Shared Prosperity Fund: Wales

Stephen Kinnock Excerpts

Wednesday 14th November 2018 Westminster Hall

[Ian C. Lucas]

The hon. Gentleman has read my speech, too—I was planning to go on to the north Wales growth deal. I am passionate about regional policy and devolving powers to the nations and regions, but the Government should be giving a lead. It is their responsibility to compensate for market failures with engineering investment to improve a part of our economy that the market on its own would leave behind.

There is agreement across the political spectrum that the present system has not worked as it should for the benefit of all the nations and regions of the UK. We need to reflect on the result of the referendum and ask why investment from the structural funds, for example, has not achieved as much as we would all have liked.

[Stephen Kinnock (Aberavon) (Lab)]

My hon. Friend is making an excellent speech. Surely the best way to ensure the best possible outcomes for our programmes and projects is to decentralise and devolve, empowering local authorities, local stakeholders and the practitioners who will ultimately deliver the projects to design measures and outputs. The people on the ground know best what works and what does not.

[Ian C. Lucas]

That is my next paragraph, which I shall read. As someone who believes in devolved decision making, I believe that decisions relating to investment in Wrexham and north Wales should be made by people who are close to our local economy and community. Historically, the EU’s structural funds system did not work well for my constituency of Wrexham.

Let me give one example. Wrexham Glyndwr University was established in 2008—the first time in our history that we had a university. That was a strategic moment for Wrexham and hugely important. As I said when I was a Minister within the Department for Business, Innovation and Skills, universities are at the centre of developing economies in the modern world. The establishment of Wrexham Glyndwr University was a really important period, but between 2008 and 2014 it received no structural funds at all. The Wales European Funding Office tells us that, in the same period, Swansea University received £89 million, the University of Glamorgan £41 million, Cardiff University £29 million and Bangor University £47 million. There was a lack of investment from the source that was supposed to be supporting the development of the economy in the area that I represent. That was a missed opportunity and will have had a negative impact on the university that we are developing as part of the local economy.

That lack of investment is mirrored in funding for north-east Wales generally. Neath Port Talbot Council received over £89 million between 2007 and 2014, while Flintshire received £3 million. Incredibly, Wrexham received only £446,000. After Brexit, we will need a new system of funding and a fair allocation across Wales. As the hon. Member for Aberconwy (Guto Bebb) said, we have shown the way in north Wales: from the bottom up, local government, MPs, Assembly Members and universities have worked together to produce a growth bid for north Wales to remedy the failings that we believe exist within our local economy. We put forward that growth bid on behalf of the community that we represent; it is very much devised and put together by the local players.

I still get frustrated at having to go with a begging bowl either to the Treasury across the road or to Cardiff Bay to beg for investment. I want those decisions about investment and the power to raise money to be devolved to places such as north Wales, because I have lot of confidence in the north-east Wales economy. Despite the fact that we have not benefited from a lot of the funding that other parts of Wales have had, the economy in north-east Wales has developed during the period that I have been privileged to represent Wrexham. We need to address the defects in our local economy in transport and digital infrastructure. In the future, we will have an insight into our local economy to see where the defects are and to begin to address them.

--- Later in debate ---

[Stephen Kinnock (Aberavon) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Hollobone. I congratulate my hon. Friend the Member for Wrexham (Ian C. Lucas) on securing this important debate.

The 2017 Conservative manifesto promised to set up a new UK shared prosperity fund to replace EU funds, with the intention that the new fund will

“reduce inequalities between communities across our four nations”

and will be

“cheap to administer, low in bureaucracy and targeted where it is needed most”,

so we know how to measure the promises that the Conservative Government are now making. Two and a half years later—not from the manifesto but from the referendum—we still do not know how much funding will be available, how it will be divided across the country, what activities will be eligible for support or who will take the decisions on how the money is spent. There is a huge fear that that will be not just a financial grab, but also a power grab, and that the Conservative Government will use this opportunity to reduce funding for areas that need it most and to claw back powers that sit naturally with the devolved Administrations.

That concern drove us to create the all-party parliamentary group on post-Brexit funding for nations, regions and local areas. In that spirit, we worked with the Industrial Communities Alliance and launched a national inquiry to help us understand the wide-ranging views on the key questions that I have highlighted. That involved inviting a large number of organisations to submit evidence to the inquiry about what they wanted from the shared prosperity fund. Respondents included local authorities, local enterprise partnerships, the TUC—including the Welsh TUC—mayoral combined authorities and devolved Administrations. Such was the huge interest and concern that we received submissions from over 80 different bodies across England, Scotland, Wales and Northern Ireland. Many hon. Members present here are members of the APPG. The report will be published on Friday, but I will give a brief summary of the key recommendations.

There is an overwhelming consensus that the shared prosperity fund must not comprise a penny less than what the EU would have invested in Britain from 2020 to 2024. The Government must, above all, prioritise narrowing the differences in prosperity across the UK. In England, the funding should be allocated to local areas on the basis of a robust formula and up-to-date statistics. In Scotland, Wales and Northern Ireland the UK Government should respect the devolution settlement and any guidelines should therefore be kept at a strategic and broad level, and agreed with the devolved Administrations, who should keep responsibility for detailed design and delivery. Those findings all reflect my own concerns. The report has been signed off by all vice-chairs of the APPG, so it is a cross-party report; we shall send it to the relevant Secretaries of State and seek follow-up meetings.

Westminster must not use Brexit and the end of the EU’s regional funding as an opportunity to short-change the poorest parts of the UK. The UK Government must not preside over a Westminster power grab, whereby devolved Administrations are denied the appropriate control over funds. The Government have promised their own consultation—I am sure the Minister will tell us more about that—which I understand will be launched before Christmas. It is very important that they take the recommendations in our report into account, particularly as they reflect the views of more than 80 organisations at the coalface of those issues. The design must not be dreamed up in Westminster or Whitehall bubbles, but driven by the practitioners—the people who really know what works, and what does not, in their communities.