UK Shared Prosperity Fund

Stephen Kinnock Excerpts

Thursday 5th September 2019 Commons Chamber

[Stephen Kinnock (Aberavon) (Lab)]

I thank the hon. Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry) for securing this important debate.

Over a year ago, I set up the all-party group on post-Brexit funding for nations, regions and local areas, with the aim of holding the Government to account on their promises regarding the introduction of a shared prosperity fund that would replace EU funding in full. I am afraid to report that in this past year, despite organisations across the country relying on information so that they can plan their 2021 budgets, the Government have done absolutely nothing to make progress on the shape of that new fund.

In November, the all-party group published a report that set out 18 questions that the Government needed to answer. These questions were based on submissions from around 80 organisations from across the country. I will not name all 18, but the most pressing questions that were unanimously agreed on by all stakeholder organisations were the following. First, the UK shared prosperity fund must comprise not a single penny less in real terms than the EU and UK funding streams it replaces. Westminster must not use Brexit as an opportunity to short-change the poorest parts of the UK. Equally, the UK Government must not prevent local areas from having appropriate control over the funds. Secondly, this is not just about the money. There is a real fear that it will not only be a financial grab but a power grab, and that the Westminster Government will use this opportunity to reduce funding for the areas that need it most and to claw back powers that sit naturally with devolved Administrations and other local areas.

Those are very serious questions that need to be answered. Since November 2018, we have had positive and constructive meetings with the former Chief Secretary to the Treasury, the Secretary of State for Wales and the former Business Minister. Disappointingly, the all-party group has not yet been granted a meeting with the Minister who is in his place today. None of those whom we spoke to were able to give us any cast-iron answers to the questions I have just set out. We are therefore continuing to demand that the Government guarantee not a penny less, not a power lost.

A recent worrying development is that the Government are considering rolling the local growth fund for England in with the UK shared prosperity fund. We know this only by rumour and leaks than by any clear or transparent statement, which is of course the modus operandi for this Government. As it stands, our recent report shows that the UK Government must find £1.8 billion per year to replace EU funding for the UK’s poorest regions, but that figure will reach £4 billion per year if the two funds are merged. The possibility of combining existing UK-managed funds with the UK SPF has led to fears of double-counting.

There were already fears that funding for the UK SPF may fall short of the EU’s projected 2021-2026 budget, given that three areas of the UK—Lincolnshire, South Yorkshire, and Tees Valley and Durham—have now fallen into a higher priority category. That is a damning indictment of the utter failure of this Government’s economic policies. They have gone into that higher priority category and would therefore receive more money in the next spending round than they each did between 2014 and 2020. That concern has now increased. I urge the Government to reconsider whether merging an England-only fund with a UK-wide fund is a logical step and to recognise that rolling the two funds together would inevitably create serious confusion and raise serious doubts about transparency. I would therefore be grateful if the Minister addressed that in his summing up and specifically answered this question: will the SPF and the local growth fund be rolled into one or not? We need clarity about when the SPF consultation will be published. That is an absolutely priority.

The great advantage of the current system is that it is data-driven and evidence-based, thus guarding against pork-barrel politics. There is a real worry that the SPF will become a politicised slush fund, with a Conservative Government using it to buy votes in marginal seats. I hope that the Minister’s response today will reassure us that our constituencies will not be left short-changed by a sleight of hand in Westminster.

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[Stephen Kinnock]

Yes. I thank the Minister for giving way. He just referred to the funding as “European funding”, but I thought he said in his opening remarks that it was not European funding. Will he clarify that point?

[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.