By the Select Committee appointed to consider Community proposals, whether in draft or otherwise, to obtain all necessary information about them, and to make reports on those which, in the opinion of the Committee, raise important questions of policy or principle, and on other questions to which the Committee considers that the special attention of the House should be drawn.

ORDERED TO REPORT

7046/98    Agenda 2000: Commission communication on the establishment of a new financial perspective for the period 2000-2006. (HM Treasury) (COM(98) 164);

7055/98    Agenda 2000: Proposal for a Council Regulation amending Regulation (EC) No. 1164/94 establishing a Cohesion Fund. (DTI). (COM(98) 130);

7609/98    Agenda 2000: Reform of the Structural Funds—proposals for Council Regulations for period 2000-2006. (DTI) (COM(98) 131).

  1.    Since the inception of the European Economic Community there has been a Treaty commitment to reduce regional disparities. Over the years a number of policy instruments have developed to support this aim. The chief instruments are the Structural Funds and the Cohesion Fund.

  2.    The Committee last reported on these Funds in March 1997. In that Report[1] we called for a radical reform of the administration of the Funds, and said that "changes should not be limited to minor tinkering for fear of disturbing existing administrative empires". We called for reform to be based on the following four policy principles:

• continuity—building on existing achievements;
  • concentration—on the most needy;
    • complementarity—of national and EU cohesion policies and actions; and
      • coherence—programmes which integrate economic and social elements;

        applied by processes which embodied:

        • subsidiarity within Member States—devolution to the lowest competent level;
          • solidarity—seeking the common good, not pursuing parochialism;
            • simplification—of administration; and
              • scrutiny—of performance.

                  3.    We also said that the number of Structural Funds should be reduced and that the arrangements for the operation of the Structural Funds for the period after 1999 must be agreed as soon as possible. We believed that the Commission should bring forward proposals for the reform of the Funds as a matter of urgency.

                  4.    This Report is about the Commission's current proposals for reform, which were published in March 1998.
                

                THE SUB-COMMITTEE'S ENQUIRY

                  5.    The enquiry was carried out by Sub-Committee A (Economic and Financial Affairs, Trade and External Relations) in April-June 1998. The House of Commons Trade and Industry Committee also conducted an enquiry into the Structural Funds in the spring of this year. We were able to benefit from reading the Report of that Committee, and evidence submitted to it[2]. The focus of our own enquiry was deliberately differentiated from that of the Commons Committee, and we hope that this Report complements the earlier Report.

                  6.    No enquiry of this kind could be complete without the co-operation of officials of the European Commission. In addition to hearing evidence in the House of Lords, the Sub-Committee took evidence in Brussels, where we were helped by Mr Marc Vanheukelen, a member of the Cabinet to Commissioner Wulf-Mathies, and Ms Edith Kitzmantel, Deputy Director-General, DGXIX, together with her colleagues. We also benefited, once again, from helpful evidence from Sr Miguel Arias Cañete, Chairman of the Regional Policy Committee, European Parliament. We wish to thank all those who gave evidence to us in Brussels, and Sir Stephen Wall, United Kingdom Permanent Representative to the European Union, and his officials, for their assistance.

                  7.    The membership of the Sub-Committee during the enquiry is listed at Appendix 1. Those who gave evidence are listed at Appendix 2. We are most grateful to our witnesses and to all those who assisted us in the course of the enquiry.

                  8.    It is, unfortunately, almost inevitable that a report on this subject will contain a large number of acronyms. Although we have tried to avoid the use of some of the more obscure acronyms, readers may find the Glossary in Appendix 3 helpful.
                
                

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                1   Select Committee on the European Communities, Reducing Disparities within the European Union: the Effectiveness of the Structural and Cohesion Funds (11th Report 1996-97, HL Paper 64). Back
                
                

                2   House of Commons Trade and Industry Committee, 7th Report 1997-98 (HC 697); Reform of European Structural Funds. Back