Will EU funding in Wales be replaced?

The Heads of the Valley road which received £80m for improvements from the EU. Source: Robin Drayton (via. Wikimedia Commons)
With EU funding soon to stop, when the UK exit's the transition period, the annual spending review gave an outlined plan for replacements. However, concerns remain over how much Wales will receive.

By Dewi Morris | Political Editor

On Wednesday November 25, Rishi Sunak, the UK’s Chancellor of the Exchequer, presented the annual spending review.

The review outlined plans for a UK Shared Prosperity Fund, which aims to replace EU funding. However, Sunak did not clarify how much would be allocated to Wales or other parts of the UK.

This has caused concern for welsh politicians as Wales received five times more EU funding per capita than England.

Plaid Cymru’s treasury spokesperson, Ben Lake, told the BBC:

“If [the fund] is not allocated on a needs-based factor then Wales, I’m afraid, does stand to lose out quite considerably”

The former Secretary of State for Wales, Stephen Crabb, said the UK government should “get a move on” as not enough information has been given about the new fund.

Crabb, the Conservative MP for Preseli Pembrokeshire who chairs Parliament’s Welsh Affairs Select Committee, published a report last month which deemed progress on plans to replace EU funding in Wales as “simply unacceptable.”

A consultation on the fund’s design was pledged by the Conservatives to take place in late 2018, but never happened.

Stephen Crabb stated in October:

“the government hasn’t made anything like sufficient progress in terms of developing clear policy for replacing European funding at the end of this Brexit transition in less than three months’ time”

However, after the annual spending review was presented, he said:

“I’m pleased personally that the government has shown a bit more of its workings out and a bit more detail but there’s a lot more that we need to see”

With the transition period quickly coming to an end, and less than a month remaining until EU funding stops, how much Wales will receive in replacement remains unanswered.

Rishi Sunak promised the UK’s prosperity fund would match the EU funding received by the UK (£1.5 billion a year). However, it is not confirmed whether Wales would receive full replacement funding for the estimated £375m it received annually from the EU.

The UK Government has previously said Wales will receive no less than it would from EU funding, however, some MPs remain unconvinced.

Chair of a Parliamentary group on post-Brexit funding and Labour MP for Aberavon, Stephen Kinnock, told the BBC:

“Our big worry is that as we take the programme and the money out of Brussels and it is channelled through Westminster. At some point along the way the Westminster government will start to get its hands on it, and start using it for purposes that its not really supposed to be used for” 

In July 2018, the UK Government promised that the Shared Prosperity Fund would respect devolution. However, the proposed Internal Market Bill would give the UK Government power to directly spend in devolved areas, such as on Highways and Transport. For example, if the bill is passed, the UK Government would be able to spend money on an M4 relief road, despite plans being scrapped by the Welsh Government – a case which has become a devolution flashpoint.

Concern has also been raised over the replacement for EU Agricultural funding in Wales. The spending review allocates £242m to Welsh agriculture next year, which the Farmer’s Union of Wales claims to be at least £95m short of EU funding. The UK Government claims the funding is the same as what Wales received in 2019.

Rebecca Evans, Wales’ Finance Minister said:

“If you’re looking for a serious failure of management of funding, and if you’re looking for a betrayal of the farming industry, I think that you can find it right there.”

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