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Mr. Hendrick: Does the hon. Gentleman agree that that regional policy will continue, and that European structural funds provide a medicine to restructure industries in particular regions of the European Union, and are not intended as a permanent means of support? Are there not countries in the EU now that are more in need of that medicine as a result of the fall of communism than certain parts of the UK?
Adam Price: I agree with the first part of the hon. Gentleman's intervention. His point is well made. What we want in all our communities is not charity. We do not want permanent dependence on any funding source, whether at central Government or European level. We want help to help ourselves. The Government are right to stress that in their statements on regional economic policy. Developing endogenous potential—indigenous potential—is the way forward. [Interruption.] "Endogenous" if I were giving an economic seminar; "indigenous", perhaps, in the Chamber. That has always been the key component of European regional aid as well.
The startling example of the Republic of Ireland was mentioned earlier. Since about 1987, it has had an incredible record of economic growth, partly—not wholly—because of a very successful strategic exploitation of structural funds, and also of the cohesion fund, for which it was eligible as a poorer member state.
Mr. Doug Henderson:
I do not want to labour the point, but does the hon. Gentleman accept that the nationalist parties in Scotland and Wales are effectively arguing that the structural fund regime, broadly as it stands, should continue because it is essential for the Scottish and Welsh economies, but that he fails to see the change in the nature of the European Union? If the existing principles were applied, very few parts of Scotland and Wales would qualify, unlike the areas
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mentioned by my hon. Friend the Member for Preston (Mr. Hendrick). It is in the interest of Scotland and Wales to move with the times.
Adam Price: In the case of Wales, the new figures contradict the hon. Gentleman's point. At this point West Wales and the Valleys come beneath the 75 per cent. benchmark for eligibility for the new convergence fund, because unfortunately it is one of the poorest regions of the European Union, even after enlargement. Overall prosperity in Anglesey, for example, is 53 per cent. of the average for the 25 EU member states. We are always being told that the UK is one of the richest member states and that it has the third or fourth largest economy in the world, so it is incredible that an island in Wales has half the average EU prosperity, even with the inclusion of the enlargement countries, which had to cope with 40 years of communism.
Mr. Hopkins : Does that point not make the case for a massively increased regional budget within the United Kingdom and for big transfers of income and wealth from richer areas to poorer ones? Is that not the real answer?
Adam Price: I do not see it as an either/or proposition, and I am not sure whether the hon. Gentleman does. Nothing precludes member states from pursuing a more robust regional economic policy. The French Government, for instance, have a broader and deeper commitment to regional economic convergence than the UK Government. Nothing precludes the UK Government from, for example, using fiscal incentives more broadly. Spain allows the Basque country and Navarre to vary their own corporation taxes, because that proved to be such a valuable tool in obtaining inward investment in the Republic of Ireland. We could pursue a more robust regional policy while retaining European funding.
Mr. Henderson: I do not want to labour the point, but the assertion that Wales would qualify for structural funding is based on the old rules, not the future rules. Surely the hon. Gentleman understands that the average per capita income in Poland is about $5,000—even in Slovenia, it is about $10,000 or $11,000. I am not saying that there is not a street or small area in Wales that contains such income levels, but there is no overall area with such income levels in Scotland or Wales, which is why the House is asking the hon. Gentleman to understand that the structural fund regime is anachronistic.
Adam Price: I hate to have to correct the hon. Gentleman again, but on 25 January EUROSTAT published the latest regional GDP figures, which show that the GDP of West Wales and the Valleys from 2000 to 2002 was 73.8 per cent. of the average for the 25 EU member states. That is less than the 75 per cent. threshold, which is the basis on which eligibility for the convergence fund will be determined.
Mr. Wayne David (Caerphilly) (Lab):
The hon. Gentleman has quoted the EUROSTAT figures, which do not take into account the most recent GDP figures
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from central Government. If the recent figures were taken into account, they would show that the GDP in West Wales and the Valleys has risen considerably.
Adam Price: That is all the more reason why the decision to award convergence fund status should be made now. West Wales and the Valleys has a window of opportunity to achieve the highest level of European aid for seven years until 2013, as a result of which we would probably qualify for another seven years of transitional funding. We are discussing 15 years of the highest level of aid for my community and for the hon. Gentleman's community, which is why we urge the Government to ensure that a decision is made in June at the European summit meeting.
Mr. David: By simply discussing regional policy in an abstract sense, the hon. Gentleman is not taking into account other issues, such as the British rebate and the size of the whole EU contribution.
Adam Price: I am discussing the concrete fact that money is on the table for the hon. Gentleman's community and for mine. As elected Members from West Wales and the Valleys, it is our responsibility to make the case so that Wales gets that money.
Mr. David: The hon. Gentleman has said that some money is on the table. What money? The EU budget has not been agreed yet.
Adam Price: Precisely. We must obtain agreement to ensure that we obtain full value from the money that is available to us. At the moment, we qualify for the highest level of EU aid, but we will not get that money if the UK Government push the decision into their own presidency or beyond it into 2006. I am not the only one to take that view: when the Welsh Local Government Association met the European Commission recently, the Commission told it in clear terms that it is in Wales's best interests to ensure that a decision is made now.
Angus Robertson (Moray) (SNP): May I warn my hon. Friend against the view that structural funds are "abstract"? Part of my constituency is in the Highlands and Islands, which was turned down for objective 1 status on the basis of flawed figures from the UK Office for National Statistics. The people of the Highlands and Islands know that regional support and objective 1 status are not abstract, but fundamental to the economic regeneration of many places.
Adam Price: I should emphasise that the Highlands and Islands will qualify for the second tier of regional funding, which the Commission propose and which the UK Government oppose. Parts of east Wales will qualify for the regional competitiveness and employment fund, and transnational projects in rural development areas, which have been valuable to rural communities throughout Wales and Scotland, will be lost to the UK. Our communities have a lot at stake, and it is our responsibility to make the case to the UK Government.
The UK Government's position is obviously to impose a 1 per cent. ceiling, which will preclude current levels of regional funding, and to pursue the policy of
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re-nationalisation to which I have referred. If the decision were pushed from June to December—I am grateful to the leader of my party for picking up my notes—new figures, which will push West Wales and the Valleys above the 75 per cent. threshold, would be a realistic prospect. In that case, we would lose out on this historic opportunity to achieve a 15-year basis for long-term economic planning in West Wales and the Valleys.
One of the benefits of European regional policy is that it allows regions at least seven years in which to develop a long-term strategy, whereas the Government can make only a three-year commitment.
Mr. Davidson : The hon. Gentleman is being particularly generous in giving way—although if I were to drop my notes, I would not expect the leader of my party to come and pick them up. May I ask him why he has worded his amendment in this way? In general terms, I support the bit that he wants to add, but I oppose the deletion of the provision on the stabilisation
which is essential. Does he agree that in many ways his dispute is not with the British Government, but with the EU, which insists that structural funding should be the last element of the budget to be considered, because it is not willing to adjust the common agricultural policy? If it were willing to cut money from the CAP to leave money for structural funding, the hon. Gentleman's problem, and my problem in Glasgow, would be resolved.
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