Last Brexit to the Valleys

Areas which collectively received billions in EU and EU enabled funds since devolution saw a party whose manifest objective is a British withdrawal finish second across many of its constituencies in this year’s General Election. UKIP’s Valleys insurgency chimes with earlier polling which found that voters in the area ranked as the most Eurosceptic in Wales.

Valleys Euroscepticism is not a recent phenomenon – Mid-Glamorgan registered the 5th highest “No” vote of any U.K authority in the 1975 referendum. Nor is it philosophically or empirically surprising. Areas which return centre-left members of Parliament can remain sceptical of national and international institutions, especially if they are seen as aloof and disconnected. This could apply to the Labour Party itself, as much as the EU. The failure of billions in European assistance to improve attitudes towards the union is not entirely unexpected either. While European funding has been generously distributed to Wales and the Valleys in particular, its penetration, impact and, crucially, public perceptions of its impact has been variable.

The overall impact of funds remains difficult to call, though some conclusions can be drawn. The aid has often been too widely distributed – as part of multi-authority deals – or too narrowly targeted and site-specific to generate multipliers sufficient to dimple the area’s deep structural difficulties. Its extensive remit, with the formal mission statement of Objective 1 being the “development and structural adjustment” of regions with lagging development suffered in having to draw from multiple funds with varying perspectives and timeframes. EU funding of almost £200,000 to improve the habitat of the marsh fritillary butterfly in Aberbargoed is a commendable scheme on environmental grounds, yet less so on ones of job-creation.

While the initial tranche of funding did exceed many of its initial targets, the headline indicators for the West Wales and Valleys region remain stubbornly below the European average. The poor baseline of much of the region and the constraints of the current devolution settlement also play a role. Unlike Ireland, which was fast evolving into a “Celtic Tiger” when it became eligible for Objective 1, Wales lacked control over crucial fiscal policy levers. The Valleys were far more reliant on now obsolete hegemonic industries and correspondingly face structural unemployment far deeper than the post-industrial areas of England.

Inconsistent oversight and reporting has probably not boosted public perceptions either. While evaluations of European funds have come to mixed conclusions, it is invariably the more polemical judgements which dominate the discussion. Figures on European funding are not produced at the local authority level. Further and more detailed reporting – expanding on that already produced by the Welsh European Funding Office – would not only create the maximal incentive for program improvement, it would trumpet the achievements and possibilities of European aid when they occur. People need to see and hear about tangible benefits in their communities, rather than simply read about aggregate spending across more than 60% of the Welsh landmass.

There is a limited window of opportunity to correct this imbalance, but at a minimum, an E.U. charm offensive in Wales is sorely needed. Its rhetoric should eschew both abstract notions of pan-European solidarity as well as technocratic talking points. An optimistic, though pragmatic and utilitarian pro-European message is ideal for the Valleys.

What would happen to the billions in ongoing and scheduled assistance to the area in the event of a Brexit? Would a British government run by a largely English party in a time of tightening budgets commit funds to an area it has no meaningful presence in? Would a Welsh Government which abolishes its signature regeneration scheme for the area 6 years ahead of schedule be willing or able to distribute resources there? These questions may defy simple answers, yet the issues they raise have major implications for the future of Wales’ former industrial areas and their place in two changing unions. They deserve to be asked.

Gareth Williams is an MPhil student at Cardiff University researching economic development initiatives in Wales and the United States

10 thoughts on “Last Brexit to the Valleys

  1. Interesting article. With the exception of transport infrastructure funding, too much of the Objective 1 cash has been squandered on half brained schemes throughout the Principality. The funds have created a dependency culture. The dependents are not really the citizens these schemes are nominally targeted at but the plethora of Local Government, Welsh Government, Third Sector Organisations and associated consultancies who’s existence depends upon a continuous flow of these projects. Viability, long term stakeholder benefits etc from these schemes doesn’t seem to figure that highly in their personal financial reward mechanisms which is why so many of them flop. Politicians like the system as is because being seen to launch high profile initiatives gets votes. Those involved in fund raising and implementation like it because it drives their salary levels up (if I can raise and spend a budget of X I must surely be worth Y). For these reasons I don’t expect this mindset to change soon.

    But here’s a nightmare scenario for you. A ‘Brexit’ occurs so no more Euro money to spend which undermines the power of those mentioned above. We have a referendum on tax raising powers for the Welsh Government which gets the usual low turnout of say 27% of the electorate. However just over half of those say Yes giving our politicians a democratic mandate to wave in our faces. In order to restore the status quo the money tap to the Valleys is turned on again but funded by increased Welsh taxes. Eventually the people might make their feelings known at the ballot box by which time those who were involved in setting up the structure have left (early retirement in exchange for a generous severance deal please) and slid into directorships of third sector organisations and grant funded businesses. Sound familiar ?

  2. There’s no such thing as EU funding – all the EU budget comes from the taxpayers of the member states. So the ‘EU’ funding being squandered in Wales is functionally just British money that ends up costing a great deal more than £1 for every £1 that’s wasted in Wales on bloating the already bloated non-productive public and NGO sectors – ‘cos that’s about all that’s been achieved since the assorted ‘EU’ funding schemes started. Don’t forget, most ‘EU’ funded madness has to be match funded with more British money which could arguably also be better spent.

    Not to mention the waste of British taxpayers’ money in many of the other EU member states since typically fewer than 10 of the 28 are nett contributors and the UK is one of the biggest – so we are being ripped off with our own money at home and abroad courtesy of ‘EU funding’. In my opinion it takes a peculiar brand of ‘stupid’ to think this is a good idea! BREXIT can’t come soon enough for me.

    Sadly only UKIP is telling the people anything resembling the truth about the ‘EU funding’ rip-off and it comes as no surprise to me that ‘Old Labour’ voters are amongst the people with enough understanding of the real world to realise this. Expect Labour to be as split as the Tories when the EU Referendum campaign gets going!

  3. Another issue that needs looking into is the apparent ‘gold plating’ of EU projects by WEFO. By this I mean the impossibility of the business sector being able to participate in the distribution of EU funds or projects because they don’t have the time, incentive or staff to do so. The reason why the third sector and local government get all the projects is that they spend all their time and effort in doing this, ticking all the (numerous) boxes and covering themselves with gold plate. It seems that there has been a need for a ‘trusted’ intermediary between EU and the project deliverers and proposers and this has been the role of WEFO. Business has not been considered ‘trusted’ enough to be a ‘deliverer’ or even a proposer (apart from BT for broadband). This is when the gold plating occurs. Despite WEFO being ‘ultra cautious’ (and slow) far far more so than any other European recipients we still see incompetence in delivery (by such ‘trusted’ providers!) and the failure of intended impact. On the plus side there has been none of the blatant ‘corruption’, misuse and disappearance into the wrong pockets that has been seen in erm…other countries.
    Brexit would be a disaster for the Welsh economy, but it might lead to enforced changes in attitude and a more self reliant and outwardly focused outcome. Well, it might!

  4. There is no doubt that the EU contribution to the Valleys (to me, a metaphor for all areas of deprivation as well as the Convergence area) has been undersold. Cynicism has been encouraged by the lack of provision for the maintenance of the assets provided.

    I am pleased that funds were spent to improve the habitat of the marsh fritillary butterfly, but how many jobs – temporary or permanent did not create. If none, why not? Was the scope of the project too narrow? Was there a matched funding component? What monitoring is being carried out?

    Much EU funding has been spent on highways. But where did the benefits of this investment fall? Is large-scale commuting into Cardiff sustainable? Or desirable? Or cost-effective?

    We should look at Newport – hardly a better-connected city anywhere in the UK – M4, M5, A449, GW, ports etc. But it will be a basket case for many years, as Cardiff and Bristol acts as leeches on its local economy.

    Investment in transport infrastructure is two-edged and problematic in many respects. There is misplaced faith in highways and railways being able to leverage economic growth – but the evidence is very weak. When constructing roads, railways and bridges required hundreds of local men and women, and there were important benefits to the local economy. Now, construction is often undertaken by cross-border or internationally-owned companies. Employment is minimal, and the local benefit difficult to discern. The additional mobility merely offers more opportunities to buy fuel.

    Such proposed projects as the Heads of the Valleys Road, the foolish New M4 and the Metro need to be much more critically assessed. It is not enough to demonstrate a positive business case. The distribution of benefits and disbenefits needs to be fully understood, not to mention the opportunity costs. These can mean education and health benefits foregone, for example.

    We need to be smarter – the NAW and WG are under-resourced. We need more AMs urgently if we are going to reap the full advantages of devolution and of future EU funding.

    It would be a disaster for Cymru were we to lose EU funding. But Convergence ought to mean exactly that – if current strategies haven’t worked, let’s ask some hard questions and demand hard answers before we waste any more EU and UK taxpayers money.

  5. In Baden-württemberg ERDF money is managed by the local Development bank that is part owned by the states and local councils but is a proper commercially focussed bank; Landesbank B-W. This appears to be a reasonable place to put the development money on a commercial footing with a long term view as the German speaking countries’ development banks have. Placing WEFO money within a pseudo government department immediately puts distance between it and the economy it is trying to stimulate. Chris Jones above is absolutely right.

  6. John R Walker – Utter rubbish.

    You give the impresssion that the UK Government does the match funding with the EU. It doesn’t!

    Under EU rules it should but Gordon Brown refused to do it, so WAG had to use some of the money that had already been allocated to them. That’s how Tony Blair’s man, Alun Michael, lost his job as First Minister and was replaced by Rhodri Morgan.

    History proves that England exploits Wales, it doesn’t invest – other than in wealthy Englishmen.

    Comming out of the EU, simply on an organisation basis, is unlikly to save the money UKIP claim. The re-organisation is just as likely to cost more to do what is alreaady being done.

    The EU has improved most, if not all of the countries thata added to the core of 15. This is investment which we all benefit from. Investment that would never come out of Westminster and Whitehall because it never has!

    Ukip just peddles the fiction that England can rule the EU from the outside and that the Commonwealth want’s to be bullied and economically bled dry again by a new dictatorial English Empire. They were glad to see the UK enter the EU and let them get on with their own economies – from which they benefited.

    The thing the UKIPers hate is being in a union of equal members. They want to dictate. It’s the UK we need to get out of. It’s the very personification of everything bad they accuse the EU of being.

  7. I wonder how far valleys support for UK is related to the views of the EU. A valleys voter may be fed up of endless Labour hegemony and cronyism and want a change. She won’t vote Conservative for historical reasons (dad would turn in his grave) and the LibDems also look like a middle-class party (not for people like us). Plaid is seen as representing a linguistic interest which excludes the majority. So where does the protest or time-for-a-change vote go? Farage seems a droll down to earth chap. Perhaps he’s right about Europe and immigration…. Dunno, but it seems possible to me UkIp support has got little to do with Europe, which does not loom large as an issue for most people.

  8. @R.Tredwyn. For once I totally agree with your assessment as above. I think to many ordinary people like myself the EU has become a refuge for a)totally useless politicians who cannot get elected to even the Assembly,b) politicians of some rank who have used it to ‘enrich’ themselves and their families,even after being totally opposed to the EEC in formative years. I was talking to business man who travelled to Brussels regularly from Cardiff and he was apoplectic about a certain Mr and Mrs who had ‘booked ‘seats’ at front of plane and all paid out of OUR taxes.We have far too many useless politicians,and consequently over governed and supervised,whilst at same time basic services going to pot. The grass cutting around Bridgend is turning it into looking like the ‘third world’!! Gawd help us!!

  9. I think that Ross has it there; UKIP support in the Valleys is inexplicable in any other terms than an incoherent cry for change when Wales has no alternative ideas amongst its tired and cosy political parties. UKIP is British Plaid; pandering to xenophobia and blaming outsiders for our own malaise.

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