1. What discussions has the Cabinet Secretary had with the UK Government regarding the shared prosperity fund? OAQ52189

6. What discussions has the Cabinet Secretary had regarding the UK's shared prosperity fund? OAQ52200

Thank you, Llywydd, and thank you for confirming that you've given your permission for questions 1 and 6 to be grouped.

The UK Government is yet to share any details of its proposals for a shared prosperity fund. I have raised the issue of replacement funds for structural funding with the Chief Secretary to the Treasury, and our position, including autonomy of funding, is clearly set out in our paper 'Regional Investment in Wales after Brexit'.

I thank the Cabinet Secretary for that response. It's generally accepted that women have suffered disproportionately under austerity in the UK, and we all know how important European structural funds have been in tackling inequalities. How can we ensure that any replacement for the EU structural funds post Brexit will concentrate on the inequalities in society?

Well, Llywydd, can I thank Julie Morgan for that question, and to thank her for the work that she does in chairing the programme monitoring committee for the current round of European funding? And she will know, as a result of the careful attention that that committee pays to inequalities, that the current social fund programmes, for example, include specific targets to provide skills and training to more than 95,000 women in the workplace, and a particularly fine scheme to support 15,000 young women to participate in learning STEM subjects here in Wales. With the help of the programme monitoring committee, we formulated our proposals, set out in 'Regional Investment in Wales after Brexit', and one of the key principles in that paper is that we learn the lessons from current and previous funding rounds, and that we take the successes of it into the future. I can give the Member an assurance that inequality issues remain at the heart of the proposals that the Welsh Government has for developing regional investment the other side of the European Union.

It is a cause of concern that there are no comprehensive proposals that have been published by the UK Government as of yet, in terms of how exactly the shared prosperity fund will work. At the moment, the Welsh Government and councils in Wales, through the Welsh European Funding Office, decide on how the regional funds are spent in Wales. In the first place, it’s important that Wales doesn’t lose a single penny of the funding that we were receiving from Europe, which will mean that the funding will have to be allocated on the basis of need rather than being Barnettised. My concern also is that, if the system does change, where organisations in Wales will have to bid for grants from a pot of money held by the UK Government, then that will be another example of the Conservatives in Westminster undertaking a power grab, in economic development on this occasion. Will you stand up for Wales on this particular issue, or are we going to see you ceding once again, under the banner of your unionist ideology?

I thank Siân Gwenllian for the questions, and I agreed with nearly everything she said, until the end there. I just want to be clear that I do agree with her; it is more than time for the UK Government to bring forward the suggestions that they have. And, when we see those suggestions, it’s important that the people of Wales hear from the people who tried to persuade them to leave the European Union, back during the referendum—to clarify, every penny that was received during our membership of the EU—that the money  must come to Wales in future, because the needs that we had continue to exist. It would be entirely unreasonable if the United Kingdom Government were to try to come forward with a new system where we would have to bid into a new fund. The best way, I am certain, is just to look at the funding that comes to Wales currently and then put that into the baseline that we have in our budget, and to give us the responsibility, as we already have, to administer the system in the future. I have already said this to the Chief Secretary to the Treasury, and I will continue to say this when opportunities arise in future. 

I agree with both you, Cabinet Secretary, and Siân Gwenllian. I disagree with both of you at the same time, so, take that as you will. The development of the shared prosperity fund is clearly of immense importance to the Welsh economy and our goal here is that Wales should be no worse off after Brexit in relation to the structural fund allowance. I agree with what you said that we don't want a new system where we would be worse off by, in some way, having to bid for this funding, but, at the same time, I think you'd agree with me, Cabinet Secretary, we want to avoid a Barnettisation of the money coming to Wales, because that would also squeeze the budget in a different, but still a very significant, way. 

What discussions have you had with the UK Government about avoiding that potential Barnettisation of the fund? And, also, in tandem with this, the Welsh Government should be developing its own regional policies so that we're in the best place possible to make use of those new funds when they do come to Wales. At what stage are you at in developing that new regional policy that will fit in with the UK Government strategy? 

Well, Llywydd, I agree that neither a bidding nor a Barnett-derived approach to a shared prosperity fund would be acceptable to us here in Wales, remembering that this fund has no origins here in Wales and that the party that proposed it certainly did not secure a majority for it here in Wales. Let me say that discussions continue both at ministerial and official levels. I hope that when the UK Government comes forward with more detailed proposals for the fund, there will be the possibility of organising funding for Wales along the lines that I set out in my answer to Siân Gwenllian.

In the meantime, I agree with Nick Ramsay that it's very important that we press ahead with the plans that we are developing for how funding would be used for regional investment purposes in Wales in the future. We've carried out a consultation exercise, as Nick Ramsay will know, on the paper that we published. That was a very engaged exercise. Officials are currently analysing all the responses that we have received and I hope to be in a position to publish those shortly. 

Cabinet Secretary, in full support of your 'Regional Investment in Wales after Brexit' paper, how can we ensure that future funding arrangements are aligned with other European funds we hope to draw on after Brexit, such as Horizon 2020 and the inter-territorial co-operation programme?  

Wel, Llywydd, Jane Hutt make a very important additional point, because our anxieties about the shared prosperity fund, if it were to be done in the wrong way, are not simply that Wales might lose out financially through a bidding or Barnett-based system, but if a shared prosperity fund was seriously to be attempted to be run out of Whitehall, then where are the troops on the ground that the UK Government could rely on to make effective use of that funding?

Twenty years into devolution, it is the Welsh Government and other Welsh bodies who have the experience of regional economic development and of making sure that funding streams that come to Wales can be properly aligned with one another so that we get the maximum impact from it. And one of the small advantages that some of us think we may gain from not being in the European Union is that we would have greater flexibility to make sure that funds that came directly to Wales could be used in greater alignment with other funding streams for the future. We are in the right position to do that. The UK Government simply does not have the wherewithal In Wales to do so, and the points that Jane Hutt made about aligning our funds with other programmes is very important.