Will disadvantaged regions in the UK benefit from the £1.6 Billion ‘Stronger Towns Fund’ negotiation between May and Labour MPs?
Molly Moe | 12 March 2019 | Articles
Is Theresa May’s Brexit deal bargaining chip just putting a plaster on an axe-wound?
Just before the second vote of her Brexit deal, Prime Minister Theresa May continues to push for a deal before the UK is to leave the EU on the 29thof March. May has faced strong opposition and difficulties in the commons in her attempts to secure a deal and earlier last week it was reported that May put forward negotiations of a £1.6 billion ‘Stronger Towns Fund’ deal between Labour MPs in order to gain their vote for her Brexit agreement in the commons.
Towns and areas in the UK that have been suffering from the impacts of 10 years of austerity are reported to be getting funding of £1.6billion, as part of a negotiation between PM Theresa May and Labour MPs to get parliamentary support for a Brexit deal. The new initiative to tackle the regional deprivation divide in the UK by the Conservative government, headed by PM May has been criticised as barrel-rolling and political bribery.
The shadow chancellor, John McDonnell, said the fund “smacks of desperation from a government reduced to bribing MPs to vote for their damaging flagship Brexit legislation”.
However, the attempts to support regions which have on average less funding and opportunities than the capital, are comparatively a drop in the ocean to the regional funding the UK was set to receive in the next 10-15 years, and fails to acknowledge the history of regional investment the EU has spent in the UK. This large investment comes from an effort to reduce the impact of austerity further in disproportionately underprivileged areas in the UK, which are likely to continue to face cuts in the now possible event of a no-deal Brexit, which will be made worse by the removal of funding from the EU regional funding policy.
An example of where the longstanding and vast differences in regional wealth have not been solved by UK government policy is where, despite suggestions by the EU iin the “2014 -2020 round of funding, the UK government chose to allocate Merseyside €202m(£167.835m) of funding, when the European Commission suggested the area should receive around €350m (£290.147m).”
In an interview with Olivier Sykes from the University of Liverpool, who only in December 2018 wrote in a paper titled The Great British Recession, that EU regional investment helped the situation of UK neglected regions,I discovered that the regional funding promised by May is a fraction of the funding the UK’s unequal regions receive from the EU. In other words, you could say May’s £1.6 billion deal is like ‘putting a plaster on an axe-wound’ for some of these deprived areas in the UK.
The regions which are set to receive this funding would however be in line to receive far more in EU regional funding from 2021 – 2027 than from this ‘Stronger Towns Initiative’, because some regions have been struggling so much over the last 10 years, that the UK would actually see an increase in its allocation of funding of around 22% for the 2021-2027 period getting around €13bn.Liverpool happens to one of the areas most affected by austerity, in 2015 Liverpool City Region was ranked the most deprived out of nearly 40 Local Enterprise Partnerships, on the Indices of Multiple Deprivation, which could be one of the many reasons why in a graph published by the PM’s press office, Liverpool (as part of the North West region) is set to receive £281 million from the Stronger Towns Fund, individually the most out of all the UK regions.
The hypocrisy of the negotiation between May and Labour MPs undermines the history of inequality of spending between regions in the UK. The amount May plans to spend in these areas is short-sighted in regards to the larger EU funding these areas could receive in the case of no Brexit. But access to European support was not just about money. Olivier Sykes also emphasises that “The symbolic and political value of EU structural funds to some places, and the opportunities they opened-up for empowerment of local decision-makers and communities, should also not be underestimated.”
In the interview with Olivier, factors such as higher budgets committed for longer periods (e.g. 2021 -2027) can mean long-term infrastructure and bigger goals for areas that need radical economic changes in order to provide regionally more equal opportunities.
With the second vote on a Brexit deal happening later today (12th March), we can only wait and anticipate whether or not the promise of funding has swayed certain Labour MPs.
Tune into the UK Politics Hour tomorrow from live 10am on LSradio to get the latest on the Brexit vote.
Listen to the full interview, with more on the implications of a no-deal Brexit for regional funding on The Politics Hour’s Soundcloud, link below!