The following amendment has been selected: amendment 1 in the name of Darren Millar.

Item 7 is next, and that's the Plaid Cymru debate on post-Brexit funding. I call on Luke Fletcher to move the motion.

Motion NDM8009 Siân Gwenllian

To propose that the Senedd:

1. Believes that post-Brexit funding streams are not working for Wales.

2. Regrets that Wales will be £1 billion worse off in un-replaced funding over the next three years.

3. Believes that new arrangements run directly by the UK Government have undermined the Welsh Government’s ability to strategically plan spending for the benefit of Wales and its communities.

4. Calls on the UK Government to restore Welsh democratic oversight over the post-Brexit funding streams by devolving them to the Senedd.

Motion moved.

Diolch, Dirprwy Lywydd. I move the motion tabled in the name of Siân Gwenllian.

Why have we called for this debate today? I could launch straight into detail about different pots of funding and rehash well-worn Brexit arguments, but I'd like to start in more simple terms: we are facing a cost-of-living disaster. Most have already started to feel its effects after the 1 April energy price hike, and yesterday's headlines reported that the typical household energy bill is set to rise again by another £800 a year in October. Whilst all this is going on, Wales not only is lacking the financial and welfare levers that are currently held by Westminster to tackle this crisis, but we have also been denied funding as we have exited the European Union, funding that could make all the difference now. Rather than the disjointed projects that tinker around the edges, Plaid Cymru is calling for the levelling-up funds to be used to deliver genuine transformational programmes such as retrofitting Wales's housing stock, one of the oldest housing stocks in Europe, to save households over £600 on energy bills. Plaid Cymru is also calling for the shared prosperity fund to be devolved, and for a needs-based funding formula to be adopted, thus giving us the opportunity to correct the arbitrary top-down approach adopted by the UK Government.

Devolving the shared prosperity fund to the Welsh Government is necessary to ensure that the funds are directed properly to tackle the cost-of-living crisis head on. Inflation figures and economic growth rates add to the mounting evidence of UK stagflation; the Conservatives' record is of 12 years of failure to create an economy that delivers well-being for people across the United Kingdom. From the banking crisis to the present day, the Westminster Government has sought out every opportunity to impose austerity and to bring about a hard Brexit of its own making. Those have combined to aggravate the UK's cost-of-living crisis. Yes, there have been other causes that have been beyond our control, but these are ideological choices that will go down in history as Tory creations.

The levelling-up fund does nothing to correct past mistakes or deliver for the future. By the Welsh Government's own figures, this Government's post-Brexit funding arrangement for Wales falls short by £772 million of structural funds alone for the period of 2021-25, and we face in Wales a loss of more than £1 billion in unreplaced funding over the next three years. That's not only an assault on Welsh devolution, as the economy Minister has already said, but also a broken election promise. The Conservative Party promised in 2019 to replace EU regional funding with a programme that is fairer and better tailored to our economy. However, so far, the amount of funding allocated to this end has failed to match the promise of the UK Government's levelling-up rhetoric. That is not what was promised on page 15 of the 2019 Welsh Conservative manifesto, which said that

'no part of the UK loses out from the withdrawal of EU funding'.

Nor is it what was promised on page 29, which said that

'Wales will not lose any powers or funding as a result of our exit from the EU'.

To be fair, the Welsh Conservative benches here must also be disappointed, as their 2021 manifesto set out their hopes to see delivered a UK shared prosperity fund that tackles inequality and deprivation and levels up the whole of Wales. A year on from this manifesto, and inequality and deprivation have only deepened. Three years into its term and six years on from Brexit, the UK Government cannot articulate or deliver any clear benefits to Wales. We need an honest funding settlement, devolved engagement, and a focus on delivery rather than glossy announcements.

The UK levelling-up agenda excludes the Welsh Government from the management of the shared prosperity fund with allocations made to local authority areas based on investment plans with approval granted by UK Government Ministers. This is a purposeful bypassing of the Senedd's democratic oversight. Fundamentally, there is a principle at stake here: decisions for Wales should be  made by Wales. It should be for a democratically elected Welsh Parliament to decide how to spend what money is left. Where there is a problem, it always seems the UK Government's answer is to patch together a solution that serves a small cohort of the population. Out of ideas—other than to centralise powers that they do not possess—the UK Government sit on their hands as the economy that they're responsible for fails to work for households and businesses not just in Wales, but across the UK.

To close, Dirprwy Lywydd, this message should have landed a long time ago. It was the UK Government that promised it, after all. We'll never stop repeating it, and we'll always remind them of it: 'Not a penny less, not a power lost'.

I have selected the amendment for the motion and 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. Recognises the commitment of the UK Government to empower local communities in Wales via the levelling-up agenda and the shared prosperity fund.

2. Welcomes the UK Government’s repeated confirmation that Wales will not lose out on post-EU funding.

3. Calls on the UK Government and the Welsh Government to ensure that lessons are learnt from how EU funds have been administered under the European structural and investment funds schemes so that future investment by both governments make a real difference to the Welsh economy. 

Amendment 1 moved.

Diolch, Dirprwy Lywydd. I move the amendment tabled in the name of my colleague Darren Millar. Members will be aware that the Finance Committee is looking at post-EU funding and, as I've said before, the Economy, Trade, and Rural Affairs Committee will probably look at this matter later on this year, after the Finance Committee has concluded its inquiry. Of course, the effective delivery of funding post Brexit is vital, particularly at a time when the cost of living is rising and everything from food to fuel to energy is costing households more and more. 

We know that EU structural funds were integral in supporting programmes to tackle deprivation, and I think that's a really important point. We're not solely talking about strategic infrastructure projects, but, in many cases, local community projects that have a huge impact on how people live in their communities. I know that in my own constituency, EU funding has been used to deliver business support programmes, apprenticeships, tourism projects and environmental schemes. Therefore, as I've said before in this Chamber, it's so important that Wales does not lose out on that funding going forward, so that projects can continue to make a real difference in our communities. 

Our amendment today reaffirms the UK Government's repeated statements that Wales will not lose out on funding, and I, like Members right across this Chamber, will continue to push for this to be the case. The UK Government have said that previous EU programmes would be ramped up and ramped down, and that its funding commitment would be met by a combination of EU funds from the 2014-20 programme and investment through the shared prosperity fund. Indeed, the level of funding was raised with experts in a recent Finance Committee meeting. I believe it was Guto Ifan from the Wales Governance Centre who explained, and I quote:

'both Governments are making different claims based on quite different assumptions about the allocations and spending. So, there's that, and then there's the issue of publicly available data on how much legacy funding we have. We don't really know what would have happened to EU funding in terms of the building up, if we had a new funding programme period. And, of course, we don't know what happens to the shared prosperity fund after 2024-25, which I think you'd need to properly compare for a complete picture of a comparison with previous EU funding.'

Therefore, it is clear that more transparency is needed from both Governments on the figures they've already published. I want to be clear that the UK Government should provide more clarity over its allocation for Wales, but the Welsh Government shouldn't be left off the hook either. Whilst the Welsh Government has released some figures, it hasn't accounted for EU legacy funding, or how much funding is coming from the EU, or making that distinction between allocations and actual spending, as was highlighted in that recent Finance Committee session. 

Our amendment also recognises the commitment of the UK Government to empower local communities in Wales via the levelling-up agenda and the shared prosperity fund. While some might not like it, the reality is that Wales has two Governments, and the direct funding to local authorities serves to highlight the UK Government's commitment to devolving power to councils who are best placed to deliver this funding. As I've said before—[Interruption.]—we've just seen how resilient our local authorities have been during the pandemic, and their local knowledge will be invaluable in delivering this investment. I give way to the Member for Ogmore.

Thank you for giving way, Paul. I appreciate what you're saying about getting some of these decisions down to a local area. In fact, that's what the strategic group looking at regional funding within Wales was looking at, based on the very best OECD models. I had the privilege of chairing it for a while. But, what they didn't suggest was, in any way, bypassing the policy framework in Wales at a national level. They actually recognised the need for partnership and working within that context. Why has the UK Government chosen to, effectively, bypass this devolved institution and Welsh Government? 

The Llywydd took the Chair.

I've said before in this Chamber that it is important that Governments at all levels actually work together, but this is about real devolution, isn't it? It's devolving these matters to local authorities, and that is hugely important, because local authorities can prioritise the projects in their own areas. That, surely, is devolution. 

The final part of our amendment calls on the UK Government and the Welsh Government to ensure that lessons are learnt from how EU funds have been administered in the European structural and investment funds scheme, so that future investment, by both Governments, make a real difference to the Welsh economy. The management of European funding has previously been criticised by some for being overly complex and bureaucratic. 

PLANED, a community-led partnership based in Pembrokeshire, told the Welsh Affairs Committee that, and I quote,

'European funds whilst being welcome, appreciated, and intrinsic to the success of many projects within Pembrokeshire, as in the rest of Wales and UK, have also proved to be an administrative and bureaucratic burden that can often detract from delivery, outputs, and sustainable change'.

Unquote. And in responding to that, the Welsh Affairs Select Committee is right to say that the development of the shared prosperity fund represents an opportunity to address these problems and establish a system of funding that is less administratively burdensome. And I'll certainly be doing what I can to encourage the UK Government to provide assurances that those lessons have been learned.

So, all Members in this Chamber should want to see the successful delivery of post-EU funding, where funding reaches the communities that it needs to reach and is used effectively to make our local areas more prosperous for the future. Therefore, Llywydd, I urge Members to support our amendment.

I want to focus on the impact of Brexit on research and innovation funding, which clearly illustrates the assertion in our motion that post-Brexit funding streams are not working for Wales. So, why is this a problem? Research and innovation is absolutely fundamental to our nation's productivity and prosperity. It further helps us understand who we are and how we can best plan our future, enabling the research undertaken in our universities to have a positive and concrete impact on our lives here in Wales and far beyond. Nobel prize winner Andre Geim memorially summarised the value of fundamental research. He said, 

'There's no such thing as useless fundamental knowledge. The silicon revolution would have been impossible without quantum physics. Abstract maths allows internet security and computers not to crash every second. Einstein’s theory of relativity might seem irrelevant but your satellite navigation system would not work without it. The chain from basic discoveries to consumer products is long, obscure and slow—but destroy the basics and the whole chain will collapse'.

And we needn't look further than the years of the pandemic to realise our need for the two cultures of the humanities and science. We need not look further than the climate crisis to understand why our lives quite literally are in the hands of our researchers.

The Welsh Government's 2019 report into protecting research and innovation after leaving the EU stated:

'Brexit will bring a significant reduction in overall UK R&I investment. Any loss of structural funding on this scale, unless addressed, will disproportionately threaten Wales’ productive research and innovation ecosystem, having managed over the past two decades to catch up and outperform other UK and many similar sized countries and regions in Europe and internationally in terms of research publication impact'.

It's clear that this prediction was spot on. What is lamentable is that neither the UK Government nor the Welsh Government have responded adequately since then to ensure the impact of the loss of EU funding is addressed, because the risks were clear. EU structural funds have played a critical role in Wales's research capacity. Wales secured around 25 per cent of the total UK allocation for the 2014-20 period—more than five times the UK average. During this period, Wales was allocated €388 million of the UK's total European regional development fund for research and innovation—the highest of any of the devolved administrations. And since 2014 the Welsh Government was able to invest over £500 million of EU-related funding in research and innovation. The loss of these funds, without adequate replacement, therefore cannot be overstated. And that's because currently, Wales does not achieve a share of the UK R&I funding equivalent to the share we should expect from the Barnett formula. In 2020 for example, despite Wales making up 5 per cent of the UK population, we received only 2 per cent of the UK R&D funding. Wales's level of R&D investment is significantly below that of the UK and EU averages. And this picture will only get worse as Welsh universities are disproportionately disadvantaged, given the high level of historical dependency on EU funding.

In 2018 Professor Reid's review of Government-funded research and innovation in Wales highlighted that, while the research and innovation ecosystem in Wales was strong, it lacked the scale needed to deliver Wales's full potential. And we all know that in most cases, to have scale, you need funding. So, how does the future of this crucial sector look, when 79 per cent of Wales's total EU funding for research and innovation is from those EU structural funds, and the shared prosperity fund falls hundreds of millions of pounds short of the 'not a penny less' empty promise? Well, it doesn't look good, because given the small scale of the Welsh research base, it's not realistic that increased success in the competitive UK R&I funding environment alone would be sufficient to grow or even maintain Wales's R&D at previous levels. Given this, the Welsh Government must urgently address this huge gap in funding, which will endanger our research and innovation capability.

Professor Richard Wyn Jones of Cardiff University has drawn attention to the consequences of the Welsh Government's failure to implement the full recommendations of the Reid review, which were designed to protect and strengthen Welsh R&I, in light of the damage caused by Brexit. So too have the Institute of Physics, the Higher Education Funding Council for Wales, the Royal Society of Chemistry, Cardiff University, FSB Wales and Universities Wales. In explaining the thinking of the Welsh Government, the economy Minister has pointed to the role of the internal market Act and the UK shared prosperity fund in reducing expected funding and related previous commitments.

While I ask all Members to therefore support our call on the UK Government to devolve responsibility over the new post-Brexit funding streams, I would also point out to the Welsh Government that the current situation is surely more of a reason for them to act now, to shore up the key driver of our nation's prosperity. Diolch.

I'm going to try today not to make any political points whatsoever. The only thing I will do, when I intervened on you earlier, Paul—. It is interesting the approach that has been taken, in that the only people excluded to a high degree from this are the Members of this Senedd, because MPs are specifically mentioned within the need to actually take this forward. So, not Members of this Senedd, this Welsh Parliament—yourself, me included—but also engagement with the Welsh Government and the policy framework. Not that the Welsh Government should do this, but that, actually, they should be a fully embedded partner within it. Now, the reason I mention that is because we spent three years—three years of my life. It hasn't been wasted, I'm glad to see, because some of it has worked its way into the way forward now. It actually has; it's permeated it, when we actually spent three years bringing forward the framework for regional investment in Wales. That was co-produced by the CBI, FSB, the third sector, higher education, further education, academia, everybody, and it was based on the very best OECD models. We were worried that that was going to be chucked out. It's been put partly to one side, but I'm happy to say, in the flurry of the fortnight before the announcement was made, on 13 April, I think it was, with the announcement on the SFP being brought forward—there was a flurry of two weeks of intense negotiations after nothing for months, but there was a flurry of a fortnight. In that fortnight, one of the concessions brought forward was actually to acknowledge that, in Wales, we collaborate. In Wales, there is a framework of partnerships—regional partnerships, local authorities working together, with the third sector, with others—and this somehow has somehow found its way into it with a protest of that last fortnight—. But the disappointing thing, Darren—and I'll happily take an intervention—is, out of all of that collaboration, all of that partnership, all that work that was done over three years, some of which has found its way in, the one missing partner is us, and I just can't understand it.

I'm very grateful for you taking the intervention. I think you're quite right, actually, to raise the fact that it is regrettable, in my view, that Members of the Senedd are not part of the decision-making process in the way that MPs are when it comes to this new funding stream. But do you also accept that it's a matter of regret that with the Welsh Government's approach, I had no say in what was being spent in my own constituency, you had no say in what was being spent in your constituency either, in terms of the way that they were dealing out the cash that was available from the European Union. So, don't you think that that is perhaps—[Interruption.]—don't you think that that is perhaps, therefore, a lesson for the Welsh Government in the way that it handles grant funds in the future? Because I agree with you, I think it would be great to give more local people greater say, including us.

That's actually part of the lessons that we took through in the framework that we put forward and that the OECD worked with us directly on over those three years. The OECD, by the way, is still working with Welsh Government on these matters, and I think that question of learning the lessons of pulling out some of the bureaucracy, but actually within the proposals here, Darren, what we have got is some of that burden of administration—it's a competitive bid process now within the IPs. That competitive bid process is now being managed by individual local authorities. I could go through the list of what we've heard on the forum that continues in a different format to actually share experience from CBI, FSB, the third sector and everybody else, and what they are saying about their experience of this. Actually, they are now taking on that burden of administering this—[Interruption.] I will give way, but I'm conscious of time.

It's a very brief one. And, of course, local authorities do say how difficult it is for them to deal with the administrative burden of this. In response to what Darren Millar said, yes, of course we have, as Members of the Senedd, an opportunity to scrutinise decisions taken by Welsh Government. That is our role as parliamentarians, and does the Member for Ogmore agree that the danger in giving direct influence for Members is that you turn into a pork barrel politics type of scenario?

Look, I'd hate to say it is going to be that way, but it is indeed a danger, and the fact that we can't scrutinise—so it's already been flagged by the forum members that they have concerns that some of the proposals being brought forward will actually duplicate existing Welsh Government programmes. Now, that would be not just a waste of resource and time, which are scarce anyway, but they may actually work against each other. Well, surely, that's crazy. That is not good regional economic framework modelling. So, we should be able to, Darren, not just at a local level, but at a regional level and here engage on these projects and get them right so we don't have that duplication.

Sorry, I've taken a couple of interventions, so I'm going to run out of time very shortly, as in now—

I'm not sure whether you've actually started yet, you've taken so many interventions. [Laughter.]

I have hardly started—[Laughter.]—hardly started. So, I want to touch on a couple of the challenges that have already been flagged on the forum. One is the additional burden that it adds to local authorities, because they have to manage the competitive bid process. Secondly, the tight timescale, they have between now and August to bring forward and to negotiate between different local authorities on what are the best bids, and to do all the stuff that we could have done in much more managed way there. We also have, I have to say, the challenges as well of looking at what is best within a regional structure. The good thing is that the collaborations that we have built over many years in Wales stand us quite strongly in that, because I'm not picking up an appetite from local authorities to beggar the hindmost, they actually want to build on what we were doing already in Wales and work together. But this carries lots of risks.

So, in this debate today, I would say to people, go and look—. If you want an impartial, balanced view of what stakeholders are genuinely saying about this process, including their analysis of the Welsh Government's points on the fact that we are, at this moment, short of money, that we have been shortchanged, and we're looking to see how that is going to be made up, then go and look at the minutes of those three meetings we've had already, the fourth to be published shortly. I hope, Minister, that what we will have is a maturing from this position, where we genuinely have the UK Government reaching out, and the Welsh Government reaching out to them as well, to say, 'Let's make this work for Wales.' Because we've been in a dark tunnel for a long, long time, I have to say, and I'm not sure that we're out of it. And I do worry that this transition between where we were with that EU funding and where we're heading is not being managed as effectively as it could be.

I welcome the debate today and I welcome Huw's position of not making political points, and I won't try to make any either. But I agree with my colleague Paul Davies on his summation of the situation, and I too am firmly of the belief that the UK Government must honour its repeated commitment to ensure that Wales does receive its share of post-EU funding. From what I'm already hearing within the Finance Committee, and we're yet to see the response, there is a clearer picture on post-European funding and clearly a misunderstanding or a different position being taken here. Clearly, clarity would be important from both sides, and that isn't there, that transparency isn't there.

But I do think we've got to be careful that we don't see this as a threat constantly to devolution; this is an opportunity, and, I think, as Huw says, an opportunity for governments to work together to drive the very best for their local communities. I know as a past leader that there is an appetite for devolution to local authorities. They may not come out and say it in some areas, but any leader of a council and their cabinets who do not want to have access to the levers to make real change in their communities shouldn't be leader. They should be looking to lever in moneys to help their communities, close to communities, to help businesses and drive up opportunities.

We have to recognise that there's been a significant amount of money flowing already through the various schemes—£121 million, we know, for projects to improve infrastructure in Wales through the levelling-up fund; £46 million for 165 projects through the community renewal fund; and we know £585 million of shared prosperity funding, along with the tail-off European funding, will be spent and match those opportunities that were there prior to.

But, Llywydd, I wasn't going to make my contribution around just figures. I wanted to think about this debate in a slightly different way. What I think is missing from the debate is a discussion about why we still need this funding in the first place, following decades of similar investments. As part of the European Union, Wales received substantial funding via the structural funding mechanism, which was supplemented by UK Government funding, but, as we well know, this was because most of Wales fell under the 'less developed' category, which was regions below 75 per cent average EU per capita gross domestic product. And what did this fund really achieve? Yes, there are examples of good projects that have benefited communities, and yet economic development has still lagged behind, despite the various initiatives and funding streams. For example, when Objective 1 money first arrived, gross value added in the West Wales and the Valleys region was 62.1 per cent of the UK average. By 2019, it was 63.4 per cent GVA for Wales as a whole. By 2019, it was just 72.6 per cent of the UK total—[Interruption.] Oh, sorry, Jenny—yes, please.

I was astonished to hear you say, 'Why does Wales need this money any longer?' We're in the middle of a climate emergency and we have a massive programme of decarbonisation that we need to achieve, and that's one of the things that the European programme was used for. 

Thank you for that. I think you misunderstood me. I'm asking for that wider debate of why we are still in here after 20 years. I'm conscious there are some new emerging areas where the money will be focused toward, but we have to ask ourselves why the country is still in such a desperate position for economic growth, and we're not seeing that movement that we need to mobilise our communities, despite all of the funding that has gone into the area.

You know from the Joseph Rowntree Foundation's report published earlier this year, it stated that Wales has the highest poverty rate among the four nations in the UK, with almost one in four—23 per cent of people—in poverty; between 1997 and 2000, this rate was 26 per cent. So, despite all of the EU funding, Wales still faces persistent poverty and an economy that lags behind the rest of the UK. So, the real question is not how much money Wales receives, but how we can use the new funding mechanism as a fresh start to ensure that the future investments made by both Governments—and I emphasise both—make a real, long-term difference to the Welsh economy and communities. Because, ultimately, despite all of the debate here, we must not forget what this funding needs to do. So, it's not just about shouting about who's right and who's wrong; it's how we use the money and lift this country out of the position it's currently in.

Just as decisions about Wales should be made in Wales, the funding allocated to Wales should be spent by the Welsh Government. That's a fundamental principle. Let's bear in mind that two years ago the Government in London announced the levelling-up fund, which was worth around £5 billion, for England only. It was only a year later that they acknowledged that some of it would be distributed between the devolved nations, with £800 million shared through the Barnett formula to Wales, Scotland and Northern Ireland. Rather than levelling up, what we are seeing is the latest proposals spreading the resources available to us thinner and thinner and drawing funding away from those areas where they are most needed.

You will, I'm sure, bear in mind that, under the EU's criteria previously, Gwynedd was considered as an area that required financial assistance, and Gwynedd did receive contributions from the EU running into millions of pounds. But, under the current regime, Gwynedd is seen as an area that isn't in need of support and so is one of the lowest areas in terms of support through levelling up, whilst the county and area of the Chancellor is identified as an area that needed more funding and is therefore receiving more funding. So, the system put in place by Westminster is perverse and works against our most deprived areas.

Now, if we look at another aspect, looking at funding for COVID-19 and dealing with the pandemic, far from proving the strength of the union, the UK's pandemic response was in fact one huge subsidy to the south of England. The Centre for Progressive Policy has calculated that the UK Government spent £1,000 more per London resident than in Wales, and £6.9 billion more on London than if each nation and region had been allocated emergency spending equally.

Wales's current strategic planning regions are a response to Westminster priorities, including the UK Government's city and growth deals and shared prosperity funds. They write off three quarters of Wales in terms of economic and cultural viability, and continue to make our future dependent on the crumbs of somebody else's table, rather than serving as a vehicle to connect our communities north and south, east and west, and realise the potential of our own country.

To turn to a sector highly affected by post-Brexit funding streams, the Conservatives have, once again, broken their promises made in their 2019 manifesto to rural and agricultural communities. We must hold the UK Government to account to commitments made on future funding for Welsh farming. The autumn budget and spending review announced that an average of £300 million a year would be allocated to Wales for agriculture and rural development, which is a full £37 million less than the budget allocated in 2019. This was when the Tory manifesto pledged to guarantee the current common agricultural policy budget to farmers in every year of the next Parliament. This will make Welsh agriculture around £248 million, nearly £0.25 billion, worse off by 2025. The current context has only resulted in further uncertainty for Welsh farmers, making it only harder for stakeholders and policy makers within the Welsh Government to provide the detail and clarity that our Welsh farmers need. Whilst the long-standing CAP system was often viewed by some farmers as a bureaucratic inhibitor to farm activity, its strengths in providing a level playing field across many countries could not be questioned. For years, CAP provided baseline support to farmers across Wales and Europe and protected them from market disruptions. As stated already, Brexit has taken this away. We're now rushing to fill the legislative void left by the UK's departure from the EU and, with it, CAP.

And with respect to EU structural funds, as they were allocated on an objective assessment of need, historically that needs-based approach resulted in Wales receiving 24 per cent of UK structural funding, more per person than any of the devolved nations and English regions, reflecting the gap that exists between the poorest parts of Wales and the UK average. In its response to the Finance Committee's consultation on post-EU funding, the NFU has suggested that the Levelling Up Advisory Council, set up by the UK Government, should include specific Welsh and rural representation to give confidence that the EU funds will be replaced in full. They also go on to state that they believe that

'there should be formal consultation on future funding streams in order to ensure funds have effective strategic oversight so they can work for Wales, farming and our rural communities' as well.

Therefore, as Plaid Cymru has explained in this debate, the funding agenda post Brexit in Westminster has meant to date more powers for Westminster, more money for Tory constituencies, and less democracy for Wales, and less funding and representation for Wales too. We deserve better than this clear effort to buy loyalty for a split and failing union. 

Jane Dodds.

Thank you, Llywydd, and I'm very grateful to Plaid Cymru for this debate today.

People have been repeatedly told since the 2016 referendum—it seems like a very long time ago, doesn't it—that we would not be a penny worse off than when we left the EU. I'm not going to retrace the arguments about how inadequate the UK Government has been around the new arrangements, but I do want to say it feels a bit like groundhog day, because we keep coming back to this really important issue, and it is so vital that we keep doing that, because I do see a glimmer of hope, perhaps, in some of the Conservatives over there. I'm really pleased to hear Paul Davies saying that he wants to challenge the UK Government, and that Peter Fox also feels that there should be transparency. But listen to what you're hearing this afternoon. You're hearing about our Welsh farmers, you're hearing about what they're losing. We heard this afternoon, and we had the debate and the discussion about our Welsh farmers and how important it was to support them, and yet—. They were promised, this phrase, 'not a penny less' when we left the EU. As we've heard, they have lost around £375 million a year to sustain world-leading quality food, excellent animal welfare standards and a £7 billion food and drink supply chain. Please, take those messages back to the UK Government.

And Peter Fox, you perhaps don't understand the effect that Sioned Williams was talking about in terms of our universities here in Wales and the impact that the loss of funding is having on them. Aberystwyth University, in my region, secured more than £40 million of EU funds in order to develop the new and innovative enterprise campus, a state-of-the-art veterinary hub and a range of other skills and projects as well. That research and development money is essential to us here in Wales. We're letting young people down, we're letting our farmers down, we're letting our rural communities down. We must do better, and we must do it now. The political posturing of the Conservatives in Westminster continues to undermine our universities and our farmers. [Interruption.] Of course I'll take an intervention.

Thank you, Jane, for taking the intervention. I think you mentioned my comments about R&D. I absolutely agree with Sioned on R&D, and that isn't necessarily because of this fund, it's because of the lack of Government interaction in trying to lever in the R&D into this country. Look at Scotland, how Scotland have levered in so much more than we have. We—this Government—have let Wales down on R&D, and we need to do a lot more. But what I was saying in my contribution was about why we have got into this position, and why haven't we done more about it til now. I'm not saying there isn't a need for funding, but why are we still in this situation? And just for clarity, the farming community are still getting £337 million a year. That is fact.

Well, thank you very much for your intervention. Perhaps you could respond to the NFU. As Mabon has said to us, the NFU themselves have told us about the lack of funding for our farmers and how let down they feel, so it really is important that we think about those farmers and our agricultural community. And R&D is absolutely essential to Scotland, England and Wales. My challenge to you, and I'll finish with this, is: if a Conservative wants to stand up and tell us about the loss of EU funding, please answer these three questions. Why will Wales not lose out? Where will that money come from? How much, and when will it come? Because we're still waiting, and we can't wait any longer on behalf of our communities. Thank you, diolch yn fawr iawn.

I'm not speaking this afternoon to be an apologist for the UK Government. However, I do take issue with Plaid's motion this afternoon and the stance of their puppet masters in the Welsh Government. Wales will not be £1 billion worse off in unreplaced funding over the next three years, nor has the UK Government undermined the Welsh Government's ability to strategically plan spending for the benefit of Wales and its communities. This blatant Welsh nationalist propaganda has to be treated with the contempt it deserves. The double accounting, fanciful figures and the revisionist history that has been used to come up with Wales's imaginary losses—it would be funny if it wasn't so dangerous. Its only purpose is to undermine the United Kingdom and further a nationalist agenda of dragging a so-called independent Wales kicking and screaming back into the European Union.

Plaid and, for some unknown reason, the Labour Party want to take us back to the halcyon days of EU membership, when the handouts were large and the gravy train was at full throttle. But, in their rush to paint a rose-tinted epitaph to the past, they fail to mention all the times that they themselves hit out at the useless bureaucratic EU funding schemes—schemes that were designed to bring Wales out of poverty, yet utterly failed to do anything other than create more bureaucrats and a few vanity projects. Objective 1 funding was a once-in-a-generation opportunity to improve Wales's economic prosperity—

Are you taking an intervention?

No. I would have accepted if I was taking an intervention. 

No. Okay. He's not taking an intervention, Alun Davies. 

It was therefore shocking when it not only failed on all counts as Wales once again qualified for structural funds. Even after the EU was expanded by the admission of former Warsaw pact states from the east of Europe, despite billions of euros being pumped into west Wales and the Valleys, our nation was still as poor, or even poorer, than many of the former Soviet bloc countries that had gained EU membership. Once more, billions of euros were flooding into Wales in an attempt to level up Wales. What Plaid like to gloss over is the fact that these funds could only be spent on terms set by the EU. This institution had no say, no sway, so it's little wonder that what emerged was a string of broken promises, failed projects and a stagnant economy.

The UK Government's replacement schemes are in stark contrast. They are designed to deliver maximum benefit to local communities, designed to give local residents the final say in projects to improve their areas, yet this is unacceptable to Plaid and Labour politicians. They don't care about local communities, they only care about holding power onto them. I urge Members to reject this motion and support—

Hold on. Hold on.

—our amendment tonight. Thank you very much.

I think you're too angry, and I would consider just calming down in your contribution. 

Passionate, Llywydd.

No, no, that was anger. That was too much. I ask you to reflect on that for your future contributions. Yes, that was a bit of a shock there, actually. I'm going to ask the Minister now to contribute. Rebecca Evans. And I'm sure you'll calm things down, passionate as you are, but calm passion is always best, I think.

Okay. Thank you, Llywydd. I do welcome this motion today and the opportunity that it gives us to debate what is an absolutely vital issue. Despite repeated commitments from the UK Government that we won't be a penny worse of as a result of the UK's exit from the European Union, the UK Government has—and this is a fact—failed to honour its pledge to fully replace EU structural and investment funds, leaving our communities and businesses more than £1 billion worse off as a result. And I'd commend to colleagues the written statement I published in response to a request from Paul Davies on this issue just a couple of weeks ago, which sets out the details and the workings out, if you like, for that.

Since 2016, the Welsh Government has worked intensively to create the strongest possible model for post-EU regional investment in Wales. I put on record my huge thanks to Huw Irranca-Davies for his work and his leadership in that particular area. During this time, we've also made frequent attempts to engage with the UK Government on these plans, but it wasn't until just two weeks before the publication of the SPF prospectus that the UK Government offered any kind of meaningful negotiation with us. And it's only then as a result of the intensive discussions that we engaged in at that point that concessions have been made and the UK Government now at least recognises in its plans the importance of regional partnership working and our existing partnership arrangements that we have in Wales.

However, we simply cannot support the UK Government's decision to adopt a funding distribution model that redirects economic development funds away from those areas where poverty is most concentrated. And I'll repeat that, because this is what the UK Government's proposals do: they redirect economic funds away from areas where poverty is most concentrated. What Government would make that choice? Its structure really fails to advance the cause of social justice and equality, and it fails to meet any kind of test that the Welsh Government would set for this kind of expenditure. But, to my mind, it also fails badly the levelling-up test that the UK Government would want to set for itself.

UK Government Ministers have said that they're devolving more locally, but let's be really clear: no funding or decision-making power is being devolved. Welsh local authorities, they have to prepare their plans, but then they're assessed by Whitehall civil servants and decided upon by UK Ministers in London.

Our rural communities, too, are also suffering as a result of the UK Government's actions. When providing replacement EU farm funding, the UK Government is deducting EU receipts due to Wales for work that was part of the 2014-20 rural development programme. And, as we've heard, what this means in practice is that Wales's rural communities are £243 million worse off than if we had remained in the EU. Again, fact.

The entire process has been an absolute abject lesson of what happens when a UK Government wades into devolved areas with such carelessness and in such a poorly informed manner. The UK Government has fundamentally disrespected Wales's devolution settlement through this process, and is using the United Kingdom Internal Market Act 2020 to take funding and decision making away from the Welsh Government and this Senedd, undermining, I have to say, even their own Welsh Conservative Members of the Senedd in the process.

We have numerous examples of where powers that are devolved to Wales have been undermined by the UK Government, and where it's deliberately overriding Welsh devolution. The UK-wide levelling-up fund replaces England's towns fund, for which the Welsh Government previously would have had Barnett consequentials to support our priorities here in Wales. So, the fund is not new money. No local authorities in Wales would be guaranteed funding from the UK Government's competitive funding stream.

Despite the Welsh Government having been democratically elected to lead on policies in devolved areas, the UK Government is administering UK-wide programmes such as grass-roots football or tennis facilities via third parties, bypassing scrutiny here. And the £100 million UK seafood fund, aimed at supporting UK fisheries and the seafood sector, is again being administered directly by the UK Government, completely failing to understand or meet the specific needs of the sector here in Wales.

The Welsh Government was elected to govern on devolved matters, and we will continue to fight for this Senedd to retain its democratic role in future regional investment. The Senedd is elected by the people of Wales to scrutinise and, ultimately, authorise spending by the Welsh Government. But the UK Government is now creating a parallel stream of activity that is outside this democratic oversight, and it will inevitably not get the same kind of focus in Westminster as it would get here in the Senedd. Bypassing the Welsh Government and the Senedd will lead to the duplication of provision across Wales, blurring accountability, creating funding gaps for sectors, and failing to deliver public value for public money.

Having less say over less money means that there will be difficult decisions to make for the Welsh Government and other institutions across business, education and the third sector, and we've heard about some of those difficult decisions this afternoon. Vital programmes delivered with support from EU funds, at a time when we're recovering from the pandemic and addressing the cost-of-living crisis, will be put at risk.

We have shared our learning from administering EU funds with the UK Government, emphasising that a greater strategic national approach will deliver better outcomes for Wales. But it's failed to listen and instead is continuing with a fragmented approach of investing predominantly in smaller local projects that may have no link to our wider objectives, such as our work on net zero or integrated transport. But we will continue to work with partners to mitigate as much of the disruption as we can, but, Llywydd, Members should be under no illusions as to the damage that this set of decisions will do to the communities across Wales that need this funding the most. 

Llyr Gruffydd now to reply to the debate. 

Diolch yn fawr iawn, Llywydd. Can I thank everybody for their—well, most Members for their contributions and their constructive contributions to this debate? I think Luke Fletcher struck the right note right at the start. This levelling up is actually a top-down agenda in reality, and I'd go further. What kind of agenda? Well, we're seeing constituencies and authorities being cherry-picked for funding, with the diktat that ribbons must be cut 12 months before the next general election. You're not fooling anybody in terms of what the agenda really is here. 

And, I have to say, there was a valiant effort to justify the amendment that's being proposed, but to say that this is about empowering local communities, the reality is quite different. Let's be honest about this. Even under the WEFO programme monitoring committee, you had local government representatives, you had business representatives, you had the education sector, you had the third sector. And now, of course, we have under the levelling-up fund an application process where applications disappear into the bowels of Whitehall somewhere, no doubt to be processed by unelected bureaucrats—remember those—unelected bureaucrats making decisions, and of course it leaves local authorities thrown into this kind of cut-throat competitive environment where you're pitting communities against each other to be in the limelight, to get the money to pay for their projects, and local authorities, likewise, competing against each other.

And, okay, how many times have we heard, 'Wales will not lose out on post-EU funding'? It's reflected again in the amendment. It's straight out of the Boris Johnson playbook, really, isn't it? No matter how ridiculous it is, say it often enough and, do you know what, people might believe you? Well, people are wise to that now. I think we've learnt when not to trust the Tories. It's when their lips move, isn't it? That's what people tell us. Or indeed, when they table these kinds of amendments, or indeed when they promise something in a manifesto. As many Members, many sectors, many organisations are telling us, where has this money gone? It's disappeared. Not a penny less, not a power lost, as we were told. Well, it's far from the truth.

I would agree with a number of the Conservative Members who actually said that we need more clarity around the funding here in Wales. We need the figures provided. We need transparency—those are the words that you used. And I would agree, because I think that does reflect that the current settlement around some of the fiscal powers that we have here is deficient. When I was Chair of finance in the last Senedd, we had one evidence session where we had the Secretary of State telling us that Wales was getting more money, and in the immediate next evidence session we had the finance Minister from Wales telling us we're getting less. And as a committee, we were sort of fumbling around in the dark trying to work it out. Well, if we couldn't work it out then what hope does anybody else have? So, I'd agree with you there that we do need to address this.

And, of course, the killer line for me came more than once from the Conservative benches. Why do we need these funds in Wales after decades of funding from the European Union? Well, because the United Kingdom is broken; because the status quo has left us in exactly that space. [Interruption.] No, I won't. You've had over an hour to make your argument, and if you've left it until now then I'm sorry.

The macro-economic levers are held at Westminster. Those are the powers that can make a real difference, and successive UK Governments have let us down and have left us poor. You've let us down. You're keeping us in poverty, so give us the powers and we'll do a better job. Not a half-cocked power arrangement to do a little bit of this and a little bit of that; not the crumbs from the table, as Mabon ap Gwynfor told us. And it should start with honouring your broken promises on post-Brexit funding, and give us the powers.

Thank you. I'm very grateful for you taking an intervention—

No, I've finished, actually. [Laughter.]

He fooled me as well, Darren.

The proposal is to agree the motion without amendment. Does any Member object? [Objection.] Yes, there is objection. Therefore, I defer voting until voting time.

Voting deferred until voting time.

We now reach voting time. We will take a short break to prepare.

Plenary was suspended at 17:28.

The Senedd reconvened at 17:31 with the Llywydd in the Chair.