‘Red Wall’ and other poor parts of England will lose as much as £1 billion of development cash this year because of Brexit, dashing Boris Johnson’s pledge to “level up” Britain.
The government vowed to match grants aimed at building local economies by attracting businesses and jobs when the UK quit the EU, but has not set up a replacement fund.
Just £220 million is being made available across the entire UK for 2021-22, and no money has yet been handed out nearly halfway through the financial year, The Independent reported.
Areas of the North and Midlands – many of which flipped to the Tories in 2019 – received up £500 million annually from EU Structural Funds, but now they will only receive a sliver of the government’s new £220 million Community Renewal Fund.
English regions were awarded a total of £1.12 billion from Brussels in 2018. The biggest losers under the new scheme are likely to be the Midlands, Yorkshire, Cornwall and the northwest, according to figures obtained by Labour.
Wales will be even harder hit, having been expected to receive £373 million a year in the EU – while Scotland received £125 million annually.
Steve Reed MP, Labour’s shadow communities secretary, told The Independent: “This research makes a mockery of the Conservatives’ pledge to to fix the gigantic regional inequalities they have created.
“Not only is the government failing to fulfil its promise to match what these regions have lost, it is making them bid against each other for what little funding there is, prioritising rich areas over poorer ones.”
And the Welsh government’s economy minister, Vaughan Gething, attacked the situation as “chaotic”, undermining its worked-up development plan.
“Wales is now being denied jobs and investment at the worst possible time. You simply cannot do this work on the hoof and no responsible government would attempt to.”
James Ramsbotham, chief executive of North East England Chamber of Commerce, added that the promised Shared Prosperity Fund – to replace EU cash – would be vital in turning around economic deprivation.
“Despite being first proposed in 2017, we still have little indication of what it will do or how it will work,” he said. “Levelling up will mean nothing unless government acts quickly to replace Structural Funds in a fair and transparent way.”
Earlier this month Vaughan Gething – the Welsh economy minister – warned that Brexit had already sent the nation careering towards a new era of austerity.
“The Welsh government has to look at the reduced sum of money and make our budgets balance,” Gething admitted.
“The chancellor said there won’t be a return to austerity. Actually, if money disappears . . . you could find yourselves having to make choices that look very similar to the choices I was having to make as a minister when austerity was at its height.”
Related: Brexit is plunging Wales back into austerity after loss of EU aid
