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Sunday, 13 February, 2000, 17:54 GMT

Morgan's promise over EU funds

Rhodri Morgan promises to 'bust a gut' to secure match funding

New Welsh Labour leader Rhodri Morgan has vowed to hold "tough negotiations" to secure match funding for European development funds.

Controversy has surrounded the funds - known as Objective One.

Wales qualifies for Ł1.2bn but the money will only be released if the Treasury matches that amount, pound for pound. Former First Secretary Alun Michael

It was a failure to do this that led to the downfall of former Assembly First Secretary Alun Michael.

Now the pressure is on Mr Morgan - almost certainly to be made Mr Michael's permanent replacement on Tuesday - to secure more money.

Speaking on the BBC's Breakfast with Frost he said he would not stint to secure agreement from Chancellor of the Exchequer Gordon Brown over the funds.

"I'm going to bust a gut in order to get the best deal for Wales out of the Treasury," said Mr Morgan.

"I reckon that I could be a tough negotiator. I'm sure Gordon Brown does as well, and Treasury Chief Secretary Andrew Smith." Chancellor Gordon Brown

He added: "There is a very strong case in Wales because we cannot take advantage of these European funds unless we get the full matched funding.

"I reckon actually that if we do get the full matched funding, the Treasury will be better off in the end because if we can close this standard of living gap of some 20% between Wales and the western European average - and the British average - the Treasury does well out of it in the end because they get more taxes.

"We have 5% of the British population but we only pay 4% of British taxes because of the poverty levels in Wales.

"Now, if we are ever to get to the state where we have 5% of the population and we pay 5% of the taxes it's by doing things like giving us the full matched funding."

Coalition possibility

And in answer to speculation on the possibility an Assembly coalition mounts, Mr Morgan says while he is not considering an immediate coalition, he would not rule it out in the future.

It is a view shared by the Leader of Liberal Democrats in Wales Mike German, who also confirmed that Prime Minister Tony Blair asked his party for help to save Alun Michael during last week's no confidence vote.

Mr German told BBC Wales: "It was certainly the case that there had been a request from London to ask if we could assist in this matter and my leader in London said it was not a matter for him and that he would pass on a message and that would be it."

Related to this story:
Morgan is new Wales Labour leader (11 Feb 00 | Wales)
Welsh first secretary quits (08 Feb 00 | Wales)
Timeline: Welsh devolution (09 Feb 00 | Wales)
No-confidence motion for Welsh Assembly leader (08 Feb 00 | Wales)
Michael confident on Euro funds (27 Jan 00 | Wales)
Pressure mounts on Michael over European funds (27 Jan 00 | Wales)
Plaid demands answers over 'flawed' funding bid (18 Jan 00 | Wales)

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