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The furious row over funding for Wales at the heart of the UK Government; David Hunt warned changes to regional funding would be seen as 'an act of dishonesty'.

Byline: David Williamson

Documents until now kept under lock and key reveal fury at the Welsh Office at plans to reduce the nation's eligibility for development funding.

Letters between cabinet ministers in John Major's government show how the level of funding going to Wales came under fire and the case was made for resources to go to Tory marginal seats in London and southeast.

The then-Welsh Secretary warned that changes would be seen as "wilful vindictiveness" on the part of the UK Government against Wales.

The papers held by the National Archives have been released at a time when there is renewed concern about the future of regional finding once Britain leaves the EU, with the UK Government planning to introduce a Shared Prosperity Fund. The Welsh Government has insisted that just as much money should come to Wales as before and "vigorously and explicitly rejects" the idea there should be a centralised UK fund.

Gillian Shephard, the then-Employment Secretary, argued in March 1993 that in London "there are more unemployed people than in any English region or Scotland and Wales put together".

In a letter to Lord Wakeham, the Lord Privy Seal, she said there was "now a mismatch between need and resources" and stated that when it came to Regional Selective Assistance (RSA) "Scotland with 9% of unemployment has 31% of expenditure and Wales with 5% of unemployment, 28% of expenditure".

She continued: "The greater part of Regional Selective Assistance goes to areas where Labour seats predominate. Unemployment in London and the South East is now affecting our own supporters in Conservative seats.

"Eleven of the top 50 marginal seats after the 1992 General Election are in London and the South East and five are in Greater London. The London seats which the Conservatives lost in 1992 are all in areas where unemployment has risen to between 15% and 20%.

"If we wish to retain a Conservative government, which is essential for the prosperity of the whole country, those are facts for consideration."

But, writing on the same day, Welsh Secretary David Hunt strongly condemned planned changes to the Assisted Areas Map which determined which parts of the UK would qualify for the development help.

He said: "Wales has the lowest male employment rate in Great Britain; the lowest GDP per head; the lowest economic activity rates; and a severe over-reliance on low-paid part-time work...

"A substantial reduction of Assisted Area coverage now would mean that investment in Wales would come to a grinding halt...

"I cannot overstate the political difficulties which I would have if there were to be a cutback in assisted area status to the degree now envisaged by some of the options under consideration."

In a further letter on May 11, 1993, he stepped up his attack.

The Welsh Secretary, who is now Lord Hunt of Wirral, was concerned that "even worse solutions for Wales" were being proposed, "at a stroke reducing assisted area coverage in the principality by well over half".

Warning it was "economic nonsense" to suggest Wales was now "economically average in the UK," he added: "The current proposals would reduce coverage in Wales by some 60%, whilst increasing coverage in England by only 10%...

"From the Welsh perspective, such a settlement would appear simply vindictive, and would make our talk of the benefits of the Union sound pretty hollow. In particular these proposals would fatally undermine the role Wales has played so successfully, in recent years, spearheading the drive for inward investment into the UK."

We asked experts what could be done for deprived parts of the South Wales Valleys

Mr Hunt cooperated in "producing a map which would bring the coverage of the Welsh workforce down to 70%" but did not hide his unhappiness.

Writing on May 26, 1993, he told the Lord Privy Seal: "I have to tell you that I can see some very serious problems in trying to explain why, for example, most of Cardiff, Newport and Wrexham should come out of Assisted Area Status completely.

"This will sit very uncomfortably with our Welsh Manifesto commitment to 'expand the support to Welsh businesses through our massive Regional Selective Assistance Scheme'.

"We also spoke in the manifesto about the Conservative Government in Wales giving top priority to the economic, industrial and commercial development of Wales and there were many other phrases which will certainly be used against us. I feel I shall have the utmost difficulty in presenting a 20% cut (compared to a reduction of 1.58% in Scotland and a consequential increase of around 10% in England) as anything other than an act of dishonesty on the part of the Welsh Office and wilful vindictiveness by the Government as a whole. I shall of course do the best I can."

The next day, Prime Minister John Major staged one of the most memorable reshuffles in recent decades, sacking Chancellor Norman Lamont. Mr Hunt replaced Gillian Sheppard as Secretary of State for Employment and John Redwood -- who would challenge Mr Major for the Tory leadership in 1995 -- moved into the Welsh Office.

On May 28, the plans for the changes to regional funding were presented to Prime Minister John Major by Damian Green, a Barry-born member of his policy unit who would go on to become First Secretary of State under Theresa May until his resignation in 2017.

It was proposed that the amount of Welsh coverage should fall from 87% to 70% but that the Welsh Secretary -- who was now John Redwood -- should be allowed to negotiate with the Department of Trade and Industry where the areas would be.

In what appears to be the PM's handwriting, there is a "yes" and a tick next to this paragraph.

Lord Wakeham had also written to the PM, agreeing with Mr Hunt that a cut in Assisted Area "coverage in Wales from 87% to 49% of its working population" could "not be defended".

In his memo to the PM, Mr Green noted: "Mr Redwood is receiving the inevitable rough reception in Wales, and it will be helpful to him to take decisions about which areas he wants to protect."

In July it was reported that parts of London would gain assisted area status for the first time but communities including Lampeter and Aberaeron would no longer qualify.

Alan Milburn, who was then Darlington's Labour MP, accused the UK Government of "gerrymandering" in a "vain attempt to prop up Conservative support".


Credit: Dominic Lipinski/PA Wire

Back in 1993 and today, the question of how funds should be transferred from Whitehall to Wales remains a topic of burning controversy

Credit: Emma Cattell

Lord Hunt was Welsh Secretary from May 1990 to May 1993

Credit: Daily Mirror

John Major in 1993
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Publication:Wales Online (Cardiff, Wales)
Geographic Code:4EUUK
Date:Dec 28, 2018
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