Philip Hammond told to extend UK guarantees on EU grants

Philip Hammond in Rome

The chancellor has been told to go further after promising to invest billions of pounds in projects currently funded by the EU after the UK leaves the union.

Philip Hammond announced on Saturday that taxpayers would contribute about £4.5bn a year to projects to support scientists and farmers and build infrastructure.

The Treasury is also expected to continue its funding for all structural and investment fund projects if they are agreed before Hammond delivers the autumn statement in November or December.

If a project obtains EU funding after that, the Treasury will determine whether funding should be guaranteed by the UK government. This means the current level of common agricultural policy (CAP) pillar one funding for farmers will remain the same until 2020, when a domestic system will take over.

Universities and researchers will have funds guaranteed for research bids made directly to the European commission, including those to the EU’s Horizon 2020 programme, an €80bn (£69bn) pot for science and innovation. The Treasury said it would underwrite the funding awards even when projects continue post-Brexit.

The Royal Society said the news was very welcome because it removed uncertainty while Britain negotiated its exit but still remained an EU member.

However, its president, Sir Venki Ramakrishnan, said some researchers had already missed out on collaborative projects because European colleagues were worried about funding.

“I think that is why this measure is so welcome, because we have been hearing anecdotal reports of people not being willing to collaborate with certain UK collaborators because they weren’t sure that they would be able to to stay for the full duration of the grant,” he told BBC Radio 4’s Today programme.

“People have been told that, so far there are anecdotal reports and we are trying to gather evidence to see the extent of this.”

Ramakrishnan called for an extension of the guarantee for projects approved after the autumn statement. He said: “Our hope is that any grants that are awarded while we are still in the EU should be allowed to complete.”

The Local Government Association said the commitment was welcome but fell well short of the full guarantee it had urged the government to make.

Its chairman, Lord Porter, said: “Local areas need certainty around the future of all of the £5.3bn in EU regeneration funding promised to them by 2020. The continued uncertainty risks damaging local regeneration plans and stalling flagship infrastructure projects, employment and skills schemes and local growth.

“Between now and the autumn statement, the government must pull out all the stops in working with local areas to get the hundreds of projects currently in development and at the cusp of funding agreements over the finishing line.”

The CLA, a lobby group representing about 32,000 farmers, landowners and rural businesses, said the move was vitally important, but called for a world-leading domestic funding policy to be drawn up and ready for 2021.

The CLA president, Ross Murray, said: “It will provide a significant degree of reassurance to farmers and other landowners across the country. We have been clear, since the start of the EU referendum campaign, that this is the first decision ministers had to make to reassure rural businesses in the advent of a Brexit vote. It is therefore a strong signal that will give confidence to businesses considering their future in a difficult agricultural market.”

The National Trust also called for backing for farming and environment projects that get under way after the autumn statement. A spokesman said: “We welcome the government’s decision to continue with funding for newly agreed and existing agri-environment schemes. But set against this is the continued uncertainty should new applications be restricted beyond this autumn. This would put at serious risk decades of effort by farmers and organisations like ours to protect and enhance our countryside.

“Farmers need certainty as we move to a more sustainable model of support for farming which puts the recovery and resilience of the natural environment at its heart. Better funded and more widely available agri-environment schemes would offer a bridge between the old and the new, helping farmers prepare for a future of new market opportunities whilst delivering greater public benefits from public money.”

Labour welcomed the move but called for clarity over whether Britain would remain a member of the European Investment Bank, which funds infrastructure investment in areas such as housing.

The structural and investment funds that will be guaranteed include CAP pillar two, the European social fund, the European maritime and fisheries fund and the European regional development fund, including European Territorial Cooperation – also known as Interreg.

Examples of projects that have received or are due to receive regional development fund money include the Graphene Engineering and Innovation Centre at the University of Manchester (£5m), a manufacturing growth programme to support areas in the Midlands, Yorkshire and the Humber and the east of England (£9m), and a new life sciences incubation and innovation centre at Porton Down in Wiltshire (£3m).

The environment secretary, Andrea Leadsom, said: “This guarantee of funding is excellent news for our farmers and our environment. I’m delighted we can provide this crucial certainty and continuity to our rural communities while we develop a new approach to supporting agriculture and protecting our precious countryside.”

Powered by article was written by Nadia Khomami, for on Saturday 13th August 2016 11.51 Europe/ © Guardian News and Media Limited 2010