2. What assessment has the Welsh Government made of how much money will come to Wales through the shared prosperity fund in the next financial year? OQ57664

Based on the Welsh allocation of this year's community renewal fund, which, as you know, is a forerunner to the shared prosperity fund, Wales could receive around £90 million from the shared prosperity fund in the next financial year. This plainly falls well short of the UK Government's repeated promises, including the specific manifesto pledge from 2019, to fully replace EU structural funds, which were worth £375 million annually to Wales.

Thank you for that answer, Minister. The fact that there are still question marks over this so close to when we should be finding out about this speaks for itself, doesn't it, in terms of how Westminster is treating this whole process? And we know the total amount that we've been shortchanged already, don't we? We lost £375 million of EU structural funding and in return got £46 million from Westminster, a loss of £329 million in this financial year. And regardless, Minister, of the fact whether Westminster will be conceding how much money we'll be receiving through the shared prosperity fund, the way it's going to be spent is deeply concerning, isn't it, because it's not just about the amount of the funding? The strategic oversight of the Welsh European Funding Office has been replaced by a pork-barrel process, with Westminster selecting specific schemes based on some opaque criteria. Do you agree with me, Minister, that there is no economic justification for spending money in this way, and that the only way to interpret the fact that the Tories have chosen this process is because they want to be able to point to certain schemes that have received funding in order to try to win votes?

Well, the Welsh Government has been very, very clear that the UK Government conduct falls far short of its repeated promises in a number of guises, and we're due to lose £1 billion. That's what Wales is going to lose over the next few years—£1 billion. And I don't see how any reasonable person could defend that, regardless of their politics. I don't think anyone came into this place to try to justify £1 billion being shed from Wales. And, of course, we're also seeing regions of England, Scotland, Northern Ireland being treated in the same way, because the UK Government has deliberately chosen to underfund those former EU programmes despite clear pledges and promises that no-one would lose a single penny. 

And there is then the concern about how the money is spent. There is no strategic understanding of how that money is going to be spent. The very small sums of money that are not strategically linked in the forerunner schemes don't give much hope for the future, if that were to be the continued path. And it is undeniably the case that having a UK Conservative Member of Parliament means you're more likely to receive money from way the funds have been allocated. And that simply doesn't match a map of need, in either Wales, England, Scotland or any other part of the UK. 

So, there's an obvious challenge here. There is, though, a way to make sure that this doesn't happen, and that's to have a proper understanding, with published criteria, for how the money is going to be used—a UK-wide framework, with a proper role for the Welsh Government and our partners. That is the way this should work, and could work. It's still not too late for Michael Gove to change course for whichever particular reason, but as we've seen on free ports in Scotland, it is possible to find agreement if the UK Government are in a position where they think that really does matter. The current course of action will see Wales having less say over less money, and that cannot be a good outcome for any Member of this place. 

Minister, I totally agree with you that it is important that Wales does not lose out as a result of the switch from European structural funds to the shared prosperity fund, and I'm sure that the Economy, Trade and Rural Affairs Committee will be taking a keen interest in this specific area in due course. Now, yesterday, the First Minister said that there is still time for the UK Government to co-operate with the Welsh Government over the delivery of shared prosperity funding, and we've seen how positive inter-governmental engagement has delivered benefits in the form of city and growth deals, for example. So, can you update us on your latest discussions with the UK Government in relation to the shared prosperity fund, particularly in light of the recent House of Lords select committee on the constitution's report?

Well, I should congratulate the Member. That is the first time that a Conservative Member in this place has said that it should not be acceptable that Wales loses money from the change from European structural funds. That's a very welcome statement. The trouble is the Chancellor's plan shows that Wales is undeniably going to lose money, moving forward, because the whole UK shared prosperity fund, which the UK Government have been very clear is the successor fund for former EU structural funds, will only be £400 million for the whole of the UK next year. Now, we're never going to get £375 million just for Wales out of that. We have tried on more than one occasion to have direct ministerial conversations about this. Thus far, there has been some engagement between officials, which has improved in the last couple of months, but we're still not at a point where there is a meaningful offer to engage with Welsh Government as decision-making partners in how shared prosperity funds are to be used. The one consistent theme has been that Ministers in Whitehall will make all of the decisions. Now, that can't be right either. There's no way for you and the committee you chair to scrutinise any choice that I make or, indeed, to try to scrutinise a UK Minister for the choices they're making on where moneys will be spent in Wales, and that can't be the right outcome when, in this place, Members of all parties have scrutinised how those funds have been used for 20 years, and I know that the Member, to be fair, Llywydd, has been part of giving advice to the Welsh Government in the past on how to effectively use those moneys to deliver significant change for the benefit of the Welsh economy. I only wish the UK would take on board the advice the Member has given in the past as to how those funds should be properly used, with the direct engagement of this place. 

I think Members across the Chamber will welcome the words of the Member for Preseli Pembrokeshire this afternoon, in the same way as Members across the Chamber have supported the Welsh Government in making the argument to ensure that Wales doesn't lose out as a consequence of the shared prosperity fund. And the power of our argument, Minister, I'm sure you'll agree with me, is in the power of our example. We're five years into the Tech Valleys programme now, nearly halfway through that programme, which was launched by your predecessor. Can you now, Minister, ensure that we do, in Blaenau Gwent, receive the full amount of the £100 million, which was guaranteed by Ken Skates when he launched that programme, and we will continue to invest to ensure that Blaenau Gwent receives the money it was promised, and that Blaenau Gwent continues to be at the heart of the Welsh Government's vision for regeneration and economic development in the Heads of the Valleys? 

I'd be more than happy to have a direct conversation with the Member about the future of Tech Valleys, about the challenges and the opportunities for the Heads of the Valleys area. Work, I know, is taking place between five local authorities on how to maximise investment and employment opportunities, because it is the area with the most concentrated disadvantage in the whole of Wales, and we won't succeed in our economic mission for the country if we don't generate better employment outcomes for people who live in that part of Wales. So, I'd be more than happy to talk with him about that. It's also been a regular feature in the conversation I've had with the capital region, morphing into the new joint committee, and I'm interested in how the Welsh Government gets alongside those five local authorities and the wider capital region to make sure we do see the better employment outcomes I know the Member seeks. I'd be more than happy to arrange with him to have a follow-up conversation to go through just that.