4. What discussions has the Minister had with the UK Government regarding the shared prosperity fund? OQ56275

The UK Government has not engaged meaningfully or respectfully on this issue, despite the huge amount of work that has taken place across the Welsh Government and with organisations across Wales over the last three years to develop a new framework for investing replacement EU funds.

I'm grateful to you for that, Minister. You will have seen the Welsh Affairs Select Committee's report from Westminster, published in the autumn, which was a devastating report and a devastating condemnation of a UK Government by a committee largely dominated by Conservative Members. They made two criticisms of the UK Government. First of all, there was the lack of engagement that you described. Secondly, there was an arrogance, as I read it, in wanting to ignore the expertise that we have in Wales, in terms of delivering the sort of investments that you have just described in the Cynon valley.

Does it concern you as much as it concerns me, Minister, that this is a betrayal? It's a real betrayal of people, not just those of us who voted 'remain' in 2016, but more so, people who voted to leave the European Union in 2016, who were promised that they wouldn't lose a penny of investment—that all of the investment that was coming to places like Blaenau Gwent would be replaced by the UK Government. That has been demonstrated to be an absolute lie. That means that places like the constituency that I represent, the constituency that you represent, and many of us in this Chamber, will see investments that would have taken place in our people, our places and our infrastructure, but will not take place now because of a real betrayal by the UK Government of people in Wales.

I couldn't agree with Alun Davies more in terms of his assessment of the way in which the UK Government has used people to deliver its own agenda, and then not fulfilled the promises that it made to them. We don't have that same arrogance here in the Welsh Government. We've worked really hard, looking internationally, and looking to the OECD, to see what we can learn in terms of delivering regional investment in the future here. We have had a national conversation, speaking to thousands of people to explore what the best way forward will be for reconstruction and how we use our funds best in the future.

The UK Government was really quick to argue that we would receive more funding this year than last. But, of course, netting off the payments has reduced our funding, and disregards the fact that, had we remained in the EU, we would now have a full year's financial allocation for new programmes, in addition to the payments due from the programmes that are beginning to tail off. So, we would have been in a very different situation as compared to the UK Government's £220 million UK-wide shared prosperity fund, of which we yet are to find out any details. Compare that to the annual £375 million that we would have had from the EU. The UK Government still has time to deliver on its promise that we won't be a penny worse off, and I would encourage them to do so.

Minister, Alun Davies, the Minister emeritus, makes his arguments with his usual passion and vigour, and I appreciate that there has been, to date, anyway—. The Welsh Government has complained about a lack of detail on the shared prosperity fund. Nonetheless, it is, in principle, a mechanism that, eventually, will hopefully deliver for Wales. So, looking beyond the current situation to that point, would you agree with me that, if we want to devolve more power down to local government and give local authorities more control, then the shared prosperity fund presents us with an ideal opportunity to give that more control to local authorities and to allow them to participate in the expenditure of this fund. They have, after all, taken part in the successful city and growth deals. So, in your negotiations with the UK Government, and also within the Welsh Government with the Minister for local government, will you ensure that local authorities are given a key role in the roll-out of the shared prosperity fund? Admittedly, not with us at the moment, but when the details are finally clarified.

Well, as Nick Ramsay says, the details haven't yet been clarified, so I don't know if I can agree with his assessment that it will put power into the hands of more local people and make that decision making as close to the ground as possible. Welsh Government has developed its regional framework for investment, and that was published in November following three years of engagement, collaboration and consultation. And we were clear that our priority areas would be more productive and competitive businesses, reducing the factors that lead to economic inequality, supporting the transition to a zero-carbon economy, and healthier, fairer and more sustainable communities. And we absolutely see local authorities as being key partners in that. And the local government and WLGA were really actively involved in the development of our framework and are represented on the steering committee that has guided that work for three years. So, local authorities should play an important role in future in terms of regional development, and I hope that we're able to do so within that framework that we've been developing here in Wales.

I wonder if I can ask you, Minister, as well to pay particular regard to the loss of the European social fund and structural funds on our works and skills programmes in Wales. I'm hearing some rather disconcerting rumours—well, they're more than rumours—that there's an intention now with the Department for Work and Pensions to centralise their work programmes. Now, we've had some exemplary work programmes here in Wales, particularly for those hard-to-reach people who need additional support to get into work because of skills and transport and other challenges they face, and we know how to do it. So, it would be disastrous if there was some centralised, Westminster-driven approach to this that reiterated the problems that they had in the 1980s Thatcher-style work programmes. So, could I please ask, Minister, that you make representations that if these programmes are being redesigned, that when they look for partners to deliver these, they use the local authorities and the regional consortiums that have been delivering them on the ground with great success—far better than in England and elsewhere—in the future as well? We're not only losing the money—it's taken away our ability to control what we do with some very important employment and skills programmes.

Absolutely. And, obviously, Huw Irranca-Davies speaks with real authority on this having chaired our group, which has been looking at this particular agenda for some time. And he'll know better than anyone about the impact that those EU projects have had in Wales, creating over 56,400 new jobs and 15,400 new businesses since 2007, and also supporting 30,000 business, and helping almost 100,000 people into employment in that time. And that's the kind of thing that we need to keep doing.

We have tried to take some early action to mitigate the early impact, so we've been proactive in extending a number of our key economic interventions supported by EU funds that were due to end in the next financial year, to extend them to subsequent years, and this includes support for entrepreneurs and small and medium-sized enterprises currently being delivered by Business Wales. Support for advanced, sustainable manufacturing, investment in business research, development and innovation, and support for low-carbon energy technologies and investment at key tourism sites—these are things that we've been focussing on as we've been preparing our budget for next year.

Question 5 was in the name of Rhianon Passmore, who is not present. Therefore, we move to question 6, David Rees.

Question 5 [OQ56289] not asked.