According to the Huffington Post, “the UK’s poorest regions could lose hundreds of millions of pounds of funding to London and the south east after Brexit”. This claim was based on what was termed an “analysis” and an “investigation” of Treasury figures by campaigners representing a nationwide network of community organisations. The Huffington Post told us that “seven UK regions are at risk of losing out” from this public funding after 2021 “if” the government distributes its promised replacement for certain EU funding streams in a certain way.
The article was greeted with acclaim on Twitter, including by influential liberal-left broadcaster and author James O’Brien, who wrote: “This excellent story suggests what many of us have feared most since June ’16: the biggest Brexit burdens will be borne by those with the least. Doff cap, tug forelock, get poorer”. O’Brien’s tweet has been liked 3,800 times and re-tweeted 1,800 times. But were the article and the figures it was based on as impressive as he thought?
A small disclosure. I would sooner not spend time unravelling the London coverage of larger websites than this one, especially those whose general outlook is broadly similar to my own. And, you know, all we journalists sometimes take on trust information that we might have approached with a bit more caution. But it’s part of On London‘s mission to challenge the many mischaracterisations of the capital and its relationship with the rest of the UK. So, here we go again…
Clues to the first problem with the Huffington Post story, which was published under the banner “regions at risk”, lie in its own built-in conditionals: the use of “could” and “if”. The government has said it will create a “UK shared prosperity fund” to replace “structural funding” from the European Union, presently worth about £2.1 billion a year, and its the workings of this fund that are worrying the campaigners (just as they are worrying London Councils). But, as the Huffington Post itself rightly acknowledges, just about nothing is yet known about how this money will be allocated.
Which brings us to a second problem. How credible is the “investigation” or “analysis” in the first place? The Huffington Post reports that it “reveals significant regional differences between the way in which the EU and the UK allocate funding for economic development”. The campaigners’ thesis seems to be that if the government divvies up its shared prosperity fund in the same way as it does its own regional funding, this will result in London and the South East being better off than they would otherwise have been at the expense of several other parts of the UK.
This struck me as speculative, even alarmist. I asked two friends who know a lot – and I mean A LOT – about how government and EU spending on London and the rest of the UK works to look at the article and the calculations it reported. One said that the comparison made between EU structural funding and UK government support for regional economies is “not so much comparing apples and oranges as apples and Ford Cortinas”. The other remarked that the analysis “simply assumes that future money will be allocated as past economic resources were”, and “suggests London will do better from a hypothetical allocation the authors of the analysis have themselves determined”.
This last point reinforces my more political reading of the campaigners’ calculations, which is that they are designed to make the case that the organisations they represent shouldn’t lose out from the shared prosperity fund, the elusive details of which are supposed to be set out following the (delayed, of course) comprehensive spending review. Communities in Charge as the campaign is called, is perfectly entitled to do that, just as London’s local authorities are. But why frame their concerns in terms of money being taken from elsewhere (notably Leave-voting Wales), defined as “poorest” and given instead to London and the south east, implicitly defined as rich?
Here is a third problem with the Huffington Post article: by taking up the campaigners’ calculations as a story, it perpetuates a larger populist narrative which flows from a crude contrast made between a privileged “rich London” and a deprived everywhere else; one which screens out the very real poverty that exists within London. It is a narrative that ignores the struggles of numerous London boroughs to keep supporting rising numbers of some of the UK’s poorest people, while at the same time contending with some of the deepest government spending cuts; a narrative that fails to recognise that London boroughs fill ten of the top 20 places in the national child poverty rate league table, when the capital’s punishing housing costs are taken into account.
As one of my expert friends stressed, despite the apples-and-Ford-Cortinas equivalence the campaigners propose, the post-Brexit landscape and the uncertain size and workings of the shared prosperity fund raise real and legitimate issues for parts of the UK in need of help with economic renewal. For example, European regional development funds have been designed to narrow the gap between prosperous and poorer areas (which have, by the way, included East London). Will a post-Brexit national government see this as a priority to be maintained or will it decide to give a greater proportion of whatever the shared prosperity fund amounts to to places it can be confident will make the most of it, which might not be the poorest of all?
But that is a concern for London as well as for other English regions and UK nations. The economies of these different places are connected and interdependent in a variety of ways, and their interests are not mutually exclusive or inherently antagonistic. To frame the solution to the UK’s geographic inequalities as a matter of stopping “rich London” getting preferential treatment is both divisive and missing the point. Would the progressive media please stop doing it?
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