Part of the debate – in the Senedd at 5:17 pm on 25 May 2022.
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.