“Not a penny less and not a power lost”
Wales was promised “not a penny less and not a power lost” if the UK left the European Union.
Almost a year after Brexit – and following the UK autumn Budget and spending review – these promises are ringing hollow.
Wales has lost hundreds of millions in European structural and agricultural funds and the UK Government is undermining devolution and bypassing the Senedd to make decisions in devolved areas.
The UK Government is bypassing devolution
The UK Government promised devolved governments and devolved powers would be respected when the UK left the EU.
Instead it passed the controversial Internal Market Act, which is undermining devolution and stopping decisions about Wales being taken in Wales.
The Act includes financial assistance powers, which enables the UK Government to make funding decisions in devolved areas – bypassing the democratically-elected government of Wales and the Senedd.
In the autumn Budget and spending review, the Chancellor announced funding would be directly allocated in Wales in devolved areas, using the Internal Market Act powers.
This amounts to some £150m in revenue funding and £100m in capital between 2021-22 and 2024-25 in the following areas:
Turing programme (the UK Government’s successor to the Erasmus+ programme
The Union Connectivity Review (transport)
UK Fisheries Fund
Major events
Global Screen fund
UK City of Culture
Pocket parks
Access to tennis facilities
Grassroots football facilities
Devolution is an established feature of the UK. The UK Government has had 22 years to appreciate and work with the devolved Welsh Government but instead it is clawing back power to Westminster.
This aggressive, unilateral approach does nothing to strengthen the bonds between our nations. This spending review makes a mockery of the UK Government’s own ambition to spread investment across the UK.
The missing EU millions
Wales was allocated £375m each calendar year in structural funding from the EU. This is not being replaced by the UK Government now the UK has left the EU.
It’s been nearly five years since the UK Government first announced that a Shared Prosperity Fund (SPF) would replace EU structural funding and nearly two years since Brexit. But the UK Government hasn’t consulted on or even published a framework about how the SPF will be delivered.
Instead, the UK Government is cherry-picking pet projects through a pilot Community Renewal Fund – the pilot scheme for the SPF.
The UK Government announced the successful bids this month (November). Wales will receive only £46m this financial year, compared to £375m we would have received from EU structural funds from January 2021.
The case of the missing EU millions continues… Wales has lost £137m in farm funding in 2021-22 to the Treasury with at least £106m being cut over the coming three years.
Levelling Up?
The UK Government’s levelling up agenda is far from that – the majority of the Levelling Up fund in Wales has been given to projects in areas with a Conservative MP.
The Levelling Up fund has funded just 10 projects worth £121m in just six Welsh local authorities, and there were only three successful bids (for three local authorities) from the Community Ownership Fund worth just under £0.5m.
Far from protecting and replacing the EU funding Wales has received, the UK Government has clawed back hundreds of millions to the Treasury.
The Community Renewal Fund, the successor to EU structural funding, has short-changed Wales by some £330m and farm funding has been slashed – the Tories are levelling down Wales.
Less than year after Brexit and “not a penny less” looks more like a cut of at least £460m and counting.
Economy Minister Vaughan Gething has challenged the Welsh Tories to “Do their job and Stand up for Wales”.
And finally, to add insult to injury, the UK Government won’t even confirm if it will foot the £200m bill for the post-Brexit border check-posts which need to be built in Wales. These check-posts are needed because the UK Government has taken the UK out of the Single Market and all goods entering the UK now have to be checked.