Spending Review: Row over post-EU Welsh farming cash

A row has broken out over the future of agriculture subsidises in Wales after Wednesday's Spending Review.

Welsh agriculture will get £242m next year from UK ministers, leading to claims from the Farmers Union of Wales that it has been cut by at least £95m compared to previous EU funding.

The union accused the UK government of a "betrayal".

But UK government ministers said that was not true, and said farmers will get the same cash in 2021 as 2019.

It comes as the chancellor warned unemployment will rise to 2.6m in 2021.

Rishi Sunak said the Welsh Government will received an increase in cash of £1.3bn next year - he said the review "underlines our commitment to Wales".

Rebecca Evans, Wales' Finance Minister, accused the chancellor of "broken promises" and said a pay freeze for much of the public sector was "unfair".

Agriculture funding from the EU has been worth £337m to Wales every year, and is paid out by the Welsh Government.

The Farmers Union of Wales (FUW) said Conservative ministers had made a manifesto promise to "guarantee the current annual budget to farmers in every year of the next Parliament".

FUW president Glyn Roberts said: "The decision to slash the budget is therefore a complete betrayal of the farmers, who have kept producing food and feeding the nation throughout the coronavirus pandemic."

Ms Evans added: "If you're looking for a serious failure of management of funding, and if you're looking for a betrayal of the farming industry, I think that you can find it right there."

EU agriculture funding is split into two - pillar 1 covers direct payments, while pillar 2 is designed to support the development of rural areas.

Pillar 2 payments from the EU are continuing for another three years.

Welsh Secretary Simon Hart said the Conservative's manifesto had made a "clear" commitment "to maintain the current annual budget for farmers across the United Kingdom in every year of this Parliament".

"That is exactly what we are doing. Claims to the contrary are unhelpful and untrue.

"The funding that the Chancellor announced today is on top of the remaining EU funding that farmers and land managers across the UK will receive for agri-environment and rural development projects.

"The fact remains that Welsh farmers will continue to receive the same level of funding in 2021 as they received at the baseline in 2019."

A UK government spokesman said the total the Welsh Government will receive will make up the difference between the £242m and the £337m.

However the Welsh Government say the EU would have provided fresh funding, and said it should not have to rely on funds from old EU programmes.

Most of the Welsh Government's cash to spend on the NHS, education and councils comes from the UK government, apart from a limited amount of tax revenue raised in Wales.

Rishi Sunak's review said the Welsh Government would receive an "additional" £1.3bn in 2021-22.

But Treasury documents show the Welsh Government will receive £16.6bn in the next financial year, less than the £20.3bn it is getting this year.

That is because this year's funds were bolstered by £5bn for Covid, spending which is planned to fall after March to around £800m.

However money for normal day-to-day spending will rise from £12.8bn to £13.5bn.

Infrastructure spending will remain the same in 2021-22 at £2.4bn - Rebecca Evans said the infrastructure capital budget would be lower in real terms.

Public sector pay outside of the NHS and the lowest paid will be frozen - but decisions on teachers, doctors and nurses pay in Wales will rest with ministers in Cardiff.

However the Welsh Government, which funds NHS, local government, education and other devolved services in Wales, can choose how to spend the money.

Mr Sunak said: "Today's Spending Review underlines our commitment to the people of Wales as we look to the future.

"It provides billions of pounds to fight coronavirus, deliver the peoples' priorities and drive the UK's recovery

"The Treasury is, has been, and will always be the Treasury for the whole of the United Kingdom. And this is a Spending Review for the whole United Kingdom."

Simon Hart said Wales as a whole would benefit from the £2.9bn Restart programme, aimed at helping unemployed people find work.

He said Wales would also benefit from "planned improvements to mobile and broadband connectivity and investment in green industries like carbon capture and offshore wind".

The Spending Review said total domestic UK-wide funding for the new Shared Prosperity Fund will "at least match current EU receipts, on average reaching around of £1.5 billion a year".

It does not confirm whether or not Wales will receive the same amount per year as it did from the EU.

EU aid programmes previously amounted to £375m in Wales annually.

UK ministers had previously promised Wales would not receive "a penny less" in funding after the Brexit transition period ends.

The review said a portion of the Shared Prosperity Fund will target places "most in need" across the UK such as ex-industrial areas, deprived towns and rural and coastal communities.

It adds that the funding profile for the fund will be set out at the next review.

Ms Evans said there was "absolute silence" on the fund from the UK government and said it was "really disappointing not to have any further information".

Plaid Cymru's Ben Lake said: "Today the Chancellor failed to confirm that Wales's share of the Shared Prosperity Fund will be decided according to need, that it will represent additional investment, and that Wales's share will not be diminished over time."