EU: Structural and Cohesion Funds

Lord Vinson Excerpts

Wednesday 8th February 2012 Lords Chamber

Asked by

[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.