EU Funding (Rotherham and Barnsley)
Debate between Lord Blunkett and John Healey
John Healey
Over the last year, my hon. Friend and I have campaigned for special transition region status for the purposes of the new European funding programme, and have tried to persuade the Minister of the case. My hon. Friend has anticipated some of the points that I shall be making later, which lie at the heart of the problem. I want to deal with the facts, the fix and the future. I want the Minister to confirm the facts, explain the fix, and pledge to make good the funding of our areas for the future.
Let me begin with the facts. As the Minister knows, I welcome the commitment to the European regional development fund and the European social fund as part of a European budget settlement that represents the first-ever real-terms cut overall. I welcome the inclusion of transition region status for ERDF purposes, although the Government held out against it until the final agreement. I welcome, in particular, the Minister’s commitment in his statement on 27 June to a local rather than a central programme, with decision-making powers in local areas. I also welcome the decision to enable European funds to take their place as part of the strategic plans of the local enterprise partnerships.
We know how to use European funding in South Yorkshire, we know how to use it well, and we have firm plans for its use in the future. The advanced manufacturing park on the edge of Rotherham would not be there without support from European funding, and the nuclear advanced manufacturing research centre and the knowledge transfer centre in Rotherham would not be there without £15 million from the ERDF. We have plans for the future. We can put the money to good use, and that will include support for the city deal and for 4,000 extra apprenticeships throughout South Yorkshire.
However, whereas our current seven-year programme of funding from the European Union is worth is worth more than €400 million in South Yorkshire alone, the new seven-year funding programme will provide €203 million, not just for South Yorkshire but for the five north Nottingham and north Derbyshire districts as part of the Sheffield city region. As was pointed out by my hon. Friend the Member for St Helens North (Mr Watts), that is about €117 per head in an area with a population of nearly 1.8 million and a GDP that is 84% of the European average. It represents a cut of more than 50% in South Yorkshire’s funding for the current seven-year period.
Ours is one of the 11 transition regions in the United Kingdom. That means that our GDP is between 75% and 90% of the European average. Which economies have been earmarked for extra funding to boost jobs, skills and businesses? All the more developed regions have a GDP of at least 90%, and nine of them will receive more, not less, funding than the Sheffield city region. They include Worcestershire, Leicestershire and, as my hon. Friend said, Cheshire and Warrington. Cheshire and Warrington has not a GDP of 84% like South Yorkshire but a GDP of 119%, and will receive EU funding of not €117 a head like South Yorkshire, but €157 a head.
Mr David Blunkett (Sheffield, Brightside and Hillsborough) (Lab)
Will my right hon. Friend give way?
Mr Blunkett
I am very grateful to my right hon. Friend, and I congratulate him on the work that he has done on this issue.
The purpose of objective 1 was to recognise levels of deprivation, and the purpose of the transitional arrangements was to recognise what had been invested and how the work needed to be done. Was it not an insult to the people of our communities for the Minister to use Shropshire as a comparator? I went to school in Shropshire, on the border of Wales, and I know the area very well. The notion that a comparison between Shropshire and South Yorkshire, North-East Derbyshire and Nottinghamshire can be anything but a gerrymander is palpably absurd. We should ask why this is being done, and what the objective is. A cynic would obviously ask about Cheshire—as my hon. Friend has just done—given the nature of the constituencies there and the nature of the Chancellor.
John Healey
My right hon. Friend makes a full point. He is right. This decision is unfair and unjustifiable and undermines the very purpose of the European funds.
To develop my right hon. Friend’s point, let me turn from the facts to the fix. Three months ago, out of the blue, the Minister announced on 26 March:
“EU Structural Funds are important for supporting economic activity. The EU formula would have seen several areas in most need of funds lose out, so we have taken the decision to correct that.”
He also said that
“the UK government has decided to re-allocate EU Structural Funds to minimise the impact of sudden and significant cutbacks in Northern Ireland, Scotland and Wales.
This decision means that each Administration is only subject to an equal percentage cut of around 5 per cent in funding compared to 2007-13 levels.”
It seems that no one in government was there to speak up for England when these deals were done for the devolved regions. There is one pot of European funding for the period, so England must pay to protect the other UK nations. Ministers are ripping funds away from South Yorkshire and from Merseyside to top up Scotland and Northern Ireland, where GDP is higher, and Wales, where GDP is at a similar level.
Let me illustrate the point about the deep flaws and unfairnesses of this decision with the highlands and islands of Scotland. The highlands and islands is an ex-objective 1 area, like South Yorkshire. It is a current phasing status area, like South Yorkshire. It has a GDP of 84%, like South Yorkshire. It will have transition region status, like South Yorkshire, but unlike South Yorkshire its funding will not be €117 per head. It will not even be €147 per head, as in Merseyside. It will be €741 per head. Its economic status is similar but it will have over six times more funding for every man, woman and child in the highlands and islands. The Chief Secretary has clearly been doing his job for his area. What has the Deputy Prime Minister been doing for our area? This is Forgemasters mark II. There has been no evidence of concern, and certainly no evidence of influence from the Deputy Prime Minister when this critical decision for Sheffield city region was taken. He is standing up while the Government blatantly make bad and damaging decisions for our area in South Yorkshire.