European Union (Withdrawal) Bill

Lord Foulkes of Cumnock Excerpts

Committee: 3rd sitting (Hansard - continued): House of Lords
Wednesday 28th February 2018 Lords Chamber

Moved by

[Lord Foulkes of Cumnock]

23: After Clause 3, insert the following new Clause—
“Strategy for economic and social cohesion principles derived from Article 174 of TFEU
(1) The Secretary of State must, before 31 December 2018, lay before Parliament a strategy for developing principles for economic and social cohesion derived from Article 174 of the Treaty on the Functioning of the European Union (TFEU).(2) The strategy laid under subsection (1) must state the principles derived from Article 174 of TFEU.(3) The principles under subsection (2) form part of domestic law on and after exit day.(4) The aims of the strategy under subsection (1) are—(a) to reduce inequalities between communities, and(b) to reduce disparities between the levels of development of regions of the United Kingdom, with particular regard to—(i) regions with increased levels of deprivation,(ii) rural and island areas,(iii) areas affected by industrial transition, and(iv) regions which suffer from severe and permanent natural or demographic handicaps.(5) A Minister of the Crown may by regulations make provision for programmes to implement the strategy.(6) Programmes under subsection (5) shall run for a minimum of 10 years and shall be independently monitored.”

[Lord Foulkes of Cumnock (Lab)]

My Lords, it is a great pleasure to move this amendment and I am glad that we have got to it at last. It is tabled in the names of my noble friends Lady Royall of Blaisdon and Lord Judd as well as mine. I am pleased to see my noble friend Lord Judd in his place. My noble friend Lady Royall has asked me to pass on her sincere apologies for not being able to be present for the debate, but in no way is that a reflection on her enthusiasm for the amendment—quite the reverse.

The amendment proposes a new clause be inserted into the Bill to incorporate Article 174, Title XVIII of the Treaty on the Functioning of the European Union into domestic law. This would require the Secretary of State to lay before Parliament, before the end of December 2018, a strategy for the future provision of funding and other support to achieve economic and social cohesion across the regions and nations of the United Kingdom. All noble Lords will know that the European Union cohesion policy has been very effective in ensuring that the less developed and transition regions have access to operational programmes and funding to support economic growth across the whole of the European Union, and thus have been able to develop.

Once the United Kingdom leaves the European Union—in my context, I should say if the UK leaves the EU—this proposed new clause will be necessary. However—I will never give up—I sincerely hope that the clause, and indeed the Bill, will be unnecessary, but since we are moving in a particular direction we need to make sure that safeguards are in place. This amendment would ensure that the principles of social and economic cohesion which the UK regions would have qualified for under the EU cohesion programme, along with the funding after the date of exit, are continued and that the Government will go on with the aim of strengthening and rebalancing the entirety of the union, including the regions of England as well as the devolved nations.

I hope that when the Minister comes to reply—she is my good friend and she had a good birthday celebration yesterday—which I am pleased to say makes it an even more interesting and enjoyable debate, she will be able to give us a clear assurance on this. Some vague promises have been made. It has been suggested, or perhaps hinted, that the block grant might be adjusted to take account of the money that will be lost through the non-availability of these cohesion funds. As far as Scotland, Wales and Northern Ireland are concerned in terms of the block grant, it is never guaranteed to include everything that it is supposed to include. We would never be able to check that the grant was going to be that much greater than it would have been otherwise, if the cohesion fund had not been included. Anyway, what about the parts of England that have been benefiting from the fund? They do not get a block grant, so will the adjustments to local authorities be changed? Local authority incomes are being cut and they are not getting any extra money, so it will be even more difficult for them. This amendment would guarantee that the funds would be available.

Let us take a closer look at the regions that have qualified for cohesion funding. Those which receive assistance are described as either less developed or transition regions. Of course, once a less developed region gets assistance and develops, it then becomes a transition region. It will still qualify for cohesion funding, but to a lesser extent. A region is less developed if its per capita GDP is less than 75% of the European Union average. In the 2014 to 2020 period, the less developed regions of the United Kingdom have been allocated £2.6 billion. Those are Cornwall and the Isles of Scilly, and West Wales and the Valleys. A region is in transition if the per capita GDP is more than 75% but less than 90% of the European Union average. In the 2014 to 2020 period, £2.5 billion was allocated to those regions, which are Northern Ireland, the Highlands and Islands of Scotland, Cumbria, Tees Valley and Durham, Lancashire, South Yorkshire, East Yorkshire, Lincolnshire, Shropshire, Staffordshire and Devon. It is also worth noting that the majority of these qualifying regions could be described as rural, coastal or peripheral parts of the United Kingdom and are therefore in great need of this kind of assistance.

I want to give some examples of the kind of money that will be lost and the kind of projects that will be affected. I shall first mention Cornwall and then Scotland. I refer to Cornwall because I was inspired to table this amendment by Clare Moody, the Member of the European Parliament who represents Cornwall and other parts of the south-west of England. I am grateful to her for her assistance in this. My first example is something called Launchpad, which received almost £10 million worth of European Regional Development Fund money. Launchpad is a graduate start-up programme run by Falmouth University that aims to give participants the skills to develop a project from inception to a sustainable, high-growth potential company in just two years. It will support graduates to develop new products and processes in response to market demand, focusing on the digital games and interactive technology sectors. These sectors are rapidly developing. That money would continue to be available right up until the end of the period if we were still in the European Union, but if we go out there is no guarantee that it will continue and Falmouth University will not be able to continue the programme. We need some kind of guarantee from the Minister and the Government that such projects will continue to be supported.

Another example from Cornwall is CETO Wave Energy, which gets £9.5 million from the ERDF. This project aims to build a wave energy converter device at the Wave Hub off the north coast of Cornwall, near Hayle. By developing a 1 megawatt device connected to the national grid, the project will advance wave energy technology and demonstrate its commercial viability. That is good not just for that area but for the country as a whole, and for trying to mitigate the effects of climate change as we develop wave technology. It is a very important area that is being funded.

Those are two projects from the ERDF. I will take one from Cornwall funded by the ESF, the stability fund. Some £1.3 million has been allocated to Skills for Young People. This project will provide skills development for young people not in education, employment or training—sometimes described as NEETs—or who are at risk of becoming part of that group. Managed by Careers South West and delivered by a range of partners, it brings young people closer to work and further learning. Again, it is a very important project in an underdeveloped area, Cornwall.

--- Later in debate ---

[The Minister of State, Department for Exiting the European Union (Lord Callanan) (Con)]

It is our money.

[Lord Foulkes of Cumnock]

That is the constant refrain from the leavers. We heard it all through the referendum campaign: “It’s our money”. It is money from all the European countries that comes in according to their ability to pay and goes out to different parts of the European Union according to their needs, and rural areas, transition areas and less developed areas are those which get it. But that is not the argument here; we have had that argument. It has been made and we can have it in another place.

Wherever it comes from, that money is within the European Union budget at the moment and is then allocated to these projects in different parts of the United Kingdom. We are asking for an assurance—we need a guarantee—that, if we leave the European Union, this money will go to the same projects and be funded by the United Kingdom Government. I hope that the Minister will be able to give us that guarantee; such projects will otherwise have an uncertain future. People’s livelihoods depend on them; people who have put their lives into developing them are now faced with uncertainty. The only way in which they can be given some certainty is if the Government accept my amendment or something like it, and make sure that the money that they currently get from those European Union funds will come in future from Her Majesty’s Government.

[Lord Wallace of Saltaire (LD)]

My Lords, I apologise that I missed the first minute of the noble Lord’s speech. I want to stress, first, that the history of Article 174 is one of British leadership. The regional development fund was set up by one of the first British Commissioners, George Thomson, and was designed to help poorer regions in Britain and Ireland in particular cope with the impact of joining the European Union—it is very good that two of Lord Thomson’s sons-in-law are in this House and taking part in this Committee, although I do not see either of them in their place. I recall clearly how he carried that through the European Community, as it then was, in the early 1970s.

The article as we now have it was inserted into the Single European Act by the British Government as one of its flanking elements, but it was then transformed by Margaret Thatcher because she committed herself to eastern enlargement—one remembers the Bruges speech and the point she made about bringing Prague, Budapest and Warsaw back into Europe. The regional development fund within the European Union became very much part of how we have helped to spread prosperity, and therefore stability, democracy and security, into those new member countries. It is worth noting that Norway contributes to the European Regional Development Fund and that in any conceivable deal which we strike with the European Union after we leave—if we end up leaving—it is likely that we will be asked to contribute in the same way. The noble Baroness, Lady Deech, might say that this is dreadful because the European Union spreads conflict, but I think that the rest of us will agree that the European Union has helped to stabilise the former socialist countries of eastern Europe. One has only to move from Poland to Belarus to see how much difference it has made.

Now that we appear to be leaving, the question of what happens to this country and what reassurance the Government can give us about the future of regional development in it is important. The Prime Minister said when she came into office that she wanted to bring the country back together and to reunite this very polarised public we have had since the referendum, but let us remember that England has the deepest regional disparities of any country in Europe—the United Kingdom even more so—and that the areas which qualify for and benefit most from the European development fund in Britain are Yorkshire, the south-west, parts of Wales, the north-east and parts of Cumbria and Lancashire. Recent studies have suggested that Yorkshire and the north-east are the two regions which will suffer most from Brexit because our trade is most clearly across the North Sea, from Hull and Newcastle, and the damage will be severe. Can the Minister begin to give us some reassurance that the Government are alive to this issue and that, as they attempt to bring the country back together, as we hope they do, they will have an active regional policy to cope with the impact of Brexit?

I read the Yorkshire Post—published by a company that used to be called Yorkshire Conservative Newspapers—and the image one gets of views in Yorkshire from our media and gossip are: that we are now governed by a very Home Counties, southern-English Government; that the north is forgotten; that the northern powerhouse is a placard without much behind it; and that the spending in the north on infra- structure, innovation, schools in rural areas and elsewhere falls well behind what is given to government. I should have thought that might leave the Conservative Party very worried. In replying, can the Minister give us some assurance—and feed this back into the Government—that, as we move towards an apparently inevitable Brexit, the Conservative Government are thinking actively about the regional disparities we already have, are taking into account that poorer regions will suffer disproportionately from a loss of European regional funds and realise that compensatory action needs to be taken by the British Government to prevent that?

--- Later in debate ---

[Lord Foulkes of Cumnock]

The Minister said that the Government would consult about the shared prosperity fund later this year. We are already 21 months past the referendum and, as my noble friend Lady Hayter said, have just over a year to go. When are we going to get the proposals? When are the people hoping to benefit from this actually going to see it? When is the consultation going to start? I hope the Minister will not say “shortly” but will give us some clear indication because, as my noble friend said, people are desperate to see it and to know the details.

[Baroness Goldie]

I shall come on to that and endeavour to address the points that the noble Lord has raised. I was merely going to observe to the noble Lord, Lord Wallace of Saltaire, who was concerned about what he saw as a sort of Home Counties-centric Administration, that, looking at this Front Bench, there is not much Home Counties representation here, with the honourable exception of the bicycling baronet. Across this Front Bench there is a genuine understanding of all parts of the UK—including, to be fair, the Home Counties—and that is very important. The Government are very anxious to reflect the pan-UK need and relevance in conceiving and constructing policy to address the issues that are the subject of the amendment.

As I understand it, the noble Lord’s amendment seeks to transfer the provisions of Article 174 of the Lisbon treaty, which provides the legal basis for EU cohesion policy, into UK law. Indeed, that policy is one of the key policies of the EU, as the noble Lords, Lord Foulkes and Lord Wigley, recognised. It recognises the importance of reducing inequalities between communities and reducing disparities across the EU. At the same time, leaving the EU allows the UK to begin to take its own decisions on the future of regional development. Arguably, perhaps, it will be better placed to ensure that those are better tailored to UK priorities rather than the priorities of the EU.

The noble Earl, Lord Listowel, raised important points, to which I listened with care. I think they are more a matter for the Ministry of Housing, Communities and Local Government and the revenue support grant, but I am informed that the local government financial settlement has allowed additional flexibility in meeting costs for adult social care, which I understand has been widely welcomed.

[Baroness Goldie]

I assure the noble Earl that I am listening to what he says.

The noble Lord, Lord Adonis, specifically raised the issue, which I will deal with here, of UK access to the European Investment Bank. The UK wishes to explore options for maintaining a relationship with the EIB in the second phase of negotiations. To avoid doubt, I say that the UK will leave the EIB when it ceases to be an EU member state, but that is all I am able to tell him at the moment. I think that will be an important feature of the second phase of negotiations. He rightly identified that the bank has been an important source of investment finance.

The noble Lord, Lord Foulkes, rightly wants to know the shape of all this and what the Government are actually doing. If your Lordships will permit me, I shall try to outline the situation. The Government have already set out their long-term strategy in many areas covered by the noble Lord’s amendment. In November, my right honourable friend the Secretary of State for Business, Energy and Industrial Strategy launched the Government’s industrial strategy, which sets out the long-term plan to boost the productivity and earning power of the UK. It sets out how we will help businesses to create better, higher-paying jobs in every part of the UK with investment in the skills, industries and infrastructure of the future.

The strategy will boost productivity and earning power across the country by focusing on five foundations of productivity. It is worth repeating them: ideas, people, infrastructure—in that connection, let me say that I listened with interest to what the noble Lord, Lord Adonis, said about the value of long-term strategic thinking; he made a number of important points, which the Government will want to bear in mind—business environment, and places.

All these foundations have links to cohesion policy, but it is perhaps that final foundation which is most relevant: places. This recognises that every region of the UK has a role to play in boosting the national economy, including North Yorkshire, to which the noble Lord, Lord Wallace of Saltaire, referred. The UK has a rich heritage, with world-leading businesses located around our country. Yet—and this is disappointing —many areas are not fulfilling their potential, and that despite receiving cohesion policy funding. The UK still has greater disparities in regional productivity than other European countries.

The challenges and opportunities facing us are shared across the union. We recognise that the devolved Administrations are acting to identify and deliver their own priorities, and we respect the devolution settlement. But devolution has never meant that the Westminster Government should stop delivering for people, businesses and places in the devolved nations.

As part of the industrial strategy, we will agree local industrial strategies that build on local strengths and deliver economic opportunities. We want to work with all relevant bodies in England and partners in the devolved nations to consider how local strategies can deliver for places in Scotland, Wales, Northern Ireland and, of course, England. I hope that that to some extent reassures the noble Baroness, Lady Hayter, who asked how all this would flow out across the UK. We are also introducing a new £115 million strength in places fund to build excellence in research, development and innovation across the UK.

We are already seeing the opportunities and benefits of a focus on places. In the year that we launched the northern powerhouse project, we saw productivity in the north rise at a faster rate than London and the UK average. We have also seen further exciting developments outside England. Our city deal programme demonstrates how the UK Government can work hand in hand with our partners in the devolved Administration Governments and local authorities to deliver co-ordinated, locally led interventions that have a real impact on local economies. As confirmed by the Chancellor in the Budget, we are currently working with regional representatives from Stirling and Clackmannanshire, the Tay cities, Belfast, north Wales and the border lands between Scotland and England to negotiate new city deals.

Meanwhile, under the people foundation, we also want to tackle regional disparities in education and skill levels so that we build on local strengths and deliver opportunities for people wherever they live. The industrial strategy will do this through a major programme of reform to ensure that our technical education system can stand alongside our world-class higher education system and rival the best in the world. There will also be investment of an additional £406 million in maths, digital and technical education, helping to address the shortage of STEM skills.

The industrial strategy recognises the importance of ensuring that all areas in all parts of the United Kingdom can meet their full potential. The strategy recognises that every region of the UK has a role to play in boosting the national economy, but the noble Lord’s amendment refers to a number of specific types of region in particular, including regions which suffer from what he described as demographic handicaps, and rural areas. These are very important matters. In responding to the challenges of demographic handicaps, the industrial strategy recognises these. The ageing society grant challenge aims to bring an innovation, productivity and growth lens to the challenges and opportunities of our ageing population.

[Lord Foulkes of Cumnock]

With respect, these are fine words beautifully delivered, but the word “guarantee”, which my noble friend Lord Judd mentioned, has not appeared so far. Will all those projects, three or four of which I described, and which reasonably expected funding right up to 2020, be guaranteed funding under the strategy described by the noble Baroness?

[Baroness Goldie]

The noble Lord would not expect me to be able to deliver specific information on figures. That would be unreasonable, but he knows that the Government fought an election on a manifesto commitment to replace the cohesion policy. I am outlining the structures on which the Government propose to base replacing that cohesion policy. I am trying to outline how that strategy has been constructed to have regard to the whole of the United Kingdom and to deal with the issues about which the noble Lord has expressed concern in his amendment.

--- Later in debate ---

[Baroness Goldie]

I thank the noble Lord; I think he raised an important point. The Government, as my noble and learned friend Lord Keen said, are very keen to listen. One benefit of debates like this is that points arise which merit careful consideration, so I thank him for raising that point.

The amendment strayed on to a more technical area. It would create provision for a Minister of the Crown to make provisions for programmes to implement cohesion policy domestically. I argue, however, that these powers are unnecessary. For example, under Section 126 of the Housing Grants, Construction and Regeneration Act 1996, the Government already possess power to provide financial assistance for the areas currently supported by EU cohesion policy and European structural funds. It allows the Secretary of State to give financial assistance in activities that contribute to the regeneration or development of an area, which include contributing to or encouraging economic development, providing employment for local people and providing or improving training services for local people. These activities cover much of the support provided under current European structural funds.

I have tried to set out why I think the noble Lord’s amendment is not required. The Government already have an industrial strategy which covers many of the areas of the amendment. There are also existing powers in place that make the amendment unnecessary. I have endeavoured to outline our plans for new funding to replace cohesion policy programmes—I appreciate that it has not perhaps been with the detail that the noble Lord might be seeking, but I hope I can reassure him that there is a plan to provide successor mechanisms to the European funding sources. I hope I have tackled his concerns and I urge him to withdraw his amendment.

[Lord Foulkes of Cumnock]

My Lords, this debate has ranged rather more widely than I had expected, and the noble Baroness has given us a very comprehensive answer, for which I am grateful. I was particularly intrigued by the reference by the noble Lord, Lord Wallace of Saltaire, to George Thomson, who I remember very well. I see that the noble Lord, Lord Steel, is here; he will remember George Thomson, who represented Dundee before he became a Commissioner and was responsible for this major development within the European Community that we are talking about today.

He once told me that he was very excited at being selected as the candidate for the Member of Parliament for Dundee. He was employed by DC Thomson at the time and went to tell his employer that he had been selected as the prospective parliamentary candidate. He thought that his employer would be delighted. Instead, his employer said, “You realise if you’d stayed with us you could have gone on to be the editor of the Beano”. So instead of being editor of the Beano, he went on, thankfully, to do a very good job in the European Community.

[Lord Newby (LD)]

I am sorry to interrupt the noble Lord but as a representative of the sons-in-law of Lord Thomson of Monifieth, I should tell him that he was the editor of the Beano before he went on to a more serious job.

[Lord Foulkes of Cumnock]

How can I contradict a son-in-law? Without my noble friend Lord Liddle being present to advise me, I am not able to do so. I thought that my original story was quite funny; I wish it had been true. To return to the serious matter, because this is a serious matter, George Thomson left us a great legacy.

The noble Baroness has covered a lot of the issues. She has gone two-thirds of the way towards answering the points that I raised. She has given a very detailed and careful outline of the Government’s strategy, for which we are grateful, and has indicated that projects in the pipeline will be supported to the end of the current funding period, but it is beyond that that we are concerned about. We are concerned about continuity. That is something we need to pursue.

The noble Baroness also helped us a little on the UK shared prosperity fund and said that the Government would engage with that issue later this year. That could take us almost to the exit date, which will be a few months beyond that, so we need to be told about that soon. I hope that through a Written Answer or further discussion we might get a clearer indication of the timescale, otherwise, there will be a vacuum and hiatus there.

I will talk with my noble friend Lady Hayter outwith the Committee but we need to look at the Minister’s very comprehensive reply in detail and consider whether it would be appropriate to table an amendment along these lines on Report. I will withdraw my amendment but this is yet another example of the many dozens, if not hundreds, that we are discussing in this Chamber and outwith it where it would be an awful lot better if we just stayed in the European Union. Why are we having to deal with all these difficulties and problems all around the country, and in this case in the poorest areas of the country, when it could be completely unnecessary? In the next year and a bit, we may have the opportunity to give the British people a chance to re-examine whether we should continue to be members of the European Union. That point is not irrelevant to this amendment, but I beg leave to withdraw it.

Amendment 23 withdrawn.