The following amendments have been selected: amendment 1 in the name of Darren Millar, and amendments 2 and 3 in the name of Siân Gwenllian. If amendment 1 is agreed, amendment 2 will be deselected.

The next debate is a debate on the UK levelling-up and shared prosperity funds, and I call on the Minister for Economy to move the motion. Vaughan Gething.

Motion NDM7708 Lesley Griffiths

To propose that the Senedd:

1. Agrees that the UK Government approach to the Levelling-up Fund and broader EU successor funding does not guarantee that Wales will not be a penny worse off and represents a clear assault on Welsh devolution.

2. Agrees that the pilot UK Community Renewal Fund for 2021-22 represents a significant cut in funding for Wales as the Welsh Government would have received at least £375m each year in the form of EU structural funds.

3. Notes that this cut in available funding threatens jobs and services in Wales.  

4. Shares the concerns raised by the Welsh Local Government Association regarding the level of available funding and the process for delivery expressed in its evidence to the Welsh Affairs Committee regarding the UK Government’s proposals.

5. Notes the independent UK Industrial Strategy Council’s description of the UK Government’s Levelling-up plans as ‘centrally controlled funding pots thinly spread across a range of initiatives’.

6. Agrees that the UK Government has neither presented nor won a mandate to cut EU successor funds for Wales or unilaterally undermine Welsh devolution.

7. Believes that decisions about Wales should be taken in Wales and that the UK Government must stop using the Internal Market Act to diminish Wales’s say.

Motion moved.

Thank you, Llywydd. And I welcome this opportunity to bring forward today's debate on the UK Government's levelling-up fund and the future shared prosperity fund. These UK proposals represent a new era of aggressive centralisation, one that delivers a very clear message to Wales: 'You'll get what you're given.' It's an approach that provokes division based on an economic rationale that is difficult to identify let alone endorse. Worse still, this top-down throwback to pre-devolution economic policy is a deliberate assault on Welsh devolution. As things stand, Wales is set to have less say over less money. Llywydd, today is an important opportunity for this Senedd to make clear its position on these matters.

In March of this year, the UK Government confirmed its plans to bypass the devolution settlement. It proposes to directly allocate funding for regional and local development in Wales through three UK-wide competitive funds: the supposedly £4.8 billion levelling-up fund; a £220 million pilot for the shared prosperity fund, called the community renewal fund; and the £150 million community ownership fund. This involves using the financial assistance powers of the United Kingdom Internal Market Act 2020, powers that are designed and are being used to usurp functions that sit within the competence of this Senedd and the Welsh Government. The Welsh Government made clear our opposition to the internal market Act, arguing that those powers should only be used in a way that has been agreed with the Welsh Government and the Senedd. The proposed funds are clearly and deliberately designed to systematically exclude the Welsh Government. As power grabs go, Llywydd, this one is about as subtle as an earthquake.

The impact of this deliberate, brutish attack on Welsh devolution is not even softened by an offer of new additional money for Wales. Last month, the UK Minister for Regional Growth and Local Government in England, Luke Hall, stated that the shared prosperity fund alone will replace EU structural funds at previous levels for Wales. However, the community renewal fund is only worth £220 million across the entire UK this financial year. That represents a huge cut compared to what Wales would have had access to in the EU.

We would have expected at least £375 million each year for new programmes over seven years from January this year. The UK Government has already failed on repeated promises made that Wales would not be a penny worse off. This will deny Wales investment, and the jobs that would have been created if that promise was kept, not just in future years, but right now, at a time when we're still managing our path out of the worst health and economic crisis that we have experienced in peacetime.

Llywydd, the inadequacy of these proposals is firmly matched by the shortcomings in the UK levelling-up fund. A total of £800 million has been set aside for devolved nations over four years, with Wales likely to receive around £10 million each year. For context, that's less than £450,000 per local authority in Wales, confirming there is really no substance behind the levelling-up brand. And it is this lack of substance that partly explains why so many others share our concerns about the proposed EU successor funds.

The devolved Governments in Scotland and Northern Ireland, two all-party parliamentary groups and stakeholders right across Wales have all raised similar concerns. During their evidence to the Welsh Affairs Select Committee just a few weeks ago, the Welsh Local Government Association raised a list of concerns, including the threat to devolution, the insufficient level of funding available, the unnecessary and costly competition, and a real lack of transparency in the process. The WLGA also questioned the exclusion from the priority list of deprived areas such as Gwynedd, Caerphilly, Wrexham and Bridgend, when other plainly more prosperous areas of England are included. It also stressed concerns about the risk to the quality of bids due to the tight bidding and unfeasible spending deadlines. Llywydd, these plans failed to impress the UK Government's own industrial strategy council, which warned against 

'centrally controlled funding pots thinly spread across a range of initiatives'.

Rather than heed those warnings and their honest advice, the UK Government opted to sack the industrial strategy council altogether.

Llywydd, on the basis that they're put, I'm happy to support Plaid Cymru's amendments regarding the UK Government's prioritisation criteria, as the criteria just don't meet our or any objective understanding of economic need or deprivation.

Given the arguments I've already set out, I just don't think there's any substance that supports the amendments put forward by the Welsh Conservatives, which we will not be supporting. The UK funds will mean funding gaps for many sectors, including higher and further education, the third sector and business. These are partners who have previously invested to help close historical gaps in research and development, to provide support to our most vulnerable people in society, and to help boost our competitiveness.

We also have real concerns about the impact of UK Government plans on key strategic interventions, including the Business Wales service, which has been crucial for so many during the crisis. I know that this is a particular concern that has been raised with all Members by Wales Federation of Small Businesses ahead of this debate. Apprenticeships, the Wales business fund and infrastructure investment all relied upon EU funding that is now coming to an end, and are directly threatened by the UK Government proposals. All of those are critical to our COVID recovery, and without adequate successor funding, vital jobs and services are needlessly being put at risk.

To put this into context, nearly a third of apprenticeship funding flows from European Union structural funding. A loss of around £30 million a year means almost 5,300 fewer participants supported each year. Nearly half of the Wales business fund led by the Development Bank for Wales is supported by EU funds. That means hundreds of businesses all across the country not being able to access the financial support needed to grow and create jobs. Threatening these services amounts to a levelling down for Wales. The UK Government's entire approach has proven to be chaotic, unpredictable and needlessly confrontational.

By contrast, our framework for regional investment was co-produced with stakeholders from business, local government, higher and further education, and the third sector. It was also informed by the Organisation for Economic Co-operation and Development and supported by a public consultation. With a robust evidence-based approach, our framework outlined clear priorities for Wales. It delivers a meaningful transfer of funding and responsibilities to the new statutory corporate joint committees, bringing power and funding closer to communities.

Llywydd, it remains our view that decisions about Wales should be taken in Wales. That is the basis of our position, which has been supported by the people of Wales consistently, including at the Senedd 2021 elections. I hope today that we can unite around that principle across the Senedd. 

I have selected the three amendments to the motion. If amendment 1 is agreed, amendment 2 will be deselected. I call on Paul Davies to move amendment 1, tabled in the name of Darren Millar. 

Amendment 1—Darren Millar

Delete all and replace with:

To propose that the Senedd:

1. Notes the UK shared prosperity fund and its intention to reduce inequalities between communities across the UK.

2. Agrees that the annual budget for the UK shared prosperity fund should be no less than the EU and UK funding streams it replaces.

3. Welcomes the role of local government in the deployment of the UK Shared Prosperity Fund. 

4. Calls upon Her Majesty's Government, local authorities and devolved administrations to develop a system to track and measure the impact and desired outcomes of the fund.

Amendment 1 moved.

Diolch, Llywydd, and I move the amendment tabled in the name of my colleague Darren Millar. I'm sure that all Members in this Chamber share the ambition to find a way of reducing inequalities in our communities, and so it's incumbent on all of us to work together to find the best possible way of ensuring that investment reaches the areas that need it most. The UK Government has made it clear that it's committed to levelling up across the whole of the United Kingdom to ensure that no community is left behind, particularly as we recover from the COVID-19 pandemic. And to support these objectives, as we all know, the UK Government has launched new investment programmes, like the levelling-up fund and the community renewal fund, which will make a huge difference in communities across Wales. I was pleased to hear the UK Minister of State for Regional Growth and Local Government recently confirm to the Welsh Affairs Select Committee that there will be a minimum 5 per cent in the first round of the levelling-up fund that will be allocated to Wales.

Now, of course, the UK shared prosperity fund is the vehicle by which the UK Government intends to deliver regional funding. As we make clear in our amendment, we believe that the annual budget for the fund should be no less than the funding streams that it's replacing. Further details will be published in a framework later this year before the fund launches in 2022, but what we do know is that the amount of money that is going to be spent in Wales when the shared prosperity fund comes in will be identical to or higher than the amount of money that came from the European Union, and I welcome the commitment to maintain those levels of funding. And in light of the repeated commitments from UK Government Ministers, it's disingenuous to perpetuate a myth that somehow Wales will lose out financially from the shared prosperity fund.

Now, moving forward, it's important that mechanisms are developed to ensure that investments continue to be made in the longer term, and that there's a robust system in place to monitor the effectiveness of projects that receive funding. Sadly, during the previous round of European structural funds, Wales received more than double the amount per person than any of the other devolved nations and English regions, and so I can appreciate why these funds are so particularly important. However, the UK Government has stated that the shared prosperity fund will improve on the delivery of structural funds in a number of ways, such as quicker delivery of funding, better targeting of places and people in need and, hopefully, less of an administrative burden through reduced forms and targets.

Of course, it's vital that there is engagement with devolved administrations, and as I understand it, the UK Government has set up an inter-ministerial group in order for UK Ministers to have regular conversations with Welsh Ministers, and I welcome very much that engagement. I also understand that as part of the levelling-up fund process, there is a shortlisting stage where the UK Government will consult the Welsh Government on their views about individual projects, and whether they conflict with any Welsh Government policies. Therefore, the Welsh Government will have a vital role in assessing shortlisted bids, and have a say in ensuring that the right bids receive the right funding.

Llywydd, I welcome the UK Government's commitment to pass on funding directly to local authorities. We want to see money invested in communities and making a difference. We do not need further bureaucracy and hold-ups in the process of getting money out there to communities and projects that need it. We shouldn't lose sight of what's important here. I think the Member for Ogmore is clearly losing sight of that. The fact is the shared prosperity fund will support improved employment outcomes and support and develop local economies. We have an opportunity to replace a complex and bureaucratic system with a much more simplified approach to local growth funding. Surely—surely—that's something that Members here should be welcoming.

And yet, the Welsh Government has spent time and effort opposing the direct channel of funding to local authorities. If the Welsh Government truly believes in devolution, then devolving these responsibilities and decisions to local authorities is true devolution and surely is the right thing to do. I've heard a lot of rhetoric this afternoon from the Minister, but I would remind him that Wales has two Governments. As someone who believes in the United Kingdom, I would have thought that he would welcome that, but clearly he should be sitting on those benches with the nationalists, I think.

Point 4 of the Welsh Government's motion highlights the concerns of some local authority leaders. However, in the Welsh affairs select committee evidence session, the leader of Powys County Council welcomed the levelling-up agendas, arguing, and I quote:

'In many ways this is a positive for Powys because we are one of the border counties between England and Wales. In the past, we have not benefited from EU structural funds as much as other areas of Wales—we have just had a very small amount—so in that sense we are extremely grateful for this.'

Indeed, later in that committee session, the Parliamentary Under-Secretary of State for Wales made it clear that local authority leaders have been very positive in the discussions he's had with them, and I believe we should welcome that and build on that positive approach.

I'd hope Ministers would welcome the efforts being made to accelerate the delivery of that funding so that the money can reach our communities and actually make a difference. However, to my mind, at least, it seems as if the focus has been lost, and instead of focusing on the huge positive benefits that this fund can bring to Wales, Ministers are more concerned with their own role in rubber-stamping projects. Therefore, I urge the Minister and Members here today to remember what is important here, and that's tackling inequalities in our communities and getting vital funding and investment in those areas. I urge Members to support our amendment.

I call now on Luke Fletcher to move amendments 2 and 3, tabled in the name of Siân Gwenllian. Luke Fletcher.

Amendment 2—Siân Gwenllian

Insert as new points after point 2 and renumber accordingly:

Believes that the UK Government approach to the prioritisation criteria for these funds is inconsistent with that of predecessor EU funding based on need.

Calls for transparency from the UK Government on the prioritisation criteria for these funds to ensure no area in Wales misses out on funding.

Amendment 3—Siân Gwenllian

Add as new point at end of motion:

Calls on the Welsh Government to lay before the Senedd an impact assessment showing the effect of these funding arrangements on the distribution of funding across Wales and devolved Welsh decision-making.

Amendments 2 and 3 moved.

Diolch, Llywydd. I move the amendments tabled in the name of Siân Gwenllian. We welcome the opportunity to debate this important issue in Government time. The UK Government has consistently misled the people of Wales on levelling up; from HS2 to the shared prosperity fund, and now the levelling-up fund, Wales stands to lose money, or we'll receive less than we did when we were part of the EU. Westminster's levelling-up agenda has so far meant more powers for Westminster, more money for Tory seats, and less funding and representation for Wales. We deserve better.

But what does 'levelling up' actually mean? So far, all we've been presented with is an array of competing competitive and opaque Westminster-controlled funds, which undermine rather than enhance Wales's economic strategy. In evidence to the Westminster Welsh affairs select committee, the Bevan Foundation said that

'Successive rounds of European Structural Funds have made significant and longstanding contributions to Wales and the Welsh economy.'

This has included tackling poverty and deprivation, regeneration, upgrading key transport facilities and infrastructure, as well as investment in skills, jobs, apprenticeships, business facilities, and support for key sectors and industries. If these funds are not replaced in full and implemented by devolved decision makers, then Wales will be left short-changed and worse off. If Wales can control its response to the pandemic, we should be able to control the levers of our economy in full. Decisions about funding in Wales should be made in Wales. The EU recognises this principle; why can't Westminster?

The levelling-up fund was announced by Westminster last year—a fund said to be open to all local areas in England. Wales would get our share of £800 million through the Barnett formula, and we would spend it according to our priorities. However, the Treasury has since announced they will be deciding how that same £800 million is spent in Wales, Scotland and Northern Ireland, and there is no ring-fenced fund for Wales. Rather than levelling up, these latest proposals are instead spreading resources thinner and taking our money away from us where we need it the most. Our amendments seek to bolster the Government's motion, making explicit points regarding the process behind the selection criteria for these funds, and calling for detailed assessments as to the impact these funds will have on Wales. 

If I could first turn to our first amendment, Welsh local authority areas like Gwynedd have been placed in the lowest priority need category for the levelling-up fund to finance infrastructure projects in deprived areas of Wales, bearing in mind, of course, that the Chancellor has included his own constituency in the highest category of need. Under previous EU funding criteria, Gwynedd was prioritised as being one of the least developed areas in Europe, along with the rest of west Wales and the Valleys. With the community renewal fund, Caerphilly has been left out. Caerphilly should score highly on the other indicators the UK Government claimed—

That's my speech. 

—they used as part of the metrics for this fund, such as household income. The average annual household income in Caerphilly is approximately £15,000 per head, which is substantially lower that the UK average of £21,000, and lower than every single English region. I know my colleague Delyth Jewell will be going into some more detail on this later, and as Hefin David just said, he'll also be going into it in detail as well.

Given that the Tories have so far refused to publish their calculations for working out the priority areas to target this funding, the conclusion that many people would draw is that these decisions are made using political rather than mathematical calculations, hanging places like Caerphilly out to dry. How can anyone trust the Tories to implement these funds fairly and transparently? Just look at the England-only UK towns fund: 83 per cent of the £610 million in this fund is going to seats with Tory MPs, with 22 of 26 places that received the funds in the latest tranche being represented by Conservative MPs. This had led to the UK Government being criticised by the Public Accounts Committee for its lack of transparency, and even the Good Law Project has taken the UK Government to court over this. This is not levelling up; it's a stitch-up.

Finally, on our second amendment, the Welsh Government announced last year a new framework for regional investment in Wales to start once EU structural funds came to an end. The Minister for European transition at the time concluded that the delivery of this framework is dependant on positive engagement with the UK Government, which has so far been withheld. Wales must receive funding in full, which needs to respect our devolution settlement. From questions raised by my predecessor Dr Dai Lloyd in January 2021, the then Minister for European transition emphasised that this plan wasn't dead in the water, and even at the late stage, there was time for the UK Government to do work with the Welsh Government and not circumvent it. That hasn't happened, and so this amendment would ensure the Welsh Government would have to show to the Senedd how their framework for regional investment has been impacted, as well as their more general funding arrangements and where this leaves devolved decision makers in Wales, when they presumably are kept out of the loop by Westminster.

I ask Members to support out amendments and I thank the Minister for his support for our amendments also. Diolch yn fawr.

I welcome the debate this afternoon. I welcome the Government bringing forward a debate on this important matter so early following the election. It's absolutely essential that if the UK is to mean anything at all, the wealth of the United Kingdom is shared fairly between the constituent parts of the United Kingdom, both across the nations of the UK, but also within the nations of the United Kingdom. It's also important that that wealth is shared with a purpose, and is done so transparently and with accountability.

The issue with the regional policy that is being invented behind closed doors in Whitehall is that none of those things seem to matter to the current UK administration. What seems to matter to them is the funnelling of public money to constituencies and regions of England where they have won elections in recent years. And that is something to be deeply ashamed of.

When I was the Minister, Paul—and Paul Davies will remember this; he seems to have forgotten a lot of other things he said previously here, but we'll give him some time this afternoon—who published the report on Objective 1, when I was a European programmes Minister back in 2011, that report outlined all the lessons that were learnt from Objective 1. It was a very positive report in all sorts of different ways, but it also said there are lessons to be learnt, that we need to improve the way in which we deliver regional funds and public investment. Those improvements were built then into the system that was used up until our friend Huw Irranca-Davies then chaired the committee that led that in the previous Senedd.

That was learning the lessons of what was done. What this and these schemes seem to be doing is repeating the mistakes of that time. But the mistakes that were made 20 years ago on Objective 1 were made—by a Labour administration, I accept that—as a new system was introduced in order to dispatch of some of the structures that might be introduced, to provide the money straight to the communities that were targeted by that. It was done in goodwill and it was done with the best of intentions. The issue you have here is that these structures have been established not in order to reach the communities and the people most in need, not to achieve objectives, because they haven't got any objectives.

It's been done without any consultation. There hasn't been any consultation, not with local government. If you'd carried on reading from what Rosemarie Harris said, she would have said in the paragraph after the one you quoted that they hadn't been consulted by the United Kingdom Government on these matters, that they didn't know how it was going to work. So, there was no consultation. We know there's been no transparency, because I've sat on the committees, and we brought the Ministers in to explain to us what they're doing, and they didn't know what they were going to be doing, because they hadn't done it yet. It wasn't a very impressive performance, let me tell you that. And so there's been no transparency.

There's no accountability, there's been no debate, there's been no consultation. What there's been has been a determination to undermine Welsh democracy, because they can't win elections. If you were all sitting here and we were sitting there, I can tell you now there'd be Welsh Ministers around that table. What this is about is the use of public money for political objectives, to alter the balance of power within the United Kingdom, and that is something to be deeply ashamed of—deeply ashamed of.

What I would like to see us being able to do, Presiding Officer, is to establish a relationship with the United Kingdom Government of equals, where we work together, bringing in the structures that involve local government. You talk about devolution within Wales; well, I support that. I put forward proposals to entrench that in the last Senedd, and you voted and argued against it—

To get rid of us.

No, not to get rid of you. You didn't understand it; that's the problem, Peter. When I asked you what powers you wanted, you didn't reply. What we need to be able to do is to provide the funding and the funding streams openly, transparently, fairly, according to need, and then deliver to those people. That was what was being done, and what's being done here is a dismantling of that system. It's being dismantled not because it didn't work, but because it couldn't be controlled by the Conservative Party.

Do you know what? There will be a lot of people, not just in my constituency and not just in Caerphilly and not just in Bridgend who will lose out as a result of that, but the greatest loser is the sense of the United Kingdom as a state able to treat all parts fairly. And do you know what? In terms of where we're going at the moment with the undermining of democracy, the internal market Act, I thought, ended the devolution period in Wales. It ended devolution. Devolution doesn't exist—it doesn't exist. What exists is a shadow that can be undermined at will by a Minister in London, unaccountable, unelected by the people of Wales. That is not what I understood by devolution. It's why read in the programme for government earlier this afternoon that things will need to change if the United Kingdom is to remain in place.

Presiding Officer, I'm trying your patience again. Let me conclude my contribution by saying this: I've found the process over the last few years one of the most deeply depressing and distressing experiences that I've been involved with in politics, because as a member of committees in this place, we have sought in goodwill and with cross-party support to bring in UK Ministers to have that conversation and to create that transparency and to debate about what is best for Wales. Those Ministers didn't just not appear, but were unable to answer questions, and they knew that they'd been rumbled. The issue we've got to face now is how do we rebuild a regional policy that has been systematically dismantled by a UK Government that doesn't give a damn.

Thank you to the Government for tabling today's debate, with contributions so far certainly impassioned around a very important issue, around the UK levelling-up and shared prosperity funds.

The insinuation, of course, in this debate today from Welsh Government is that the UK Government's approach to this fund does not guarantee that Wales will not be a penny worse off and represents a clear assault on Welsh devolution. As my friend Mr Davies stated, this simply is not true. The Conservative manifesto for the 2019 general election stated that the shared prosperity fund would match or exceed the amount of structural funds received in each of the four UK nations, and that's exactly what is happening. The UK Conservative Government has committed to matching these previous contributions. And, again, the Welsh Government specifically mention an assault on devolution, and as debated last week, equally as passionately, in this Chamber, the United Kingdom Internal Market Act 2020 has guaranteed more powers into Wales, not fewer powers.

Now, what we should be celebrating is actually, now that we are out of the European Union, we can go above and beyond the limits of previous schemes and we can help local people and local issues. In fact, the structural funding can now see quicker delivery of funding, better targeting of places and people in need, and better alignments with domestic priorities, rather than the EU-wide priority areas for funding. 

I want to take a moment to focus on the role of local authorities and the opportunities that they have to make a difference through this funding. In my question this morning to the First Minister, the First Minister praised the role of local authorities and the work that they carried out during the pandemic. And I know from my experience and other Members' experience in the room here today that the hard work, dedication and sacrifice that council staff have shown through the pandemic, and elected members have undertaken, has shown what local authorities can deliver, and we should be welcoming these proposals for local authorities and celebrating the exceptional work that they carry out and can carry out through the further devolution of this funding.

Indeed, we all seem to have referenced the Welsh Affairs Committee at the end of May this afternoon, but local authority leaders there welcomed the role that they'll be playing, and most of them certainly have welcomed the funding coming from the UK Government. And we know—[Interruption.] You selected them, too, Mr Davies, you selected them too. We know that many of the electorate have an outstanding relationship with their local councillors and local democracy. And, remember, 53 per cent of people in Wales elected to come out of the European Union and expect a Government to deliver on that promise.

Finally on this point, the First Minister, of course, also this morning said that more powers for local authorities to make decisions that are right for their local areas and for their populations, supporting that local authorities should have a bigger say on what happens—. Isn't the truth, Llywydd, that this motion today and this debate has really shown that the Welsh Labour Government are not happy because these powers are not being devolved to them, but rather are being devolved down to local authorities? And, once again, COVID-19 has shown what local authorities can deliver and we should be confident in their delivery of this funding.

To conclude, Llywydd, it's time for the Government to work in collaboration with the UK Government and local authorities to level up funding across Wales. I urge all Members to reject the Government's motion, support our Conservative amendment and, most importantly, celebrate the fantastic work carried out by local authorities and welcome the opportunity for local councils to create the environment for their residents and businesses to flourish. Diolch yn fawr iawn.

EU funding enriched the communities I represent. From town-centre developments to financing infrastructure projects, it created opportunities. When we left the EU, we were promised not a penny less by the UK Government, but, Llywydd, there is already plentiful evidence to suggest that my area will be short-changed by the successor schemes.

Earlier this year, the Tory Government in Westminster announced a list of 100 priority areas for the community renewal fund, as has been suggested already—areas that would likely be prioritised; that is, to get the funding. Those living in Caerphilly were dismayed to discover that the area was not included, this in spite of the fact that the area benefited from EU funding, and something didn't add up. So, in April of this year, my team conducted research. Before I share the findings of that research with the Chamber, I would point out, Llywydd, that the UK Government website claimed that any data used for the fund should be publicly available so that the calculations behind the rankings are fully transparent—a laudable aim, and yet, when I wrote to Robert Jenrick on 13 April asking for those data to be made publicly available, answer came there none. The UK Government has also refused to release the data to the Western Mail, and indeed, they refused to release them under a freedom of information request put in by the Caerphilly Observer.

My team analysed how Caerphilly stacked up and whether it should qualify to be a priority area, and they used the metrics that the UK Government claims to have relied on when deciding on the prioritisation—that is, productivity, skills, employment, population density, household income. And can you guess what I'm going to tell you, Llywydd? Caerphilly of course scored highly on all of the metrics, particularly productivity, which was meant to be the weightiest of them. That is, Caerphilly's scores should have meant that they would qualify. To add insult to this injurious discovery, we found that of the 100 areas that were prioritised, 35 had higher productivity rates than Caerphilly. That is, they should have scored more lowly than the area and have been less likely to qualify for support. Of those 35 areas, where question marks hang over why they've been included, let me enlighten you: 22 have Conservative MPs, 10 are red wall seats prioritised for quite specifically Tory interests, and eight of the seats are the seats of Government Tory Ministers.

I asked Mr Jenrick to re-examine the calculations and, indeed, to make them public to avoid any possible suggestion that these calculations were political rather than mathematical, and, to date, I have not received a response from the UK Government. I mentioned that the Caerphilly Observer had put in an FOI request for the data, and last week they finally received a response that of course refused to release the data, owing to the fact that it wouldn't be in the public interest to release them. This in spite of the fact—I think the point bears repeating, Llywydd—that their own website claimed that any data used should be publicly available to aid transparency. The UK Government now seems intent on pressing ahead with awarding the funds before it releases the data and before any of these concerns are cleared up. The reason seems clear to me: these Tory successor schemes are designed to enrich Tory party interests, not our communities. 'Not a penny less', we were told. Well, a penny for your promises, Prime Minister, because that's about all that they're worth.

In February 2020, the Industrial Communities Alliance published an important consideration of how the economy of Britain's older communities can be rebuilt. The report offered conclusions affecting over a quarter of the UK's population who lived in these areas, and an even larger proportion of citizens in Wales, with recommendations that would affect 12 of the 22 Welsh council areas. The report prioritised a number of key interventions that were needed—interventions that were important in February 2020, but which are even more critical now as we aim to rebuild from COVID. It called for increased support for manufacturing, investment in skills, improved connectivity and redress of the failure of the property market, and I welcome the fact that many of these priorities have been met by the ambitious programme for government that the Welsh Government published earlier today. But the report also called for a replacement of EU funding, which has been a major tool in promoting jobs and growth in less prosperous parts of the UK, including older industrial areas. In particular, it said Wales should receive the funding required on a need rather than on a population basis. It also called for the active involvement of all relevant parties: local authorities, but also, crucially, devolved national Parliaments. As the motion in the name of the Trefnydd makes clear, the proposals that have been brought forward by the UK Government fail to meet these criteria.

The ICA also published additional reports that expose in a little more depth exactly what was required for many post-EU funding models. In view of the critical importance the ICA ascribed to this for former industrial areas, such as my constituency, it is worth taking a little time to consider their findings. I'm grateful to Professor Steve Fothergill, Joan Dixon and Peter Slater for keeping the cross-party group on industrial communities informed of this research during the last Senedd term.

What were their conclusions? Firstly, it's important to note the UK would have actually qualified for additional funding if we had remained in the EU. A telling reflection on the 2010s as being a wasted decade of needless austerity is that three additional English regions would have qualified as less-developed regions. Secondly, west Wales and the Valleys would have still qualified for this funding, so would have received a higher share of money. Thirdly, to be transformational, any successor scheme would need to offer multi-annual financial allocations of the longest practical duration. Fourthly, and I quote,

'it is important that the management' of post-Brexit funding

'reflects both the spirit and the letter of the devolution settlement.'

Indeed, the ICA recommended rebranding the funding bodies to reflect the nations of the UK within which they work. This symbolic commitment would match the practical measure of letting devolved nations decide how money was spent within their jurisdictions.

Fifthly, crucially, funding should be not a penny less than the schemes that it was replacing. Again, set against these criteria, it is clear that the UK Government's proposals are inadequate. They try to circumvent devolution, representing an unwelcome power grab by the UK Government Ministers. As the WLGA's economy spokesperson noted, the amount Wales will likely be receiving does not just fail to meet our need, it fails to match the funding previously provided. Instead of an annual £375 million, Wales will get a measly £30 million to £40 million from the levelling-up fund, and crumbs from the table of the community renewal fund. This represents a clear failure to honour commitments and deliver what was promised. All we will be left with is peanuts rather than prosperity.

I'm quite dismayed at what I've heard today from the Minister and from his colleagues and others, and I fundamentally disagree with most elements of this motion today. I don't recognise that world that the Minister would have the country believe, and the Government scaremongering is not only wide of the mark, it looks to undermine confidence and promote fear across the country at a time when our communities and our economy need support and hope like never before. I'm so thankful that the UK Government are stepping in to offer that support. There is nothing to fear from the UK Government wanting to work closely with our country and its tiers of governance to help drive prosperity here and help get Wales back on its feet and in good shape for the future.

The issues for colleagues opposite is purely one of fear, of not having a direct influence on all that is delivered here. This is such a tired, negative mindset, one that has to be moved away from. I've seen, sadly, myself for many years—and it is many years—that devolution in Wales really means devolution to Cardiff Bay and absolutely no further. The motion mentions the WLGA's concerns about the level of available funding, and we respect their position—I absolutely respect their position and concern, and everybody wants some clarity around quantums and different things very soon. But there's one concept that the WLGA does agree about, and they've said it for years on years, and it's gone, obviously, not listened to here, and that's subsidiarity. They totally sign up to subsidiarity, and that means devolving decision making to the lowest possible level. That concept of real devolution seems to be alien to past Welsh Labour Governments, and possibly this one also.

None of us here, nor any other stakeholder, wants to see less funding coming to Wales than previously received. So, we agree that this is a hugely important point, and something my party will make sure that we speak up for if we felt there was a need to do so. But having said that, the UK Government—you've heard it again and again—has reiterated time after time, again and again, that the shared prosperity fund will at least match previous EU receipts, and I absolutely believe that. The levelling-up fund is offering real opportunities to shape communities on the ground. You will all know that, as we speak, bids are coming in from councils all across Wales, supported by their MPs and, I hope, their MSs, as we speak. They are falling on the doorsteps of Ministers. These bids that have to be in by this week demonstrate just how capable local authorities are at mobilising and rising to the occasion with their efforts working with the UK Government, and they will directly boost growth and spread opportunity to thousands of people across Wales. Likewise, the community renewal fund will provide an additional £220 million-worth of investment to support people and communities, both in need across Wales and the rest of the UK, and pave a way for the shared prosperity fund.

Llywydd, the shared prosperity fund when here, together with our levelling-up fund, will help to empower local communities by ensuring that funding is directed toward people's priorities. The Government here shouldn't fear this, but they should embrace this partnership approach. Different people, if allowed to hold the levers of power here in Wales, would have a different perspective of the UK Government support. I would see the opportunities being unlocked as an opportunity to strengthen the partnership we have in the UK, and an opportunity to change things for the better. Too often we hear people like my colleague here decry our UK relationship. It's time to move on.

Llywydd, the Welsh Affairs Committee said several things, as we've heard today, and one other thing they said is, and I quote:

'The switch to the Shared Prosperity Fund is an opportunity to reset and re-evaluate Wales’ economic priorities post-Brexit and post-COVID-19 and to develop a Shared Prosperity Fund that tackles the root causes of Wales’ economic underperformance.'

That's a strong statement. So, now is a time of opportunity and hope, a time to allow our country to flourish, and a time to work in unison at all levels to deliver for our people and give them what they need and deserve. So, I urge Members here to defeat this silly motion today, and join with me to support the Welsh Conservative amendment, and let's all move forward together. Thank you, Llywydd.

If you take a stroll around the Conservative benches, you can still see, even after all this time, the still-glowing embers of the argument that was left behind by David Melding, the last of the unionists, and isn't he missed today? I think what we are seeing from the Conservative Government in Westminster is an attack on devolution, because Peter Fox mentioned subsidiarity. You cannot have subsidiarity without structure, and what this whole programme lacks is structure. Delyth Jewell has already mentioned the fact that Caerphilly, despite having the levels of economic inactivity that justify inclusion, was left out of the community renewal fund. That was a deliberate omission and having had this omission, I spoke to Wayne David MP, who I work very closely with. I'm very lucky as a Member of the Senedd because I've got a very good relationship with my Member of Parliament, and we together have a very good relationship with our county borough council. And together we've spoken about this, and talked about the consequences of these decisions that are being taken. Wayne David was approached about the levelling-up fund by the UK Government to say to him, 'What do you want to spend the levelling-up money on?' Local authorities were not included in the conversation. I wasn't included in the conversation. Wayne was. That's how it's happening throughout Westminster with Members of Parliament, and the majority of those Members of Parliament are Conservative Members of Parliament.

Now, Paul Davies, you know I am not naturally the majority of Members of Parliament. I'm not naturally a party political animal. I don't get up in this Chamber and attack other political parties. You can count on the fingers of one hand the number of times I've attacked Plaid Cymru and the Conservatives, but this is a wrong decision. It is undermining devolution and it has no structure behind it. 'There are three key questions', Wayne said to me, 'you should be putting to the Chamber today.' What is the strategy? There is no strategy. What is it connecting to? So, what is Caerphilly borough doing that it connects into? What is the Welsh Government doing that it connects into? Nothing—there is nothing. And what is its value? What value will it bring to those communities that it purports to affect? None. That is the problem with this set of funding. It is about undermining devolution. And I respect Paul Davies and I listened to an awful lot of what you said. I think that you shoehorned your arguments around what crumbs we are getting from Westminster. You shoehorned those arguments around it, and I think Peter Fox, who I've got growing respect for, having first met him in this Chamber, did the same today. 

Now, I think there are independent minds on the Conservative benches, and it is up to them to take the opportunity to follow in the footsteps of David Melding and breathe life into those embers that are left by the last of the unionists. This is your chance. This is your chance to stand up to the UK Government and save devolution.

Can I thank the Minister for bringing such an important debate to the Senedd? There are two key issues I would like to discuss. Firstly, the pressure that the levelling-up fund places on local authorities is of real concern, with local authorities given short periods of time to submit projects for funding consideration. The competitive nature of the bidding process, alongside the categorisation of authorities by need, which completely ignores most measures of deprivation, has created a system for funding allocation that is entirely unfit for purpose. On top of these challenges, the funding provided is mainly capital, yet revenue funding is needed to employ people to submit applications and deliver the schemes. Not all local authorities have been able to maintain technical officers during the 10 years of the UK Government public funding austerity policy. An extensive programme of work is required to prepare bids for submission to UK Government, including engagement of local stakeholders and property holders, the preparation of plans for key sites, detailed investigation and feasibility studies, preparation of robust costings for work—the list goes on. Clearly, the bidding process represents a very significant programme of work that will absorb capacity from a number of other vital services. Successful local authorities may not bid a second time for the same constituency or for another overarching transport project, so what happens if there is a shortfall or they want to build on a project?

The second issue of real concern is the UK Government's attempt to undermine devolution and the Welsh Government whilst avoiding accountability to the people of Wales through this Senedd. The investment themes centre around cycling infrastructure, public transport, local road improvements, regeneration of town centres, culture and heritage investment, all of which are devolved competencies. Why, then, do funding bids require the backing of MPs and not Members of the Senedd? This is just another example of how the levelling-up and shared prosperity funds ignore our democracy here in Wales. 

The UK Government has consistently refused to engage with or consult with Welsh Government on this matter and local authorities. Decisions about Wales must be given to Wales for the good of everyone in Wales. There should be a three-way conversation between Westminster, councils, and led by Welsh Government about this replacement EU funding as a matter of urgency. Thank you. Diolch.

I have received one request for an intervention—Alun Davies.

I'm grateful to you, Presiding Officer. I wanted to respond to a point that Peter Fox made. This isn't inherently a political matter. When I was a Minister in the Welsh Government, I worked alongside Conservative Ministers. We sat in the delegation room in Brussels and argued the same case for Welsh Government-provided civil servants to work with the United Kingdom Government in order to design and develop the structural funds programme. We argued the same case at the General Affairs Council in Luxembourg and General Affairs Councils in Brussels. We spoke together and we worked together, and that was a Welsh Labour Government and a UK Conservative coalition Government. What this United Kingdom Government has done is to break that co-operation, break that partnership, and my fear is that the conclusion of that work will be to break the union.

The Minister to reply to the debate—Vaughan Gething.

Thank you, Llywydd. I'll try to run through some of the comments in the debate before concluding. I think it's fair to say that the debate's highlighted very clearly how people feel both about the current UK Government and the reality of what is happening, not just from the comments made by the Plaid Cymru economy spokesperson about the challenges over the prioritisation criteria and the lack of transparency, and you heard those from Alun Davies, Hefin David, Carolyn Thomas and others. Unfortunately, that's the reality of where we are. We can't honestly tell you about all of the criteria because they don't make sense and on the data we understand, it still is so hard to understand. You'll have heard Huw Irranca-Davies from a sedentary position confirming that, of course, Bridgend as well as Caerphilly as well as Wrexham as well as Gwynedd are all excluded. And when you look at the objective data, that's an absurd position. It's absolutely absurd for Richmond to be included, whereas, actually, the Ogmore valley is excluded. Now, that's just an absurd place to be.

There is a challenge for all of us about the seriousness with which we approach our responsibilities. I do think that, when you look at not just the points about transparency and structure that Hefin David made, but it was important to hear what Carolyn Thomas had to say about the very short notice that local authorities have had to turn around bids and the real lack of coherence. And I'm afraid that the undoubted truth is that this approach does threaten the union. I'm proud to say that I believe in the future of the union and in Wales's part within it in a successful United Kingdom, but if we're going to have the reappearance of centralisation to ride roughshod over this institution and the Welsh Government that the people of Wales have chosen, then you will see further challenges about the future of the union. And people who believe in the union, whether on the right or the left, need to reflect seriously on the course on which you're headed.

I would say that the comments made by Sam Rowlands and Peter Fox—. Look, I've worked with Sam and Peter at various points in time in their previous roles as local authority leaders and I have a good amount of respect for them even though I disagree with them. But today, I'm afraid that you've forgotten the practical impacts of the funding cuts—the threats to Business Wales, the development bank, the apprenticeship programme, research and development. That's the reality of what will happen with the current atomised approach of the UK Government, and you can't bravely attempt to say that an exercise in Whitehall centralisation is actually great news, because there's a deliberate attempt to drive a wedge between the Welsh Government and local government here. And I just don't think that that is going to wash. And so, Conservative Members really should reflect on their priorities.

Last week, in this Chamber, you criticised constitutional arguments and said that you wanted to focus on the powers of this Senedd and the Welsh Government. You called for other parties to respect the judgment of the people of Wales on 6 May, and yet, here you are championing a deliberate attempt to undermine that judgment, to get around the judgment of the people of Wales. The current UK Government approach guarantees an argument, as it is transparently seen to usurp powers that the people of Wales voted for in two different referenda as well as multiple elections. Who can credibly come to this place in this Senedd and argue, as an elected Member, that powers and responsibility should be removed from this place? It would be extraordinary if the Welsh Conservatives chose to continue supporting a significant budget cut. It simply won't wash to claim that the budget cut that has already been delivered within this year by the UK Government is really somehow an increase. And the reality-defying approach of the Welsh Conservatives does, on the one hand, show real loyalty to Ministers in Whitehall but not to Wales. Our approach in Wales is a coherent regional approach with the buy-in of stakeholders and yes, with devolution to regions of Wales outside Cardiff Bay.

And as Sam Rowlands and Peter Fox know, local government has a key leadership role within the new corporate joint committees. This Welsh Government has a renewed and strong mandate for devolution to govern on behalf of the people of Wales. Bypassing these elected institutions is not just an insult to the people of Wales, it would clearly result in worse outcomes. The First Minister has made his willingness to collaborate on future funding clear to the UK Prime Minister. I wrote early last month to the Secretary and Minister of State leading on these funds to request a meeting as soon as possible to discuss how we can make the funds a success in Wales and to use them as a demonstration of resetting inter-governmental relations in order to deliver practical and effective change. I'm yet to have a response.

If the UK Government is serious about future prosperity here, in and for Wales, it must provide Wales with a fair share of UK spending and work with the Welsh Government and this Senedd, not in a tokenistic way, but as a genuine partner in decision making and delivery, and that simply isn't happening right now. 

There cannot be an attempt to return things to an outdated way of working, when Whitehall Ministers supposedly always knew best. This place has the mandate, and should continue to have the responsibility to act in these matters. I ask Members to support the Government motion and the Plaid Cymru amendment. 

The proposal is to agree amendment 1. Does any Member object? [Objection.] Yes, there are objections, and therefore we will defer voting on this item until voting time and, in accordance with Standing Order 12.18, I will suspend the meeting to prepare for voting time. So, the meeting is suspended. 

Plenary was suspended at 18:31.

The Senedd reconvened at 18:43, with the Presiding Officer in the Chair.