UK Government slammed for ‘persistent underfunding’ of Wales over EU money replacement plan

The UK Government have been slammed for a “blatant disregard” and “persistent underfunding” of Wales over plans to replace European structural funds with a UK Government controlled resource.

Wales’ Brexit Minister Jeremy Miles said that the UK Government had “failed to engage meaningfully with Welsh Government officials and to engage at all with Welsh Ministers” on the issue.

Earlier this month it was revealed that the UK Government will bypass devolved administrations, including the Senedd, which will no longer get to choose where the money will be spent.

The comments by Jeremy Miles are made in a letter dated 11 January, and published today by the Welsh Affairs Committee.

In it he says that there is a “gap between rhetoric and reality extends” in the UK Government’s claims that Wales would receive more money from the UK Government than they did from EU funding.

“The programmes which are ending are worth £375 million annually to Wales. What is on offer from the UK Government is £220 million across the whole UK to run a pilot SPF scheme in 2021-22,” he says.

“Even were Wales to receive a share of this equivalent to Wales’ recent share of ESI funds committed to the UK as a whole, this would be a massive cut in funding for Wales, in contradiction of the promises made to the people of Wales.”

‘Parity’

He added that Wales had used EU structural funds to “mitigate the negative impact of the persistent underfunding of Wales and that there was a structural inequality “particularly benefiting London and the South East to the detriment of the rest of the country”.

“To reiterate the Welsh Government’s response to your Committee last year, the primary driver of regional inequality is the failure of the UK to fairly and effectively allocate funding on reserved matters,” he said.

“Although Wales has 11% of UK rail track miles, we receive only 2% of expenditure on rail enhancements from the UK Government.

“Treasury statistics show that rail expenditure per head in Wales is around 40% that in England. In 2017, Research and Development expenditure in the UK was £34.8bn, while in Wales it was £742m, equivalent to 2.1% of the UK total spend.

“The Welsh Government has used European Structural Funds effectively to mitigate the negative impact of the persistent underfunding of Wales, but the quantum in question is insufficient to provide parity of spend in Wales on reserved matters.”

‘Rejection’

Turning to the Internal Market Bill he says that it was “forced through” by the UK Government against the Welsh Government’s will.

“The blatant disregard for the Welsh Government is the more disturbing within the context of the Internal Market Act which allows UK Ministers to bypass and undermine devolution by exercising spending powers over areas of devolved competence,” he said.

“The Act was forced through despite explicit rejection by the Senedd and strong objections from peers across the House of Lords, including those on the Government benches such as Lord Bourne and Lord Dunlop.

“The apparent determination of the UK Government to ignore the legitimate and established role of the Welsh Government and Senedd in respect of economic development in a further centralisation of regional development policy stands in sharp contrast to our Framework for Regional Investment, published in November 2020 which proposes a considerable decentralisation of powers and decision-making.”