The cross party group on repatriating powers from the EU this week launched a piece of work on regional policy. They pointed out that the EU structural funds account for Euro 348 billion over the seven year budget period, the second largest budget head in the EU accounts.
The UK is the third largest loser from these funds, after France and Germany. We contribute Euro 35.9 billion over the 7 years to these funds, and receive back just Euro 10.6 billion. Much of the money goes in circular flows, being sent to the EU only to return to the original contributing country, or even circulating within the same region via Brussels.
In the case of the UK 70% of our overall contribution goes to other member states. 25% of our contribution is given back to the same region that raised the tax and sent in the money in the first place, with 5% being sent back to a different UK region.
Apparently the last Labour government looked at the possibility of changing the EU policy by limiting regional transfers to sending money only to regions with average incomes more than 10% below the EU average. Most EU countries would be better off as their contributions would fall substantially. The three largest winners would be France, Germany and the UK.
Within the UK at present only two areas are net recipients of funds from the EU structural programmes – West Wales and the Valleys, and Cornwall. The rest are part of the money go round, getting a portion of what they send in back. It is returned as EU approved project payments, often spending money on less valued projects which we not choose for ourselves. Regions with relatively low incomes per head like Northern Ireland, the West Midlands and Merseyside, are net contributors to structural funding elsewhere.
It was good to see a cross party consensus emerging that we should push to repatriate much of this policy. We could make savings on the expensive double administration at present. We could then make choices about how much of this spending we want at home, where we want it, and how much we should spend on the whole programme.