Extract from Welsh Parliament: Questions to the First Minister: Shared Prosperity Fund - Feb 2

Mark Drakeford MS (First Minister of Wales):Llywydd, the UK Government’s proposals for the shared prosperity fund fail to honour repeated commitments that Wales would be no worse off as a result of leaving the European Union, and have grave implications for our devolution settlement.

Alun Davies MS: I'm grateful to the First Minister for that. He will have seen the reports and analysis that have been published over the last few weeks, all of which have demonstrated clearly that communities such as Blaenau Gwent and the Heads of the Valleys are likely to suffer a much worse economic impact as a consequence of the coronavirus than many other communities. These communities will therefore require additional investment to help us recover. I agree with him that the shared prosperity fund, as currently proposed, is a real betrayal of all those people not only who voted for Brexit, believing that the EU structural funds will be replaced by UK funding, but also those people who believed that the United Kingdom Government had our best interests at heart. The UK Government seem determined to repeat the mistakes of the past and not learn the lessons for the future. In this way, Blaenau Gwent is being short-changed and will pay the price of Tory dishonesty and Tory incompetence. First Minister, do you agree with me that places like Blaenau Gwent, communities in the Valleys, and the Heads of the Valleys, require additional investment to help us recover from the economic impacts of coronavirus and to create the jobs that we all want to see and need?

Mark Drakeford: I thank Alun Davies for that, Llywydd. He's right to point to the reports that have been published recently. I was able to read at the weekend the Sheffield Hallam University's report on the impact of the coronavirus crisis on older, industrial Britain, dealing exactly with areas such as the one that Alun Davies represents here in the Senedd. And it does indeed demonstrate the vital importance of continued investment in those communities, of the sort that we have been able to draw down during the period when Wales has been able to deploy the funds that have come to us through the European Union. Now we see that being put into reverse. We get £375 million a year in structural funds and, as the Member will know, you can see the impact of those funds in so many aspects of the infrastructure of the Blaenau Gwent constituency.

The Welsh Affairs Select Committee, chaired by a Conservative Member, back in last year described the shared prosperity fund as having made negligible progress, no clarity as to what it will look like, how it will be administered nor how it will be funded. And when the UK Government responded to the Welsh Affairs Select Committee's report, the same Conservative chair said there are still major questions left unanswered—still no certainty of the size of the fund, the method of distribution, the share of the fund for Wales compared to EU funding, and what role, if any, devolved Governments can be expected to play in the fund's operation—and

'we do not consider this matter to be closed',

the chair of the committee said. I'm quite sure that this Senedd doesn't regard it as closed either.

Nick Ramsay MS: First Minister, as you've just said, the chair of the Welsh affairs—the committee, I should say—in Westminster has expressed concerns, and I think we all appreciate that there have been issues with the roll-out and the development of shared prosperity fund. However, according to the UK Government response to the Welsh Affairs Select Committee report, 'Wales and the shared prosperity fund', in December, the fund will, at least, match the current EU structural fund receipts with the intention of targeting places most in need—those mentioned by Alun Davies—such as ex-industrial areas, deprived towns, rural and coastal communities. So, I appreciate that's the UK Government position; it may not be the Welsh Government's position. But how is the Welsh Government planning so that these areas of Wales do indeed ultimately benefit? And how are Welsh Government officials working with or, at least, liaising with the UK Government to make sure that when funding does get up and running those areas will be delivered for?

Mark Drakeford MS: Well, Llywydd, I just don't agree that it's a matter of a difference of opinion. It is a difference of straightforward fact: Wales gets £375 million a year, in the last round of European funding; the shared prosperity fund next year will have £220 million in it for the whole of the United Kingdom. That is not a difference of opinion. That is a difference of £150 million. If Wales got the whole of the UK shared prosperity fund, we would be £150 million worse off than we would otherwise have been. And that's why, when Alun Davies asked his supplementary question, he said this is a betrayal of everything that people in Wales were told would happen after we left the European Union.

I'm afraid there isn't a great deal of engagement at official level, because every time we ask the question we are simply told that there are no further details that can be shared with us. And that's the same answer we've had now since 2017, when this idea was first suggested by the UK Government—2017 to 2021, in which there are no further details that can be shared with us. Little surprise that not just the Welsh Government but those communities who depend upon this investment to create the sort of economic futures that we need for them have lost patience and confidence in what this UK Government is likely to deliver.

Helen Mary Jones MS: Given how Wales has faired for many decades, through the Thatcher years in the 1980s, 15 years of a Westminster Labour Government that didn't reform the Barnett formula, leaving Wales worse off, 11 years of Tory-led austerity and now the disgrace that it is the shared prosperity fund—and I would associate myself with what the First Minister has said about that—does the First Minister now accept that it is decades since the redistributive potential of the Untied Kingdom, to which he often refers, has come anywhere near to being fulfilled? And does he now agree with me that it's time for us here in Wales to look after ourselves and each other, using the economic levers available to an independent nation to rebuild our economy and end poverty?

Mark Drakeford MS:No, I don't, Llywydd, as the Member knows, and she's very unfair in her characterisation of the last Labour Government. During the last Labour Government, the cash available to the National Assembly grew by 10 per cent every single year in the first term of this institution. It grew in real terms in every year that Labour was in power. It is absolutely possible to use the United Kingdom as an engine for redistribution, and the last Labour Government demonstrated that year in and year out. The temporary failure of the current occupants of power at Westminster to do that should not be confused for an argument that the system is incapable of delivering what I believe it is capable of doing and which will be in Wales's interests.