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EU Regional Policy (EUC Report)

My Lords, in this important debate, it is very difficult to try and encompass all aspects of EU regional policy. The noble Baroness, Lady Cohen, gave a very fine speech covering the main points, and it is appropriate to compliment her on the running of European Sub-Committee A, of which she is the chairman and I am a lowly committee member. I also compliment the noble Lord, Lord Woolmer, who is also on the committee, and my noble friend Lord Trimble. I was also enthused by what the noble Lord, Lord Teverson, said from an earlier date. I look forward to the maiden speech by the noble Lord, Lord Davies, and hope that he will answer the wide-ranging questions asked by earlier speakers. He will be relieved that I will not ask him any questions. The European economic recovery plan takes account of the recent financial market turmoil and tries to take in the structural and cohesion funds with a view to supporting the real economy. They are anchored in the stability and growth pact and the Lisbon strategy for growth and jobs. Sub-Committee A scrutinised that document at its meeting on 13 January 2009. In its communication entitled Cohesion Policy Investing in the Real Economy, the Commission proposed a set of legislative and non-legislative measures to strengthen the cohesion policy's contribution to the economy. This is in the light of the current situation with the ultimate objective of accelerating payments to member states and facilitating access to the structural funds and other cohesion policy instruments. The EU cohesion policy is the largest source of investment in the real economy and provides a stable and targeted source of financing that can be used to stimulate recovery in the present climate. One thing about speaking fifth in a debate is that previous speakers have already mentioned that the cohesion policy represents about a third of the EU budget. It amounts to—I do not think I heard this figure correctly and will be corrected if I am wrong—€347 billion for the period 2007 to 2013. More than 65 per cent—or €230 billion, if my arithmetic is correct—of those funds are earmarked for investment in the four priority areas in the EU's renewed Lisbon strategy. Number one is people; number two is business; number three is infrastructure and energy; and number four is research and innovation. Under those headings, the communication structures specific recommendations on how to make a preferred use of cohesion policy instruments under the current economic circumstances. Some of the ways in which those funds can be disbursed and allocated have been considered, and the acceleration of payments of fund allocations have already been earmarked for specific regions. That will not lead to any overall increase in the budget, but it is intended to lead to an injection of cash into the economy. It also provides for broader use of flat rates and lump-sum costs to enable most authorities to implement projects at a faster rate. It will also extend certain funds to allow greater eligibility for rich member states to use them to fund energy efficiency and housing. The richer countries include France and Germany, and the poorer countries include Romania, Bulgaria and Greece. The United Kingdom fits in somewhere between, but opinions vary as to our position in the league table. The overwhelming objective is to accelerate payments to member states and to facilitate action through the structural funds and other cohesion policy instruments. Amendments to the European regional development funds to support investments in energy efficiency and renewable energy in housing in favour of low-income households in all member states is within the framework of all state aid schemes. The noble Lord, Lord Teverson, will be pleased to hear another acronym. He mentioned several, but I have a couple more. It is a common complaint about the European Union that its regulatory provisions are overly complicated. Part of the plans are to simplify the financial engineering instruments, such as—wait for it—the Joint European Support for Sustainable Investment in City Areas, known by the lovely women's name of JESSICA. From 2009, an increase of 25 per cent is proposed for the technical assistance capacity of—here is another—the Joint Assistance in Supporting Projects in European Regions, JASPERs, which sounds more like the name of a nightclub. That initiative will help new member states to develop infrastructure projects. There is a case to be made that only poor countries should benefit, but there is always an argument that money should be distributed fairly and reasonably, helping as many countries as possible. The British Government are anxious to retain the focus on the Lisbon strategy for jobs and growth, although one must say that this objective, worthy though it is, will not produce much in the current climate while the future is so uncertain. I hope that those few comments, complicated as they may seem, show a desire by the EU to improve the economic plight of weak countries, now and in future. Only time will tell whether those objectives will be achieved. Thank you for listening to me and I just hope that you do not meet JESSICA very soon and do not take her to JASPERs nightclub.