Commission awards UK pounds 1.4bn development cash

THE European Commission yesterday disappointed ministers by awarding regional development funds to the UK worth some pounds 1.4bn over the next three years - far less than the Government had wanted.

The commission, under the Commissioner for Regional Development, Bruce Millan, formerly a Labour Secretary of State for Scotland, seems to have headed off an attempt by the Government to spread the money from the north to the south and west of England - where the Tory vote is under pressure. There were hints in Whitehall that Mr Millan had favoured Labour areas. But he denied his decision had been politically motivated.

Tim Sainsbury, the industry minister, yesterday said the Commission subscribed to the 'old-fashioned' view that areas of deprivation were all in the North.

The funding, for areas in industrial decline, is awarded on top of money for the most undeveloped regions (designated as Merseyside, Northern Ireland and the Highlands and Islands) and for the redevelopment of former agricultural areas. The UK proportionately receives more of these funds than any other European Union member.

Countries make their pitches on the size of the domestic population living in areas where unemployment is significantly above the Union average of 12.8 per cent.

Mr Sainsbury said by securing 76 per cent of what it had bid for, the UK had fared better than almost any other state. But he complained the Government had sought 'much greater coverage of urban areas' including more of London, the East Thames corridor, and parts of Bristol, Derby and Leicester. The Government had asked the Commission to consider the plight of 23 million people. Mr Millan determined that by EU criteria, only some 17 million merited special consideration. As a result areas such as the Isle of Wight, Derby, Leicestershire, Bristol, part of North Yorkshire, Lincolnshire and Clywd in Wales failed to qualify.

For the first time, the Lee Valley (parts of the London boroughs of Enfield, Hackney, Haringey, Newham, Tower Hamlets and Waltham Forest as well as the island of Thanet in Kent and Plymouth in the South-west) were included on the Commission. Scotland too, did well, with parts of central Scotland, Fife and Strathclyde all qualifying. The funds are designed to help regional restructuring. Brussels is therefore reluctant to award funds to unemployment black spots. In cities such as Bristol, for example, though unemployment is particularly high in some parts of the city the wealth of surrounding areas compensates.

Swan Hunter gets pounds 7m, page 27