Uk Shared Prosperity Fund

– in the House of Commons at 2:14 pm on 5th September 2019.

Alert me about debates like this

Photo of Drew Hendry Drew Hendry Shadow SNP Spokesperson (Business, Energy and Industrial Strategy) 2:14 pm, 5th September 2019

I beg to move,

That this House
notes with concern that the Government is more than half a year behind its schedule to provide details of post-2020 funding through a UK Shared Prosperity Fund;
supports the Joseph Rowntree Foundation’s recommendation that the Fund should at the very least match the £2.4 billion per year currently allocated through the EU structural funds;
and calls on the Government to ensure that full details of the fund are published with urgency, that the devolved settlement is respected and that there is no reduction in the levels of funding to devolved governments or their role in distributing funds.

I thank the Backbench Business Committee for allowing us the opportunity to bring this matter to the Chamber today. Scottish communities stand to lose millions of pounds from Brexit. Communities, charities and other organisations have been waiting for years to find out what funding will be available. There is also a threat to devolution. Long-term planning has been abandoned to Brexit.

We need clarity about the details of the so-called shared prosperity fund. We need to know whether the devolution settlement will be protected. Currently, until 2020, communities and charities can access funding worth £2.4 billion a year. Work by the Conference of Peripheral and Maritime Regions—the CPMR—shows that, for 2021-27, the UK would have received €13 billion in regional development funding. For Scotland, failure to replace that would mean a loss of €840 million. For the highlands and islands alone, that would be €130 million. It is therefore vital that that money is replaced.

That funding has underpinned further education, youth employment, smart cities, connectivity for islands and communities, small and medium-sized enterprises, apprenticeships, regeneration, innovation, productivity, social inclusion and much more. In Scotland, it has supported projects and development in West Lothian, the Orkney isles, Ayrshire, Fife, Argyll and Bute, Midlothian, East Lothian, Perth and Kinross, Aberdeenshire, West Dunbartonshire, Stirling, Western Isles, Inverclyde, Clackmannanshire, Moray, Shetland, Edinburgh, Dumfries and Galloway, Renfrewshire, Glasgow, Dundee and more.

In the highlands and islands, we would be hard pushed to find any town or village, let alone our city of Inverness, that has not had investment since we joined the European Community in the 1970s. Indeed, two specific and unavoidable icons stand testament to that. The Kessock bridge was built through Europe before devolution because Westminster ignored the highlands for decades.

Photo of Jamie Stone Jamie Stone Liberal Democrat Spokesperson (Scotland), Liberal Democrat Spokesperson (Armed Forces)

When the hon. Gentleman and I drive around the highlands we cannot help but notice the signs with the stars on them on new bits of road that say that the development was funded by the EU. Without that funding, those roads would probably not have been built and transport across our vast constituencies would have been difficult for our constituents. Replacing the funding is essential. Notwithstanding the fact that the Minister has met me several times, tried to do his level best and knows the area, I am bound to say that we seem no further forward, which my constituents find not just frustrating but deeply worrying.

Photo of Drew Hendry Drew Hendry Shadow SNP Spokesperson (Business, Energy and Industrial Strategy)

It is absolutely true that the money has had a massive impact on the infrastructure of the highlands and it must be replaced.

Photo of Albert Owen Albert Owen Labour, Ynys Môn

This is an important debate and I know that the Minister has worked hard on the matter and been very good with Members. The hon. Gentleman talks about peripheral areas, and west Wales and the valleys have particularly benefited. However, small businesses tell me that they need to plan. They need some indication of what is happening. We have just talked about science and technology. Does the hon. Gentleman agree that research and development also require planning? Brexit has taken the Government’s eye off the ball, but we need some answers now.

Photo of Drew Hendry Drew Hendry Shadow SNP Spokesperson (Business, Energy and Industrial Strategy)

I am grateful to the hon. Gentleman for those comments and I can confirm that I will underline those very points later in my speech.

Photo of Jake Berry Jake Berry Minister of State (Cabinet Office), Minister of State (Cabinet Office) (jointly with the Ministry of Housing, Communities and Local Government)

Show me the money.

Drew Hendry has repeatedly referred to “EU money”. I hope he will acknowledge that it is not the EU’s money but British taxpayers’ money and that he will reflect on the fact that, in 2018, we paid £13.2 billion into the EU and they returned £4.2 billion to this country.

Photo of Drew Hendry Drew Hendry Shadow SNP Spokesperson (Business, Energy and Industrial Strategy)

I will reflect on the fact that if it had not been for EU funding—that is what I am talking about: funding that is generated out of EU schemes—the highlands and islands, as others have pointed out, would have been ignored by Westminster.

Several hon. Members:

rose—

Photo of Hywel Williams Hywel Williams Shadow PC Spokesperson (Work and Pensions), Shadow PC Spokesperson (Brexit), Shadow PC Spokesperson (Cabinet Office), Shadow PC Spokesperson (International Trade)

Does the hon. Gentleman agree that the difference between the European Union and the Government here in Westminster is that the European Union has a regional policy to counteract the effects of poverty, unlike this Government?

Photo of Drew Hendry Drew Hendry Shadow SNP Spokesperson (Business, Energy and Industrial Strategy)

Yes—I am grateful to the hon. Gentleman for that comment.

Before I took those interventions, I was talking about the two icons, one of them being the Kessock bridge, which I will not go into now. It is there for everybody to see and is a monument to the fact that Europe has paid attention to the regions that need assistance. The other icon is the University of the Highlands and Islands. EU funding enables research capacity, new facilities and equipment and expert researchers, and it has enabled doctoral and post-doctoral students to support priority sectors such as life sciences, marine science, aquaculture, archaeology, Gaelic and the creative economy—all coming together to make the highlands the vibrant place it is. The University of the Highlands and Islands receives the largest Scottish grant of €7.17 million, out of €68.6 million throughout Scotland. The view of the University of the Highlands and Islands is that Brexit will reduce prospects in those areas.

Erasmus has enabled student and staff exchanges for more than 30 years. International collaboration and EU engagement are at the heart of the University of the Highlands and Islands, and have been since its inception. It was helped by the EU to achieve university status and title in 2011, and is a vital contributor to economic growth. More than £250 million of investment has been levered into the UHI through structural funding. Some 25% of the university’s non-teaching “other” income has come from the EU. If we were remaining in the EU, there would be much more potential for growth through the EU 2020-27 programmes.

Adam Haxell of MillionPlus, the Association for Modern Universities, said to me:

“On UHI itself, it is important to emphasis what a remarkable success story it has been. The idea of having a university that covered this area in the early 1990s seemed totally unrealistic to many, and it is thanks to the determination and perseverance of those involved combined with the spread of funds they were able to draw down on, namely European funding streams, that made it happen. Today, the university stands as a pillar of the regional economy of the Highlands and Islands and an important element of the modern social fabric. The range of courses that are offered through this institution, some of which relate directly to the regional culture and heritage, combine to create a unique local offer that reflects the needs and ambitions of local residents. Moreover, in the last Research Excellence Framework, 69% of research at the institution was deemed world-leading or internationally excellent. For an institution that only gained university title in 2011, this is a phenomenal trajectory and could not have happened without the support it got.”

He went on to say that

“Kate Louise McCulough has written on the historic framing of the ‘Highland problem’
in Scottish and UK public policy and how European funds played a critical role in its transformation from the 1980s to become ‘…an example of what a successful peripheral region looks like’.”

Photo of Drew Hendry Drew Hendry Shadow SNP Spokesperson (Business, Energy and Industrial Strategy)

I will not; I am going to make some progress, as I indicated. There is very limited time.

Communities and charities have used European funding to benefit people, especially the most vulnerable and disadvantaged. The Shaw Trust says:

“Without ESF

European social fund—

“funding, Shaw Trust would not have been able to support 70,000 disabled people” and

“offenders…to gain new skills, improve their wellbeing and find work”.

Equally Ours—formerly the Equality and Diversity Forum—says that EU funding has provided vital, dedicated support to individuals experiencing disadvantage, discrimination and abuse, as well as the voluntary and community organisations that support them. It says that the continuing lack of lack of consultation on the UK shared prosperity fund is creating significant uncertainty for communities, organisations and disadvantaged people.

Communities and charities have now been waiting for years to find out what funding will be available post Brexit, yet so far there is nothing from the UK Government, other than a name, that the Union flag will be on it and that it will be administered by the Minister for local government in England. That is in spite of a recognition of how valuable the funds have been and a commitment made to replace them. The UK shared prosperity fund was promised by the Tories in their 2017 manifesto. They said that it would

“reduce inequalities…across our four nations.”

They said it would be “cheap to administer” and “low in bureaucracy”. Without a like-for-like replacement, inequalities will increase, and that is what we are now looking at. The Tories were right in the second part of what they said: the fund is cheap and there is no bureaucracy—because it does not exist.

The Commons Library notes that many considerations are required for the fund, including priorities, objectives, amounts of money, allocation, method of model, length of planning and who administers funds. The latter role currently rests with the devolved Governments. All the organisations and charities that have contacted me agree with the conclusions of the all-party group on post-Brexit funding for nations, regions and local areas, which in turn received many submissions, including from the Welsh Government, the Convention of Scottish Local Authorities, Scottish local authorities directly, the Equality and Human Rights Commission and numerous educational and voluntary bodies. They all said, first, that the fund’s budget must be no less in real terms than the EU and UK funding streams it replaces, and, secondly, that the devolved nations’ share should not be reduced and that it should remain a devolved matter.

The UK Government must now respect the devolution settlement and UK Ministers should commit to work with all the devolved Administrations to agree funding arrangements that make sense for all the nations of the UK. As I have said, currently the biggest piece of concrete information we have is a written statement from July 2018 that largely consists of a future planning framework for England, with, as mentioned, the English communities Minister, who is judged on English community improvement, in charge of UK funding distribution.

The groups and communities aided by the funds do not believe that Westminster knows best how to act in the interests of the parts of Scotland that need the most support. They do not want to see a Westminster power grab. There have been no assurances about devolved powers, despite numerous questions raised in the House. In mid-November last year we were promised that a consultation on the UK shared prosperity fund would be published before the end of that year, but there is still nothing. All the while, the hard-working volunteers, charities and communities face rising concerns about the future of the people they selflessly serve, and about their own futures. They need more than the new Secretary of State for Scotland saying that he will put Union flags on all projects, with the attendant suggestion of misplaced priorities and a desire to interfere with devolution by insisting on UK Government agreement on all UK shared prosperity funding. It is unacceptable.

The Scottish Government are determined to defend and maintain the benefits that EU funding has given them, to defend the organisations I mentioned, and to defend their hard-won fiscal responsibility. How will the shared prosperity fund ensure the flexibility, which currently exists with EU funding, to allow organisations to fund different policy areas, from biotech to tourism and education? How will the new fund enable strategic planning within organisations over the longer term, as EU funding has enabled? Will the Minister guarantee like-for-like funding for the €13 billion that would have come from the EU? Will he guarantee no detriment to the Scottish Government as a result of Brexit? Will he commit today to respecting the devolution settlement? If he cannot do those things—if he cannot make those commitments—he should work with his Government to revoke article 50, so that the money is not lost to our communities. If he is not able to do that, all it will do is show the people of Scotland that they need to make a new choice about their future—to be an independent country, taking their own seat in Europe.

Several hon. Members:

rose—

Photo of Lindsay Hoyle Lindsay Hoyle Deputy Speaker and Chairman of Ways and Means, Chair, Panel of Chairs, Chair, Standing Orders Committee

Order. I want to make sure that everybody gets in and that we start the next debate on time, so Members will have up to six minutes. Please be aware of that.

Photo of Sarah Newton Sarah Newton Conservative, Truro and Falmouth 2:28 pm, 5th September 2019

It is a huge privilege to stand in the House today. We have a special word in the Cornish language: hireth. There really is no direct translation into English, but it is about a feeling that comes from being Cornish. It derives from our inspirational natural environment and from our history and culture.

As someone whose family has lived and worked in my constituency for generations, it has been a huge privilege to represent my home town. [Interruption.] Mr Deputy Speaker, just before you leave the Chamber, let me say that you were in the Chair when I made my maiden speech. As the general election is just around the corner, this may well be my last speech in this House, and it will be a speech standing up for the people of Cornwall who sent me here. Thank you, Mr Deputy Speaker, for standing and listening to me say that.

There is no doubt in my mind that the funding that Cornwall has received via the European funds has been absolutely essential. Despite the many natural wonders of Cornwall, and the hugely talented, creative and resourceful people, the fact remains that we are still the poorest region in England. There is no doubt that a huge amount of progress is being made. In no small part, that is down to the funding that we have received via the European Union. Let me explain why.

Just before the summer recess, colleagues from across the House, including my Cornish colleagues and I, supported by 14 first tier local authorities, launched a report called “Britain’s Leading Edge”, which demonstrates beyond doubt that the English regions that do not have a major city have been historically underfunded and that there is a bias in the system of the allocation of public money towards the English regions that do have cities. I am delighted that the Government have responded positively to the report and that we have seen some real progress in some of the funding formulae used to allocate funding, particularly in the NHS and the recent moves on the national funding formula for education. However, the models that the Treasury uses in the allocation of funds for transport and economic development are systematically biased against regional peripheral maritime regions such as Cornwall.

This is where the European funding that Cornwall has received comes in. It has enabled us to put that money on the table in our negotiations with the Treasury when we are securing vital investment for our infrastructure, such as roads, rail, superfast broadband and education. It is vital for future progress that anyone and everyone who represents Cornwall and the regions of the UK that do not have major cities ensures that there is dedicated funding to close those gaps and to make the progress we want.

Cornwall, like all these regions, has huge potential and capabilities that need to be unleashed. We want to play our full part in our nation. We do not want to be the poorest region. We certainly have the talent and the capability to deliver, particularly on some of the key challenges and opportunities our country faces. I think we can all agree that there is no greater challenge than facing up to climate change and environmental degradation, and our regions have the solutions; we produce the nation’s food as well as vast sources of renewable energy. We have talented people, great businesses and wonderful universities. With dedicated funding, we are more than able to meet the challenge of closing the gap. I know that the Government want to ensure that no one and no region in our country is left behind, and dedicated replacement funding for the EU funding will enable us to ensure that.

Photo of Clive Betts Clive Betts Chair, Housing, Communities and Local Government Committee

I wish the hon. Lady all the best for the future, as she has indicated that she will not be in this place after the election.

It is important that areas such as Cornwall get the continuation of the funding they have had in the past when we are outside the EU. But there are other areas such as South Yorkshire, which are not currently not objective 1 areas but which would get objective 1 funding in the future if we were still in the EU. It is important that that is recognised in any future settlement, so that areas such as South Yorkshire get the proper funding as well.

Photo of Sarah Newton Sarah Newton Conservative, Truro and Falmouth

Let me put this beyond doubt; I am just being respectful of the fact that no one has a right to a seat on these Benches. If we have a general election, I do not make any assumption about whether I will be returned to this place, but I absolutely plan and hope that the general election does send me back to this place. Far too many people in this House are complacent and see themselves automatically being re-elected. In a forthcoming general election, I know that I will have to go out and earn my right to represent my constituents here. [Interruption.] I appreciate that Madam Deputy Speaker would like me to complete my speech, which I am very happy to do.

I would like Ministers to make an unequivocal commitment in our manifesto for the forthcoming general election that Cornwall will receive, pound for pound, what it would have received had we stayed in the European Union, so that we can unleash the huge potential that we can deliver to our great nation.

Photo of Hywel Williams Hywel Williams Shadow PC Spokesperson (Work and Pensions), Shadow PC Spokesperson (Brexit), Shadow PC Spokesperson (Cabinet Office), Shadow PC Spokesperson (International Trade) 2:35 pm, 5th September 2019

European funding has been hugely important to Wales: particularly to my area of north Wales, but also to mid-Wales and other areas. I echo the concern expressed by Drew Hendry: many of us are frustrated by the lack of information—any information at all, for that matter—about how the shared prosperity fund will operate. The delay in the consultation is just symptomatic of the lack of care that the Government have shown towards the European funding that we have already had and towards what will happen in future, suggesting that regional funding is a low priority for this Government.

This issue is incredibly important in Wales, because we get a large amount of European funding. In fact, we get four and a half times more per head from the European Union in funding than any other nation or region in the UK. Of course, this was not always the case. Some people here will recall that the maps were redrawn to delineate west Wales and the valleys as the area that would get funding. These maps are called nomenclature of territorial units for statistics maps—ludicrously known as NUTS maps, as that is the acronym. The previous NUTS map for Wales put poor west Wales, where I live, in with the rather more prosperous north-east Wales, and south-west Wales in with the rather more prosperous Cardiff area. When the map was redrawn, suddenly we were allocated funding under the European Union’s regional policy, showing the value of that policy and also that a degree of cleverness is required in acquiring that funding, which we eventually showed.

Wales—particularly my area—is economically on a par with the former communist parts of eastern Europe, Portugal and southern Spain. That is not something that we celebrate, of course, although it does bring us in a certain amount of funding. Rather, it is the consequence of decades of marginalisation, neglect and mismanagement by Westminster. Let me echo the points made by the hon. Member for Inverness, Nairn, Badenoch and Strathspey. At the very least, can we have an assurance from the Minister that not a penny less will come to Wales under this fund as compared with under European funding?

Photo of Bob Stewart Bob Stewart Conservative, Beckenham

My reading is that, actually, the funding will continue. It will just not come from Europe; it will come from London—at least in the immediate future.

Photo of Hywel Williams Hywel Williams Shadow PC Spokesperson (Work and Pensions), Shadow PC Spokesperson (Brexit), Shadow PC Spokesperson (Cabinet Office), Shadow PC Spokesperson (International Trade)

The hon. Gentleman may be right, but I would like some confirmation of that, and certainly more information than “the immediate future” because we are looking beyond 2021. There are projects whose timescales demand that. In fact, there are projects in my community that require funding for many years into the future, including projects at Bangor University.

What is also extremely unclear, to me at least—perhaps the Minister can enlighten us—is the criteria for the allocation of money under the shared prosperity fund. I would argue for allocation on the basis of need. We will not accept the milking of funds that would otherwise have gone to Wales to fund projects elsewhere. That is certainly a fear. For example, Welsh farming might proportionately get considerably less money than one would expect if the criteria were based on, say, per head funding.

Photo of Albert Owen Albert Owen Labour, Ynys Môn

I represent a neighbouring constituency, so I share many of these projects in north-west Wales with the hon. Gentleman. He talked about the agricultural community. Is it not important that any new allocation of funds is not made through the Barnett formula, as this would mean a huge reduction in moneys allocated? We are talking here about food production, much of which is exported to mainland Europe.

Photo of Hywel Williams Hywel Williams Shadow PC Spokesperson (Work and Pensions), Shadow PC Spokesperson (Brexit), Shadow PC Spokesperson (Cabinet Office), Shadow PC Spokesperson (International Trade)

The hon. Gentleman makes a good point. I raised it with the then Minister over two years ago and was given a verbal assurance that that would not be the case. Were we to use the Barnett formula, funding to Welsh farming would probably be halved. At that time, the Minister gave us a verbal assurance, but I seek a similar reassurance from the Minister today.

Funding should go directly to our Government in Cardiff, rather than being allocated directly from London to individual local authorities and organisations. There is much merit in ensuring that local organisations and local government get the maximum funding. I have heard the argument that diverting money through Cardiff would increase bureaucracy and cost, but the fundamental argument is that the competent authority should be the Government in Wales. Any move in any other direction would undermine the devolution settlement and would be resisted by Members on these Benches and others.

To close, I should point out again to the Government that Wales is another country and that EU membership has had a different value and quality for us in Wales, as reflected in the funding we have been getting. That is particularly the case in my own area of Gwynedd, despite its poverty. One might suppose that that would put us in with areas that voted strongly to leave the EU, because of the marginalisation, poverty and distance from London and the seat of power. In fact Gwynedd voted 60:40 to remain, because of our values, the way we see the world, our culture, our bilinguality and our happiness at being part of the EU, which is much more congenial to us. Gwynedd is a different place—Wales is a different place—and should be treated with respect.

Photo of Scott Mann Scott Mann Conservative, North Cornwall 2:41 pm, 5th September 2019

Meur ras, Madam Deputy Speaker. Thank you for calling me in this important debate.

One of the promises the leave campaign made during the referendum was that European funding would be replaced. I am pleased the Government have pledged to introduce the shared prosperity fund, although I have to say that progress has been rather slow. European funding was designed to tackle inequalities between regions, and the shared prosperity fund should go in with exactly the same aim. I will be lobbying the Government strongly on behalf of my residents in North Cornwall to ensure we get our fair share of this funding. I will also be taking a lot of interest in the consultation, particularly after yesterday’s spending review.

The question of whether the current European funding has been successful can be answered by asking the public in towns such Bodmin in my constituency, who, after two decades of regional development funding, are yet to see any tangible benefits to their incomes or small businesses. A recent report highlighted that only one job was created for every £250,000 of ERDF funding. I believe the UK Government can do much better than that.

Many large organisations, companies, professional public relations teams and consultants were able to successfully apply for this level of funding, but many small businesses in North Cornwall, which run their operations on tight budgets and do not have the time or the staff, or sometimes the expertise, to make those complicated and onerous bids, were not successful. As the Government look forward to the shared prosperity fund, we need to make it much easier for those small businesses to bid. The rules on these bids and structural funds were often dictated by Brussels. The shared prosperity fund must be easily accessible, be more streamlined and have a much simpler bidding process, so that small businesses in my constituency can benefit.

There are also disparities between urban and rural communities and, although programmes such as LEADER helped, we need to go much further. I know that the Minister was instrumental in the coastal communities fund, which was seen as a really positive fund for communities, including some that I represent, that were feeling left behind by globalisation. In North Cornwall, we have very mixed traditional industry, with many agricultural and fisheries businesses, but we are also keen to explore how 5G and fibreoptic technology can help people to run their businesses from home in small towns such as Bude in my patch.

People are making choices about where they live and work and, as they make those choices, they are looking at where they want to bring up their children, retire to or move their businesses to. Some of them are coming to places such as Cornwall. We want to be able to respond to the changing market conditions in places such as Cornwall by ensuring we have the business skills and the shared prosperity fund to support these small businesses as they grow. We need to ensure that as businesses are displaced from the cities we can accommodate them in rural places such as North Cornwall.

Photo of Mike Amesbury Mike Amesbury Shadow Minister (Work and Pensions) (Employment)

I actually share some of the hon. Member’s analysis and concerns about the former structures, and I speak as someone who had the pleasure of taking forward ESF funds. The urgency now, which was displayed by 100 chief executives writing to the Prime Minister in August, is to get on with it and make it happen for communities such as Cornwall and Weaver Vale. Does he agree?

Photo of Scott Mann Scott Mann Conservative, North Cornwall

I agree absolutely. We faced a bottleneck after we did not leave the European Union in March—a bottleneck with businesses not investing—and we have to clear that bottleneck as quickly as we can. The replacements for the ERDF should be in place to help those businesses to grow and expand as the economy changes.

On one occasion, there were two businesses working alongside each other in North Cornwall. One was able to double its footprint due to a generous EU grant, but that placed the other business, which was working on the other side of the road, a family-owned business, into some difficulty. We have to be aware of some of the regional and local difficulties when implementing these funds and of how they can change the economies of the towns we work in.

To sum up, while North Cornwall will continue to ask for its fair share of these moneys, we also want to work with our local authority partners to ensure that we develop their programmes and their economic plans. During the upcoming consultation, I am hoping to be here and to speak up on behalf of the residents of North Cornwall to ensure that they get their fair share.

Photo of Roberta Blackman-Woods Roberta Blackman-Woods Shadow Minister (Housing, Communities & Local Government) (Planning) 2:46 pm, 5th September 2019

I congratulate Drew Hendry on securing this important debate. It builds on the important Westminster Hall debate that we held recently on this subject called by my hon. Friend Paul Blomfield. In that debate, we sought to elicit more information from the Government about how the shared prosperity fund would operate, and we also focused on the loss of EU funding and the impact it would have on regions classed by the EU as less developed. That is of particular importance to me because I represent a constituency in the north-east. We need to know what will happen about the shared prosperity fund.

Since that debate, however, we have heard very little from the Government about how things are going to proceed.

Photo of Chi Onwurah Chi Onwurah Shadow Minister (Department for Business, Energy and Industrial Strategy) (Industrial Strategy)

I thank my hon. Friend and neighbour for giving way and for her remarks. The UK is the most regionally unequal country in Europe and indeed the world in terms of how the economy is centralised around London. Does she share my concern that any fund administered from Whitehall will not meet the needs of regions such as ours—the north-east—or allow them to achieve their economic potential?

Photo of Roberta Blackman-Woods Roberta Blackman-Woods Shadow Minister (Housing, Communities & Local Government) (Planning)

I absolutely agree. Indeed, we have pointed out in previous debates that, given what we know about regional inequality in this country, we do not trust this Government to use these funds to eradicate it.

As we have heard throughout this debate, we need a shared prosperity fund to replace the EU structural funds currently being paid to the UK regions through the European regional development fund and the European social fund. The total value to the UK of funding from these streams in the current funding round is £9.15 billion, or £1.3 billion per year, so we are talking substantial sums of money. There are also smaller pots of funding—the European maritime and fisheries fund, the LEADER programme, the youth employment initiative and so on—amounting to a further £100 million a year.

Although there are funding implications for the whole of the UK, our withdrawal from the EU and the loss of access to these funding streams is of particular importance to the regions of greatest need. If the UK were to remain in the EU, we would be due to receive significant additional funding in the next round. I am not sure that the Minister has taken this issue on board. It would be really good to hear him acknowledge what these regions would have got if we were staying in the EU. The three regions that are currently affected—Tees Valley and Durham, South Yorkshire and Lincolnshire—are on course to slip below the threshold of 75% of EU average GDP per head, which means they will qualify for extra funding. They would join the three regions already acknowledged—west Wales, the valleys and Cornwall—in receiving a much higher level of funding: about £135 million a year. As my hon. Friend Chi Onwurah said, the Government should be very concerned that these regions are facing such inequality and experiencing a need to develop their economies further. We really do want to hear from the Government how they are going to achieve that.

We want to hear from the Government about how the shared prosperity fund is going to operate, and about timescales. We want to hear what they are doing to address the growing regional inequality in the UK. How do they see the shared prosperity fund sitting alongside local growth funds, for example? How will those funds interact with other funds that are available to support regional development? Are the Government giving themselves a timeframe in which to eradicate regional inequality? To date, we have not had enough information from the Government. Even at this late stage, we know very little about how the fund will operate. What sort of money are we talking about, and will it be disbursed in the same way as it has been under the EU? Will the Government take into account the regions in greatest need, or not?

I feel very strongly about this issue, as do other Members of Parliament in regions that very much need investment to help our economies to grow and to reach their full potential. These are amazing regions with huge skills and talents among the population. They all need development in digital and higher-level skills, so we need to use our universities and colleges to drive up that development. They need investment in renewable energy—particularly the north-east, which has wonderful expertise in this—and in pharmaceuticals. We need to upgrade the transport system. We must ensure that everyone in these regions can reach their potential and contribute to the future prosperity that we all want to see, particularly in the communities that need more support from this Government.

Several hon. Members:

rose—

Photo of Rosie Winterton Rosie Winterton Deputy Speaker (Second Deputy Chairman of Ways and Means)

Order. Can I stress to colleagues that there is real pressure on time, and if they could take more like five minutes than six minutes, that would enable us to have a fair allocation of speakers this afternoon?

Photo of Luke Graham Luke Graham Conservative, Ochil and South Perthshire 2:53 pm, 5th September 2019

I congratulate Drew Hendry on securing this debate. I thought we were going to be singing from the same hymn sheet today, because in previous debates on this topic we have agreed, but unfortunately he has, yet again, let nationalism get in the way of some of the facts and figures, and the actual impetus and help that these structural funds deliver. He is quite right that in the period 2014 to 2022 the funding arrangement for the EU structural fund is about £15 billion for the United Kingdom. That gets topped up to about £26 billion, I am informed by the House of Commons Library, with UK match funding.

The hon. Gentleman raised a point about some of the roads being built in his constituency, as did Jamie Stone. In those constituencies—yes, they are right—the EU flag does fly, but why does the Union flag not fly proudly alongside the EU flag and the Saltire when the UK has made a contribution, as I believe my right hon. Friend the Minister will be able to confirm?

Scotland received around £1.2 billion from EU structural funds between 2010 and 2016, which is great, and I will come on to say why I want that to be secured and continued. The hon. Member for Inverness, Nairn, Badenoch and Strathspey parades and champions the EU structural funds, as will I, but he was less willing to recognise the £1.2 billion of additional funding awarded to Scotland by the Government in the spending round just yesterday, which will give our devolved Administration in Scotland over not a six-year or 10-year period but a one-year period the greatest settlement we have had in over a decade.

My constituency of Ochil and South Perthshire has only received £1.1 million to £1.3 million a year of EU funds between 2014 and 2020 so far. That is not enormous, but it is helpful. Although Scotland has 8% of the UK population, we receive around 14% of the UK allocation, so it is very important to us. I know from visiting companies such as the Loch Leven Equine Practice in my constituency that these funds can be very helpful to small businesses.

The funds are meant to help combat structural inequality and have a transformative effect on the economy, but from my constituency point of view, they have not been able to do that. In Clackmannanshire, we still have a job density of only 0.5 per head of population. We have higher rates of unemployment and youth unemployment than the Scottish and UK averages. In Perth and Kinross, on the other side of my constituency, we also see it reflected in some of the official figures in terms of deprivation and in the recent increase in the number of drug deaths per 1,000 people.

I am quite excited about the fact that the shared prosperity fund can be a fresh start. Unlike the SNP, Conservative Members will be requesting more funding and coming up with innovative solutions. [Interruption.] If the hon. Member for Inverness, Nairn, Badenoch and Strathspey would like to make an intervention, I will gladly let him. He certainly did not let anyone on the Government Benches intervene on him.

Photo of Luke Graham Luke Graham Conservative, Ochil and South Perthshire

I will let him intervene, but before I do, the House will be well aware that my hon. Friend Kirstene Hair tried to intervene on the him, and he refused her multiple times. It is a friendly understanding among Scottish MPs, who have to get back to friends, family and constituencies on a Thursday, that we usually let one another intervene because travel is very restrictive. He failed to do that. However, I will extend the courtesy to him in the hope that it will be reciprocated to my colleagues in future.

Photo of Drew Hendry Drew Hendry Shadow SNP Spokesperson (Business, Energy and Industrial Strategy)

I thought the hon. Gentleman was inviting me to intervene on him. He mentions extra money for Scotland, but he does not take into account the cumulative cuts of £12 billion that we have had over the whole decade.

Photo of Luke Graham Luke Graham Conservative, Ochil and South Perthshire

I secured a debate on Scottish funding and devolved funding just before the summer recess to which no SNP MP turned up. In that debate, I gave the opportunity to challenge those figures and have an in-depth, detailed discussion about them, because they are not recognised by the House of Commons Library. If they are, I will be happy to welcome another debate on the topic, so that we can take it further.

I would like to go on to the positive things that we are trying to do. The shared prosperity fund allows us to formalise the process of applying for funds. It could also build and improve the city deal and growth deal projects that have already been awarded Scotland to the value of over £1 billion. The money in the city deals has been very welcome, but I think Members on both sides of the House would agree that the city deal and growth deal process could do with some improvement. We can have less bureaucracy, and central Government should provide support to not only the devolved Administrations but the local authorities and civic groups that are applying for these funds. So often, exciting and transformational opportunities are lost because local businesses and local groups do not have the skills to meet a Green Book or European set of qualifications to access the funding that they so require.

Photo of Bob Stewart Bob Stewart Conservative, Beckenham

It seems to me that there is a requirement for the shared prosperity fund organisation to have a local office, particularly to help small businesses.

Photo of Luke Graham Luke Graham Conservative, Ochil and South Perthshire

I thank my hon. Friend for his suggestion. That is just the kind of innovative proposal that we should be putting forward and having a cross-party discussion about, to ensure that the shared prosperity fund works for the entire United Kingdom.

Although we could talk about this for a great many hours more, I am conscious of time, so I will conclude. I am pleased that the Government have guaranteed funding to 2022, which I am sure the Minister will confirm, so that we can give assurances to the charities, local government and businesses in our communities. We do not come with grievance; we come with solutions. Let us keep the central fund of around £1.2 billion plus inflation for the future, but let us also recognise that it has not delivered transformational change for our constituents in Scotland. Perhaps we could put some of the UK match funding into a new direct central fund that local authorities and businesses could bid into, along national lines, to provide greater clarity and guarantees for our local communities, so that they can access the funds they so badly need to thrive and survive.

I agree with colleagues in Wales, Scotland and England that these funds provide opportunities to all our regions. We want to combat structural inequality and improve the opportunities we have, and we want to do it through a fine United Kingdom system.

Several hon. Members:

rose—

Photo of Rosie Winterton Rosie Winterton Deputy Speaker (Second Deputy Chairman of Ways and Means)

Order. I am afraid I will have to impose a time limit of five minutes.

Photo of Justin Madders Justin Madders Labour, Ellesmere Port and Neston 3:00 pm, 5th September 2019

As we know, the central aim of the shared prosperity fund is to reduce inequality and enable all our communities to share in the country’s economic growth. It could not be any more needed than it is now, because regional inequality has grown since 2010.

My constituency is in the north-west, and it is no surprise to me that earlier in the year the Institute for Public Policy Research North published a report finding that the north has borne the brunt of the Government’s austerity drive. We have had a £3.6 billion cut in public spending, while the south has had a £5.1 billion rise in real terms. We have seen public sector employment fall by 2.8%, compared with 1.2% in London, and spending on transport rose by more than twice as much in London as in the rest of the country. We have seen weekly pay increase by only 2.4%, compared with 3.5% nationally, and the number of jobs that pay less than the living wage has risen by nearly 11%.

Of course, these cuts have had and continue to have a negative impact on our communities. There are now more than 200,000 extra children living in poverty in the north than there were five years ago, meaning that 800,000 children are now living in poor households. That is nothing short of a scandal. The economy has been growing consistently—very slowly, but consistently—throughout the last five years, so having such an extra number of children growing up in poverty during that period shows that the way the economy is working at the moment does not work for many in the north. The points that have been made about maintaining, at the very minimum, existing levels of expenditure are absolutely right. The budget for the UK shared prosperity fund must match, in real terms, what the EU has been paying, but we need to go much further. I am worried about the lack of transparency from the Government about how they are going to adopt this fund, because I believe we have good grounds to be worried.

Let us take the future high streets fund. It is potentially a good initiative, but one that I fear has already been hijacked for party political ends. Ellesmere Port put forward what I considered to be a good bid. Indeed, the Government seemed to think it was, because when it was rejected in the first round, the Department wrote back a very nice letter to say that it was impressed with the bid and that it was well placed for the second round that would be decided some time next year. However, somehow—out of the blue—another round of funding for successful bids was announced only last week. Sadly, Ellesmere Port missed out again, but when I saw that the majority of the lucky towns were in Conservative constituencies, I was overcome by a flush of cynicism. Could it be that the announcement was entirely connected to secret plans to hold a snap general election? I think that subsequent events have borne out my concerns in that area, which is why we cannot trust this Government to allocate these funds in a non-partisan manner.

Towns such as Ellesmere Port and Neston in my constituency have been struggling for a long time. The rise of the internet and changes in shopping habits are leading to shops closing on a weekly basis. The sums we need for a truly transformative approach will not come from one pot alone. If the shared prosperity pot is operated in tandem with other funding pots, as the Local Government Association suggests, there would be an opportunity for an integrated and creative approach that could lead to a better outcome for all. Although we must ensure that this does not reduce the scope for matching funds in relation to any other projects, it is vital that we can access as many funds as possible to ensure that the communities we represent are properly resourced, that the imbalances are shared out and that the inequalities across the country are actually eradicated altogether.

For too long, people have felt left behind and held back by a system that does not work for them. We do not want more platitudes from London. We need a new approach—one that really empowers our local communities by giving them the responsibility, power and resources to shape their own futures, in line with local priorities and local need, because decisions that impact on local communities are best made by those communities themselves. It does not make sense that, in 2019, London still controls all the resources and holds all the levers. It is time we realised that business as usual is not going to cut it, and that further Westminster handouts on Westminster terms are not what our communities want. We need this new prosperity fund to be really owned by local people so that it actually delivers for their priorities.

Photo of Bill Grant Bill Grant Conservative, Ayr, Carrick and Cumnock 3:04 pm, 5th September 2019

I thank Drew Hendry for securing this debate, which is important for Scotland and the whole UK. In recent weeks Opposition Members have made many, fairly wild, allegations that the Government have not adequately planned for Brexit. Aside from the fact that we have seen daily evidence of considerable planning, and that we cannot possibly know today how effective such planning will be in the fullness of time, many are still determined to paint a bleak picture. I hope the provision of the UK shared prosperity fund will provide some reassurance to those who have instead kept an open mind, and offer an indication that the Government have planned for some time to replace the structural funding that the UK receives via the EU. British taxpayers’ money is currently managed in the European Union, far away in Brussels, and I believe this fund will considerably benefit my constituents.

This funding is in the region of £2.4 billion per annum to boost economic development. It will provide support for businesses, employment and agriculture and, as stated in the industrial strategy, it will strengthen the “foundation of productivity”. Fisheries will be covered by separate funds. The funding will be administered by the different nations of the UK, and I understand that, as always, the UK Government will respect the devolution settlements regarding the allocation of funds.

The laudable aim of the fund, which could be said to be at the skeletal heads of terms stage following stakeholder engagement, is to reduce inequalities between communities. A consultation will follow, to enable flesh to be added to the bones. I welcome the statement that the new fund will be low in bureaucracy and duplication. The single most important fact is that the UK Government have guaranteed to maintain all EU funding that was agreed before the UK leaves the EU.

Let me reflect on infrastructure in Scotland, the bulk and best of which was built long before we joined the European Union. I will name just two iconic bridges—the Forth rail bridge and the Forth road bridge—neither of which encompasses Chinese steel. I believe that recent data show southern Scotland as a less developed area. When considering my constituency, I welcome the fact that this funding will provide support to local small businesses, several of which have highlighted to me that they routinely struggle to make a living, never mind a profit, under the burden of increasing rates and taxes, while also accommodating increased salary costs.

The unemployment rate in Ayr, Carrick and Cumnock is 6.9%, which is far above the Scottish and UK average of around 3.8%. My constituency has immense potential, and really needs this funding. That high unemployment rate would further concern me if, as part of its method of allocating spending between regions, the new UK shared prosperity fund replicated the measures used by the EU for its structural funds—namely GDP per person—because in some former mining areas that would result in a distorted picture.

The Joseph Rowntree Foundation suggested that the funding should be focused on “inclusive growth” and be

“allocated according to the employment rate and earnings of the least well off”.

That would be most beneficial for constituencies such as mine, and others across the United Kingdom.

I have met several constituents with good, innovative ideas and sound STEM and business backgrounds who could perhaps benefit not just local communities but the wider UK. They are people whose ideas, with the support of local councils and community partnerships, could come to fruition if the right funding was available for them to bid for. It is therefore vital that we conserve what was formerly ERDF and ESF funding.

I thank Stephen Kinnock for his work on the all-party group for post-Brexit funding for nations, regions and local areas. He produced an excellent report in November 2018. Will the Minister assure the House that the shared prosperity fund will be sufficiently funded, and flexible enough to take account of the diverse needs of my constituency, with its many struggling rural ex-mining communities that bear the legacy of a harsh industrial past, as well as those towns whose high streets have been ravaged by the change in shopping trends and, sadly, the demise of local banks?

Photo of Stephen Kinnock Stephen Kinnock Labour, Aberavon 3:09 pm, 5th September 2019

I thank 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 which 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.

Photo of Jane Dodds Jane Dodds Liberal Democrat Spokesperson (Wales), Liberal Democrat Spokesperson (Food and Rural Affairs) 3:14 pm, 5th September 2019

Thank you, Madam Deputy Speaker, for giving me the opportunity to say a few words on this really important issue. I am grateful to Drew Hendry for bringing it before the House.

We have heard from colleagues from Wales, and I echo what they said about the importance of this pot of money for people in Wales, particularly for rural areas. As the Member for Brecon and Radnorshire, I know that we are particularly reliant on these sorts of funds to support our residents. I would like to say a few words about one project in particular: Workways+ in Powys, which helps young people to access jobs. In rural areas, we have a real challenge in keeping young people in our communities. Many want to move out to perhaps more exciting and more urban ways of living, but we want to keep them in our communities. They are our future. They are going to be the families of the future and the people who work in our communities, and we want to keep them there. Workways+ in Powys does a wonderful job of keeping our young people in our rural community.

I ask the Minister to address four points. First, will he give us a very clear timescale for publishing where the shared prosperity fund is going? Secondly, what is the consultation process? Thirdly, will he give us an assurance that the moneys from this fund will go to the devolved Governments? Certainly, in terms of Wales, he has had very clear representations on that. Finally, we all have our views on the politics of this issue, but we share a common interest: we want this fund, and we want the timescale for the fund and information to be given to us and our communities as quickly as possible.

Photo of Alison Thewliss Alison Thewliss Shadow SNP Spokesperson (Treasury), Shadow SNP Spokesperson (Housing, Communities and Local Government) 3:17 pm, 5th September 2019

I thank Jane Dodds for setting out her stall for her constituency. In the short time that she has been here, she has been a strong advocate for her constituents. I also thank my hon. Friend Drew Hendry and the Backbench Business Committee for granting us time to discuss this fundamentally important issue.

It is difficult to think of an area of Scotland’s economy that has not benefited from structural funds, and my constituency is no exception. Being part of the EU has been beneficial to Scotland in many ways, just as it has for Cornwall, as the hon. Members for North Cornwall (Scott Mann) and for Truro and Falmouth (Sarah Newton) set out, and for Wales, as Hywel Williams and other Members said. There is no doubt that communities will be poorer as a result of leaving the EU—culturally, socially and economically. Organisations in Glasgow Central have received over £241 million in European structural funds since 2014 according to figures from the House of Commons Library.

The aims of European structural funds are closely aligned with those of the Scottish National party—to grow the economy while tackling inequalities. Our Madame Ecosse, Winnie Ewing, MEP, fought for European funds when Westminster got its sums wrong and tried to deny them to the highlands of Scotland. The Scottish Government have set out a programme of sustainable inclusive growth in their national performance framework and we are working as a responsible Government to improve outcomes across a range of indicators. It is extremely important that any replacement fund does not diverge from the aims of our inclusive growth strategy.

European structural funds have been vital in the delivery of inclusive growth in Scotland. The European social fund has been used to increase the skills available in Scotland’s labour market and to help to lift people out of poverty into increased social inclusion. The European regional development fund is supporting small and medium-sized enterprises and is investing in Scotland’s transition to a low-carbon economy. There is still a lot to be done to tackle inequality and we cannot let these issues be overshadowed by the process of Brexit.

The Scottish Government value the European structural funds dearly, not just because of the monetary value, but because we have a shared vision of what we can achieve when they are used in a strategic way. I am not convinced that the UK Government share that vision. I agree with Justin Madders that local areas do not want handouts on Westminster terms. It is difficult for anybody in Scotland to know precisely what the UK Government’s intention is. We have been waiting an inordinate amount of time for details on the UK shared prosperity fund. From the 2017 Tory manifesto until now, we still do not know. Bill Grant himself called it skeletal—I think that is being generous, frankly. It is not a trivial amount of money that we are dealing with here. Third sector organisations, which are delivering vital services in our communities, need to know what their future will be.

Stephen Kinnock set out well the questions that he and his APPG have been seeking, and referred to the lack of answers and clarity that, shockingly, we still have. We need to know how the new fund will be drawn and whether there will be criteria to allow for the treatment of contaminated land, for example, such as in Shawfield in the Clyde Gateway area. Decontamination programmes are crucial to development but cannot go ahead until funding is secured. Opportunities to clarify matters have come and gone, with the spending review only yesterday failing to address the issue.

These are vital funds, and many of the organisations that depend on them are doing valuable work to mitigate some of the worst excesses of this UK Tory Government. Those on the Tory Benches could barely be providing a better argument for Scottish independence. We are once again seeing a tale of two Governments, with the Scottish Government working to increase equality and grow the economy in a sustained and sensible way, and the UK Government hellbent on pursuing a hard exit from the EU without adequate preparations for what will come next.

The Scottish Government have been clear on the five key principles that they would like any new funding scheme to adhere to. First, there should be no reduction in the level of funding that Scotland currently receives from the EU. Secondly, the devolution settlement must be respected, and there must be no reduction in the powers that the Scottish Parliament currently has. Thirdly, the Scottish Government should be an equal partner in the development of the shared prosperity fund. Luke Graham let the cat out of the bag when he talked about the bypassing of the Scottish Government—

Photo of Luke Graham Luke Graham Conservative, Ochil and South Perthshire

The hon. Lady is misinterpreting me. I did not talk about bypassing the Scottish Government. I specifically said—I am sure that Hansard will have recorded this—guaranteeing the £1.2 billion plus inflation, plus an additional fund that could be administered centrally so that they could work together in partnership, because that is what our constituents want: devolution plus central Government in a United Kingdom.

Photo of Alison Thewliss Alison Thewliss Shadow SNP Spokesperson (Treasury), Shadow SNP Spokesperson (Housing, Communities and Local Government)

The hon. Gentleman is talking about a United Kingdom system here. He is talking about the UK choosing Scotland’s priorities. That is not what our communities deserve, that is not devolution and that does not respect the devolution settlement, and he knows that just fine.

Fourthly, the current level of flexibility in the allocation of funds should not be reduced. Fifthly, the replacement scheme should be operational in time to be implemented in early 2021, so that communities, organisations and businesses in Scotland do not lose out on much-needed funding. There must not be any gap, and the Minister needs to be able to guarantee that today.

Photo of Philippa Whitford Philippa Whitford Shadow SNP Spokesperson (Health and Social Care)

With the threat of actually being out of the EU in literally a matter of weeks, is not a gap inevitable, given that we are talking about the end of 2021?

Photo of Alison Thewliss Alison Thewliss Shadow SNP Spokesperson (Treasury), Shadow SNP Spokesperson (Housing, Communities and Local Government)

I agree with my hon. Friend that a gap is inevitable. We do not know what will happen, and the UK Government cannot tell us what will happen next week, never mind in 2021. We cannot believe anything that they tell us on these commitments.

Will the Minister today commit to giving the principles set out by the Scottish Government the consideration they deserve, because the people of Scotland did not vote for any of this Brexit mess and should not lose out on funding as a result? Scotland has benefited from EU funds while the UK Government looked the other way, from the Kessock bridge to inequalities, education and industry. Will he guarantee today that Scotland will have not one penny less under the shared prosperity fund than we would have received under the EU?

Photo of Peter Dowd Peter Dowd Shadow Chief Secretary to the Treasury 3:23 pm, 5th September 2019

We have had 11 speakers and interventions, and I think they have all expressed their concern about the lack of detail. I thank Drew Hendry for bringing this to our attention.

The breaking news as I arrived in the Chamber was that Joseph Johnson, the Prime Minister’s brother, is standing down from Parliament, apparently to spend less time with his family.

As a Member of Parliament who represents a Merseyside seat, I very much appreciate, in a personal sense, the role that EU funds have played in ensuring investment in our region, as in other regions. I remember that Geoffrey Howe, the former Chancellor of the Exchequer, talked about the managed decline of Merseyside in the early 1980s. The European economic community was virtually the only social and economic lifeline that the city region had.

The Minister can sit there chuntering and shouting from the Front Bench, but I think he should behave in a much more dignified way. The Tories are using bully-boy tactics at the moment, threatening everybody. The Minister should pause and think about the distress that his Government caused to so many regions, and continue to cause to so many regions now. We have a bully-boy Minister, a bully-boy Prime Minister, and a bully-boy adviser in Dominic Cummings. Let us see a little bit of respect for the Chamber, and for the democracy that it embodies.

EEC funds helped Merseyside, and they helped other regions. The Government’s proposals raise a fundamental question that others have raised today and that the House must address. Even if the UK leaves the European Union and ends our participation in these funds—or substitute funds—can we trust the Government to ensure that the proposed prosperity fund will offer the same funding and reach the same communities? That question has been asked by virtually every Member, including Conservative Members, and there is also concern about the delay.

As was pointed out in June by my hon. Friend Paul Blomfield, a report published recently by the Conference of Peripheral Maritime Regions states that had the UK remained in the EU we would have been entitled to €13 billion from EU structural funds between 2021 and 2027. That amount, an increase from €10.6 billion, would have allowed five regions—including West Wales and the Valleys, Cornwall and the Isles of Scilly, Tees Valley and Durham, Lincolnshire and South Yorkshire—to receive the lion’s share of the funds, as they represent some of the “least developed regions” in Europe, where GDP falls below 75% of the European average. The fact that those regions fall below the 75% threshold is itself a indictment of a Government who have let them down and continue to do so. The very fact that the UK has gone from having two less developed regions to five in a matter of six years testifies to the failure of their economic policies.

Falling GDP is another legacy of the Conservative Government’s austerity agenda, which resulted in 200,000 more children living in poverty in the north than five years ago. As other Members have said, under this Government regional inequality is at an all-time high. According to analysis conducted by the Institute for Public Policy Research, the north of England has lost £6.3 billion of public spending as a result of the Conservatives’ economic policies, while the south has gained £3.2 billion. The Chancellor’s spending round statement yesterday did little to address regional inequality, despite what was promised earlier in the year.

The importance of the structural funds that the UK receives from the EU cannot be underestimated. According to the Joseph Rowntree Foundation, they are worth £2.4 billion a year, which goes to the very people whom the Government have left behind. That £2.4 billion is broken down between £1.2 billion a year from the EU and equal funding matched by other public and private sources. The funds finance research and development projects, support the retraining and skilling of workforces, help small and medium-sized businesses to grow, and encourage local areas to make the transition to a low-carbon economy.

Let me now deal specifically with the proposal for a shared prosperity fund. Previously, Ministers have committed themselves to maintaining the current arrangements for structural funds throughout the transition period. Given the Government’s commitment to pushing the UK towards a no-deal Brexit, perhaps the Minister will tell us for how long the Government will now commit themselves to similar levels of funding, and over what period. I am sure that he will be able to do so.

Similarly, while the Government have said that the fund will “reduce inequalities between communities”, they have consistently failed to offer further details about the specific design of the funds and who will be likely to administer them. Virtually every Member who has spoken today has drawn attention to that pattern. There is a fear, particularly among the devolved Governments and the metro mayors, that the shared prosperity fund will be yet another centralised fund controlled by Whitehall—a slush fund, in the words of my hon. Friend Stephen Kinnock. The clue is in this: the Prime Minister said at a recent leadership hustings in Cardiff that there should be a “strong Conservative influence” over how money that replaces EU structural funds is spent in Wales, implying at the very least that this Government will interfere with the distribution of funds far more than previously stated. That is key.

Ministers have claimed that a shared prosperity fund would be easier to administer and reduce bureaucracy, but again there is little detail on how this will be achieved, especially if the Treasury is hellbent on administering these funds centrally and with little flexibility for the involvement of the regions and devolved Governments.

The UK remains one of the most economically unequal countries in Europe. The gap between the richest and poorest is almost twice as large as in France and three quarters larger than in Germany. The EU structural funds have played an important role in addressing these regional inequalities, which the poorest communities cannot afford to lose. It is time for the Government to dispense with the smoke and mirrors, come clean about the details of the Government’s plan to replace EU structural funds, and offer a cast-iron guarantee that the communities that rely on these funds will not be cut adrift and there will be as much devolution and subsidiarity in these funds as possible.

The prevarication and procrastination at the heart of the Government is affecting the continuity of services already being provided, with staff in various agencies currently funded by EU funds being laid off. For example, Members will probably have had contact from employment support providers for ex-offenders, particularly vulnerable people whom Jobcentre Plus is ill-equipped to help. Staff are having to be laid off because we do not know about the future of the fund.

At this stage we still do not have any details on what the fund will cover. The Government are more than six months behind schedule in providing details of the post-2020 funding and have not yet published a consultation. The indecision of the Government in so many policy areas is damaging the country and their indecision on this particular fund follows that pattern. Ministers need to get a grip of this sooner rather than later.

Photo of Jake Berry Jake Berry Minister of State (Cabinet Office), Minister of State (Cabinet Office) (jointly with the Ministry of Housing, Communities and Local Government) 3:32 pm, 5th September 2019

It is a privilege and an honour to have the opportunity to respond to this debate, and I congratulate Drew Hendry on proposing it. It presents us with a timely opportunity to update the House on the progress we are making.

I also congratulate the hon. Members who have spoken; I will not have time to name them or respond to all the points they have raised but this shows that across the House there is real passion for the communities that each of us represents, and I share that passion for my own constituency, of course, in east Lancashire.

Many of the Members who have contributed referred to our being the recipients of EU money, and I think it is really important that the point is made for people who may be watching our proceedings today at home and following our every word about the future of EU structural funding and the UK shared prosperity fund that this is not the EU’s money. This money belongs to the British taxpayer; it is taken into the EU and is sliced, diced and taken away. It is then returned to the British people wherever they may be in our United Kingdom with a whole load of strings attached.

In 2018 the UK contributed £13.2 billion to the European Union and it sent us back £4 billion—£4.3 billion to be precise. We know in this country better how to spend UK taxpayers’ money than the European Union does; many Members on this side of the House, if not the other side of the House, will certainly agree with that.

We in Government have a history of working with the devolved Administrations, metro mayors and local authorities across our United Kingdom, and that is why we are so pleased that we were able to commit over £500 million of Government funding to the Glasgow city region deal. Specifically in the Inverness and Highland city region, we are proud to have contributed £53 million, among other things, towards the funding of the University of the Highlands, about which the proposer of the debate spoke with such passion. I know he will let no opportunity pass him by to ensure that the Scottish Government, the European Union and the UK Government are all credited for the contributions they have made to that exciting growth deal.

Photo of Jamie Stone Jamie Stone Liberal Democrat Spokesperson (Scotland), Liberal Democrat Spokesperson (Armed Forces)

An issue that I and others raised with the previous Secretary of State for Scotland is that, while we welcome the Inverness and Highland city region money, there is some evidence that the money is not going to some of the furthest corners of the Highlands, such as Wick and Thurso in my constituency, where it has been badly needed.

Photo of Jake Berry Jake Berry Minister of State (Cabinet Office), Minister of State (Cabinet Office) (jointly with the Ministry of Housing, Communities and Local Government)

The hon. Gentleman makes an excellent point on behalf of his constituents. I know it is not the first time he has made it, and we should certainly continue to monitor that. I, like him, suspect that there may not be a completely even-handed approach to disbursing money around the highlands, but he will know more about that than I do. However, these growth deals across our United Kingdom in Wales, Scotland and Northern Ireland are an example of what we can achieve when we work together as four nations. The awesome foursome that makes up the United Kingdom is the most successful political partnership and Union that Europe has ever known, and that is why, despite what the separatists may say in today’s debate, we are stronger together.

Turning to the main points raised in this debate, I understand that recipient organisations of European funding have concerns about the certainty of the future of their funding, but it is important that we acknowledge—[Interruption.] Is Stephen Kinnock seeking to intervene?

Photo of Stephen Kinnock Stephen Kinnock Labour, Aberavon

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?

Photo of Jake Berry Jake Berry Minister of State (Cabinet Office), Minister of State (Cabinet Office) (jointly with the Ministry of Housing, Communities and Local Government)

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.

Photo of Peter Dowd Peter Dowd Shadow Chief Secretary to the Treasury

I am glad the Minister is telling us how much it costs—£1 billion a week or a month or whatever it happens to be. He is very good with his numbers, so can he give us an estimate of how much a no-deal Brexit will cost the country each month?

Photo of Jake Berry Jake Berry Minister of State (Cabinet Office), Minister of State (Cabinet Office) (jointly with the Ministry of Housing, Communities and Local Government)

It seems to me that the hon. Gentleman is suffering from a version of Stockholm syndrome. I happen to believe that the British people and this British Parliament are best able to determine the future for our country. The rebel alliance is going to Europe with its flag fluttering behind it—a white cross on a white background—surrendering British sovereignty, but I am proud to be part of a Government that will never support that.

Photo of Peter Dowd Peter Dowd Shadow Chief Secretary to the Treasury

This stuff about surrendering is bizarre, because this is the Government who surrendered last night to what is apparently the surrender Bill. That is the situation we are in. They should publish the Yellowhammer report and make it transparent, so that we can see how much a no-deal crashing out will cost us. Let us get the facts on the table, so that we can examine them—if they do not prorogue Parliament before then.

Photo of Jake Berry Jake Berry Minister of State (Cabinet Office), Minister of State (Cabinet Office) (jointly with the Ministry of Housing, Communities and Local Government)

I am sure the hon. Gentleman would like to have blamed the passing of his surrender Bill on the House of Lords. The Members of Parliament who voted for it know that the Opposition parties have passed a law meaning that we cannot leave the European Union on 31 October, deal or no deal. If we do get to an election—if the Labour party finally has the backbone to have a general election—I will be reminding lots of those constituencies in the north of England that it was the Labour party that stopped us leaving on 31October.

Photo of Jake Berry Jake Berry Minister of State (Cabinet Office), Minister of State (Cabinet Office) (jointly with the Ministry of Housing, Communities and Local Government)

I am sorry, but I must make some progress, and I would like to briefly get on to responding to the debate.

Specifically, I want to deal with the two pertinent questions, which were repeated by many others, asked by the hon. Member for Aberavon in an extremely good speech. The first was about whether the UK shared prosperity fund will respect the devolution settlement, and the answer is absolutely yes. We are clear about that, and we want to work with the devolved Administrations and metro mayors as partners. We do not want to set the UKSPF up against the devolution settlement, which we will celebrate in the country.

The second question was about when the quantum will be clear, and it will not become clear until we have completed the comprehensive spending review. I will point out, however, that the quantum from the European Union would also not be clear until 2020. People have referred to the Conference of Peripheral Maritime Regions report, but that is of course a report by a think tank. It is not a report from the European Union setting out the quantum at this stage.

Finally, turning to the guarantee provided by the Government, it is quite right that areas are worried about the future of their funding, which is why the Government have set out a guarantee—deal or no deal. This week, I was involved in discussions approving new spending in the current period of European funding, and the guarantee enables commitments to be made until 2021, and it will apply to commitments that are paid out between now and 2023, so there is certainty for projects. Projects are still being approved. With the guarantee, there will be no gap, and clarity about the quantum and the form of the UK shared prosperity fund will become clear at the comprehensive spending review, notwithstanding the fact that we are already involved in deep consultation with both the recipients of the funding—British taxpayers’ cash—and the mayors and devolved Administrations. Official level consultation is ongoing between the devolved Administrations and the UK Government. The most recent meeting took place on 2 August, and additional consultations will happen later this month.

Madam Deputy Speaker, I would have loved to have said more, but—

Photo of Drew Hendry Drew Hendry Shadow SNP Spokesperson (Business, Energy and Industrial Strategy) 3:42 pm, 5th September 2019

I thank all hon. Members who took part in today’s debate and the Backbench Business Committee for the opportunity. I must correct the Minister, because the CPMR is not a think tank. It is a representative organisation of local authorities from across Europe, and I know that because I used to be its vice-president. We asked the Minister to clarify the flexibility and timetable, but we have had no answer. We asked the Minister whether funding will be matched pound for pound, but we have had no answer. We have had no answer on whether devolution will be fully respected. He said—[Interruption.] I will allow the Minister in.

Photo of Jake Berry Jake Berry Minister of State (Cabinet Office), Minister of State (Cabinet Office) (jointly with the Ministry of Housing, Communities and Local Government)

To be absolutely clear and to repeat what I said in my contribution, the Government will fully respect the devolution settlement in respect of the UK shared prosperity fund and, I am sure, in all other respects.

Photo of Drew Hendry Drew Hendry Shadow SNP Spokesperson (Business, Energy and Industrial Strategy)

In that case, I will accept the Minister’s comments, but he will be judged not on cheap words but on the actions of this Government and on whether they fail our communities.

Question put and agreed to.

Resolved,

That this House
notes with concern that the Government is more than half a year behind its schedule to provide details of post-2020 funding through a UK Shared Prosperity Fund;
supports the Joseph Rowntree Foundation’s recommendation that the Fund should at the very least match the £2.4 billion per year currently allocated through the EU structural funds;
and calls on the Government to ensure that full details of the fund are published with urgency, that the devolved settlement is respected and that there is no reduction in the levels of funding to devolved governments or their role in distributing funds.

Photo of Martin Docherty Martin Docherty Shadow SNP Spokesperson (Industries of the Future and Blockchain Technologies)

On a point of order, Madam Deputy Speaker. Earlier today, following the statement by the Secretary of State for Northern Ireland, I asked about aspects of being Irish, British or both in relation to an upcoming review that the previous Prime Minister had promised. In response, the Secretary of State stated:

“It is vital that this House continues to respect the dual citizenship components that the hon. Gentleman talks about”.

I talked about the birth right to be Irish, the birth right to be British, or both. What is open to Members such as myself to ensure that the Secretary of State reads the Good Friday agreement and recognises that the utterances that they make in relation to the politics of Northern Ireland have grave consequences not only for the peace, but for the social and economic prosperity of the people of Northern Ireland?

Photo of Rosie Winterton Rosie Winterton Deputy Speaker (Second Deputy Chairman of Ways and Means)

I thank the hon. Gentleman for giving me notice of his point of order. Obviously, I am sure he will understand that Ministers are responsible for what they say in the House. He has expressed concern about what was said earlier, he has made his point, and I am sure it will have been heard on the Treasury Bench and will be reported back to the Minister.