WALES FACING ‘TRIPLE BREXIT WHAMMY’
REGIONS of the UK that have struggled to recover from the financial crisis a decade ago face problems such as losing EU funding after Brexit, a new report warns.
Weak economic performance in areas such as Wales, the North East, Northern Ireland and the North West leaves households particularly vulnerable to the potential impact of leaving the EU, said the Financial Inclusion Centre.
The gap between the wages of these areas and London has widened in the past 10 years, said the report.
Author of the report, Mick McAteer, said: “If the Government’s own economic predictions are correct, Brexit will cause these gaps between the various countries and regions of the UK to widen still further. It is only in London and the South East where we see the amount of public revenue generated being greater than public expenditure. This has potentially serious implications for the weaker UK regions.
“In the worst-case scenario, some of the most vulnerable regions could suffer a ‘triple whammy’ – a very significant loss of potential economic output, the loss of EU funding and third, unless fiscal transfers from stronger parts of the UK economy can be maintained at the same level to mitigate these impacts, the combined economic shock could be severe.”
Malcolm Hurlston, chairman of the Financial Inclusion Centre, added: “Mitigation strategies are needed immediately to protect vulnerable regional economies from the impact of Brexit.”
Clwyd West Conservative AM Darren Millar looked forward to a new development funding system once the UK has left the EU.
He said: “The current EU funding system has failed Wales. Billions of pounds have been pumped into west Wales and the Valleys over the past two decades, yet this money has been squandered by Labour-led administrations in Cardiff Bay and as a result, Wales continues to be one of the poorest places in Europe.
“Brexit provides Wales with an opportunity for a fresh approach to regional investment and economic development through a new UK Shared Prosperity Fund which, unlike the current regime, will be available for projects in communities in all parts of Wales. The Welsh Government must seize this opportunity to maximise Wales’ potential so that we can eliminate the prosperity gap once and for all”.
However, South Wales East Plaid Cymru AM Steffan Lewis made the case for Wales remaining part of the single market and customs union.
He said: “Both Labour and the Tories want to leave the single market and customs union which would lead to job losses as Wales loses access to its biggest export destination. “The Leave campaign made a promise to Wales that must be honoured – that every penny of funding Wales currently receives from the EU in regional funding would be replaced.”
Warning that “around £370m a year” was at stake, he said: “This promise must be kept. The Labour Welsh Government has leverage at its disposal that it needs to use in order to force the UK Government’s hand in this regard.”