UK Government ‘broken promise’ to replace EU funds set to cost Wales £1bn says Economy Minister
The UK Government’s “broken promise” to replace EU funds for Wales is set to cost the country £1bn over the next three years, the Welsh Government has said.
The Welsh government said that its calculations found that £750m in “lost” structural funds and £242m in support for farmers that the country would have received if part of the EU amounted to “close to £1bn”.
Economy Minister Vaughan Gething said that “the Tory broken promise on fully replacing EU funds looks set to cost Wales £1bn over the next few years”.
He said that there had been “not a single whimper of complaint from the Welsh Conservatives” as they noted two years since the UK left the EU at midnight last night.
Speaking to the Financial Times he described it as “a straightforward breach of the manifesto pledge.”
“Instead of having fresh or new money to commit each and every year, the UK government is including spending committed under previous years in its calculation for this year’s funding,” he said.
£1.5bn a year in EU regional funds was returned to the UK from its EU membership contributions before leaving the EU. The UK Government has announced an £870m a year replacement fund over the next three years.
The Shared Prosperity Fund, which will launch in April, is set to finally reach £1.5bn by the final year of the spending review in 2024-25.
“We have been clear throughout that UK-wide funding for the UK Shared Prosperity Fund — worth over £2.6bn [over three years] — will ramp up to at least match receipts from EU structural funds, which on average reached around £1.5bn per year,” the UK Government said.
West Wales and the Valleys was one of western Europe’s biggest beneficiaries of EU funds as one of the political union’s poorest regions.
The Scottish Government, Northern Ireland executive and English regions have also complained about a reduction in funding.
Analysis commissioned for the Northern Powerhouse Partnership found that funding in areas such as Teesside and Leeds could fall by up to 50%.
Henri Murison, director of the partnership, told the Financial Times that the figures exposed “the gap between rhetoric and reality”.
“Many of the places that stand to lose out the most under the current funding formula are the ones most in need of serious investment,” he said.
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