Yorkshire to miss out on millions in Scottish cash grab

Furious MPs and MEPs from across the region will meet with Ministers this week to press the case for a fairer distribution of the money allocated to the UK by Brussels for regeneration projects.

The Department for Business, Innovation and Skills (BIS) plans to divert £665m away from hard-pressed English regions from the next tranche of EU support funds, in favour of the devolved nations. The decision flies in the face of advice from EU statisticians, who insist England is in greater need of the money.

“This money is there to help the regions,” said Labour MEP for Yorkshire Linda McAvan.

“I do not understand the rationale behind this. Scotland’s economy is stronger than ours. They have taken money away from the regions, and it is not based on any economic criteria.”

As a result of the EU budget cut negotiated by David Cameron earlier this year, the amount of money available from Brussels for regeneration during its next funding round, from 2014-2020, has inevitably been scaled back.

EU officials make regional allocations on the basis of need, and Scotland’s relatively buoyant economy meant it was facing a 32 per cent reduction in funding.

But BIS has announced that Scotland, Wales, and Northern Ireland will each receive an “uplift” in their funding allocation totalling £665m, at the expense of the English regions.

Scottish Secretary Michael Moore told voters north of the border that Scotland’s £194m (228m euros) “uplift” was the sort of benefit they can expect to enjoy if they remain part of the UK.

“By sharing the cut in EU structural funds across the UK, the Government is protecting Scotland from the big cut we would otherwise receive,” he said. “An independent Scotland would face a 32 per cent cut, because it would not have the UK’s flexibility. On structural funds, 228m euros is the price of leaving the UK.”

The precise cost to Yorkshire remains unclear, as the Government has yet to confirm how the English tranche of funding – totalling £5.2bn – will be carved up.

But with South and East Yorkshire designated as special cases by the EU due to their high levels of deprivation, it is certain a sizeable portion of the lost £665m would have headed to the region.

“I am very concerned,” said Yorkshire Liberal Democrat MEP Edward McMillan-Scott.

“These allocations are made on a clear statistical basis related to deprivation, and the Government seems to want to ignore that.

“We have known for a generation that Scotland has done better through the Barnett formula than the rest of the UK. I have long argued it is unfair and unreasonable. This compounds the issue.”

Mr McMillan-Scott suggested part of the problem for Yorkshire is the lack of a regional voice negotiating on its behalf.

“All the regional government offices, and of course Yorkshire Forward, have been swept away, and there is no-one speaking for the region any more,” he said.

“Scotland and Wales speak with one voice – we do not. It is not a satisfactory arrangement.”

The Government defended the move, which it said meant England, Scotland and Wales will now each receive a five per cent cut.

Business Secretary Vince Cable said: “We made a decision that we could not inflict the very large, disproportionate cuts on the devolved administrations.

“We’ve taken the view that Scotland, Wales and England should be treated equally – with five per cent (cuts) each.”