Did the Tories lie about continuing EU support for Wales?

The Tory government is being accused of “broken promises” to Wales in relation to the level of financial support the Welsh government will receive from Westminster.

During a debate on the 2021 Budget in the House of Commons, Liz Saville Roberts, group leader of Plaid Cymru in Westminster and MP for Dwyfor Meirionnydd, accused the Tory government of “not only a broken manifesto promise, but also a broken promise to Wales.”

Saville Roberts alluded to the 2019 Tory manifesto which committed to the “same level of financial support” as under EU funds. She said the 2021 Budget provides “an array of competing, competitive and opaque Westminster-controlled funds” which will “undermine rather than enhance Wales’ economic strategy.”

Community Renewal Fund shortcomings

In the 2021 Budget, the Chancellor announced a Community Renewal Fund, which fell under the banner of the Tories’ “levelling up” agenda.

The Community Renewal Fund is the pilot scheme for the Shared Prosperity Fund, which provides £220 million for the whole of the UK. However, under EU funding, Wales alone received around £375 million a year in needs-based funding.

Referring to the sharp decline in funding that will be offered to Wales through the Shared Prosperity Fund compared to the needs-based funding from Europe, Liz Saville Roberts labelled the Tories’ move as not only a “broken manifesto promise” but also a “broken promise to Wales.”

The Dwyfor Meirionnydd MP says that by introducing schemes that promote UK-wide competition instead of being centred on a needs-based system, the “UK government has divided, and, it hopes, conquered Wales, by breaking our economy into 22 competing units.”

Undermining devolution?

The phrase “levelling up” was at the heart of the Spring Budget, though the term dates to the Spending Review in November 2020, when the UK government announced a “Levelling Up Fund”. The £4.8 billion fund is designed to support town centre and high street regeneration, as well as other projects like local transport and cultural assets. £800 million of the ‘levelling up” pot will be shared between Wales, Scotland and Northern Ireland over the next four years.

17 counties in Wales are on the priority list to receive the fund. However, some economically hit areas have missed out. The fund has come under fire for “undermining democracy” by moving powers on economic development and transport that were devolved to Wales after two referendums back to Westminster.

During the debate on the 2021 Budget, Liz Saville Roberts accused the ‘Levelling Up fund’ as being applied in a way that is “deliberately set out to undermine devolution.”

“Both schemes entail UK-wide competition, rather than a needs-based system which tackles the UK’s vast regional inequalities without fear or favour. Welsh local authorities will now bid for funding from a smaller pot in direct competition with the entire UK.”

Commenting on the Levelling Up Fund’s consequence on Welsh devolution, a Welsh government spokesperson said: “This isn’t new or additional money. This is the UK government aggressively undermining the outcome of two referendums which backed Welsh devolution.

“The UK government was not elected to take decisions or spend money in areas that are devolved to Wales.”

Fewer investments in new projects

The long-term implications of the Tories’ reneged promises to Wales to match EU funded support have been voiced.

Guto Ifan, researcher on the Wales Fiscal Analysis (WFA) programme within Cardiff University’s Wales Governance Centre, spoke about the decrease in funding Wales will receive and the implications the Tories’ backtrack on its 2019 manifesto is likely to have on the nation.

“The European Structural and Investment Funds (ESIF) in Wales are worth an average of £375 million annually over seven calendar years. The Conservative Party manifesto said the UK Shared Prosperity Fund would ‘at a minimum match the size of those funds in each nation’,” Ifan told LFF.

“The new Community Renewal Fund for 2021-22 is worth £220 million for the whole of the UK, with the UK government saying it will eventually ‘ramp up’ funding to £1.5 billion per year.

“While receipts from EU funding allocated for 2014-2020 will still be coming to Wales next year, these will tail off over coming years. This will create a funding shortfall compared to what Wales could have expected under EU schemes, and fewer investments in new projects will be made over coming years. In the future, meeting the Conservative manifesto promise would entail Wales receiving a quarter of all proposed UK-wide funding – which is unlikely given what we know of the design of the scheme so far,” Ifan continued.

Gabrielle Pickard-Whitehead is a freelance journalist and columnist for Left Foot Forward.

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