Britain passes up pounds 329m grants for industrial regions

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THE European Union's Regional Policy Commissioner, Bruce Millan, said yesterday that it made no sense for a government desperately short of money to pass up pounds 329.2m in grants earmarked for declining industrial regions, as Britain risks doing.

The European Parliamentary Labour Party is to hold public hearings across Britain into the administration of financial aid from what is now the European Union (EU) in an attempt to exploit the groundswell of anger in the run-up to next June's European elections.

Local authorities in the most deprived regions are growing increasingly angry over the trials they face trying to gain access to EU regional grants because of spending restrictions. Britain's allocation for 1992 and 1993 should have totalled pounds 900m, but only pounds 600m is being taken up, according to Mr Millan.

In an interview with the Independent yesterday, Mr Millan expressed his frustration at the Government's refusal to commit matching funds to local authorities and county councils for the remainder of the 1993 allocation from the European Regional Development Fund (ERDF). To ensure that the grants do not become a substitute for central government spending, the Commission insists that they are matched pound for pound.

''If you are strapped for money, it doesn't make much sense to pass up European money,' Mr Millan said, before calling on Michael Heseltine, President of the Board of Trade, to discuss the developing controversy. Mr Millan said the need to come up with matching funds did not stop the poorest states - Ireland, Greece, Spain and Portugal - from absorbing all the grants available.

Mr Millan described as 'very worrying' a recent government request for a full revision of spending plans for projects in the North of England, Wales and Scotland, where county councils are desperate for European cash to help to build business innovation centres and science parks and create jobs.

Mr Millan said the Government 'may miss the boat' if it does not meet the end of year deadline. Grants cannot be carried forward under EU regulations.

Pauline Green MEP, the leader of the parliamentary Labour party in Strasbourg, said yesterday that public pressure was 'needed to ensure that this money goes where it is needed, not to the Treasury so that the Chancellor can cut public spending in his budget this month.'

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