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I am delighted to have this opportunity
to address the Committee. The UK Presidency is now well underway, and
today provides a good opportunity to present our work programme for the
next four months. One of our key priorities is to make swift progress on
reform of the Structural and Cohesion Funds. And I would like to start
emphasising our commitment to working in close partnership with the
Parliament on this dossier.
The UK Government is passionately committed to a strong regional
policy, both for our nations and regions at home, and for the rest of the
European Union. Regional policy is at the heart of our domestic efforts to
ensure that prosperity reaches every part of the UK. And the Structural
Funds have a vital role to play at the EU level, maintaining solidarity
and to helping us achieve the Lisbon targets.
The Structural Funds have already made an important contribution to
tackling economic disparities across the EU – providing much needed
investment in infrastructure, support for training and skills, and
stimulating enterprise, research and innovation.
The Funds will continue to play a vital role in the next Financial
Perspective. Not least because the historic enlargement of 2004 has
significantly increased the disparities in economic development across the
Union, and the Funds represent one of our most important tools for
addressing these disparities, for demonstrating EU solidarity, and for
ensuring that enlargement is a success.
The reform of the Funds is therefore of great significance for the
future of the Union, as well as for its economic ambitions and its
credibility. The Commission’s package of draft Structural Funds
regulations will establish the overarching framework for delivery of EU
regional policy during the full seven years of the next budgetary cycle.
It is critical that we get them right. And it is essential that the
Council and the Parliament work in close cooperation over the coming
months to achieve a successful outcome.
The negotiations on reform of the Funds are, of course, inextricably
linked with the difficult negotiations on the next EC budget. We need to
reach a settlement on the wider budget before we can adopt the Structural
Funds Regulations or establish the precise levels of future spending. So
perhaps I could start by saying a few words on our plans for taking
forward the debate on future financing.
First of all, I must emphasise that we fully understand the concerns of
the European Parliament and many Member States – in particular the new
Members – about the delay in reaching agreement on the budget. We shared
your disappointment that it was not possible to reach agreement at the
June European Council. And we understand the importance of an early
agreement on the budget to enable a prompt start to the next cycle of
Structural Funds programmes.
As Tony Blair made clear in his speech to the Parliament in July, we
are committed to making as much progress as possible during our
Presidency. We want to reach agreement – but it has to be the right
agreement: one that equips the EU to deal effectively with the challenges
of the 21st century, one that takes account of the wider debate
on the direction of the Union, and one that meets the needs of the new
Member States to ensure that EU enlargement continues to be a success.
After the June Council, we launched a series of consultations with all
Member States to gain a clear understanding of their concerns. We’ve been
listening and working hard, but there’s still some work to do. We aim to
finish consulting by the end of September. Once we’ve heard and considered
all the points of view, we will set out our plans for how to take
discussion forward.
That consultation will be vital in helping us find a way forward, so we
won’t be making big decisions before we’ve completed it. But I can make
clear now that if we do decide to make a new proposal for the next EC
budget, we will not do so before November. Agreement would then be for the
December European Council.
For the same reasons, we have not yet developed a blueprint for any
proposal for the budget. However, as Tony Blair made clear in July, we do
believe that there is a case for a re-prioritisation of EU spending to
ensure that the budget responds effectively to the challenges of the 21st
century, and adds value over and above national expenditure.
As part of this process, we will of course need to work towards
agreement on future Structural Funds spending. However, as Alun Michael,
my colleague, noted in his speech to the Parliament of 5 July, there
continues to be a range of views, both in the Council and the Parliament,
on the size of the Structural Funds budget and its distribution between
the Member States and their regions. We all agree on the important role
that EU regional policy can play in ensuring solidarity, but there is a
range of opinions on what genuine solidarity means in practice. We will
take careful account of both the Member States’ positions and the
Parliament’s views when attempting to move towards a consensus.
While we are working hard to reach that consensus, we hope, in
parallel, to be able to reach agreement on many of the technical
provisions of future Structural Funds programmes.
As you know, the draft Structural Funds Regulations establish the broad
architecture for delivering future Structural Funds programmes. The
Regulations will apply for the full seven years of the next Financial
Perspective – so it’s vital that we get them right to ensure we have an
effective EU regional policy in the future.
We’ve been discussing the Regulations in the Council since last
September and have made good progress, reaching agreement on most of the
technical rules governing future programmes.
However, a number of important issues need to be resolved. And we have
put forward an ambitious schedule of discussions to reach a consensus on
these issues as swiftly as possible in the autumn.
We are eager to work in close partnership with the Parliament and to
take careful account of its position as we move forward. We warmly welcome
this Committee’s four excellent reports on the Regulations, and will
attempt to address the concerns you raise as we develop revised texts. We
will aim to propose compromise texts that both the Parliament and the
Member States could accept, in order to allow the Council and the
Parliament to adopt the package of Regulations very quickly once the
outcome of the future financing negotiations is known.
Building on the progress made under the Dutch and Luxembourg
Presidencies, we have already produced a revised compromise text for the
draft Structural Funds General Regulation, which we intend to discuss with
the Member States throughout September. We have done our best to take
account of the key issues raised in Mr Hatzidakis’s very useful report on
the Regulation, in order to ensure a common approach.
The Council and the Parliament share many common objectives for reform
of the Funds: we agree on the need for a robust strategic framework and a
greater focus on the Lisbon and Göteborg agendas; we agree on the
importance of the principles of partnership, equal opportunities and
sustainable development; we agree on the need for robust rules on
financial management; and we are determined to streamline the regulatory
framework, to ensure that the Funds are spent as effectively as possible.
There is, of course, a range of views on how best to deliver some of
these objectives in practice. Mr Hatzidakis’s report highlights a number
of issues that are of particular concern to the Parliament, including the
Parliament’s role in developing the strategic framework, the complexity of
the provisions on strategic reporting, the provisions governing
partnership and non-discrimination, and the precise operation of the rules
governing programming and financial control.
We believe that the revised compromise
text goes a long way towards reaching a consensus on many of these issues.
We have rejected
the proposals in previous texts to weaken the Parliament’s role in
adopting the Community Strategic Guidelines.
We have simplified
the original, burdensome proposals for annual strategic reporting, so that
the Member States will provide a concise section on the Structural Funds
in their annual reports on the Lisbon reform agenda, with a formal review
and debate by the European Parliament every three years.
We’ve maintained
robust requirements for the involvement of partners in all stages of the
programming process, and we have accepted the Parliament’s arguments for
extending the principle of equal opportunities to cover discrimination on
the basis of race, religion, or disability.
We have accepted
the Commission’s proposals to introduce a mono-fund approach, although -
in line with the Parliament’s recommendations - we have increased the
cross-financing rate from five to ten percent.
We have accepted
the Commission’s proposals to simplify aspects of the financial management
of the Funds, for example the treatment of co-financing rates. However,
again in line with the Parliament’s proposals, we have made modifications
to ensure that there are still strong incentives to mobilise private
capital and promote public-private partnerships.
And finally, we
have maintained robust rules for financial management, for example
resisting any attempts to weaken the automatic decommitment procedure, the
so called “N+2” rule, which provides an essential discipline for the
delivery of the Funds.
We believe that these amendments go a considerable way in responding to
the Parliament’s concerns. And we very much hope that, following further
discussions in September, we will be able to develop compromise text that
is satisfactory both for the Council and the Parliament, and that can form
the basis for swift adoption of the Regulation once the Financial
Perspective has been agreed.
As well as the overall framework we want to make further progress on
the subsidiary Regulations for the European Regional Development Fund, the
Cohesion Fund and the European Grouping of Territorial Co-operation. We
are developing compromise texts for all three proposed Regulations and
will be eager to incorporate the Parliament’s amendments and
recommendations wherever possible.
As for the European Regional Development Fund and the Cohesion Fund, we
have noted the Parliament’s comments on issues such as the thematic focus
and scope of spending, and the technical rules governing certain forms of
expenditure. We will be discussing over the next few months how best to
respond to your concerns.
As for the European Grouping of Territorial Co-operation, we very much
agree with the Parliament on the importance of facilitating cooperation
activities. However, the Member States have raised a number of concerns
about the technical operation of the Regulation, its compatibility with
national legal systems, and its added value in comparison with the
existing legal instruments for delivering co-operation activities. We will
attempt to overcome these difficulties, while taking account of the
concerns raised in Mr Olbrycht’s report.
So I hope, Chair, that this provides a useful overview of the
Presidency’s work programme for the Regulations. As I stated at the
outset, the UK Government is fully committed to maintaining a strong and
effective regional policy both at home and across the EU. As the
Presidency, we attach huge importance to making speedy progress towards
agreement on the Regulations in the coming months. And while the timetable
for finalising the Regulations will ultimately depend on the Member
States’ discussions on the wider EC budget, we are determined to reach
agreement on the vast majority of technical issues swiftly, so that the
Regulations can be adopted immediately following a budgetary settlement.
As I have mentioned,
both the Parliament and the Member States have warmly welcomed the
Commission’s proposals to introduce a new strategic framework for EU
regional policy and a greater focus on the Lisbon agenda. The Commission
is consulting with stakeholders on the draft Community Strategic
Guidelines, which will establish the broad objectives for EU regional
policy. And the Member States are in the early stages of drawing up their
National Strategic Reference Frameworks, setting out how they will deliver
the Community objectives in their programmes.
From the outset, the UK has been eager to support this process and we
intend to host an EU-wide conference in Newcastle on the 7th
and the 8th of November to explore further the contribution
that cohesion policy can make to meeting the Lisbon targets. We are
delighted that Commission Hubner will be able to participate in the
meeting, and we very much hope that Members of the Regional Development
Committee will also be able to attend.
Thank you for giving me the opportunity to begin these proceedings with
these remarks.
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