In the heat of the EU referendum campaign leading Leave-supporting ministers (many of whom remain in Theresa May’s post-Brexit cabinet) were categorical that regions like the North East would not be financially hit if the UK voted to leave the EU. It is looking ever more uncertain that England’s poorer regions will receive their full allocation of funds.
For decades, the EU has channelled vital funding to the North East of England - my home region. This is because Brussels works on a system of redistribution according to need. As a result the North-East benefitted from EU development funds more than any other English region between 2007 and 2013 receiving hundreds of millions of pounds.
This money has underpinned our local economic strategies, securing thousands of jobs, developing key infrastructure, driving real innovation and excellence in our region. These funds have been central to the economic and physical transformation of the region funding everything from transport infrastructure, new business start-ups to the iconic Angel of the North itself.
Over the next few years we were set to receive over half a billion pounds in regional and social funding, which should be doubled with match funding from central government and the Big Lottery.
A joint letter from pro-Brexit ministers on the 14 June dismissed the concerns raised by farmers, academics, local authorities and many stakeholders about European funds stating “those who now get funding from the EU — including universities, scientists, family farmers, regional funds, cultural organisations and others — will continue to do so”. Following on the heels of the commitment to spend £350m on the NHS, this promise quickly evaporated.
In the depths of the summer recess, on the 13 August, Chancellor Philip Hammond set out assurances for British recipients of EU funds, which have raised more questions locally than ministers answered. It was welcome news that research and farming funds have been guaranteed for the full budget period until 2020.
However, the Tory government has only offered a partial guarantee for those regional structural and investment fund projects, including rural development schemes, signed before the Autumn Statement in November.
As a result there is a real danger that the poorest English regions, including the North East, could be heavily out of pocket. For many there is sick irony that the poorest regions of England voted to leave the EU and will be now hit the hardest, but government should not be operating on the basis of retribution but economic and social need.
Lots of the anger I heard on the doorstep during the referendum campaign was from people who felt the North East had been left behind. This anger meant that people were not willing to listen to arguments about how much EU funding had done to benefit the region. The North East’s economy needs investment and that anger will only grow if it doesn’t get it.
The whole situation is compounded by the fact that the latest round of funding has beenlong delayed as a result of the scrapping of the Regional Development Agencies in 2010. Funds for 2014-20 only started being allocated in autumn of last year and the lion’s share of the funds are yet to be formally signed off. For example, Durham County Council estimates that only 25% of funds will be covered by the Autumn Statement deadline, while the Tees Valley, due to benefit from £170m of EU funding from 2014-2020, has only allocated £24.6m.
At Labour Party conference, Shadow Foreign Secretary Emily Thornberry said that the Labour Party will guarantee that a future Labour government will make up any shortfall in structural funding into the 2020s and beyond. The Labour Party believes that the communities who stand to lose out most from Brexit must be looked after first, and government policy must reflect this.
Ahead of the Autumn Statement, the Treasury is set to announce further arrangements for assessing whether to guarantee funding for specific regional fund projects signed after the Autumn Statement, but while we remain a member of the EU. This week I have heard first-hand the damage that uncertainty about the future of these regional and social funding is having on businesses and vulnerable groups across the North East. Action from government is urgently needed.
That’s why in parliament, I have called on Philip Hammond and the government to guarantee that all EU funds promised are delivered and that investment in English regions like my own are guaranteed in the long term.