Mention of Twinings Tea conjures up images of genteel tea sipping and good old-fashioned English tradition. Twinings have been providing tea to our thirsty nation for over 300 years and are a quintessentially British company. Yet their North Shields base in, I kid you not, Earl Grey Way has become the focal point of an instructive battle involving the use of British taxpayers’ money by way of EU subsidies to assist Twinings to move some of their operation to Poland. For it seems that funding of at least €10 million was approved for a subsidiary of R Twining and Co in Poland from the European Union Structural Fund via the European Regional Development Fund. This unhappily appears to have at least coincided with the announced closure of the North Shields’ plant with the loss of hundreds of jobs. So what does this latest instance of what it means to be in the EU teach us about the reality of British membership?
EU rules are quite clear that these funds cannot be used to transfer jobs and business from one member state to another. Paragraph 4 of Article 57 of EC Regulation No 1083/2006 spells this out, albeit in typically abstruse fashion. This introduced a specific legal provision ensuring that, in the 2007 to 2013 programming period, ‘the Member States and the Commission shall ensure that undertakings which are or have been subject to a procedure for the recovery of sums unduly paid following the transfer of a productive activity within a Member State or to another Member State cannot receive a contribution from the Funds’. How does this fit with the situation at Twinings? Clearly the Tyneside base is moving to Poland. A Twinings’ spokesman confirmed, in September this year, that
next week Twinings will be welcoming a handful of new employees from Poland to the North Shields site. They will be visiting to familiarise themselves with the tea-making process and receive training. While we recognise that this has been a very difficult time for our employees at North Shields and appreciate that some people would prefer not to participate, many employees are willing to help carry out this training.
Twinings have also said, ‘our business case for setting up a new factory in Poland was not based on receiving any external funding’. However, the company in addition maintains
we applied to the Polish Ministry for a grant. The Polish authorities are satisfied we meet the eligibility criteria and have approved the grant. Twinings remains committed to the UK. More than 90 per cent of the tea British customers drink will continue to be produced here in the UK and Twinings is investing £6million in its Andover [Hampshire] factory.
In answer to a Parliamentary Question in May, Mr Hahn, on behalf of the European Commission revealed that
R. Twining and Company Sp. z o.o., has applied for funding from the ERDF [European Regional Development Fund] under the operational programme “Innovative Economy”. The application was made under the heading of “support for investments in the production sector” for an investment in Swarzędz, in the Wielkopolska Voivodship. The total project value amounts to €45031830, co-financing from public funds (ERDF and state budget) amounts to €10400439, with the European Funds possibly contributing.
The answer then went on to say
It should also be noted that specific clauses were negotiated by the Commission for all relevant operational programmes in Poland for 2007‑13. Such clauses are contained in the “Innovative Economy” operational programme and stipulate that the Polish authorities undertake to request an assurance from enterprises that the assistance will concern new investments and will not be used for support of investments that concern the relocation of production or service facilities from another Member State of the European Union.
Now bear with me, because we finally got to the really interesting part, which was that
Further to our request addressed to the Polish authorities to provide the Commission with confirmation that the assurance was delivered by the applicant in this case, the Polish authorities replied that, being a small company, the Polish subsidiary of R. Twining and Company is not bound to provide such information, which is compulsory only for large enterprises. As this assurance was not delivered at the time of submission and appraisal of the application by the Polish subsidiary of R. Twining and Company, the Commission is contacting the Polish authorities to seek formal guarantees that EU support will not be used to support relocation of production or services from the United Kingdom (UK) to Poland.
Clearly the jury is still officially out on this matter but let’s consider the implications of this perverse state of affairs. Britain is, as we all know, one of the few net contributors to the EU and that costs us dearly. Now, if some of that money has been used to give a grant to Twinings (in any guise) for them to transfer some of their business from the UK to Poland I would like to know how this can be right?
Some estimates show that for the period from 2007 to 2013 Poland will receive a net benefit of tens of billions of pounds from the EU – almost the same amount, in fact, that the UK will lose during its continued membership of the EU. These are huge figures. If any of the contributions made by British taxpayers are going to be used for relocation projects away from the UK this will be a double slap in the face for taxpayers and the economy, both of whom will lose out. Accordingly, I have tabled an Early Day Motion urging the Government to make representations to the EU and hope that more of my colleagues will share my concerns and sign it. But the lesson surely is clear from this: we’d be Better Off Out. We’ve got the facts, we’ve got the arguments and we’ve got the evidence. What exactly is the case for staying in, and would anyone care to make it to the recently unemployed in Tyneside?