UK Shared Prosperity Fund
This week it was revealed that the British State is well on its way of achieving US style wealth, wage and health inequality.
This manifests itself not only on the basis of individuals but also on a geographical basis. The economic model of the British State pursued by successive governments is completely bust, and the current Brexit crisis is partly a consequence of it in many ways. The tragedy of course being that Brexit is likely to exacerbate the wealth divisions within the British State as opposed to remedy it.
We can say with great confidence that Singapore upon Thames isn’t going to create a more cohesive economic model for the British State.
We have a saying in Welsh ‘I’r pant y rhed y dwr’ – which roughly translates ‘the water runs to the pool’. This is certainly the case within the British State where wealth concentrates in London and the South East of England.
The communities I serve are amongst the poorest parts of the European Union. According to Eurostat we have a GDP ratio of only 68% of the EU average. Yet down here in Inner London, the richest part of the European Union by a country mile, the corresponding figure is 614%.
There are several reasons for these grotesque differences, but British Government policy is a key factor with public spending per head in London higher than it is in Wales, whilst critically infrastructure spending in London dwarfs the crumbs offered to Wales.
Due to the highly centralised taxation system in the British State, the government of my country have few precious job creation tools to enable us to address the situation we find ourselves in.
Trickle down economics pursued by successive British Governments has failed Carmarthenshire and Wales badly.
Wales is not alone, 9 of the ten poorest parts of the northern Europe are within the British State. Every single nation an region within the British State apart from London and the South East of England run a deficit to the UK Treasury.
The most simple way to deal with chronic productivity in the British State would be to invest in those parts of the State which finds themselves in deficit. At the last Budget I called for the British Government to increase infrastructure by expenditure by 1% of GDP – returning to pre-2008 levels, providing around £20bn extra per annum. This extra investment should only be allocated into the 9 debtor parts of the State on the basis of a ten year commitment. In the case of Wales this would equate to £1bn per annum.
If political states loose economic and social cohesion their reason for being come into question. Add the national dimension in Wales, Scotland and the North of Ireland and it is of little surprise that the British State now finds itself at death throes.
Despite this record of shame there has been no serious attempt by the British Government over the last forty years to realign the UK economic model. Indeed its de-industrialisation policies and its obsession with high finance has directly created the situation. It is beyond comprehension that the British Government hasn’t got a regional policy.
Following the fall of the wall in 1989 and the reunification of Germany – the Federal Government pursued a strategic policy of equalising wealth between West and East. This was built on deliberate investment in the poorest parts of the new State, but also the empowerment of the federal states with job creation leavers – in other words tax powers.
Out of the ashes of Brexit The British State needs a similar determined strategic goal of addressing its own north-south divide.
The European Union for all its faults realised the importance of economic and social cohesion. The only regional economic money flowing into Wales has come from European funding streams.
Wales currently receives £245 million more a year from the EU than it pays in, which accurately reflects the chronic underfunding by the British Government.
Carmarthenshire has hugely benefited from European Structural Funds. During the 2014-2020 programme, EU funds have so far assisted 611 enterprises, created 130 enterprises, generated 884 jobs, supported 877 people into work and helped 3,557 people to gain qualifications.
We now face the loss of this money. Three years after the referendum the British Government have yet to publish any detail on its replacement programmes apart from a grand title called the Shared Prosperity Fund.
In the absence of any commitment by the British Government, Plaid Cymru has produced its own model for post EU regional funding.
Our approach is based on a few simple principles. Firstly not a penny less, indeed due to the scale of the problem the SPF should be far more generous than European Structural funds. Secondly, decisions over Welsh funding should be made in Wales. A power grab of any nature which undermines the Welsh constitution will be met with fury. Thirdly, the new framework needs to be ready to take over from the end of EU structural funds seamlessly. Fourthly, funds should be pre allocated not subjected to a competitive bidding process which inevitably would mean the poorest parts of the British State loose out. Finally, we believe that programme funding within Wales should continue to meet the goals of European structural funds, including streams relating to employability and economic development, whilst also co-operating with Welsh Government policy and expenditure, and meeting legislation regarding sustainability, such as the Wellbeing of Future Generations Wales Act.
Over the weekend thousands of our fellow countrymen marched for the political independence of our country in our capital city. The people of Wales are watching developments closely. If Westminster shows no interest in investing in our country, we will take matters into our own hands.