UK Shared Prosperity Fund

Peter Dowd Excerpts

Thursday 5th September 2019 Commons Chamber

[Peter Dowd (Bootle) (Lab)]

We have had 11 speakers and interventions, and I think they have all expressed their concern about the lack of detail. I thank the hon. Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry) for bringing this to our attention.

The breaking news as I arrived in the Chamber was that the right hon. Member for Orpington (Joseph Johnson), the Prime Minister’s brother, is standing down from Parliament, apparently to spend less time with his family.

As a Member of Parliament who represents a Merseyside seat, I very much appreciate, in a personal sense, the role that EU funds have played in ensuring investment in our region, as in other regions. I remember that Geoffrey Howe, the former Chancellor of the Exchequer, talked about the managed decline of Merseyside in the early 1980s. The European economic community was virtually the only social and economic lifeline that the city region had.

The Minister can sit there chuntering and shouting from the Front Bench, but I think he should behave in a much more dignified way. The Tories are using bully-boy tactics at the moment, threatening everybody. The Minister should pause and think about the distress that his Government caused to so many regions, and continue to cause to so many regions now. We have a bully-boy Minister, a bully-boy Prime Minister, and a bully-boy adviser in Dominic Cummings. Let us see a little bit of respect for the Chamber and for the democracy that it embodies.

EEC funds helped Merseyside, and they helped other regions. The Government’s proposals raise a fundamental question that others have raised today and that the House must address. Even if the UK leaves the European Union and ends our participation in these funds—or substitute funds—can we trust the Government to ensure that the proposed prosperity fund will offer the same funding and reach the same communities? That question has been asked by virtually every Member, including Conservative Members, and there is also concern about the delay.

As was pointed out in June by my hon. Friend the Member for Sheffield Central (Paul Blomfield), a report published recently by the Conference of Peripheral Maritime Regions states that had the UK remained in the EU we would have been entitled to €13 billion from EU structural funds between 2021 and 2027. That amount, an increase from €10.6 billion, would have allowed five regions—including west Wales and the valleys, Cornwall and the Isles of Scilly, Tees valley and Durham, Lincolnshire and South Yorkshire—to receive the lion’s share of the funds, as they represent some of the least developed regions in Europe, where GDP falls below 75% of the European average. The fact that those regions fall below the 75% threshold is itself a indictment of a Government who have let them down and continue to do so. The very fact that the UK has gone from having two less developed regions to five in a matter of six years testifies to the failure of their economic policies.

Falling GDP is another legacy of the Conservative Government’s austerity agenda, which resulted in 200,000 more children living in poverty in the north than five years ago. As other Members have said, under this Government regional inequality is at an all-time high. According to analysis conducted by the Institute for Public Policy Research, the north of England has lost £6.3 billion of public spending as a result of the Conservatives’ economic policies, while the south has gained £3.2 billion. The Chancellor’s spending round statement yesterday did little to address regional inequality, despite what was promised earlier in the year.

The importance of the structural funds that the UK receives from the EU should not be underestimated. According to the Joseph Rowntree Foundation, they are worth £2.4 billion a year, which goes to the very people whom the Government have left behind. That £2.4 billion is broken down between £1.2 billion a year from the EU and equal funding matched by other public and private sources. The funds finance research and development projects, support the retraining and skilling of workforces, help small and medium-sized businesses to grow, and encourage local areas to make the transition to a low-carbon economy.

Let me now deal specifically with the proposal for a shared prosperity fund. Previously, Ministers have committed themselves to maintaining the current arrangements for structural funds throughout the transition period. Given the Government’s commitment to pushing the UK towards a no-deal Brexit, perhaps the Minister will tell us for how long the Government will now commit themselves to similar levels of funding, and over what period. I am sure that he will be able to do so.

Similarly, while the Government have said that the fund will “reduce inequalities between communities”, they have consistently failed to offer further details about the specific design of the funds and who will be likely to administer them. Virtually every Member who has spoken today has drawn attention to that pattern. There is a fear, particularly among the devolved Governments and the metro mayors, that the shared prosperity fund will be yet another centralised fund controlled by Whitehall—a slush fund, in the words of my hon. Friend the Member for Aberavon (Stephen Kinnock). The clue is in this: the Prime Minister said at a recent leadership hustings in Cardiff that there should be a “strong Conservative influence” over how money that replaces EU structural funds is spent in Wales, implying at the very least that this Government will interfere with the distribution of funds far more than previously stated. That is key.

Ministers have claimed that a shared prosperity fund would be easier to administer and reduce bureaucracy, but again there is little detail on how this will be achieved, especially if the Treasury is hellbent on administering these funds centrally and with little flexibility for the involvement of the regions and devolved Governments.

The UK remains one of the most economically unequal countries in Europe. The gap between the richest and poorest is almost twice as large as in France and three quarters larger than in Germany. The EU structural funds have played an important role in addressing these regional inequalities, which the poorest communities cannot afford to lose. It is time for the Government to dispense with the smoke and mirrors, come clean about the details of the Government’s plan to replace EU structural funds and offer a cast-iron guarantee that the communities that rely on these funds will not be cut adrift and there will be as much devolution and subsidiarity in these funds as possible.

The prevarication and procrastination at the heart of the Government is affecting the continuity of services already being provided, with staff in various agencies currently funded by EU funds being laid off. For example, Members will probably have had contact from employment support providers for ex-offenders, particularly vulnerable people whom Jobcentre Plus is ill-equipped to help. Staff are having to be laid off because we do not know about the future of the fund.

At this stage, we still do not have any details on what the fund will cover. The Government are more than six months behind schedule in providing details of the post-2020 funding and have not yet published a consultation. The indecision of the Government in so many policy areas is damaging the country and their indecision on this particular fund follows that pattern. Ministers need to get a grip of this sooner rather than later.

--- Later in debate ---

[Jake Berry]

I am so pleased that the hon. Gentleman is listening closely to my response. What I would say is that if he, like me, is concerned about protecting the British taxpayer’s pound, perhaps he will reflect on the fact that the Bill passed by Opposition parties last night in this Parliament will cost the UK taxpayer £1 billion a month for every additional month we spend in the European Union. That will cost up to £24 billion. Maybe he should be committed, as I am, to leaving on 31 October, as the British people want, if he is concerned about spending money.

[Peter Dowd]

I am glad the Minister is telling us how much it costs—£1 billion a week or a month or whatever it happens to be. He is very good with his numbers, so can he give us an estimate of how much a no-deal Brexit will cost the country each month?

[Jake Berry]

It seems to me that the hon. Gentleman is suffering from a version of Stockholm syndrome. I happen to believe that the British people and this British Parliament are best able to determine the future for our country. The rebel alliance is going to Europe with its flag fluttering behind it—a white cross on a white background—surrendering British sovereignty, but I am proud to be part of a Government that will never support that.

[Peter Dowd]

This stuff about surrendering is bizarre, because this is the Government who surrendered last night to what is apparently the surrender Bill. That is the situation we are in. They should publish the Yellowhammer report and make it transparent, so that we can see how much a no-deal crashing out will cost us. Let us get the facts on the table, so that we can examine them—if they do not prorogue Parliament before then.

[Jake Berry]

I am sure the hon. Gentleman would like to have blamed the passing of his surrender Bill on the House of Lords. The Members of Parliament who voted for it know that the Opposition parties have passed a law meaning that we cannot leave the European Union on 31 October, deal or no deal. If we do get to an election—if the Labour party finally has the backbone to have a general election—I will be reminding lots of those constituencies in the north of England that it was the Labour party that stopped us leaving on 31October.