EU funding 'cushion' for Wales as 5% cuts announced

Rhondda scene
Image caption The Welsh government says the cut will be £60m not £400m as feared

Deprived parts of west Wales and the valleys are to face a 5% cut in European funding.

First Minister Carwyn Jones said he was "disappointed" although pleased the prime minister "has listened to our arguments and has sought to deliver a fairer settlement".

Welsh secretary David Jones said Wales had been cushioned from the full extent of cuts it could have faced.

Plaid Cymru said it was less than feared but "devastating news".

At the time of the EU budget deal in February, the Welsh government said it feared the agreement could mean a reduction of £400m for Wales.

It now says the cut will be £60m.

David Jones said the UK government has decided to re-allocate EU structural funds for 2014 to 2020 to minimise the impact of reductions in Wales, Scotland and Northern Ireland.

It represents a 5% cut, compared to the last six years.

Under this deal, Wales will receive a total allocation of around €2.145bn, which Mr Jones said was "a substantial uplift" of €375m compared to the amount it would have received under the EU formula.

"What is important now is that the Welsh government uses this money wisely to help deliver strong and sustainable growth for Wales," he added.

According to Welsh Labour MEP Derek Vaughan, the original plans would have meant a budget cut of 22% for areas such as west Wales and the valleys.

Mr Vaughan - a member of the European parliament's budget committee - said that efforts to lobby the EU Commission and UK government had been "largely successful".

The final settlement of this and other EU funding pots would mean that Wales will be "in a position to benefit more than ever from assistance available at a European level."

David Cameron said in a letter to the Welsh government that the decision "will provide Wales with the funds it needs to deliver strong, sustainable growth and I hope it will carry your support."

First Minister Carwyn Jones expressed his disappointment that there was a drop in funding, but welcomed the decision to limit the scale of the cuts.

"The prime minister has proposed that all parts of the UK should take a 5% cut in their Structural Fund budgets.

This will deliver a more equitable settlement, but it still represents a reduction of around £60m in our budgets over the next funding period.

"That said, we are pleased that the prime minister has listened to our arguments and has sought to deliver a fairer settlement than that originally proposed.

"We hope that the UK government will now move quickly to agree these arrangements with the European Commission so that our new programmes can start on time."

Plaid Cymru MEP Jill Evans has described the reduction in EU funding as "devastating news for our nation" and accused Labour MPs from Wales of aiding and abetting the overall cuts in the EU budget.

"As a net beneficiary of EU membership, parts of Wales receive structural funds for all-important fields such as agriculture and education - funding which is vital for some of our poorest communities," she said.

"Some of these are not only the worst off areas in Wales but throughout the whole of Europe.

"Areas such as west Wales and the valleys are new set to miss out on vital EU cash that could have helped strengthen and develop our economy."

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