EU Structural Funds: Least Developed Regions

Debate between Jake Berry and Paul Blomfield

Wednesday 26th June 2019 Westminster Hall

[Paul Blomfield]

I agree. The European Union has demonstrated itself to be a very effective redistributive mechanism, taking from richer areas and redistributing to poorer ones. In my area of South Yorkshire, I imagine that we are a net beneficiary of that, although the UK as a whole is a net contributor.

Cornwall and the Isles of Scilly and west Wales and the valleys are already recipients of funding for that category, but have been joined by Tees Valley and Durham, Lincolnshire and my own region of South Yorkshire, because those three regions have now sunk below the 75% threshold, too.

In preparing for the debate, I consulted the House of Commons Library, which, as ever, provided excellent independent assessment and support—I commend those in the Library for the work that they always do for us—and confirmed the CPMR analysis. The Library said that, if anything, the CPMR report underestimated the position because it had not taken account of southern Scotland, which would have been eligible, and added that

“the ‘Outer London – East and North East’ region is also on the borderline”

for classification for support. The amount of funding for which UK regions could have been eligible may have been even higher than in the CPMR analysis.

[The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Jake Berry)]

I will raise a point about the CPMR analysis that I was going to make during my speech, because it is hugely important to the hon. Gentleman’s argument. I saw a copy of the House of Commons Library briefing, which confirmed that the analysis said that some areas could see funding rise by 22%, but, as I am sure he knows, the European Union has said that it does not want funding to go up by more than 8% in relevant areas. I do not think that the Library covered that. That would be worth expanding on as the hon. Gentleman develops his argument.

[Paul Blomfield]

I will mention the 22% increase specifically as I proceed.

I am delighted that Members from across the regions that would have benefited are in the Chamber. Everybody will want to focus on the impact in their own areas but, as the Minister indicated, the projections indicate that the UK would be entitled to an increase of 22% in funding. I am sure that if we were a participating member, we would be arguing strongly to ensure that that assessment was matched in reality and that the funding came through.

The funding estimate is up from the €l0.6 billion that we received from 2014 to 2020 to approximately €13 billion. Part of the reason that the CPMR estimates that increase is that we would now have five less developed regions, compared with two during the current funding period. The analysis states:

“All five of these regions would stand to receive EU support in excess of 500 euros per capita for the seven-year period.”

On current figures, that would result in £605 million for South Yorkshire to support economic growth.

There is a sense of déjà vu, because South Yorkshire has been here before. When the Thatcher Government decimated our coal and steel industries, and our whole economic base with them, we became one of the poorest regions in Europe. The EU stepped in with funding that was critical to rebuilding our economy, funding projects decided by local politicians and delivered by local bodies.

We received £820 million of objective 1 funding—levering in matched funding—which was channelled into more than 250 organisations and 650 projects. That encouraged investment, stimulated the development of new growth and high-technology sectors, helped businesses to modernise and become more competitive, supported innovation, helped with the commercialisation of research, developed skills and provided infrastructure in the region. We saw real transformation in a variety of ways.

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[Jake Berry]

The hon. Gentleman will have to send me the figures he refers to. Across the north of England, unemployment is lower than it has been for a generation. Picking up on the comments of the hon. Member for Redcar (Anna Turley), £450 million has been committed to a devolution deal for the Tees valley and £120 million has been invested in the SSI site.

Frankly, if the Labour local authorities in the Sheffield city region could get their act together and agree what powers they should hand to the Mayor of South Yorkshire—I know he is already doing an excellent job, but I want him to be given those powers so he can continue to drive the hopes and dreams of the people of South Yorkshire—the Sheffield city region could receive nearly £1 billion as part of its devolution deal. It is shameful that Labour councils are blocking this Government’s giving nearly £1 billion to the Sheffield city region. The councils should hang their heads in shame. We are debating European structural funds, but all this is connected; we cannot consider Europe on its own.

Let me set out some truths. There was reference to a report that mentioned growth of up to 22% in money for less developed areas. That report does not take into account the points made by the hon. Member for Strangford (Jim Shannon), who is no longer in his place, about European countries that may join the European Union during the spending period; it does not take into account the cap that the European Union itself has said it would like to see on spending increases; and it is an estimate. That estimate would go into the European Union and be negotiated.

[Paul Blomfield]

Will the Minister give way?

[Jake Berry]

I will in a moment. I will develop this point first.

Once the negotiation had taken place in Europe, the British Government would bring that figure into the comprehensive spending review and negotiate how it was distributed—which parts should go to European structural funds, to the Department for Work and Pensions and to the Department for Environment, Food and Rural Affairs. Only after that would any of the bodies have certainty about how much they were going to receive.

In fact, if we accept that the quantum of the UK shared prosperity fund should be negotiated through the comprehensive spending review, people will find themselves with exactly the same certainty under that fund as they would have had if we had continued with European structural funds. There is of course certainty until January 2021, when the current spending period ends, and the Government have been clear that the UK shared prosperity fund will start in 2021, so there will be no gap.

[Jake Berry]

I have to give way first to the hon. Member for Sheffield Central, who opened the debate.

People talked about crashing out of the European Union with no deal. Frankly, I do not expect that to happen. Nor do I accept that, even if it did happen, it would look like a crash out of the European Union. However, even if we accepted that analysis—I do not—the Treasury has given a guarantee about the current spending period for European structural funds, which means people who are in receipt of them or want to apply for them should carry on as normal, regardless of Brexit.

[Paul Blomfield]

The Minister knows we are not talking about the current period of structural funds. We are talking about the next period of structural funds, and about what we would have expected to receive had we remained a member of the European Union. We should receive no less than that. I know the European Commission has said since the publication of the CPMR report that, in part because of the impact on the EU budget as a result of Brexit, it may be that regions can expect to receive not 22% but 8% more, but that is not the circumstance we are debating. We are debating what we would have got had we remained in the European Union. Even if I accepted the Minister’s premise, that would mean £536 million for South Yorkshire. Will he guarantee that?

Shared Prosperity Fund

Debate between Jake Berry and Paul Blomfield

Tuesday 14th May 2019 Westminster Hall

[Paul Blomfield (Sheffield Central) (Lab)]

I congratulate my hon. Friend the Member for Barnsley Central (Dan Jarvis) on securing this debate.

In the 1980s, when the Thatcher Government broke the industries on which our economy was built—steel and coal—we faced really tough times in South Yorkshire. We sunk to become one of the poorest regions in Europe, and because of that, the EU stepped in with funding. In reply to some of the comments that have been made, I say that that funding responded to what we asked for locally and funded programmes that were delivered by local organisations.

European structural funds were key to rebuilding our economy. Objective 1 funding provided £820 million to more than 250 organisations and 650 projects, from major projects such as the Advanced Manufacturing Research Centre, which has become a national flagship for industrial innovation, to small community initiatives that reskill people. The economy grew by 8.5%.

Shamefully, under Government policy since 2010, regional inequality has grown again. We are back where we were before: below 75% of the average gross domestic product of the EU and one of the poorest regions in Europe—formally designated a “less developed region” along with Tees Valley and Durham, Lincolnshire, west Wales and Cornwall, which have been mentioned.

On those regions, the February report from Conference of Peripheral Maritime Regions of Europe, which my hon. Friend the Member for Barnsley Central mentioned, stated this for 2021 to 2027:

“All five of these regions would stand to receive EU support in excess of 500 euros per capita for the seven-year period.”

That would mean £605 million for South Yorkshire.

I was puzzled by the Minister’s intervention, as he seemed to suggest that because those areas voted leave they should not expect to receive that funding. That is not what they were promised in the referendum campaign, nor was it what they were promised subsequently.

[Jake Berry]

Nor was that what I said.

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[The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Jake Berry)]

It is a pleasure to serve under your chairmanship, Sir David. I start in the traditional way by congratulating the hon. Member for Barnsley Central (Dan Jarvis) on an excellent speech. As with so many things that we do together, with our shared passion to drive forward the economy of the northern powerhouse, there was very little I disagreed with in his speech, although there were a few things I will mention if I get the opportunity. Many Members asked similar questions, so before I deal with individual contributions I will address some of the more general points.

Let us be realistic about this debate: Members have picked me up on my saying that many areas that voted leave have been recipients of EU structural funds. One of my jobs in Government is administering many EU structural funds, and some Opposition Members may have done that job during the Labour Government. Those funds are hugely bureaucratic, and they do not target many of the things that we are desperate, across the Chamber, to drive in every constituency—including mine in east Lancashire, which is a deprived area in the north of England. Those funds are often inefficient. Although we have heard about some of the brilliant things they have done, such as supporting Mencap, which the hon. Gentleman mentioned, they have been hugely inefficient in many places.

My hon. Friends the Members for St Austell and Newquay (Steve Double) and for North Cornwall (Scott Mann) made interesting points about how some of those funds have been wasted in Cornwall. I suspect that may be part of the reason—although I would be the first to accept that the picture is very complicated—why 68% of the people who live in Barnsley and 60% of the people who live in Oldham voted to leave the European Union. We in this place have to address some of people’s deep frustrations about inequality, which traditionally have not been addressed or targeted by European structural funds.

We keep referring to European structural funds as European money. Let us be absolutely clear: this is British taxpayers’ money, which is given to the European Union and then, after a large percentage of it has been removed, returned to our country.

[Paul Blomfield]

Will the Minister give way?

[Jake Berry]

I will not, sorry—there have been many interventions.

That is why, looking to the future, in our 2017 general election manifesto, my party—the Conservative party—said we would come forward with a new UK shared prosperity fund that would be designed to reduce inequalities between communities across the four nations of our United Kingdom and target productivity. That was reiterated by my right hon. Friend the Communities Secretary in a written ministerial statement in July 2018 laying out some of the foundations of the UK shared prosperity fund.

The Government accept that tackling inequality is absolutely something we need to grip in this country. The hon. Member for Leigh (Jo Platt) mentioned that Leigh, which I know well—it is just down the road from my constituency—does not have a railway station. It is not the case that there was a railway station there that was closed by a Conservative Government; that is a sign of decades of under-investment in northern transport infrastructure by successive Governments. The UK shared prosperity fund should seek to challenge some of the inequalities that we see north, south, east and west across the United Kingdom.