gentleman will accept that. If the best deal comes from the British Government, I will fight for it. If it comes from the European Commission, I will fight for it on that basis, but we do not know where the best deal will come from. At the moment, however, the best deal on the table is coming from the British Government.

Andrew George: Unfortunately, the hon. Lady did not speak long enough for me to look up what she said in a debate on 15 June last year. As she knows, she supported the Government's proposals to repatriate funds to the UK. It is all very well her saying that she supports that proposal—but I can now quote what she said in the House on 15 June:

She cannot retract those words, which are on the record.

The problem that I want to explore in this debate is that the promises and so-called guarantees that the Government have offered since the proposals were first put forward in September 2003—the relevant
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consultation document was issued in June that year—do not contain anything that provides the equivalent of the present funding extended to objective 1 regions. Moreover, they do not undertake to provide the funding over seven years, plus the two-year transitional period, that the EU makes available to the same regions.

The hon. Lady supports the withdrawal of support. We need cast-iron guarantees that future funding extended to Cornwall will be equivalent to what is available under existing EU objective 1 programmes, and that that money will be available for the same seven-plus-two year period. In addition, the Government must assure us that Cornwall and the Isles of Scilly can continue the successful partnership that has been established. We must make the Government understand that Cornwall desperately needs and deserves that.

Matthew Taylor (Truro and St. Austell) (LD): When the Minister discussed these matters in one of the Committee Rooms, it turned out that there were no guarantees to be had, even though the Government had used that word previously. There were no guarantees that the funding would last as long as the EU money, or be equivalent in amount—or, crucially, that it would be dedicated to expenditure in the area. The Government are unable to give such guarantees because they do not operate on a Budget time scale of seven years or nine years, whereas the EU can give a commitment for that length of time. Therefore, is it not clear that neither the Minister nor the hon. Member for Falmouth and Camborne (Ms Atherton) supports a deal of the same value or strength as the one that Cornwall currently enjoys? That is reflected in the fact that Labour local authorities around the country, and other Labour Members, have been far more critical of the Government on this matter.

Andrew George: I could not get to the meeting to which my hon. Friend refers because of the debate on hunting, but I have checked all the relevant correspondence, and what he says is true. For example, on 16 December I asked the Economic Secretary to commit himself to guarantee that places such as Cornwall and the Isles of Scilly would get the same level of funding over seven years as was available to them from the EU. In response, he promised that

What does the phrase "UK nations and regions" mean? The hon. Member for Falmouth and Camborne knows well—and my hon. Friend knows it even better—that Cornwall is a region for the purposes of Europe, but not for the Government's purposes. It is subsumed in the south-west Government zone. It may be called a region, but it is not treated as such. It has no integrity, and there is no community of interest. It represents bureaucratic convenience, and that is why I call it a "zone". I fear that the expression means only that the money will go to Government quangos operating in Cornwall, and will not get to those who richly need and deserve it. All the partnership work that has succeeded so well over the past five years will be lost if the money is not given to the people on the ground in the objective 1 regions.
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These are matters of deep concern to many people. The Minister for Trade and Investment wrote to me on 15 November last year, and said that the Government's commitment to the UK's nations and regions meant that

That is helpful and reassuring, but there is no commitment on the seven-year time frame. Of course there will be more money for regional aid as a result of the repatriation of funds, and it is reassuring that the money will, I hope, be disbursed in that way, but there is concern that the funds will not be used effectively in the areas that would be eligible for regional aid during the seven years from 2006.

Matthew Taylor: A further point is that European objective 1 funding is awarded on the basis of match funding from Government, so it has a value far beyond the amount to which the EU commits. However, there are no guarantees that the Government will provide the equivalent match funding, let alone that they will ring-fence it, for objective 1 areas such as Cornwall. Not only could the money be spent elsewhere in the region, it may actually not be spent at all. Technically, objective 1 might be matched—although there is no guarantee—but even if it is, there is no guarantee that the rest of the funding that it should bring will be provided. The Government are making a very different proposal, with none of the guarantees that the Minister likes to suggest.

Andrew George: I strongly endorse my hon. Friend's comments. The Government promise that countries and regions of the UK will not lose out, but there are serious concerns about the so-called guarantee. That "not losing out" is against an imaginary comparator, and there may in fact be a net reduction of between 55 and 65 per cent. in the current receipts. The guarantee is general, calculated across the UK; there is nothing specific to any area. It is not aimed at Cornwall, West Wales, South Yorkshire or anywhere else.

As my hon. Friend said, there is no mention of how match funding will be handled. In the current objective 1 programmes for the UK, match funding doubles the value of EU structural funds. In Wales and Scotland, the extra money would go to the devolved Administrations—rightly so—but they are not required to spend it in a particular area, or even necessarily on regeneration.

In England, distribution would probably be through the regional development agencies, and there is no guarantee that they would spend the money in the neediest areas or in those that currently have objective 1 status, nor that they would recognise the needs of those regions. The Government have not yet sufficiently explained how their plans for, or commitment to, a seven-year lifespan will be delivered.

Let us consider the figures for the EU as a whole, and for the areas in the 10 accession countries that could have objective 1 status. Some regions of the Czech Republic, Poland, Bratislava in Slovakia, Slovenia, Malta and Cyprus will all receive objective 1 funds, yet their gross domestic products not only exceed that of
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Cornwall and the Isles of Scilly but exceed it to a large extent. That is an obvious injustice. The Government appear not merely to be signing up to, but to be the main protagonists for, a system whereby Cornwall would not receive objective 1 aid, yet regions in accession countries that are not as poor as Cornwall would benefit from such aid. That is wrong.

If the Government want to stick to the 1 per cent. proposal—and one can understand why—they could adopt the negotiating position that objective 1 regions will be determined purely on their merits, irrespective of whether they are in accession states. If the Government accepted that alternative, there would be a greater likelihood of equity in the system.

When we have debates on the subject there is always a scramble to claim credit for achieving objective 1 status, and no doubt the notes that the Minister will read out later will say that it was all thanks to the Labour Government. I am grateful to the Government, who were among the large number of contributors to Cornwall's success in achieving objective 1 status. The then MEP, Robin Teverson, and the local authorities worked hard. The people of Cornwall marched and campaigned, and the quiet statisticians of Eurostat, Cornwall county council and elsewhere made the arguments for achieving technical change, particularly the statistical separation of Cornwall and its relatively wealthy neighbour, Devon. All those people made a significant contribution to getting the objective 1 status that Cornwall and the Isles of Scilly richly deserved.

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