EU: Structural and Cohesion Funds

Baroness Wilcox Excerpts

Wednesday 8th February 2012 Lords Chamber

[Lord Vinson]

To ask Her Majesty’s Government whether they propose to seek the devolution to the United Kingdom of regional spending under the European Union structural and cohesion funds so that the £9 billion the United Kingdom currently receives from its £30 billion budget contribution to those funds can be self-administered and effectively targeted.

[The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Baroness Wilcox)]

My Lords, the Government will seek significant cuts to the EU structural fund’s budget from 2014, aiming at reducing it to zero in richer countries after 2020. The United Kingdom will achieve substantial savings from the EU budget only by not contributing to the structural fund budgets of all wealthier member states, but that would require unanimous agreement by all 27. No other countries want to go down this road and we cannot unilaterally opt out of our treaty obligation to contribute to the EU budget.

[Lord Vinson]

I thank the Minister for her reply and hope that we might eventually see some of her words turned into deeds. Meanwhile, does it really make sense to continue with this farcical monetary subsidy merry-go-round? Surely we as a great country are perfectly capable of running our own regional policy without the help of others. Would it not make sense to repatriate these powers, albeit unilaterally, and thereby save billions of pounds which could be directed in a much more positive and worthwhile fashion into exercises that would create the many millions of jobs that this country so badly needs today?

[Baroness Wilcox]

In the current EU budget period, the United Kingdom has already spent almost half its allocation. If we stopped drawing down the remainder, we would forfeit approximately £1.6 billion and have to break live contracts with costly consequences. We would then not receive back 100 per cent of the unclaimed funds—only two-thirds—due to the rebate process, which, of course, is a preferential deal for the United Kingdom that was politically hard-fought-for and must be protected by us. Any rebated funds to the United Kingdom would not necessarily be available for economic development, so this important area of activity would suffer as a sharp drop in funding occurred.

[Lord Wigley]

My Lords, would the Minister give an assurance that if this money was repatriated, those areas within the United Kingdom now benefiting from European structural funds—such as a large part of Wales because of the low level of income per head—would continue to receive the benefit needed to stimulate their economies?

[Baroness Wilcox]

In saying “if this money was repatriated”, I presume that the noble Lord follows on from the previous question asking us to repatriate it now. The answer is: no, we won’t. Is that not what the noble Lord asked? I am sorry.

[Lord Wigley]

With the leave of the House, that was not what I asked. If it is repatriated, can assurances be given? If they are not given, it is in the interest of these areas to continue to get those funds from Europe.

[Baroness Wilcox]

I apologise for not understanding the question at first. The answer is yes.

[Baroness Royall of Blaisdon]

My Lords, at the special summit last month, a large sum of money—I do not recall how much—was made available for tackling youth unemployment in the European Union. Will the UK apply for some of that money, or will it be spent only in the 25 states that have signed up to the new treaty?

--- Later in debate ---

[Baroness Wilcox]

Interestingly, I do not have the answer to that question with me. I do so wish I did. I would be delighted to respond to the noble Baroness by letter.

[Lord Pearson of Rannoch]

My Lords, more worryingly, did we not send £10.2 billion in net cash to the European Union for it to waste last year? That should be compared to the mere £6.2 billion of our own public expenditure cuts. Why do we need any of the 75,000 fat Eurocrats in Brussels, who have little to do but strangle our economy with their endless regulations and waste our money which could be better spent at home? Surely the answer from the Minister to the noble Lord, Lord Vinson, should be that if we want to do what he so sensibly suggests, the only way is to leave the European Union.

[Baroness Wilcox]

The noble Lord has his own agenda which he is free to pursue. Fortunately, Her Majesty’s Government do not at the moment agree with him.

[Lord Swinfen]

My Lords, how much is lost in administrative charges as our funds pass through Europe on their way back to this country?

[Baroness Wilcox]

I do not happen to have the figures to hand on how much it costs us. I will happily write to the noble Lord.

[Lord Harrison]

Is it not in the British interest that we support the help to poorer countries of the European Union so that they can participate in the single market actively and bring their standards of living up so that eventually British firms and services can be provided within the European Union for our benefit?

[Baroness Wilcox]

I completely agree with the noble Lord. The aim of the structural and cohesion funds as set out in the EU treaty was to reduce disparities between regions to create a more cohesive single European market. Structural funds have helped to underpin enlargement of the European Union, opening up new markets in central and eastern Europe to British companies. We have done very well by that.