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Alan Johnson MPThe Future of European Cohesion Policy |
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I am going to try to fulfil my brief this morning by talking about the usefulness of the Structural Funds to the UK, and in particular, the South West. Unfortunately, I shall not be able to stay very long after my talk - constituency commitments mean I shall have to leave to travel to Hull. But I will highlight three broad issues that I hope will be useful to you for your discussion today. The first of these is how the Structural Funds fit into the UK's regional policy. Following the 2002 spending review, Government agreed a new focus for regional policy: to improve the economic performance of all regions and over the long term, to reduce the persistent gaps in growth rates between them. So the objectives of UK regional and European cohesion policy are now very much aligned. We want to reduce disparities while at the same time boosting the UK's economy overall. Make no mistake, the task in front of us is a big one. Take productivity, for example, which is the key driver of economic prosperity. Productivity levels remain highest in London, with other parts of the country outside the East and South East between 15 and 25% lower. To further complicate the picture, there are also large differences in productivity at a sub-regional level. Within the South East, the statistics suggest that Berkshire has productivity around 15% above the national average but productivity in Brighton & Hove may be 20% below. For unemployment too, there is tremendous variation around the UK. Although the South East and East both have unemployment rates below 4%, the rate in London is above 7%. And in the North East, unemployment rates vary from 18% in Middlesbrough to around 3% in Northumberland. Here in the South West, average unemployment is well under 4% but but ranges asthough there are a few areas like Falmouth and Cinderford in the Forest of Dean where it is higher. And although the South West's GDP is 91% of the UK average, based on 1999 data, the latest available, the level in Cornwall is only 65%. Action clearly needs to be taken to narrow the gaps that I have illustrated, but our policies must be carefully tailored to meet the actual conditions on the ground, rather than some simplified picture of them. There isn't time this morning for me to give a full review of what the Government is doing about this but at the heart of our regional policy are the RDAs. We have given them considerable flexibility of action. And now through the single pot they also have the control over funding to deliver against key regional priorities. Priorities that, they and their partners, have identified in their Regional Economic Strategies. We look to the RDAs to provide strategic leadership and to use their own funds as well as their influence in their regions to make things happen. So my first issue has been that the Government takes regional policy (and therefore cohesion policy) very seriously. The second issue I'd like to discuss is the role of the Structural Funds in helping to deliver the improvements I've been talking about. The UK is due to receive about £10 billion over the period 2000-2006, in the region of £600 million here in the South West - large amount of money by any standards. I will come back in a moment to the added value of the Structural Funds as it lies at the centre of the debate about the future. But if we are talking about aligning regional and cohesion policy, it must surely make sense also to align the Structural Funds as closely as possible with other sources of funding in the region. And for all these sources to support the regions' priorities. In the South West, the priorities set out in the Regional Economic Strategy are: improving business competitiveness, addressing social and economic imbalance and improving regional coherence. To give you a few examples of how the Structural Funds are supporting these:
I think these give a flavour of how the support from the EU Structural Funds is being put to good use. But has the source of funding delivered any unique benefits, ones that could not have been achieved through national sources of funding? Have projects gone ahead that could not have been funded through national sources? Or have they been bigger and better because of the Structural Funds? Are the partnership arrangements, which are at the heart of the way the Structural Funds work, unique or could they be replicated? We are collaborating with other Departments and with the Devolved Administrations on research to try to get a handle on these and other questions about the added value of the Structural Funds and would welcome your views. For my third and final issue, I'd like to turn to the debate about the future of the Structural Funds. You'll have gathered from what I've said so far that we see this debate as firmly in the context of Government's objective to improve regional and national economic performance. By helping to deliver this, we will also help to reduce disparities across the EU. Of course, the debate is very different to that which happened in the run-up to the Berlin European Council in 1999. Then we were looking to agree priorities and funding for an EU of 15 Member States. What we need to work out now is, what is the best way forward in an EU of, probably, 25 Member States from 2004. Most of these new members are much poorer and have much greater needs than we do. The Structural Funds have always been focused on the poorest parts of the EU and in 1999, I think everyone realised that it was probably the last time that richer Member States would be able to justify the levels of receipts that they gained then. Indeed, some Member States are now signalling that with enlargement they think the time has come to focus EU support more explicitly on the new Member States. The Dutch, for instance, have proposed that countries with a GDP above the average should instead pursue their own regional policies with their own finances. The alternative view is that EU support should be maintained in all Member States, rich and poor. So there is quite a polarised discussion at the moment. I hope we will hear from Commissioner Barnier about where the Commission's thinking is now. The Commission set out the terms of the debate in its 2nd Cohesion report last year and since then, the UK, other Member States, regional representatives and the Candidate Countries have been meeting in a variety of fora to share their perspectives. I am sure that the Commissioner will describe the process that has been going on and the timetable leading up to the publication of the Commission's proposals. The UK Government takes this debate very seriously and we will shortly be launching a consultation to inform our position. We will be seeking views on what has been learnt from the current and past programmes - about what works and what doesn't and where there has been most added value. We certainly intend to play a full part in the debate at the European level and overall, our aim must be to achieve the goals of regional and cohesion policy that I started with. In other words, we must find the most effective way to raise the economic performance of all regions while reducing disparities between them. I hope what I have said provides a reasonable introduction to your talk, Commissioner Barnier, and I look forward to hearing what you have to say. I should like to thank you, Sir Michael Lickiss, for inviting me to speak this morning about the way in which the Government's thinking is developing. And I look forward to receiving a report of the today's discussions. |
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Other speeches by Alan Johnson MP
(the following are available from the archive) |
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