It was agreed in bilateral talks between Jacques Delors, the EC president, and British ministers on 20 July that the United Kingdom's Objective One aid would be reduced from an expected pounds 2.25bn to pounds 2bn.
But when the allocation of that money between Northern Ireland, Merseyside and the Highlands and Islands was announced by Tim Sainsbury, Minister for Industry, in a Commons written reply on Tuesday night, Merseyside was the loser.
While many of those involved in negotiations had expected Northern Ireland and Merseyside to receive roughly equal amounts, Ulster got pounds 1,040m, Merseyside pounds 690m, and the Highlands and Islands pounds 260m.
Robin Cook, the Labour spokesman on Trade and Industry, said last night: 'It is very difficult to avoid the conclusion that this had nothing to do with the Northern Ireland economy and everything to do with the votes of the Ulster Unionists, whose votes were the most expensive since the Act of Union.'
Jane Kennedy, Labour MP for Liverpool Broadgreen, said: 'We are quite convinced that the money due to Merseyside has been diverted to buy the votes of the Ulster Unionists in the government lobbies last week.'
The Department of Trade and Industry insisted that the money had been distributed according to criteria that included unemployment, local income per head and population, although the spokeswoman conceded that there was no precise formula. Final decisions had been taken at Cabinet level, but she was unable to say when - although the timing of Mr Sainsbury's answer suggested final allocations had been made after last week's confidence vote.
Meanwhile, a spokeswoman for Bruce Millan, the EC's regional aid commissioner, insisted that allocations between the 12 member states had not been agreed on 20 July, and would be finalised at a meeting on 8 September. 'As far as the commission is concerned,' she said, 'nothing has been decided. This is premature.'
Unionists' deal, page 9
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