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Adam Price: I disagree with the Government, who have made their position clear. They see no future for structural funds in our communities, but structural funds are critical in my area, which is the point of the amendment.

On the UK abatement, which the hon. Member for North Cornwall (Mr. Tyler) mentioned, I am an agnostic because its effect in Wales has been entirely negative. Wales has not had the full benefit of European structural funding, and some rural development programmes and the compensation arrangements for farmers in Wales were affected negatively by movement in the sterling exchange rate. We did not receive that funding, partly because the Treasury would have lost out if we had had more receipts and there would have been less for the UK abatement. The operation of the abatement so far has not always been to the benefit of Wales.

My principal reason for drafting the amendment was to emphasise a principle. I agree with what the Commission has said in the past few days about the need to protect the notion of EU-wide structural funds. Last week, Commissioner Hübner outlined the case for EU structural funds and said that the seven-year programming periods allow regions to think strategically and to plan for the long term. That will not be possible if we have a repatriation, because we will then have only the three-year period of a spending review to plan financially.The way in which structural funds have operated has allowed capacity to build up at local and regional levels. Local ownership and regional capacity-building has been welcome.
 
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A third element is the raft of inter-regional co-operation, experience sharing, and networking, which have been positive and part of European regional policy from the beginning. According to the Commission's proposals, 4 per cent. of structural funds will be devoted to that element. That is critical, not just in the economic sphere but in spreading innovation, because one of the great virtues of the European Union is its diversity. We would lose that element if we lost structural funding, particularly the transnational programmes, in the UK. It is vital to continue to have structural funding available.

Empirical data show that structural funding, particularly objective 1 funding, has been successful in most objective 1 regions. EU-wide regional policy was first proposed in the late 1970s because of a fear that member states had failed to promote a convergence agenda. Contrast that with experience in objective 1 regions whose economic growth in 1988–2000 was three times faster than in Europe as a whole. That is true in the Republic of Ireland, Spain and parts of Portugal, which had positive economic growth records during that period. The one exception is West Wales and the Valleys, which, despite achieving objective 1 status, does not have a good growth record so far.

Mr. Elfyn Llwyd (Meirionnydd Nant Conwy) (PC): Is it not true that the reason for that is the slow start in getting things moving, including the various committees, and the absence of proper match funding from Westminster? I note that the hon. Member for Caerphilly (Mr. David) is arguing against further structural funds for Wales and his constituency. I wonder what he will say in his election mail-outs.

Adam Price: This is not the time to go into detail about the operational difficulties of the West Wales and the Valleys objective 1 programme, but there have been significant issues with the slow start to spending and what some people see as an overly bureaucratic and complex approach, which can be contrasted with the more strategic approach taken in other economic regions. West Wales and the Valleys region has seen a relative economic decline, contrary to the positive experience of other objective 1 regions. The available data show a further slide and it is vital that we have a second opportunity. We must learn from the failures of the past few years.

Mr. Tyler : Does the hon. Gentleman agree that the stifling bureaucracy to which the Financial Secretary referred during a debate last year has been more evident in the relationship between Whitehall and our local communities than in Brussels? Whitehall has been the problem, not Brussels.

Adam Price: That is a good point. As I tried to argue a few moments ago, there is a powerfully enabling attitude and culture within the Commission on regional policy. It is all about grass-roots, bottom-up development to enrich and promote indigenous capacity. That has been powerful, but Wales could learn from the experience of Ireland and its identification of key strategic weaknesses in the Irish economy. Sectoral strategies and looking forward 15 years in terms of new technologies when they were on the distant horizon were
 
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key elements in Ireland's armoury and part of the reason for its powerful success. A similar strategic approach has been taken in some of the Atlantic arc regions, such as Portugal.

We can learn the lessons, but the central issue is the need for a decision. West Wales and the Valleys region is eligible. We have a second tier offer for disadvantaged regions, but the 15-year window of opportunity must be grasped. We must press the Financial Secretary on whether the Government will put the interests of Wales first at the European summit in June, or will allow that opportunity to slip through their fingers. It would be a terrible waste of a massive opportunity to regenerate our communities and would impact on other funds such as the European agricultural fund for rural development. Projects such as Tir Gofal, Tir Mynydd and Tir Cynnal, which have been important in many rural communities, are at risk because of the Government's intransigence. It is vital to have an early decision in June, as timetabled, so that West Wales and the Valleys can benefit from its eligibility. That is the simple message behind the amendment.

This is another historic opportunity for us. We did not think that we would have to have a second chance. It should not have been necessary because we should have had a successful programme that would have lifted our communities out of poverty. However, we are debating the matter day because of the failure and incompetence of the Labour Government in Cardiff. We should not be punished twice because of their incompetence and failure adequately to represent us in Brussels.

We are among the poorest communities in the European Union. I am not proud of that and I want to change it. I do not want to go, cap in hand, to London or Brussels. I want a future for my community, as Ireland has. Ireland lifted itself out of poverty and it is incumbent on the Government to ensure that communities that successive Governments have failed—I accept that the fault lies not just with the Government, because it is a legacy of the devastation of the previous Administration—have the opportunity to help themselves. We need the funding and, from the bottom of my heart, I appeal to the Financial Secretary. It means so much to our communities. We need to mount a cross-party campaign. Will the Minister please heed the voices from Wales? We need a decision for our communities now.

6.20 pm

Chris Bryant (Rhondda) (Lab): I do not know whether I shall rise to the oratorical heights to which the hon. Member for East Carmarthen and Dinefwr (Adam Price) has just risen, but perhaps he will be able to calm himself a little over the next three quarters of an hour. I remind him that Members on both sides of the House feel strongly about the issue of poverty in the valleys communities and want to try to rectify the inadequacies of past policies across the whole of the last century, including the inequity on which much of the valleys' prosperity was built from the 1850s to the 1980s when the mines closed. However, I do not necessarily agree with him on the amendment. I shall return to some of the issues that he raised later.

I shall start with a few comments about the gamut of papers before us. It is true that the financial prospects for the EU in the next few years will be challenged by
 
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several issues that the Union has not had to face before. The most dramatic of those issues is enlargement, which increased the population of the EU by 30 per cent. but its gross domestic product by only 5 per cent. The EU has always taken pride in trying to use structural funds and other measures to provide a measure of equity between the member states, and that will become a major challenge.

Another issue, which was mentioned by my hon. Friend the Member for Newcastle upon Tyne, North (Mr. Henderson) earlier, is that of asylum and border controls. It is true that one of the issues that most interests many people in this country is how the EU can assist in developing a strong asylum and immigration policy that recognises the importance of strong borders with neighbouring countries. The days when Britain could have bilateral agreements with France, with Spain, with Greece and so on are long past. If we are to   have a secure country, we must increase our co-operation through the EU, which will pose financial difficulties for the Union.

The hon. Member for North Cornwall (Mr. Tyler) advanced an argument that he appeared to have lifted straight out of the Commission's document, and it was also mentioned by my hon. Friend the Member for Crewe and Nantwich (Mrs. Dunwoody). That argument—that the EU gets to spend only 1 per cent. of GNI, whereas member states get to spend 45 per cent. of GDP—bears no weight at all. It is a fatuous argument and it undermines the Commission's document. After all, the Commission is not trying to create a superstate—[Interruption.] My hon. Friend the Member for Glasgow, Pollok (Mr. Davidson) is heckling me. Perhaps he is trying to persuade me to join Labour against a superstate. If so, I would be happy to join him, because I am opposed to a superstate. Indeed, I am probably more rigorously opposed to it than he is. However, I see that he has given up on that attempt.

I was interested to note that the debate has brought out areas of broad agreement between parties. It is important that the message we send from the House this afternoon to the Commission and to other member states is that some of the things that we are saying have broad cross-party support, the most notable of which is the 1 per cent. ceiling on the budget. Some people think that if one ever says a word of criticism of the EU, one is by definition a bad European, but I do not accept that argument. Indeed, many of those who have most ardently and successfully campaigned for reform of the EU have been those who have believed in it more keenly than others.

I agree that 1 per cent. is a sensible ceiling for the Commission's budget. I also believe that we need to be resolute in our attempts to reform the CAP. Some would argue that it is one of the most pernicious elements of the EU set-up, and I agree, but some use it to argue that we should not be a member. To those people I would simply point out that if we had not played Johnny-come-lately at the beginning of the European adventure, the CAP would not have followed the format that it has. It would have been better if we had been involved in the first drafting, rather than in attempts at redrafting. A Conservative Member claimed earlier that the CAP had been reformed in the past couple of years and that the Doha round was important in achieving another step
 
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forward. However, I think that we should start to reduce the percentage of the EU budget devoted to the CAP considerably.

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