§ Mr. Archy Kirkwood (Roxburgh and Berwickshire)
I am grateful for the opportunity to raise the subject of the effect on the Borders region of the European Community's decision to withdraw priority status for social fund assistance.
I apologise to the Minister for having interposed myself between him and his holiday. However, I hope that he will agree that this is a subject worth considering because it has been causing some concern to my local authority. I hope that we shall have a useful half hour's debate.
New guidelines were issued by the European Community on 30 April this year on the management of the European social fund for the years 1986–88. These new guidelines exclude the Borders region from priority for most, though not all, forms of European social fund assistance. Before the change in the guidelines the Borders region was eligible for most types of European social fund assistance, because it came within the "priority" region which at that time encompassed the whole of Scotland.
The EC has now decided to change the geographical coverage of European fund assistance to cover smaller units based on local authority regions and counties which are undertaking industrial restructuring or have a particularly high unemployment rate or, alternatively, many long-term unemployed. Since the guidelines change, only two local authority regions in Scotland are without European social fund assistance priority—the Grampians and my own region of the Borders.
It has been made clear to the Government by me and by my right hon Friend the Member for Tweeddale, Ettrick and Lauderdale (Mr. Steel) as well as by people in the Borders region that employment by itself is not a good measure of economic well-being in a rural area such as the Borders, to the exclusion of everything else. The total number of unemployed in the Borders region in June 1985 was 3,460, giving an average rate of 9.1 per cent. I fully accept that in other parts of the country unemployment is much higher. Nevertheless, it is worth noting that there has been a slight but significant increase in the level of unemployment since June 1984, when it was 8.6 per cent. That is the direction in which the trend is going and it is causing concern in the Borders.
Within the regional average there are wide local variations in unemployment rates. For example, in the Berwickshire travel-to-work area within the Borders region the June 1985 unemployment rate was 13.3 per cent., which is only slightly lower than the current Scottish average and slightly above the current United Kingdom average. The situation in Berwickshire will deteriorate still further after the civil work stage at the nearby power station at Torness is completed. It seems unfair for the Borders, and Berwickshire in particular, to have European social fund priority withdrawn when other parts of Scotland with lower unemployment rates are being allowed to retain priority status.
The main thrust of the European social fund objective is to provide for the needs of two classes of people, those unemployed under the age of 25 and long-term unemployed. The April 1985 figures for the Borders show that one third of those out of work locally are under 25 1473 years of age. In addition, the number of local long-term unemployed has quadrupled since the late 1970s. In the Borders, 29 per cent. of the unemployed have been out of work for more than a year. In the bigger industrial areas, such as Hawick, 34 per cent. of those out of work have been unemployed for more than a year.
There are other factors that the Government should recognise when they take policy decisions, whether exclusively or in concert with the European Community, about the status afforded to different regions under any development or regional assistance scheme.
The continuous loss of population from areas such as the Borders is a problem. If those in the economically active age groups find difficulty in getting work, they move elsewhere. The Minister may take the view—and it is a view that others Ministers have taken—that there is nothing wrong with that. People may well get on their bikes, but one must consider the enormous problems created by imbalanced population distribution and the knock-on effects in other parts of the community when working age families start to leave the area in significant numbers. One very quickly realises the high price that has to be paid when active families quit the area.
The lack of employment opportunity is another factor which must be taken into account. The regional council in the Borders is doing its utmost to encourage and promote new, diversified industry to create new jobs from within the region and to encourage inward investment. I am pleased to say that it has been extremely successful, but changes, such as the new directive issued in April, mean that the council will be operating in future with one hand tied behind its back. I suggest to the Minister that the high incidence of low pay is another important factor in the Borders economy. Many families there need to have both parents working if they are to have a tolerable standard of living. The existence of two wage earners in a family in other parts of the country often signifies a desire to indulge in luxurious living, like the soft-living people who live in the south-east of England, but in such places as the Borders it is necessary to have both parents working to enable families to keep their heads above water.
There are also difficulties in getting guidance and advice to those out of work in a geographically disparate region such as the Borders. There is no access to commercial job agencies, as there often is in urban areas.
I have been pressing the Government, principally the Minister's colleagues in the Scottish Office, ever since I was elected to the House to recognise that areas such as the Borders have problems. They may not be the same problems as those in the more urban areas and they may be less easily quantified and recognised, but in their own way they are as real and as urgent. In my opinion, they are frequently ignored by Governments.
I strongly urge the Minister to hold urgent talks with his opposite numbers in the Scottish Office. I understand that it is not entirely within his responsibility, but I ask him to discuss these matters with his colleagues with a view to bringing forward early proposals to set up a rural development plan that could be used in conjunction with the Scottish Development Agency's powers and those available already to regional council planners to give a real boost and stimulus to appropriate types of commerce and industry in the landward areas of the United Kingdom.
1474 I accept that the grand, capital-intensive projects that have been considered in regional development schemes in the past may not be appropriate to smaller areas, but there is every opportunity to set up a sensitive and sensible amount of programming and planning within the remit of a rural development plan. It would not cost an enormous sum of money, but it would make a significant difference to the economic activity in such places as the Borders. In my view, no other single initiative could do more to generate real and beneficial economic activity in rural areas.
I remind the Minister, because he is responsible for the Department of Employment, that we in Scotland do not have the benefit of an organisation such as COSIRA, which has set up a rural development area south of the border in Northumberland. From north of the border we look across with envious eyes to what is happening there. Real and positive developments are taking place. The position is made worse from our point of view because Border Television straddles the border area. I get nightly reports on activities in north Northumberland, and my constituents telephone me asking why I am not getting this for them. It does nothing but engender and foster nationalism of the very worst sort, and the Government ignore that at their peril. The work that COSIRA has been doing is commendable. There is a great deal to be said for it, and it should be mirrored north of the border. If we had it, it would go a long way to mitigate the effect of the withdrawal of European social fund assistance.
The Borders lost its assisted area status in August 1982. It meant, among other things, that the Borders was no longer eligible for assistance from the European regional development fund. The loss of priority for European social fund assistance means that the region no longer has effective access to the most important forms of EEC funds available to local authorities. I am aware that restricted eligibility to European social fund assistance still obtains, but my local authority reports to me that it is difficult to use the categories that remain available because they are so very restricted.
I am also aware that to date no real use has been made of the European social fund's schemes. The Borders region has not been able to benefit from the funds but it had begun to mount a series of training initiatives for about 300 unemployed persons through the Borders college of further education. They would have been looking for financial assistance from the European social fund. It is a great tragedy that these efforts, which were well advanced, may be prejudiced if not entirely thwarted by the decision to withdraw priority status from the Borders region.
The Minister therefore owes us answers to a few salient questions. First, what influence, if any, do the Government have over the Commission in Brussels when it takes decisions of this kind? I am as ardent a European as the Parliamentary Under-Secretary of State, but nothing is more likely to sour pro-European feelings than decisions of this kind being visited upon us. I quote from The Scotsman of 12 June 1985 and pray in aid the Conservative Member of Parliament for the European seat of South of Scotland who said:According to the Commission's own table of areas with regional problems, the Borders come within the top one fifth, along with regions like Tayside, Central, Fife and Lothians. There must therefore be evidence for including the Borders on the list of regions qualifying for ESF's assistance.1475 Since the regional authority, the local Members of Parliament and the European Member of Parliament agree that the fund needs to be retained, what influence, if any, do the Government have over the Commission?
Secondly, what representations were made by the Minister on this issue? I accept that negotiations with the authorities in Brussels do not revolve around the needs of Hawick and that policy decisions have to be taken on a much wider basis than that. However, the Government should have considered the implications for regions such as my own and for Grampian when the strategic decision was taken, which predated the April announcement, to withdraw priority status from these two regions.
Finally, will the Minister give an assurance that, if he cannot deliver a rural development plan and if he is unable to have discussions with his colleagues in the Scottish Office about a rural development set-up in Scotland, he will seek to have the Borders region reinstated as an area that qualifies for European social fund grants? Because of the problems faced by 300 youngsters who had expected to be provided with extra assistance for the employment projects of the Borders college of further education, can the Minister assure us that the Government will consider the problems caused by the withdrawal of European social fund assistance? Nevertheless, I hope that he will be able to say something positive about the establishment of a rural fund for the Borders area.
§ The Parliamentary Under-Secretary of State for Employment (Mr. Peter Bottomley)
The hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) has not interrupted my holiday. It was not supposed to start until next week. In fact it is being interrupted by other matters. One of the encouraging aspects of being an Employment Minister is that not only is one able to listen and pay a great deal of attention to representations but one is also able to learn about success stories in the various regions of the United Kingdom. Too often we refer only to the failures. The hon. Gentleman has done well to point to many of the successes in his constituency and in the Borders region. I hope the message will go out that, even if he does not get what he is asking for from the European social fund, although Ministers may occasionally have to say no, we are just as keen as is he to ensure that the 300 young people to whom he referred are provided with the best possible opportunities. All those with the power to influence events —those on the regional council, Members of Parliament and those in statutory or voluntary organisations, or in commerce and the public sector— should try in every way to encourage people to do more for themselves and for others. The idea of such a self-improvement society unites most hon. Members. I am glad to see my hon. Friend the Member for Tayside, North (Mr. Walker) here. There is hardly a Scottish debate in the House without his presence, and often his interventions.
In simple terms, special schemes to meet needs are bound to create problems. Last night, I replied to a debate about the definition of a travel-to-work area. It was said that if a ward could be placed in a different travel-to-work area, extra help would be available. With any scheme people on one side of a boundary say, "We want to be on the other side because our problems are worse than others realise." In the Borders, incomes are lower than they are in some areas. The hon. Gentleman said that that should be taken into account when looking for priority areas under 1476 the European social fund. I would not claim to be an expert on whether it is taken sufficiently into account, but if it was given a higher weighting than the unemployment figures I could not guarantee that the Borders would come top of the list for receiving more favourable consideration.
The Government make representations to the European Commission, and we have views on some areas which we believe, rightly, should be included for priority treatment. The Borders is not at the top of that list. Other areas are in a much worse position than the Borders. I hope that the hon. Gentleman's constituents will realise that, however persuasively he has made their case, I must say bluntly that the Borders does not come top of the list of areas that should be given the highest priority. I hope that they will realise that we must work out our priorities and try to do something for the worst afflicted areas first. No doubt all of us would wish to treat the entire country in the same way, but if we did that we might lose assistance. We must exercise some common sense.
The hon. Gentleman asked about our influence with the Commission. I should tell him that the Commission has the legal right and, I expect, the duty under article 6 of the Council decision on the tasks of the social fund to set the priorities for assistance from the fund for each financial year by means of guidelines. The priority areas are part of those guidelines. Member states, including the United Kingdom, are consulted about the contents of the guidelines before publication, and although the Commission will listen to representations that we make, it is not legally bound to accept them. It is responsible for making the final decision. We put in strong representations on behalf of the areas that we believe should be included, and we must then wait to see what the Commission says. If it says something that we believe to be illogical or inconsistent, we can return to the Commission and say so.
It is worth remembering that the United Kingdom does relatively well from the social fund. That is because we deserve to do well. However, we also try to ensure that we take advantage of all the opportunities available to us. The guidelines are there for a purpose — to meet special needs—and if we can organise ourselves and put in the appropriate applications, we shall do well. Those who do not do what the social fund is designed to achieve will not do as well. Occasionally, we are unhappy with changes in allocations, but perhaps any comment about that should be left for another time.
I pay tribute to the officials in the Department of Employment who deal with social fund matters. They have a high reputation with Commission officials in Brussels for the quality of their work and for their knowledge of what we and the Commission are trying to do. They also have a good reputation among applicants from the United Kingdom for their helpfulness and knowledge. That is well reflected in the number of allocations made by the fund to the United Kingdom during the past few years. I should tell the hon. Gentleman that anyone who is thinking of developing a scheme should contact the European social fund section of the Department of Employment. Even without priority status, there are opportunities to help people to put in applications that meet some of the other guidelines.
It is worth saying — and not too loudly — that I suspect that the changes in the guidelines for the European social fund will make virtually no difference to the Borders region. In future, people may think that the schemes that they have worked out would have been accepted under the 1477 old arrangements, but that is looking some way forward. In another debate, which did not come off, another region would have been mentioned which thought that the changes were frightful. That case was not precisely the same, but even under the changes it got twice as much in the subsequent year as in the previous year. Therefore, the changes are not quite as bad as they appear.
I should like to answer some other questions that the hon. Gentleman asked towards the end of his speech. First, he asked what the Government were doing about the position of the Borders in the priority list. We have made it clear to the Commission that we disagree with some parts of the new priority list. We shall continue to make representations. Frankly, that does not mean that we believe that the Borders has been unfairly treated in its position on the priority list. It is worth noting the unemployment rates in some of the new priority areas—for example, 11.3 per cent. in Derbyshire, 12.4 per cent. in Lincolnshire, 10.7 per cent. in Nottingham and 14.6 per cent. in the Isle of Wight. Although I am not going into the details of the level of income and the difficulties of a relatively small population, well dispersed, I think that most people regard it as reasonably fair that there should be some order of priorities.
The reason for having priority regions is that the social fund supports employment and training schemes in the member states, and is invariably oversubscribed. Many of us would have views on the balance of spending in the European Community, but given the size of the social fund as it is now, there is a need for priorities. To ensure that the money available goes to the areas of greatest need, regions with the highest unemployment are given priority for funding. There is a more restricted range of employment and training schemes supported in non-priority regions, as the hon. Gentleman acknowledged.
How are priority regions determined? Before the fund review undertaken by the Council of Ministers in 1983, they were defined in the United Kingdom as standard regions with the highest unemployment. The term "standard region" could have been better phrased because the whole of Scotland was regarded as a single standard region and given priority status. Those standard regions were considered too large because, as the hon. Gentleman said, pockets within them that might be seen as having lower priority qualified and some areas where unemployment was high were not in standard regions. The new system allows fund aid to be more precisely targeted, although not as much as some people would like. A balance needed to be struck between targeting aid and the administrative nightmare of splitting the Community into thousands of small areas.
The Commission proposed that the new system should be based on a statistical mechanism. In the United Kingdom, at county or regional level, it would list areas on a hierarchical index with those with the highest unemployment and lowest income placed at the top and those with the lowest unemployment and the highest income at the bottom. Then it would be necessary to find the appropriate cut-off point to determine who had high priority status. That is self-evident.
There has been a delay in introducing the new system because of normal difficulties in working out the statistical mechanism. The Commission was not able to introduce the league table system until 1986, old priority regions 1478 having been retained on a transitional basis for 1984 and 1985. Although the final statistical mechanism has not yet been agreed by the Council of Ministers, the Commission considers the system equitable enough for introduction in the next round of applications and the Government agree in principle that a more rational means of determining regional priorities is necessary.
What is the effect of the change? It is pretty small from the United Kingdom's point of view. Some areas such as the Borders have lost priority and others have gained it, some of which I have mentioned. It is worth noting that the United Kingdom has gained relative to most other member states.
We should not regard the social fund as a great football match in which we try to grab the greatest share that we can. However, it is important to maximise the gain for the United Kingdom. At the same time, it is necessary to consider the underlying purpose of the fund and to ask ourselves whether our targeting is right and whether the existence of the fund encourages us to do things that we might not otherwise have undertaken, especially in the local authority and voluntary sectors.
The hon. Gentleman spoke of the unemployment rate in the Borders and the possible effect on the region of its removal from the priority list. It is worth noting that in 1985 there was just one application, which was successful. The application was submitted by a charitable organisation that is directed to the employment rehabilitation of the mentally handicapped. The project is likely to continue to be eligible for social fund assistance despite the change in status of the region. One cannot be absolutely certain but that is the presumption.
The removal of priority status does not exclude the Borders from access to social fund grants. There is scope for applications to be given priority under guidelines that are not subject to regional limitation. Vocational training schemes for new technology skills for those aged under 25 years is one of the target groups. We are as concerned as the hon. Gentleman to ensure that there is as much help for them as possible. We cannot claim that new technology skills are the answer for every young person, but it is important that as many as possible who can benefit from the schemes are able to do so.
The fund is still able to consider training where exceptional measures are being taken to assist industrial restructuring; training-linked jobs in small firms involving certain new technologies; schemes for women, migrant workers or the disabled and innovatory projects. The Department is keen to assist any organisation in the Borders or anywhere else that is contemplating applying to the social fund for assistance. Applications to the Department should be submitted by 31 August. This may mean that some people will not get the holidays that some hon. Members may be expecting.
I turn to the main area in which the hon. Gentlman can help positively, as he is doing, which is to consider whether more can be done perhaps to encourage the establishment of a system that is similar to COSIRA in Scotland. The hon. Gentleman talked about a regional development plan and the creation of appropriate schemes but I cannot provide the answer. In this instance the Department is not the expert and it is not in control. I shall ensure that the hon. Gentleman's comments are passed to my colleagues in the Scottish Office or even the Department of Trade and Industry. I am sure that he will persist in trying to ensure that with or without public 1479 funding there will be the same kind of encouragement, the accumulation of expertise and the finding of means to build and reinforce people's confidence and competence.
The hon. Gentleman spoke of the migration of active families and made some mention of dual income households. It is worth noting that I am one part of a dual income household. The hon. Gentleman made a polite remark about my hon. Friend the Member for Surrey, South-West (Mrs. Bottomley), which she put in her local newspaper. Unfortunately, his name was misprinted—he was given a female christian name. One of the newspaper's readers wrote asking whether she did not know that the hon. Gentleman was a man. The newspaper printed the letter and it was a week later when it bothered to acknowledge that it was responsible for getting his name wrong.
Apart from examining schemes that have already been agreed, such as the social fund, and pressing for other schemes to be created that will assist in the development of industry and employment in rural areas, we must recognise what is happening outside the social fund, although these developments may be assisted by it. I hope the hon. Gentleman will encourage those who might be referred to as community signposts to learn about the details of the enterprise allowance scheme. It allows many of those who have been out of work for 13 weeks or more and who can produce £1,000 to set up in business while retaining basic benefit for a year. The scheme has been found to be a good way of getting people to fill gaps in the market and to bring together unused resources—often their skills and labour—to meet unmet needs.
It is worth giving encouragement to the youth training scheme. It is knocked sometimes, but it is recognised by those on it to be of great value. The same is true of developing the community programme.
There is a partnership of opportunity and responsibility. We in the Department are glad to play our part and I am pleased that the hon. Gentleman has given me the opportunity to explain that fact. I wish his constituents well in finding employment and creating a better future for themselves.