Yorkshire missing out as EU coffers swollen

Yorkshire gives three times more than it gets back from the European Union in regeneration funds despite parts of the region suffering severe deprivation, says think tank Open Europe.

Much of the money is simply recycled between rich countries, according to the report, which claims that restricting the fund to helping poorer countries would give the UK an extra £4.2bn to plough back into helping our economy.

The report has been seized on by MPs who are pressing for powers to be pulled back from Brussels, heaping pressure on Ministers for reform of the funding system.

Report author Pawel Swidlicki said: “Limiting EU regional spending to poorer countries would be a win-win situation for both Britain and Europe.

“It would channel more cash to the newest member states and allow the UK to spend exactly the same amount on its regions as it does now, with the option of adding the several billion that it would save from streamlining the structural funds.”

The European Union’s so-called structural and cohesion funds – designed to close the gap between rich and poor areas – have helped to fund projects in Yorkshire like rolling out superfast broadband, building vital infrastructure schemes and offering support to individual businesses.

All EU members contribute and all get something back. But because Britain will contribute around £30bn but get back just under £9bn between 2007 and 2013, some of our money funds grants for other rich nations. Yorkshire and the Humber is contributing £2.3bn but receiving only £784m.

The report says contributions should be cut and the pot of cash should only fund poorer nations. With savings on administration savings, the UK would end up with £4.2bn more than it receives at the moment and Open Europe suggests the money could be chanelled through an expanded Regional Growth Fund to create private sector jobs in areas such as Yorkshire which are facing heavy public sector job losses. France would gain most from reform, while Greece, Spain, Italy, Cyprus and Slovenia would lose.

The report comes at a time when there is concern that problems finding match-funding for some of the funds will mean £237m earmarked for this region between 2007 and 2013 may be lost if it is not spent on time.

Skipton and Ripon Tory MP Julian Smith said: “It is important that Yorkshire gets a good return for the amount of taxpayers money that currently goes to Europe and these figures suggest this is not currently the case.”

But Timothy Kirkhope, Tory MEP for Yorkshire and the Humber, said in the past civil servants and councils have worked up “completely inadequate” programmes which failed to properly exploit available funds.

“The other problem with the Open Europe proposal is that it assumes that the Treasury – under either the coalition or any future Government – would allocate regional funding in a fair and proper way to the areas most in need,” he added. “With current and projected economic circumstances, I very much doubt it.”

John Bufton, UKIP’s regional spokesman, said: “There is no way that the UK will ever get the support of enough other countries to allow this to happen. Too many of them have their mouths attached to the teat of Brussels subsidy to ever support the proposal.”

A Department for Business spokesman said: “The Government has stated previously that structural funds should be focused on the poorer member states and that in the long term, they should be phased out in the richer member states altogether.”