Why Does European Regional Policy Matter?

Regional Policy is an important expression of the solidarity of the EU.  All European citizens, irrespective of which country or region they are from, should live in a society that works for the good of the many, and not for the wealth of the few.  Although the European Union is one of the richest parts of the world, there are strong disparities between the incomes and opportunities for European citizens living in different countries and regions.  Many people are unaware that the EU generates 43% of its economic output in just 14% of its territory.  This area is known as the geographical pentagon – formed by London, Hamburg, Munich, Milan and Paris. 

The social disparities between regions are significant and have deepened over the past few years, largely as a result of enlargement.  European Regional Policy is in line with priorities set by the EU for economic growth, job stability and improving living standards for all.  Regional policy is designed to create the right conditions for regions to contribute towards achieving sustainable growth and competitiveness. 

Regional Policy is as much in the interests of the richer regions of the EU, as it is in the interest of the poorer regions.  Europe should not be a society of entrenched inequalities.   Being born poor in a deprived region does not mean that you should be poor for life.   For too long, regions within the United Kingdom, and across the whole of Europe, have been allowed to fall behind and too many citizens have been unable to fully develop their potential and talent.  Labour in Europe believes that this is fundamentally wrong.  The European Structural and Cohesion Funds make up a large part of the EU’s budget.  It is safe to say that these European funding programmes have already made a significant difference, from helping poorer member states to catch up with their richer counterparts, to financing infrastructural projects across Europe and improving business productivity and competitiveness.

Regional Policy in Practice

The EU is a unique partnership.  European Regional Policy puts this partnership into practice by strengthening the social, economic and territorial cohesion between its members. 

The Structural and Cohesion funds are the main EU financial instruments for supporting the social and economic re-structuring of areas and regions across Europe.  The Cohesion fund provides additional  funding to member states that have a gross national income per capita below 90% of the EU average.  The European Social Fund - one of the EU’s Structural Funds - was set up to improve employment opportunities in the EU and to equip the workforce with the skills needed in order to participate fully in a global competitive market.  The European Regional Development Fund deals more specifically with ‘physical’ investments; namely infrastructural changes and enterprise development.

Scotland has received European funding for over twenty five years and during that time over two billion has been spent on projects which have helped to re-generate whole communities, to strengthen the local work base and to support ground breaking research and innovation.  The overall amount spent is normally matched ‘pound for pound’ by money from local or national or other external sources.  The displaying of the EU ‘flagship’ signs next to areas and projects that have received funding is a highly visible and practical way of showing people how important European integration is to local communities. 

The importance of these funded projects cannot be over-stated.  Although the UK is one of the most prosperous countries within the EU, some of our cities continue to have pockets of deprivation amongst the worst in Europe.  For more than two decades, the regeneration of Glasgow – which for a long time has been regarded as one of the UK’s poorest cities - has been made possible partly due to financing from the EU.  Glasgow City Council has set up a dedicated European Funding Team which provides assistance to projects which may be eligible for European funding.  It is always a pleasure to see European funding addressing community priorities and needs.  European funding is just one way of preventing whole areas from sinking into the poverty gap, and being left behind as the rich get richer and the poor get poorer. 

It is vital that deprived areas and communities within the UK continue to receive much needed funding from Europe.  Although the EU faces a severe East-West poverty gap, it must not be forgotten that there are a number of areas which lag behind in economic terms within the EU 15.  Let us not forget that thanks to EU funding areas of high unemployment across the UK, such as coalfields and rural areas have been helped to recover from the decline of heavy industries and financing has been used to help these areas cope with the emergence of new industries.  Thousands upon thousands of unemployed youngsters, disabled persons and women returning to work after bringing up their families have and will continue to benefit from money injected from the EU.  If the UK were to lose a significant amount of this money, the consequences would be great and hard felt. 

Our membership of the European Union is vital.  As part of the EU, the UK has benefitted from funding opportunities that would not have been possible if we had relied on our ‘homegrown’ funds.  Labour in Europe firmly supports that communities all across the UK have prospered and thrived as a result of financing from Europe.  But there is more to be done.  It is vital that neither Scotland nor the rest of the UK misses out on EU funding.  More must be done to ensure that the people of Britain – particularly small and medium sized businesses – are aware of the funding opportunities and are able to apply and take advantage of what resources are available to them.  In addition, there are many parts of the UK which could benefit further from European funding.  It is important that political representatives across the board – from local to national – continue to voice the need for greater European funding in the UK and do not neglect the areas of real hardship across our country.