EU Structural Funds: Least Developed Regions

Sarah Newton Excerpts

Wednesday 26th June 2019 Westminster Hall

[Derek Thomas (St Ives) (Con)]

I am glad to have the opportunity to speak in this interesting and important debate. The six Cornish MPs went to the Treasury some time ago to set out why it was so important to address the issue properly. It is absolutely right that when we get the consultation, we use the expertise available to make sure it is done correctly.

I want to be clear that in Cornwall and on Scilly we are looking not for a handout, but for a hand up. The aim of European funding is to reduce inequalities between communities and reduce disparities in regional levels of development, with particular regard to those that have increased deprivation, rural and island areas, areas affected by industrial transition and regions that suffer from severe and permanent natural or demographic handicaps. Cornwall and the Isles of Scilly fit perfectly with those aims. There is no reason not to see ourselves as benefiting from funding.

The seven least developed areas have set some priorities. The most sensible one, I think, is for an ambitious regional policy for England and Wales that recognises the need for a specific mechanism for the regions that are furthest behind. We want a protected allocation of funds to such regions that will allow a genuine rebalancing of the UK economy. I have heard nothing from the Treasury or the Minister to suggest that is not their intention.

[Sarah Newton (Truro and Falmouth) (Con)]

My hon. Friend is making a powerful point. The modern industrial strategy clearly commits to making sure that regions can play their full part, so no region is left behind. The allocated funding would not only improve the lives of people in Cornwall and the Isles of Scilly, but enable the region to contribute to national well-being.

[Derek Thomas]

My hon. Friend is absolutely right. As I say, we have heard nothing yet to suggest that the economy in Cornwall and on Scilly could not thrive. It is really important to MPs in Cornwall that we are part of the solution, not the problem. In July last year I set up a group that works with local business, Cornwall Council and people who already work with the most deprived and left behind in our communities. The group looks at the skills that a shared prosperity fund should deliver to enable people to get the well-paid, skilled jobs they want. The Chief Secretary to the Treasury, my right hon. Friend the Member for South West Norfolk (Elizabeth Truss), attended the first meeting and set out a Government commitment and invitation for us to engage in the process and help them to understand what was needed.

Outside this building today there are thousands of people demanding that we take urgent action on climate change, clean up our air and make our society healthier and fairer. Through the shared prosperity fund we can achieve exactly that, particularly in places such as Cornwall. The Committee on Climate Change recommendations set out the need for massive upskilling to give people the skills needed for research and innovation, so that we can decarbonise our environment and our economy and ensure that people are healthier, live in healthier homes and have better opportunities. Now is the right time to have this debate and create a vibrant, low-carbon economy with better health, better skills and better pay.

In our jobs and growth group we have looked at skills. Even with European funding, the real problem in Cornwall is that many communities and young people never feel they have the opportunity or the learning that they need.

--- Later in debate ---

[Sarah Newton (Truro and Falmouth) (Con)]

I congratulate the hon. Member for Sheffield Central (Paul Blomfield) on securing this debate, which builds on the excellent debate about the shared prosperity fund led by the hon. Member for Barnsley Central (Dan Jarvis).

All of us here would like to be evidence-based policy makers. There is inconclusive data about how successful the European funding programmes have been; the London School of Economics study and the excellent House of Commons studies all show that. It is important that we learn the lessons about how that money has been invested. From my own constituency, and Cornwall more widely, I can see that this money has been absolutely essential, but we need to draw the right conclusions from previous programmes so that the Government’s commitment to regional growth funding is done right and builds on the success we have seen.

[Stephen Kinnock]

How does the hon. Lady propose that the lessons be learned and things be improved if there is no consultation exercise?

[Sarah Newton]

I will come to that in a moment. At the last debate, the Minister invited us to put forward our suggestions. We do not need to wait for a formal consultation; my hon. Friend the Member for St Ives (Derek Thomas) has demonstrated that. There have been consultation meetings with local enterprise partnerships and with the business community all over the country. It is up to us; we are leaders in our own communities. We should be making the most of these opportunities—today is one opportunity—so I will make some suggestions to the Minister, as he has invited suggestions about how we should go about allocating the funding.

First, we want to have designated funding for our regions. The EU funding that has been used so successfully is seldom the only source of funding. As other Members mentioned, it is often an opportunity to leverage additional funding. I want to get across the message that the huge investment in rail and buses in my constituency, where we have two universities, was enabled by European funding, but it was brought about by leveraging and working in partnership.

The way that the Treasury allocates funding and looks at gross added value often disadvantages areas with populations that are dispersed over large geographical areas. In the last five years, investment in cities and city regions has been successful, but those of us without cities—or even towns that meet the Government’s criteria of a population of 135,000—are disadvantaged. That geographical designation is really important for us to meet the opportunities of our local economy to grow, through the regional industrial strategies that feed into the national industrial strategies.

[Jim Shannon (Strangford) (DUP)]

Because of the processes that the Government and the EU structural fund have followed, Northern Ireland has been able to access the fund. The simple reason is that we have lower wages and higher energy costs, and therefore a higher cost of living. It has proven to be the case that Northern Ireland needs the structural fund, and it has been a success. If the Government were able to ensure that something happens in the future along the same lines, it would be positive.

[Sarah Newton]

I agree that it is important that the Government honour their commitment to provide regions with the same sort of money as they would have got had we remained in the European Union. That was a clear commitment made by our party at the last general election. We will be working hard to make sure that whoever leads our party honours that commitment.

We should have opportunities to make decisions about how that money is spent, and I want those decisions to be made locally. The great city regions—I know the hon. Member for Barnsley Central is doing a good job as the Mayor of the Sheffield city region—must work in partnership. When I was a Minister at the Department for Work and Pensions, I saw the opportunity for central Government Departments to work in partnership with the metro mayors to innovate in their regions; that is something Government should be proud of and advancing.

It is not only regions or metropolitan areas with mayors that can work with Government in that way. Single-tier authorities, such as Cornwall Council and the Council of the Isles of Scilly, in partnership with our local enterprise partnership, can work on greater devolution and have far more say about how the money should be spent in our region.

In my remaining time, I want to touch on the European social fund. Debates are usually about roads, bricks and mortar rather than about the ESF’s work helping people who have been out of work, and far from the labour market, into work. There has been a huge amount of innovation under this Government, particularly led by the Department for Work and Pensions, working with metro mayors. The hon. Member for Barnsley Central has been pivotal to that work, and there has been a great deal of learning.

I would like the big, national work programmes contracted by the DWP to stop at the end of this round, and I would like that money to be spent by devolving it into partnerships in regions. We have an excellent local enterprise partnership in Cornwall, with a good skills committee, which is addressing the issues that my hon. Friend the Member for St Ives articulated so well: the need to develop skills and get people into work for the economy of the future. The best approach would be to enable regions to commission employment services that meet the needs of their communities.

Obviously, we have to be mindful of the market. We have to have a thriving market in people who provide those services, but that could be done at the same time as enabling greater local partnership. Then we would see the real progress in our economy that we want to see, in Cornwall and in every part of our community, and closing the unacceptable gaps in people’s life chances.