Government’s Communities Fund is ‘just a drop in the ocean’ compared to cost of Brexit

Shoppers walk past an empty unit on the high street. Photograph: Rui Vieira/PA.

Shoppers walk past an empty unit on the high street. Photograph: Rui Vieira/PA.

PA Archive/PA Images

A new £1.6 billion government fund to boost run-down towns after Brexit has been criticised for being “just a drop in the ocean” of what is needed to help communities once the UK leaves the EU.

Labour said that it was a “Brexit bribe” aimed at trying to influence its MPs in Leave-supporting areas to back Theresa May’s Withdrawal Agreement in crunch Commons votes.

The Stronger Towns Fund will be “targeted at places that have not shared in the proceeds of growth in the same way as more prosperous parts of the country”, ministers said.

The money will be aimed at creating new jobs, helping train local people and boosting economic activity.

Only £1 billion of the money will be allocated via a “needs-based” formula, meaning up to £600 million could be allocated at ministerial discretion. This has aroused suspicions that the money could be spent not to deliver economic improvement but to secure the passage of the government’s Brexit plan.

The North West would get £281 million, the West Midlands £212 million, Yorkshire and the Humber £197 million, the East Midlands £110 million, the North East £105 million, the South East £37 million, the South West £35 million, and the East of England £25 million.

Analysis from the People’s Vote campaign shows that in just 36 constituencies alone the cost of the government’s Brexit plans will be an estimated £1.1 billion annually.

Alex Sobel, Labour MP for Leeds North and leading supporter of the People’s Vote campaign, said that it was a “a drop in the ocean compared to what we now know will be lost if the prime minister’s Brexit plan goes ahead.

“The People’s Vote campaign has shown how the annual loss to local economies will be more than enough to wipe out any potential return from this scheme...

“And the People’s Vote campaign has just published new polling evidence of just how popular Labour’s shift to supporting a new public vote on Brexit is with the party’s voters in the North and Midlands. Labour MPs should bear that in mind when considering this latest desperate piece of Downing Street scheming.

“The North and the Midlands cannot afford to suffer the second deindustrialisation the prime minister’s Brexit plan will bring. With all the promises made in 2016 being broken, it’s only fair that instead of being ignored, the people should get the final say on Brexit in a People’s Vote.”

Shadow chancellor John McDonnell said the initiative a “desperate bribe”.

He said: “This towns fund smacks of desperation from a government reduced to bribing MPs to vote for their damaging flagship Brexit legislation.

“The reason our towns are struggling is because of a decade of cuts, including to council funding and a failure to invest in businesses and our communities.

“Labour pledged in 2017 that we will establish a network of regional development banks that will be dedicated to delivering the finance that our small businesses co-operatives and innovative projects need across the whole country. No Brexit bribery, stable investment where it’s most needed.”

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