Battle For EU Cash Not Over Yet

Mr Smith has written to Gordon Brown asking for guarantees that no Scottish region lose any European money as a result of cuts to the rebate and that the Treasury will make up the funding gap between what is available now and what will be on offer in 2007.

The UK government had originally planned to strip Scotland of structural funding, but the efforts of other EU countries such as Ireland, Estonia and Latvia to secure their funding led to limited concessions over funding for Scotland in the budget negotiations in Brussels. Speaking from Brussels Mr Smith said

"The battle for Scotland's funding is not over yet. The allocation of Scotland's European money is determined by the Treasury. We have to keep the pressure on Gordon Brown and Tony Blair to make sure Scotland receives all the money we are entitled to, to be spent on the ground by local organisations in Scotland not centrally by the Scottish Executive.

"Gordon Brown has already warned that the loss of the rebate will mean cuts to domestic budgets; there is a serious risk of a squeeze on Scotland, including funding that would come to projects in Scotland.

"There has been a lot of horse-trading over this deal and many member states secured extra concessions from the UK government in return for their support. Unfortunately for Scotland and Scotland's EU funding there was nobody round the negotiating table bargaining for us. We are just lucky the wishes of other EU member states worked out in our favour or Scotland would have had no funding from 2007 onwards.

"The UK government has consistently promised us that any shortfall in structural funding for Scotland, as a result of these negotiations, would be compensated for by the Treasury. So, I am asking Gordon Brown to show Scotland that he really meant it and to promise to meet funding gaps across Scotland that result from this deal."