Examination of Witnesses (Questions 160-171)
Mr Keith Boyfield, Ms Florenica Ahumada Segura and
Dr Robert Leonardi
19 FEBRUARY 2008
Q160 Chairman: If I have picked up
Dr Leonardi's argument correctly, yes, there may be some money
spent on administration but it is worth it.
Dr Leonardi: Very, very little—very, very
little.
Q161 Chairman: We have manuscript
figures for England and some for the Commission.
Dr Leonardi: The technical assistance, there
is a line in the budget as technical assistance that pays for
in-house activities as well as bringing people in, and that technical
assistance is one per cent, 0.7 per cent—we are talking
about very small figures. But it also pays for all of the evaluation,
all of the oversight and all of the semester meetings that take
place.
Q162 Chairman: If there was anything
that any of you had to attribute on administrative expense—we
received Open Europe's figures with some scepticism but there
is a difficulty about getting figures and it is something I would
like to cover so that if there is any evidence around I would
be glad to have it.
Mr Boyfield: We would gladly like to write back
to you on that if we discover any.
Q163 Lord Maclennan of Rogart: As
a follow-up to something that was said a little earlier about
sources of extravagance or waste. It was rather broadly stated
by Mr Boyfield in his written evidence that lobbying was wasteful,
but how can a political system work to redress imbalance when
you say that the Union is now increasingly dominated by the city
states if the peripheral regions do not actually lobby and come
together and find common ground. It seems to me that that is such
a broad generalisation.
Mr Boyfield: Speaking as a lobbyist, because
I have been a lobbyist for the last 25 years of my life, even
I see when I go to Brussels, (which is now the second capital
after Washington for lobbyists), I think, yes, I am all in favour
of lobbying because it can provide more accurate information and
you can advocate your best case, but there are excesses, and I
think that one can install a ceiling to this type of activity.
Speaking as a lobbyist, I think when I go to Brussels that there
is an awful lot of lobbying going on and there is an awful lot
of excess there.
Q164 Lord Maclennan of Rogart: But
the lobbying is not a function of the European Union, surely it
is a matter for the Council themselves.
Mr Boyfield: No, it is rent-seeking activity
because quite rationally these representative offices are pursuing
funds and if 35 per cent of the EU budget goes on the regions
it is quite rational that you will see a lot of rent-seeking activity.
Chairman: It is a very tempting digression but I
am going to haul us back out of it because Lord Woolmer has a
final question.
Q165 Lord Woolmer of Leeds: Going
back right back to basics, to the start as it were, to get a sense
of perspective. There are three ways in broad terms, three underlying
causes why regional disparities might change, let us say reduce.
One is countries entering into a single market in which capital
flows is increasingly moved around freely, and where certainly
trade seems not to make any difference and trade in services less
so but increasing, and mobility of labour. So there is that single
market issue. There is the operation of regional policies within
Member States and then there are EU-wide regional funds. To get
a sense of perspective what work has been done to demonstrate,
to try to calculate the effect of each of those elements in reducing
regional disparity? Because we have been talking, as inevitably
we do in inquiries, as if our central interest is the one that
is making all the difference. To me, on the face of it, it must
be—but I may be wrong—that this entry into a single
market for trade, capital and so on must have made overwhelmingly
the biggest difference, and some Member States have had regional
policies. So what work has been done to try to disentangle those
because otherwise we could be arguing a great deal about something
that actually does not really make a lot of difference? It is
important but—
Dr Leonardi: Is Lord Woolmer an academic?
Q166 Chairman: The Irish case is,
I would suggest, particularly difficult to disentangle some sensible
fiscal policies and the ability to trade from what, if anything,
structural funds did for them.
Dr Leonardi: We had a special issue of Regional
Studies last year addressing the point and it is difficult because
we do not have a clear and precise accounting for the funds that
are spent at the regional level because in this policy we have
national operational programmes which are multi regional, for
example for the large, infrastructure projects, that cover more
then one region. Therefore in the regional operational programmes
we know how much is being spent in the particular region and we
can figure out from the accounting when it was spent. But with
the multi regional projects we do not have a regional breakdown
of the multi regional expenditure. For example, in Spain two-thirds
of the money is being spent in the national, multi regional programmes
because they have built a lot of infrastructure and so as a result
we have regional convergence taking place but we cannot pin it
to what is being invested because we do not have this regional
breakdown of investment. So we do not know where it is being spent
and when it is being spent; therefore, we are stuck with a minimum
amount or a minority of the information that we would need in
order to sort out these two. Also, given that they take place
simultaneously, they overlap.
Q167 Lord Woolmer of Leeds: That
is the public spending element whether it is national Member State
or the EU; but what about the trading case, movements of capital
and labour and so on as opposed to public spending. In very simple
terms, is it overwhelmingly—as my instinct is that it must
be overwhelmingly the biggest impact? That must be the biggest
impact in Ireland, for example?
Mr Boyfield: I was just going to say that that
seems to be the theme of what comes out of these Economist
articles about Ireland and why it proved to be that this Celtic
Tiger, has proved successful partly demographics, a lot to do
with fiscal policy, but also the opening up of the EU. Its something
we want to look at. I will gladly write to you about it but I
cannot quote you chapter and verse on the academic literature
because I am not as learned as Robert Leonardi on this; I defer
to his excellent knowledge.
Q168 Lord Woolmer of Leeds: Dr Leonardi
was shaking his head at that. It is an important issue and we
can all spend a lot of time worrying about this issue here in
front of us but actually it might be very marginal in its actual
impact.
Dr Leonardi: One of the interesting aspects
of the cohesion policy is that large infrastructure projects arguably
need to justified and from the EU point of view a large infrastructure
project should be financed if it has a European-wide impact, not
just a local impact but a more national impact. One of the things
that one sees in national infrastructure is that you have a tendency
of creating a star system with the national capital in the middle
and all the roads leading out from the national capital to the
periphery, and instead in the EU it has to link up to an EU infrastructure
grid and so therefore that significantly changes the nature. Once
you have the infrastructure in place then it helps to reduce the
cost of production in particular peripheral areas. The important
thing in Ireland is that they restructured the ports in Ireland.
Q169 Chairman: They restructured
the connecting links.
Dr Leonardi: Exactly, and then they created
the infrastructure connecting the ports because the ports were
the crucial elements—and also the airports were another
element.
Mr Boyfield: Can I just say that I do quite
a lot of work on Sub-Sahara and Africa and it is very noticeable
that the money which China is putting into places like the Democratic
Republic of Congo is going into the development of the harbour
and the railway system and so on, so that they can get their cobalt
and copper out more easily. I think it is very interesting what
is happening with regard to investment in places like Angola and
The Congo; it is really focused on the infrastructure, roads,
rail and harbours.
Q170 Chairman: I think I have probably
exhausted everybody, including my witnesses. It remains for me
to say thank you very much for what has been a very interesting
session and to plead for any evidence that you have which you
can conveniently lay your hands on on administration costs.
Dr Leonardi: I shall leave a copy of my book
on this subject with you.
Q171 Chairman: Thank you. It is always
argued that the costs are always too high and outweigh the benefits
and if I can get a decent handle on the costs and they are as
small as you suggest, then that is another bit of the puzzle.
Mr Boyfield: We will gladly keep you informed
of our progress.
Chairman: Thank you very much.
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