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Chancellor fails to quell fears over 'crucial' business projects and 'serious risk' to farming with Brexit fund

'What happens after 2020? Where is the extra £350m a week for the NHS that the Leave campaign promised?'

Harry Cockburn
Saturday 13 August 2016 16:00 BST
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Philip Hammond has promised to safeguard funding for projects applied for before the UK leaves the European Union
Philip Hammond has promised to safeguard funding for projects applied for before the UK leaves the European Union (AFP/Getty )

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Chancellor Philip Hammond has been urged to make further guarantees that the Government will step in to shore up European Union funding lost once the UK leaves the EU, despite promising over £4.5bn a year to plug the gap.

The spending commitment will see universities supported, EU agricultural subsidies guaranteed by the Treasury until 2020, and the Government said it would meet the cost of supporting structural and investment projects which receive EU funds, if they are approved before Mr Hammond’s Autumn Statement.

But several bodies said they were worried about the Autumn Statement cut-off date, and others have called for further assurances after having already been hit by uncertainty caused by the Brexit vote.

In addition, the funding guarantee only lasts until 2020, and could spark a scramble for capital unless it is extended.

The Royal Society's president, Sir Venki Ramakrishan, welcomed the announcement, but said some scientists had not been able to undertake collaborative projects because their European colleagues about the effects of the UK’s withdrawal from the EU.

Speaking on BBC Radio 4’s Today programme, he said: “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 stay for the full duration of the grant."

He called for an extension of the guarantee to projects that gain approval after the Autumn Statement, but while the UK is still an EU member.

“Our hope is that any grants that are awarded while we are still in the EU should be allowed to complete,” he said.

The National Trust and British Chambers of Commerce said they were worried about Mr Hammond’s Autumn Statement cut-off date.

A National Trust 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.”

British Chambers of Commerce acting director general Adam Marshall said projects “crucial to local business success and confidence” have been at risk since the referendum due to the lack of clarity over funding and welcomed the move.

But he added: “The delays that many worthwhile projects face in the approval process must also be cleared away – especially given the fact that the Treasury guarantee only covers projects signed by this year's Autumn Statement.”

The Country Land and Business Association (CLA), a lobby group which represents over 32,000 farmers, landowners and rural businesses, welcomed the move, but called for a “world-leading” domestic funding policy to be drawn up.

Announcing the funding, Mr Hammond said: “We are determined to ensure that people have stability and certainty in the period leading up to our departure from the EU and that we use the opportunities that departure presents to determine our own priorities.”

But Tim Farron, the Liberal Democrat leader, said: “It is complete brass neck from the Treasury to try and spin that matching the funding that businesses, scientists and farmers currently receive from Europe is somehow a ‘benefit’.

“What happens after 2020? Where is the extra £350m a week for the NHS that the Leave campaign promised?”

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