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Mr. Peter Kilfoyle (Liverpool, Walton) (Lab): I, too, congratulate the hon. Member for St. Ives (Andrew George) on securing the debate. As has been evidenced this evening, hon. Members from around the country have a great interest in the outcome of the conversations about objective 1 taking place in Government and in the European Union. However, the hon. Gentleman did himself and objective 1 a disservice when he spoke about it in the terms that he used. Let me remind him of the background, from the perspective of an area that had objective 1 status long before Cornwall.

Twenty-three years ago, a journalist called Stanley Reynolds wrote an article entitled "The Museum of the Horrifying Example". It was a caricature, in my view, but an unhealthily realistic one, of Liverpool at that time as a stereotypical city in post-industrial decline. The city laboured for another 10 years under that image of itself, due mainly to Sir Geoffrey Howe's report, "The Managed Decline of Liverpool", which would have consigned the city to oblivion. It was a difficult time to live in the city and to champion it, not least because of the problems there.

Along came objective 1. I mentioned in an earlier intervention the two key levers in Merseyside's case—Bruce Millan and Graham Meadows. I appreciate what was done by MEPs and other interests, but those two men made the moves that enabled Merseyside to get objective 1 funding. That was unique. The Highlands and Islands of Scotland and Northern Ireland got it, but they had Government offices that could act as the interlocutors in all that needed to be done between the Commission and the recipients of the funding. We did not have that.

The Tories set up a monitoring committee, which was a total and abject failure to begin with. I would argue that in some ways it did not improve a lot over time. It consisted entirely of public servants and quangocrats to begin with. The private sector was the first to renege on it. I was told that I could not meet anyone without the express written permission of the Minister concerned, because there was no locus for mere Back Benchers,
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particularly Opposition Back Benchers, anywhere in objective 1. Nevertheless, we struggled through and obtained objective 1.

We are unique in another sense in that, as far as I am aware, we are the only objective 1 area to get a second tranche of objective 1 support. The reason was simple. It was said that we had not made that 75 per cent. GDP cut-off point, which, at least as far as the statisticians in Europe were concerned, would enable people on Merseyside to stand on their own feet. We were more than grateful to receive it a second time round.

The hon. Gentleman implied, to put it no stronger than that, that we were naive in our optimism following discussions with the Paymaster General. The last thing that the hon. Gentleman can say about me, and about my colleagues on Merseyside, with our long and bitter experience, is that we are naive about these matters. I still have my reservations about the outcome of the negotiations, as we were all right to do. We should be critically constructive in what we want out of those negotiations. But at the end of the day it is the outcome that counts, and whether that form of aid is repatriated does not matter one jot to people in his constituency, my constituency or anybody else's constituency. What they want to see is their material lot improved, in whatever form it takes, and this is a damn good form. I trust the Paymaster General and accept that she was acting in good faith when she assured us that there would be no loss within those regions—that the regions would be supported on the basis of their need.

Other things have happened in the recent past that emphasise how the Government are refining their way of defining need. Now we do not do it on a ward basis, as the hon. Gentleman knows. The Office of the Deputy Prime Minister produces lists of specific output areas to define deprivation. I am keen on objective 1 and on continuing to get a good deal, because the No. 1 SOA for deprivation is in my constituency, as is the No. 10. In fact, the whole of my constituency is in the top 1 per cent. of every one of the deprivation indicators. So I have more than a vested interest in ensuring that whatever funding is coming in remains, in order to benefit those people.

But I do have a problem, and it is one that I discussed with the Chancellor just before Christmas. The main delivery agency is a Lib Dem council, which fails to deliver in an impartial way in the areas of most need. It was difficult before for Government Departments to pinpoint what was happening, but now we can pinpoint that we have a council that is not doing what it ought to be doing in terms of social justice. The figures will pan out in a macro way across Liverpool and Merseyside as a whole, but it will only be by concentrating those in need in specific areas, for the purpose of political gerrymandering, in my opinion. I hope that the Government will address that.

I sincerely believe that the Government will address the need for a long taper that will ensure that the many good projects that are going through, across Merseyside as a whole and in my own city of Liverpool—and, I am sure, in Cornwall, South Yorkshire and Wales—will continue.
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Andrew George: I too have no doubt that there are local matters that need to be sorted out locally. I cannot possibly second-guess what is going on within and between councils in the Merseyside region. The hon. Gentleman said that I was accusing him and some of his colleagues of being naive, but I can reassure him that while I was encouraged by the statements made by a variety of Ministers, they do not provide the cast-iron guarantee, which I think is already on the table with regard to the EU. I am not accusing the hon. Gentleman or his colleagues of being supine. Many accusations have been made against me, but I have not made extravagant accusations against him and his colleagues in quite the same way.

Mr. Kilfoyle: I take on board what the hon. Gentleman says. In a grown-up world we all have to recognise that circumstances change. I recall that in an intervention I was making the point to him that government is an organic process. It is not preserved in aspic from one year to the next, as it has to cater for changing circumstances. The object of objective 1 is to enable some areas, whether in Cornwall, Merseyside or South Yorkshire, to compete on the same basis as others. Previously, those disadvantaged areas have not been able even to get into the same ring as the others.

In the case of Merseyside, given that the taper will come in across the country as a whole, I sincerely hope that our share will enable us to carry on with the resurgence that is taking place, together with the other funding streams—I echo the comments of my hon. Friends—which are just as important, and are coming into the area of the hon. Member for St. Ives as much as into mine. If there is real good will in objective 1 areas and a willingness to act objectively in the interests of people there, along with meaningful dialogue in the Council of Ministers, I do not believe that, even given the augmentation of the European Union with 10 accession states, there will be a problem down the line.

We are all big and bold enough to recognise that there will be areas, perhaps like Cornwall, that will need to qualify for some time to come. Some of us, however, are hoping that the programme will be successful in achieving its aim. That is why we are positive about it; it is a damn good scheme. I ask the hon. Gentleman to bear it in mind that the scheme, which was brought in under the Tories against their wishes—they did not want objective 1, and tried to frustrate it—has achieved effects that are undeniable in terms of regenerating areas and uplifting the aspirations and hopes of citizens within them.

6.56 pm

The Minister for Industry and the Regions (Jacqui Smith): I congratulate the hon. Member for St. Ives (Andrew George) on gaining this debate. It has perhaps been longer than some of us might have expected, but it has been a very useful opportunity for many hon. Members across the House, although only on the Labour and Liberal Democrat Benches, to represent their constituencies passionately and to articulate clearly the significance of ongoing support for the parts of our country, as well as countries that are parts of our nation, on which we need to focus attention to ensure
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that we can achieve the sort of economic growth and prosperity that all those who have spoken want to see for their constituencies.

At the heart of the debate is a call for a positive approach to regional policy and the argument about the best route for funding that regional policy. One of the reasons why the argument has moved on is that, during the time when my hon. Friend the Member for Blaenau Gwent (Llew Smith) was arguing the need for objective 1 in the European Parliament, regional policy in this country was a dirty word. We had a Government who did not believe in investing in ensuring that we closed the disparity in growth rates between different regions in our country and did not believe, as this Government passionately do, in investing in things that will make a difference to productivity in areas that most need them, whether that includes skills, infrastructure, enterprise or new technology. The different context now is that we have a Government who are passionately committed to a strong regional policy and have been willing to invest money behind that commitment.

As the hon. Member for St. Ives gained this debate, let us take Cornwall as an example. The Government are making a major contribution to key regeneration schemes in Cornwall. He listed a range of ways in which the Government are contributing to Cornwall, partly to make a point about the streamlining of funding, to which I shall return later. He also demonstrated precisely the commitment that a UK domestically funded regional and social policy is making to Cornwall and, I suspect, to the constituencies of many other hon. Members who are present.

Let us think about the investment in Cornwall. The Government are providing massive levels of match funding for Cornwall's current objective 1 structural funds programme. We have already provided some £28 million for the first phase of the Combined Universities in Cornwall, which is, as my hon. Friend the Member for Falmouth and Camborne (Ms Atherton) rightly pointed out, a dynamic partnership of higher and further education institutions.

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