The South West could lose £1 billion in public investment over the next five years if the UK leaves the EU. A new study looking at government plans to replace EU funding with a ‘Shared Prosperity fund’ reveals significant differences in the ways the EU and the UK allocates funding for economic development. The analysis concludes that if the government’s new fund is distributed in the same way it currently allocates spending, it will lead to a transfer of resources from the relatively deprived economy of the South West to more prosperous areas, especially London and the South East.
EU structural funding is worth some £2.1 billion with the South West, and Cornwall in particular, being a major beneficiary. Amongst other things the funds have been used to support small and medium sized enterprises and innovative renewable energy projects.
Commenting, Molly said:
“The EU has done great things for Cornwall, supporting one of the most deprived regions of the country by funding the creation of low carbon jobs, innovative start-ups and small and medium sized enterprises.
“All this is at risk if we leave the EU because the government has clearly indicated that it will target its ‘Shared Prosperity fund’ on areas with the maximum potential for growth rather than those that have the greatest need. This could result in money being channelled to London and the South East instead of the regions of the country like the South West.
“Most seriously of all, we still have no detailed proposal on what will replace EU regional funding. And if we do proceed with a disastrous Brexit there will be less money in the pot anyway. Our austerity government will be forced to tighten its belt still further to cope with the fallout from leaving the EU.”