Wales: Regional Development Funding

Hywel Williams Excerpts

Tuesday 7th May 2019 Westminster Hall

[Hywel Williams (Arfon) (PC)]

I congratulate the hon. Member for Aberavon (Stephen Kinnock) on securing the debate, and I welcome the Under-Secretary of State for Wales, the hon. Member for Torbay (Kevin Foster), to his place—I hope that he will add some much-required substance to the Wales Office team.

Three years ago, Vote Leave campaigners promised that Wales would lose not a penny if we voted to leave the EU. If we leave the EU, Plaid Cymru is determined to ensure that they fulfil their promise. I will briefly outline the principles of Plaid Cymru’s model for regional development funding. It would be a substantial new step in reducing regional inequalities across the UK; I think that Wales could take a lead in this regard.

Although the EU has the makings of a proper regional development policy, in the UK, by default, the regional policy is to favour London and the south-east of England. Wales currently receives £245 million more a year from the EU than it pays in. That we qualify for so much money reflects our poverty, which is on a par with areas in former USSR satellite states. It also reflects the extreme centralisation, the policy vacuum and the chronic underfunding by the UK Government. The worst inequality in any EU member state is indeed that between London and Wales, and leaving the EU will make the situation worse, unless the Government act.

Two years ago, Westminster committed to creating a UK shared prosperity fund that was

“specifically designed to reduce inequalities between communities across our four nations.”

We are on the cusp of exiting the EU, so where is it? Wales will not forgive a Westminster Government that cannot, or perhaps will not, plan for the funding on which so many of our communities are forced to depend. However, decisions on future funding must be timely. We cannot have a Government-caused funding gap disrupting the proper transition in the delivery of projects on the ground.

Replacing European structural funds with a well-funded UK SPF could be genuinely transformational for Wales and for the rest of the UK, but we need timely planning and proper funding to enable Welsh solutions for Welsh problems. Funding must be managed in Wales and be pre-allocated. A cut-throat bidding process would pit Wales against other regions and nations in a race to the bottom. Also, funding must be multi-annual. I think that all hon. Members here today will know of project managers who have so often been disempowered by self-defeating short-term funding cycles.

Finally, Welsh programmes should continue to meet the goals of European structural funds, with streams for employability and economic development, with any funding being co-ordinated with Welsh Government policy and spending, as well as meeting sustainability legislation, such as the very welcome Well-being of Future Generations (Wales) Act 2015.

[Wayne David]

Does the hon. Gentleman agree that, as far as Wales is concerned, it is important that any allocations are made outside of the Barnett formula?

[Hywel Williams]

Indeed, that is a crucial point, and one that I have taken up with Government Ministers. In my case—in north Wales and in much of rural Wales— that point is particularly crucial for farming. If we pit marginal farming on the uplands of Wales against the grain barons of East Anglia, we all know what will happen. The hon. Gentleman makes a crucial point.

Funding for Wales should meet the goals of the European structural funds. I also mentioned the Well-being of Future Generations (Wales) Act 2015, which is crucial in this regard. Decades of under-investment by the Welsh and UK Governments have led to chronic and disgraceful child poverty, as outlined in the Assembly this afternoon by my colleague Rhun ap Iorwerth, and to families having to choose between heating and eating. Leaving the EU will harm our communities further, unless the Government act properly.

The UK shared prosperity fund must deliver for Wales. Otherwise, ever more of our citizens will conclude—rightly, I believe—that we would be better out and in: out of the UK and back in the EU.

--- Later in debate ---

[Kevin Foster]

I thank the hon. Gentleman for his further intervention. As I said, I do not want to get into specific dates, but I am clear that the spending review will set out how we approach the fund in the future. I am not surprised to see such passion. We will ask people across Wales about the size, structure and priorities for the fund, and that will develop as we approach this year’s crucial spending review. Given the continuing debates about our EU exit, it is clearly hard to give a specific date, although, as the hon. Gentleman knows, constructive discussions are ongoing between our Front Benches as we speak.

[Hywel Williams]

I understand that the Minister cannot go into any detail about the fund itself, but can he give us some indication of the principles behind it? Will it be based on need, or on some sort of competitive tendering or competitive proposals, either between Wales and other regions and nations, or even within Wales itself?

[Kevin Foster]

I thank the hon. Gentleman for his intervention. Our clear emphasis will be on ensuring that it works for local communities and delivers prosperity and growth across the nation. The consultation will set out our plans, and I am sure that he and other Members will be powerful advocates in ensuring that the fund works for their communities in the way they envisage.

I am conscious that many Members have raised the future of EU funding. In 2016, the Government guaranteed funding for UK organisations in receipt of EU funds where projects are agreed before the day the UK leaves the European Union. In July, the Government announced an extension to that guarantee, which will underwrite the UK’s allocation for structural and investment fund projects under this EU budget period to 2020 in the event of the UK leaving without a withdrawal agreement. That ensures that UK organisations, such as charities, businesses and universities, will continue to receive funding over a project’s lifetime if they successfully bid into EU-funded programmes before December 2020.

Our overall message is therefore business as usual. We want all places to continue to sign contracts while we still belong to these funds.