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Mr. Paul Tyler (North Cornwall) (LD): I am delighted to follow the hon. Member for Newcastle upon Tyne, North (Mr. Henderson), who said many things that I agree with. His comments are made on the basis of greater experience than I have in this particular area of policy. What he said about the linkage between aid and trade was particularly important. I heard the Front-Bench spokesmen debate the matter earlier and I broadly concur about the national role in comparison with the Europe-wide role. That is a perfectly fair point, but we should all recognise that no one is blameless in the matter.
No country's aid programme under any Government has been as effective or as well targeted as we would like, not least because it has occasionally been supplemented by arms sales policies that definitely do nothing to promote the right relationships between Governments. On that score, I agree with what the hon. Member for Newcastle upon Tyne, North said, and I also accept what he said about the constitution. The sooner Europe has a constitution that limits and codifies the different roles and governance, the better. I hope that we will achieve that—[Interruption.] I can hear some sedentary contributions from the Conservative Benches. However, the argument that the hon. Member for West Suffolk (Mr. Spring) made on behalf of his party actually led to that conclusion; we need more effective codification of the different financial responsibilities in Europe.
The hon. Gentleman talked in most helpful terms about the context. I want to say a few words about the financial context. As I understand it, the EU budget is limited to about 1 per cent. of total national income in member states, compared to an average of about 45 per cent. for national Government budgets. That is a different cup of tea—a different scale of operation. Furthermore, the EU budget has risen about 8 per cent. since 1997, which is less than the rate of inflation, at a time when the UK budget increased by between 60 and 65 per cent. The common agricultural policy takes a whacking 45.8 per cent. of the whole EU budget—a point to which reference has already been made. That is a huge figure, yet in a sense it is outwith our discussion this afternoon. I shall come back to that point in a moment. Incidentally, those figures do not even include support for the common fisheries policy.
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Built into the main document before us, "Financial Perspectives 2007–2013", is an implicit tug of war between two distinct approaches to regional aid programmes—structural funds, which have already been a feature of the debate. I represent an area that already benefits from objective 1 status. Other such Members are in the Chamber. I am well aware that in Cornwall, mid and west Wales, south Yorkshire and Merseyside we are subject to an explicit threat from the Treasury. It is for that reason that we have some sympathy for the amendment tabled by the hon. Member for East Carmarthen and Dinefwr (Adam Price). Unfortunately, by excluding the whole second half of the motion, the amendment would remove any hope of retaining the UK rebate. I do not know whether that was intentional. As the Minister said, the figure would be £5 billion by 2013. The Welsh nationalists are prepared to sign that away, so I am afraid that we cannot support the amendment.
Mr. John Gummer (Suffolk, Coastal) (Con): Does the hon. Gentleman agree that the European Union has had a remarkably good effect both on regional development and because countries such as Ireland started off being in receipt of large sums of money but will soon become net contributors? Is not that a remarkable achievement, given how much more successful they were than the British?
Mr. Tyler: The right hon. Gentleman is right. I am delighted to agree with him. Some years ago—possibly when he was a Minister—some of my colleagues from Cornwall and I visited Ireland to examine precisely what good use had been made of EU structural funds. We came to the conclusion that if we could complete the border between Cornwall and England by taking a bulldozer towards the Irish sea from the Tamar, to shift or tug ourselves over and attach Cornwall to Ireland we should be doing better than under the right hon. Gentleman's Government.
Mr. Hopkins : The success of Ireland is welcome and I have many Irish constituents who agree. However, given that the net contributions from the European Union to Ireland amounted to 5 per cent. of gross domestic product, which in Britain would be more than £50 billion every year, and that Ireland joined the euro at a relatively low parity for its currency and had to reduce interest rates, it is hardly surprising that the economy boomed.
Mr. Tyler: I understand the point that the hon. Gentleman is making. I was not suggesting that England, or indeed Wales and Scotland, should join Ireland and benefit—simply Cornwall.
At present, there is a clear plot to undo some of the good work that the right hon. Member for Suffolk, Coastal (Mr. Gummer) and I agree is going on in some parts of the United Kingdom. The Library briefing shows that some real economic progress is beginning to come through from the objective 1 process. GDP per capita in Cornwall, for example, is up from 70 to 72.6 per cent. of the EU average in just two years. That is more than the whole of the previous six years. The situation is similar in other objective 1 areas although, of course, we all started from a low base and the
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improvement is painfully slow. To pull the plug on the objective 1 process in the period between 2007 and 2013 would deal a devastating blow to our economic and employment activity rates just when they are showing signs of sustained progress.
Unfortunately, UK Ministers constantly bad-mouth such programmes. In the debate in the House on 15 June last year, the Minister for Industry and the Regions said that she wanted
"to get away from the stifling effects of Commission bureaucracy on structural funds projects."—[Official Report, 15 June 2004; Vol. 422, c. 747.]
However, Members from all the objective 1 areas know only too well from our contact with the local communities, local authorities and their partners that the problem is not the bureaucracy in Brussels, but the bureaucracy up the road in Whitehall. We constantly face that problem. I accept that there is a trade-off because, of course, the bureaucrats say that they are monitoring and auditing everything that is going on, but to complain about the bureaucracy in Brussels is completely misplaced in this respect.
As a result of what is now proposed, there is a well-founded suspicion that the Chancellor has set his sights on the repatriation of regional support funding programmes, not so much to save taxpayers' money, but to gain control of the direction of such investment, first, to concentrate it where it can be of political benefit to the Labour party—regretfully that clearly will not be in Cornwall—secondly, to limit the Treasury's match funding commitments and, thirdly, to avoid longer-term investment in specific areas of the UK.
The Chancellor and his ministerial colleagues have done nothing to remove our fears, and almost all MPs from objective 1 areas have expressed serious concern about the complete lack of realistic guarantees. The objective 1 group in the House has, for example, pointed out that the EU programme lasts for seven years, but that the Treasury can promise only three years of assistance, with no commitment to match funding comparable with what we have experienced in phase 1. So are the savings sought by the Government, within the package and implicit in what we are considering now, real and realistic?
Incidentally, I find it odd that the Conservative spokesperson, the hon. Member for West Suffolk, assumed that we could do nothing about all this. He even seemed enthusiastic about what the Chancellor is up to in respect of objective 1 areas. It happens that Cornwall is a Tory-free zone—indeed, as are most of the other objective 1 areas—but to deny the useful contribution that objective 1 status has made to our economy and so on seems extraordinary.
My colleagues and I have met officials from the appropriate directorate of the Commission in Brussels who believe that such savings are neither real nor realistic. Unless the Chancellor is prepared to preside over a sharply reduced impact on regional development in the UK and is successful in persuading the majority of the other 24 member states to do the same, this attempt at a unilateral break-out is clearly doomed. Meanwhile, the effect of the Government's refusal to compromise is delaying vital decisions and leaving UK local authorities and their partners in a state of dangerous confusion—they simply have no idea what will happen or when—and the potential for avoidable waste and dissipation is immense.
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We seek an explicit reassurance from the Minister. What will happen and when to such regional funds? What guarantee is he prepared to make? Frankly, given the Chancellor's obstinacy, there is little prospect of finding any solution to the problem before the end of June. If he thinks that he can bully his opposite numbers into agreeing with him during the British presidency, many MEPs, from all parties, are simply convinced that that is wishful thinking.
A great deal has already been said about the CAP. As I made clear at the outset, the CAP is the real meat of the EU budget. The 2002 deal, which was referred to earlier, struck between the French and German Governments has resulted in a continuation of many of the least satisfactory and least sustainable aspects of CAP expenditure. Reference has been made to the sugar and tobacco regimes, both of which are clearly undesirable in the medium to long term. The sugar regime is not finalised and could still be revised much more effectively.
I recall that the then Minister for Europe, now the Leader of the House, whom I shadow, said that the CAP's
"quick reform is imperative, and it will not bear the weight of enlargement without it."—[Official Report, Westminster Hall, 16 April 2002; Vol. 383, c. 121WH.]
We now have enlargement, yet the CAP is not fully reformed. That is unfinished business.
Where were the United Kingdom Government when the latest Franco-German CAP deal was struck? Did our Ministers, let alone the Chancellor, fight for effective restraint on that huge element of the overall Brussels budget? They seem to have been conspicuous by their quiet acquiescence.
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