Wales: European Structural Funds

Lord Murphy of Torfaen Excerpts

Wednesday 5th February 2020 Lords Chamber

[Lord Murphy of Torfaen (Lab)]

My Lords, as always, it is a great pleasure to follow the noble Lord, Lord Bourne, with all his experience as a Minister and as leader of the Conservative group in the Assembly for many years. I also welcome the noble Lord, Lord Wigley, whom we congratulate on raising here in the Chamber an extremely important issue.

Some £2 billion will be owed to Wales over the next number of years. It is by far the biggest percentage of the British amount of structural funding, and that is what we are due to receive. Some 25% of the whole of the European Union budget goes on structural funding through the European Regional Development Fund and the European Social Fund. It has been of enormous benefit to the people of Wales in our lifetime, as politicians representing Wales or in their places here will know. My own former constituency of Torfaen, a Gwent valley constituency, and many other valley constituencies have benefited enormously. It is something of an irony that if you look at the constituencies that voted to leave the European Union, they are those which received the most money from it. That was something of which I tried to persuade my former constituents, but they did not listen to me.

It is important for us to focus on what happens next, except for one thing. Both noble Lords have raised the point about additionality. Some 20 years ago I became the Secretary of State for Wales, and the first thing that I had to deal with was additionality. It was a great battle with the Treasury, helped by the National Assembly and by the European Union itself. For an unbiased account of what happened you can do no worse than look at page 113 of my autobiography, where you will see how it developed as a huge issue in Wales. But it was important to ensure that the money was truly additional to the Welsh budget and did not come out of the block grant.

The questions that we have to ask the Minister have been enumerated by both noble Lords, but I shall repeat them because they are so important. First, will the money in its entirety come to Wales? In other words, will what we were going to have from the European Union by way of structural funding come to us in the shape of the new prosperity fund? Apparently it is yet to be decided how the mechanics of it will work, but will it come to us? Will it be additional—not taken out of the block grant for Wales, or indeed for Scotland or Northern Ireland? What about the match funding? As everybody knows, structural funding is always matched by local government, other government departments or private funding. The match funding for it is therefore a hugely significant issue that the Government have to look into.

The other hugely important issue touched on is whether the Welsh Government will now be responsible for it. It was always the case that the European Regional Development Fund and the Social Fund would be for the devolved Administrations to administer. When I was the Northern Ireland Secretary, even after the Assembly and the Executive had fallen, it still came to the Northern Ireland Office to decide what to do with Objective 1 funding. As an aside, I hope the Government are looking at what to do with the peace funding from Europe with regard to the Northern Ireland situation. We are here today to talk about Wales, but the principles are the same. The Northern Ireland Executive, the Welsh Government and the Scottish Government are the appropriate bodies to administer the successor to the European structural funding.

At the same time, there is an issue about not just the European funding but the new post-Brexit relationship between the United Kingdom Government and the devolved Administrations. We now have three, after the restoration of the Assembly and Executive in Belfast. Now is the time to ensure that we set the parameters and establish confidence. Not all these Governments are of my political party. There is an SNP Government in Scotland, and in Northern Ireland there is of course a coalition between the parties; in Wales it is Labour. None, of course, is Conservative. The real test of what is likely to happen on the European funding—a test of the Joint Ministerial Committee—is how a Conservative Government of the United Kingdom, based here in London, deal with these three devolved Administrations.

Nearly 11 million people live under devolved Governments, and these Governments—particularly in Wales—administer the parts of our country where people are poorest. That is why we got the money in the first place. So it is vital that the Government get it right at this stage. It is about not just the funding but relationships between the devolved Administrations and the Government in Westminster.

People’s lives in Wales over the last 20-odd years have been transformed because of European funding. Sometimes the administration has been difficult—the bureaucracy can sometimes be a bit stifling—but it is a lot of money. It is well over £2 billion for a country of 3 million people; that is a great deal of money. It was always the idea, of course, that the money would not simply be there to build a bypass around a town or village but to transform how our economy worked in Wales. The Social Fund and the European Regional Development Fund were there for the long-term future of our country. That is why there is unanimity here in this Chamber, right across the political divides, to ensure that what we get in Wales is our just deserts—what we deserve—because we have already made the case and Europe has given us the green light in the past. We do not want to lose the opportunities and challenges that the structural funding gives us.