Examination of Witnesses (Questions 117-119)
Mr Keith Boyfield, Ms Florenica Ahumada Segura and
Dr Robert Leonardi
19 FEBRUARY 2008
Q117 Chairman: Good morning. First
let me say that we are broadcasting. You will get a transcript
of everything you have said to have a look at and comment on,
but it is all being recorded. What I would like to ask—and
there are three of you—is if anybody would like to make
an opening statement we would be glad; or if you would rather
just sit and we will start on questions that would also work.
We would hope to let you go by about 11.40. Who, if anyone, would
like to start?
Mr Boyfield: I would like to make a general
statement about why I first became interested in this subject.
I go to Brussels quite a lot and I have to declare an interest.
I do work for the European Commission—an excellent organisation—for
their Competition Directorate and Transport Directorate. I also
write for the Wall Street Journal, whose main offices are
in Brussels. When I go on my visits to Brussels I have been very
struck by the number of representational offices of EU regions
and I think to myself why is this? Then a couple of years ago
when I wrote Eutopia, published by the Adam Smith Institute—and
I wrote that with Tim Ambler of the London Business School—I
was surprised, I have to say, to discover that 35 per cent of
the EU's budget is channelled into regional development aid—I
was quite surprised at that. I was also interested in this whole
general trend towards the emergence of city states; the world
is becoming more and more like Renaissance Italy, dominated by
cities like Florence, Venice, Genoa. I think that London and New
York have far more in common with each other; and the people who
work there tend to work for the same sorts of firms, go to the
same sorts of restaurants, shop at the same sorts of shops, and
often criss-cross the Atlantic and spend much more time with each
other than they do, for example, with people in the north-west
of England, which is my home region. Similarly, people in New
York feel more at home in London than in Wichita, Kansas. It also
makes me think that there is an analogy with soccer—and
I will be brief about this. Increasingly, people seem to support
major soccer teams and it is a global market place, so people
are supporting Manchester United, Inter Milan, Real Madrid—they
get their talent from all over the world. The people who support
England or Wales, I am told, tend to be the people who support
Brentford or Millwall because those teams tend not to win so much.
So you will see increasingly a dominance of city states. Then
it also made me think—and this is probably the last thing
I should say—about the EU's budget and how it is being spent
on regional aid for many laudable reasons. It is often said that
Brussels is a centralising influence, but I think there is an
interesting argument to suggest that this regional development
funding is acting as an encouragement, if not a catalyst, for
the increased fracturing of Europe, by-passing the nation state.
In areas like Catalonia and the Basque country it will be interesting
to see how the money is spent there. That is why Florenica, my
colleague, who speaks fluent Spanish and Italian, is helping me
on this. We are also interested to see how the regional development
funding is working in places like Scotland, which of course is
keen on taking a much more independent line; and a whole host
of other places like Belgium where the Flemish, as I understand
it, are increasingly seeking to plough their own furrow. The last
thing I would say is that we are not the Delphic Oracle; we have
not come with a battery of statistics and we are really just earnest
seekers after truth. So that is my general statement.
Q118 Chairman: Thank you. Dr Leonardi.
Dr Leonardi: Could I add to that? I teach at
the London School of Economics and this term I am teaching a course
on the social and economic cohesion policy of the European Union,
so therefore I follow very closely what is happening throughout
the EU. One thing that needs to be established here is that the
Cohesion Policy or the Regional Development Fund and the European
Social Fund, which are the primary funding bodies, concentrate
this funding in the less developed areas. At the present time
81 per cent of the cohesion budget is concentrated in the convergence
areas—that is, Central and Eastern Europe, bits of Greece,
bits of Italy, bits of Spain and bits of Portugal. Therefore,
we do not have an equal distribution of the funding. In the non-convergence
or the ex-Objective 1 regions there is very little money that
is provided, but the cohesion policy has had a very important
impact in leveraging private funding; therefore this is one of
the main elements why the non-convergence regions would like to
continue with the cohesion policy because it is a very strong
stimulus for the mobilisation of private investment. So usually
the relationship is one to five, one to six in terms of EU funding
and building on that, because there is this idea that if the funds
come from the EU they are first predictable—you know that
they are there, they are not going to disappear from one budgetary
year to another; secondly, they are going to have strong controls,
therefore it is difficult to misuse the money; thirdly, it is
money that is seen as oriented to economic restructuring and therefore
it has a positive impact; fourthly, it allows a certain amount
of multi-level governance, that is with the participation of the
private sector, regions, national funding and European funding,
so therefore this creates a much greater European feel. This is
something that is not just locally oriented but it has a European
focus to it.
Q119 Chairman: Thank you very much.
This has strayed promptly into the territory of question one,
which is about how successful the cohesion policy from 1988 to
date has been with regard to all the Member States. Let me remind
myself, the convergence funds go to people whose income is less
than 75 per cent of the average of EU GDP per head?
Dr Leonardi: Right.
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