European Structural and Investment Funds Common Provisions and Common Provision Rules etc. (Amendment) (EU Exit) (Revocation) Regulations 2020

Wednesday 16th September 2020

(1 week, 6 days ago)

Grand Committee
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Department for Business, Energy and Industrial Strategy

Considered in Grand Committee

Moved by

Lord Callanan Portrait Lord Callanan - Hansard

That the Grand Committee do consider the European Structural and Investment Funds Common Provisions and Common Provision Rules etc. (Amendment) (EU Exit) (Revocation) Regulations 2020.

Lord Callanan Portrait The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con) - Hansard

My Lords, the EU regulations for structural funds and the cohesion fund are designed to reduce social and economic disparities in the EU and are the main funding tools designed to deliver the EU’s cohesion policy. They come under the wider family of European structural and investment funds. These EU regulations set out the rules governing these funds and give powers to the member state to ensure the operability of eligible projects.

More than half of EU funding is channelled through the European structural and investment funds. They are jointly managed by the European Commission and the EU member states. BEIS sets the policy and co-ordinates the management of four of these funds across the UK: the European Regional Development Fund, ERDF, which includes European Territorial Co-operation funding—ETC; the European Social Fund—ESF; the European Agricultural Fund for Rural Development—EAFRD; and the European Maritime and Fisheries Fund, or EMFF.

The UK has been allocated about £9.5 billion of funding under structural funds for the 2014-20 period. The funds currently support growth, low carbon, transport, research, innovation, small businesses, employment opportunities and social inclusion. Structural fund programmes are managed and delivered by government organisations designated as managing authorities—MAs—which in essence are delivery bodies for the funds in England and the devolved Administrations and are responsible for drawing up operational programmes. These programmes set out the levels of funding available for certain activities and how the programmes will be run within the parameters set by the EU regulations.

The Department for Business, Energy and Industrial Strategy—BEIS—is the co-ordinating body for ESIFs in the UK. In England, the managing authorities for the European Regional Development Fund and the European Social Fund are, respectively, the Ministry of Housing, Communities and Local Government and the Department for Work and Pensions. The devolved Administrations and Her Majesty’s Government of Gibraltar administer ERDF and ESF in their respective areas. The Department for Environment Food and Rural Affairs manages the agricultural funds—EAFRD—in England, and the devolved Administrations in their areas, apart from EMFF which is run across the UK by the Marine Management Organisation, an executive non-departmental public body sponsored by Defra. Gibraltar receives a small allocation of about €10 million —£8.8 million—from the European Regional Development Fund and the European Social Fund for 2014-20 and has agreed operational programmes with the European Commission to implement them. It also takes part in two transnational programmes.

The need for continued regional investment in the event of a no-deal exit and the nature of the projects supported by these funds led to the introduction of legislation so that these funds could operate domestically under a no deal until their planned closure, even though they would cease to be funded by the EU in such circumstances. As the UK subsequently signed the withdrawal agreement, which maintains the EU regulations for European Structural and Investment Funds until programme closure, which could be until 2026, given that programmes run until 2023 and then generally take two to three years to wind up, SI 625 contradicts the intent and purpose of the withdrawal agreement.

This instrument is being laid in order to revoke the aforementioned SI 625/2019, which was made on 18 March 2019. That SI disapplied retained EU law in relation to the European Regional Development Fund, the European Social Fund and the European Territorial Cooperation Fund to ensure that the programmes could continue in a no-deal scenario. Under the withdrawal agreement, these regulations can still apply in the UK, despite the UK not being a member state. Now that the withdrawal agreement has been signed by the UK and made into law through the European Union (Withdrawal Agreement) Act 2020, the original statutory instrument, 625/2019, is therefore no longer required and should be repealed in order not to confuse the statute book.

The EU withdrawal agreement Act 2020 allows the UK to continue to apply EU Regulation 1303/2013, supplementary funds, specific regulations and associated delegated and implementing legislation for the European structural and investment funds through until the end of the current programme. It is proposed that the UK shared prosperity fund will be set up as the domestic successor to the European structural and investment funds for new programmes.

In conclusion, it is therefore necessary to revoke the original no-deal statutory instrument 625/2019 to remove conflict with the provisions of the EU withdrawal Act. The UK will continue to participate in European structural and investment funds programmes until their closure, and delivery continues through the managing authorities and devolved Administrations. Therefore, in order to remove any confusion from the statute book as the no-deal guarantee for funding is now not required, I commend this regulation to the Committee.

Lord Foulkes of Cumnock Portrait Lord Foulkes of Cumnock (Lab Co-op) - Hansard

My Lords, I welcome the opportunity to speak on these regulations. Particularly as a Scottish Peer—indeed, a former Minister of State for Scotland—I am only too aware of the important role that ESIFs have played in reducing disparities across Scotland over the past four decades. Indeed, under the current 2014-20 programmes, Scotland benefits from more than £780 million of funding through the European Regional Development Fund and the Social Fund, in addition to £1.5 billion through the European Agricultural Fund for Rural Development. Indeed, more than two years ago, I spoke here about the importance of continuing these funds to support communities and regions not just in Scotland but throughout the UK, saying that I was concerned that they would be lost in the Brexit void.

Nevertheless, while I welcome the UK shared prosperity fund as the domestic successor to ESIF for new programmes after 2020, I am concerned that with government cuts, it is in danger of becoming a shared austerity fund rather than a shared prosperity fund. Indeed, we are still no clearer on how the funding will be allocated or when a final decision will be made. The Government have said that they will not confirm the allocation until after the cross-departmental spending review in the coming months. However, these are challenging times and we need to provide both Scotland and the whole of the UK with clarity on the allocations from this scheme, so will the Minister explain why we are having to wait and how soon after the spending review the Government will make the announcement on this? Will it be by the end of 2020, or will they kick the can down the road into 2021?

Finally, the Explanatory Note says that BEIS originally laid an SI in March 2019, as we know: SI 625. That removed the EU regulations for structural funds from UK law in the event of a no-deal exit. However, as the UK signed the withdrawal agreement, which maintained the EU regulations for ESIF until programme closure, as the Minister said, SI 625 contradicts the intent and purpose of the withdrawal agreement, which is why it is now being revoked. However, is it not ironical that the Government are now considering overriding parts of the withdrawal agreement, so will we have another SI in a few weeks’ or months’ time? Perhaps the Minister could tell us. No wonder the noble and learned Lord, Lord Keen, could not stand the heat in the kitchen and has left it—going back, no doubt, to make some money at the Bar. Nevertheless, I support the regulations.

Baroness Bowles of Berkhamsted Portrait Baroness Bowles of Berkhamsted (LD) [V] - Hansard

My Lords, I thank the Minister for introducing the instrument. I have no disagreement with the redundancy of the revoked legislation, given that the funding has been agreed and is to be paid out for parts of the programmes that are yet to be completed—at least, that is the agreement, although, given that the UK may go back on the backstop details of the withdrawal agreement, I feel I should point out that one of the Commission’s general retaliations for misbehaviour is the retention of structural funds from an erring member state.

Leaving that aside, we are coming to the end of the EU structural funds and, as the noble Lord, Lord Foulkes, said, there is great anxiety about the replacement fund, the UK shared prosperity fund, and how closely it will replicate not just the EU funding but the matching national funding, and the method of calculation and distribution. It has often been a criticism that structural funds were cumbersome and expensive in their distribution mechanisms. I do not dispute that, but wherever I asked questions about it in the UK—that is the sort of thing that MEPs got up to—the answer I got back from the regions was that they preferred to have the funds allocated by the EU, because otherwise they could not guarantee getting the money from a Government of any stripe. That was probably true, and if getting the maximum bang for your buck is applied, as the Treasury has in the past, it does not favour the less developed areas. But that is potentially not how it is to be in the future. I believe I heard the Chancellor say that the methodology of funding more generally was to be looked at as part of levelling up. If that is the case, can the Minister categorically reassure us that the basis of need will be retained as the key feature?

My other question is: how granularly will the areas be looked at? I am very conscious of conflicting pulls here: when large areas are deprived, there can be cumulative effects, but it is also the case that highly deprived pockets within rich regions also suffer exaggerated effects. Can the Minister shed any light on that?

Lord Flight Portrait Lord Flight (Con) - Hansard

My Lords, this statutory instrument revokes legislation laid in 2019 that would have guaranteed structural funding in the event of a no-deal exit. Under Article 138 of the withdrawal agreement, the UK will continue to have access to the ERDF, ESF, EAFRD and EMFF until the end of the current multiannual financial framework, the term 2014-20. Funding cycles typically last up to three years, with closure taking up to another three years, so some ESIF projects will continue expenditure through to December 2023.

The UK will not be pursuing participation in future ESIF programmes, including ETC health, in the MFF 2021-27 period. The UK will participate in ETC peace plus for 2021-27. The UK shared prosperity fund, the UKSPF, will succeed the ESIF for new programmes. BEIS originally laid an SI in March 2019, SI 625, which removed the EU regulations for structural funds from UK law in the event of a no-deal exit. Unreplaced, it would now come into force on the last day of the transition period. BEIS is seeking to revoke that no-deal regulation because it is not compatible with the arrangements set out under Article 138 of the WA.

As already pointed out, the no-deal SI 625 disapplies the regulations for ERDF, the ESF and ETC when it comes into force at the end of the TP, while the WA maintains the same regulations until the programme closure. If SI 625 were kept, it would confuse the statute book. It is currently planned that the UK shared prosperity fund will replace the EU structural funds with funding realigned to match domestic priorities. At a minimum, it will match current levels of funding to each nation from the EU structural funds.

I apologise for reading out the abbreviations for the titles of various bodies, but there is not time to read the whole lot in full.

Baroness Garden of Frognal Portrait The Deputy Chairman of Committees (Baroness Garden of Frognal) (LD) - Hansard

The noble Earl, Lord Clancarty, has withdrawn, so I call the noble Lord, Lord Naseby.

Lord Naseby Portrait Lord Naseby (Con) - Hansard

My Lords, my first point has already been made: that the regulations assume that we will not have a no-deal exit. As someone who saw a whole lot of SIs when I was in the other place, as chairman of Ways and Means, I have to say that it was normal with something of the scale of this SI for the Commons to have a look at it first, but the Commons have not considered this SI, so I become as suspicious as my noble colleague opposite about why something different is being done this time. Of course, it may be entirely innocent, but I have my doubts.

On paragraph 2.4 of the Explanatory Memorandum, headed:

“What will it now do?”

and the various funds set out there, is it the UK Government’s policy to apply for new projects in the remaining three and a half months of the period 2014-20? Or have we put in for all our projects and are just running down in this period? Are there to be any new projects in the remaining three and a half months?

Paragraph 3.1

“Matters of special interest to Parliament”

is followed by a paragraph that refers to

“English Votes for English Laws”

and then by a paragraph:

“The territorial application of this instrument includes Scotland and Northern Ireland.”

One asks the question: what happened to Wales, other than that paragraph 3.3 says that the instrument applies to all the UK? Is there something in the Welsh devolution arrangements that precludes it from doing something in relation to this SI?

We then come to what I call the run-off period. With no deal yet agreed and three and a half months left, are we in a position whereby we will not apply for anything else or, if we did, we would be treated rather frostily for doing so?

Is the £9.5 billion referred to in paragraph 7.2, which is a hell of a lot of money, a guaranteed amount, or is there any wriggle room for the EU to get out of that?

That takes one on to left-over projects, of which paragraph 7.4 says

“even though they would cease to be funded by the EU.”

One assumes, but we would like confirmation, that all the projects going on now, which at some point the EU will cease to fund, will be picked up by the UK Government.

On “Monitoring & review”, I am a passionate believer in monitoring—it is my own little analysis—but, increasingly and rightly, the time limit on reviews has been coming down. It is now almost quite normal to have a three-year review. I hope that in this case we will have a three-year review.

Baroness Garden of Frognal Portrait The Deputy Chairman of Committees (Baroness Garden of Frognal) - Hansard

The noble Lord, Lord Liddle, has withdrawn, so I now call the noble Baroness, Lady Ritchie of Downpatrick.

Baroness Ritchie of Downpatrick Portrait Baroness Ritchie of Downpatrick (Non-Afl) [V] - Hansard

My Lords, I thank the Minister for his explanation of this SI, which we have to consider against the background of that other disputatious legislation, the internal market Bill. While I obviously welcome that there will be a progression towards the shared prosperity fund, I want to provide some context and then ask the Minister some questions.

Like the noble Lord, Lord Foulkes, I was a Member of the other place, so I want to ascertain why the other place has not considered this legislation. As a former Minister in the Northern Ireland Executive, I am only too aware of the great benefit that the European Regional Development Fund, the European Maritime and Fisheries fund and the European Social Fund provided to our local communities. In fact, the European Union provided a levelling-up process through financial assistance for fisheries, infrastructure and social development projects in areas where funding would not necessarily have been provided by the national Government, notwithstanding that the UK Government were a net contributor to the EU. As a consequence, regional levelling-up was provided which mitigated against disadvantages and regional imbalances and ensured that projects which brought benefit in construction jobs and new facilities could come to realisation.

What resource has been allocated to the new shared prosperity fund? Will it be centrally resourced and then allocated to the devolved Administrations, or will they set up separate funds to deal with that? Will the shared prosperity fund have more resources than the EU to allocate to projects? Will it still address the deficits in marginalised communities, particularly in isolated, rural and coastal communities? Will it deal with and address those regional imbalances to which we have already referred?

What discussions have taken place with devolved institutions regarding the replacement money through the shared prosperity fund? As I asked earlier, will they receive that money over and above their annual block grant allocations to compensate for the loss of these European funds?

Baroness Altmann Portrait Baroness Altmann (Con) - Hansard

My Lords, I recognise, as other noble Lords have done, that this SI is necessary to revoke the previous no-deal planning because the withdrawal agreement continues Regulation 1303/2013 and associated legislation with respect to the European social investment fund. The no-deal funding guarantee therefore appears no longer to be required, but as the noble Baroness, Lady Bowles, and the noble Lord, Lord Foulkes, mentioned, if there is a problem with the withdrawal agreement, could the sums agreed under it be withheld? Is there any view in the department on that and could my noble friend comment on it?

It is clear that the ESIF has aimed to reduce social and economic disparities and support communities and regions and has generated over the years many useful projects: national programmes, local initiatives—including on biodiversity, energy efficiency, micro- generation and brain imaging—and help for rural areas that might not have been prioritised in a UK national policy. While I welcome the new UK shared prosperity fund, can my noble friend answer some of the questions already posed by other noble Lords, such as: when will the cross-department spending review happen and how much will be allocated? Will the amounts that the UK has invested be replicated in addition to the amounts that we have received from other EU nations? Will the shared prosperity fund still have as its driver need around the country rather than other priorities?

I am concerned to make sure that we do not lose some of the valuable initiatives that we had as a member of the EU. I know that the Government are committed to ensuring that Britain supports its own projects as required rather than being directed by the EU, and I respect that, but a little more clarity on how the shared prosperity fund might operate would be gratefully received.

Baroness McIntosh of Pickering Portrait Baroness McIntosh of Pickering (Con) [V] - Hansard

My Lords, my questions are not dissimilar to those from colleagues, which I am sure will help the Minister a great deal. Obviously, it seems a little odd that we are considering revoking an instrument when we still have not reached a trading deal, so I do not know whether this instrument before us today is a little premature.

I will ask the Minister a couple of questions. Of the €9.5 billion of funding under the structural funds for the 2014-20 period to which my noble friend referred, how much of that is still left to run and what is the distribution of the amount left between the four nations? Can he assure us today that the cost of administering them up to 2023-25 will be less than these sums of money involved? Presumably, match funding will still apply, and that money will have already been allocated, so no new money will be required.

Specifically on the European agricultural fund for rural development, I understand that €100 billion has been allocated overall to the whole of the EU for the period from 2014 to 2020. As the clue is in the name—this refers to the rural development programme—I place on record how much the north of England, North Yorkshire in particular, has benefited from this fund. However, this raises the question on which we have not yet had clarification: how will the UK shared prosperity fund function? I would like confirmation from the Minister, if possible today, that a significant element of this fund will go towards rural areas and, in particular, that it will carry forward many of the strands set out in the rural development programme, which has benefited the UK so much, not just in the 2014-20 period but overall. As we have learned that the original SI we are revoking aimed to reduce social and economic disparities across the UK, can we be sure that the Government’s levelling-up programme will continue to do what this SI has done in the past?

Baroness Kramer Portrait Baroness Kramer (LD) [V] - Hansard

My Lords, sparked by the noble Lord, Lord Foulkes, let me say how refreshing it is that we are debating a part of the European withdrawal agreement that the Government intend to uphold—there is a positive note to start on.

Of course it makes sense to repeal SIs that are redundant and potentially confusing, and we support the changes before us today. However, this debate gives me the chance to press the Government with the same kind of questions that the Minister has heard from other speakers. By the end of this year, EU funds will go into a run-off process over the subsequent few years, supporting existing or agreed projects but not investing in new ones. Like everyone else, I am remarkably short on detail for the UK shared prosperity fund that will replace them. Frankly, that seems a little extraordinary, because we are only three months or so from the end of transition. I thought there would be a major consultation on this. Have I missed it? It is possible that I have, but I attempted to find it and, frankly, I could not.

A number of bodies have raised quite a few issues around the UK shared prosperity fund. One of the hopes is that it will be transparent, simple and flexible—you could accuse the European structural funds of not meeting that test—to enable it to respond to local needs. I ask this because centralisation rather than devolution seems to have become a theme of this Government. I would also like to understand what role Parliament will play, particularly compared to the European Parliament, in holding the Government accountable for what happens with these funds. I am afraid I do not understand that either; perhaps the Minister could enlighten me.

Will the objectives that the Government have articulated for this new fund, such as boosting prosperity and tackling inequality, be adjusted as a result of Covid? That matters because of areas that might not have qualified under the original definitions but which are not dependent, for example, on hospitality, the airlines or on public transport. I pick up the point made by my noble friend Lady Bowles that sometimes a small sector or area can be deprived within an area of overall prosperity, but that still matters. Will those areas that might not have made the original list but now, because of Covid, may be very much in need, be looked at as recipients for this fund?

We could better understand the impact on geographies. My understanding—the Minister can correct me—is that however you look at the analysis, it looks as though areas such as Cornwall, for example, which benefited from the cliff-edge approach inherent in the European funds, will be serious losers in every approach that has been discussed for the new fund. Is that right? Perhaps the Minister can help us.

Again, to pick up on issues raised, the Conservative manifesto promised that each nation would receive as much funding as if we had not left the EU. For how long will that be true? Areas are desperate to know how much money will be available, particularly as we go into very rocky economic times.

To pick up a point made by both my noble friend Lady Bowles and the noble Baroness, Lady Altmann, will we continue with the needs-based criteria or shift, as some have suggested, to an outcomes-based criteria? It makes a very big difference to which parts of the country and which kinds of projects receive funding rather than others.

Generally, I join noble Lords in saying that this is a great opportunity for the Minister to tell us much more about this new future—it would be exceedingly useful.

Lord Stevenson of Balmacara Portrait Lord Stevenson of Balmacara (Lab) [V] - Hansard

My Lords, as other noble Lords have said, I am grateful to the Minister for his clear and focused introduction, which allowed us to understand better the importance of the SI with regard to clearing up the statute book, but also to point out some of the transitional difficulties that the Government will face as they see the end of these substantial schemes, which, as other noble Lords have said, have had such a huge impact across the country. They are a significant investment, many communities are involved, they connect all parts of the United Kingdom, and it is vital that we get this right. That would be true even if it were not also the case, as the noble Baroness, Lady Kramer, pointed out, that the impact of Covid-19 stresses every aspect of that and will bring it very much to the forefront of our thinking.

The noble Lord, Lord Naseby, went through the Explanatory Memorandum and asked a number of detailed questions. I just wanted to ask one or two questions related to consultation. The extent and territorial application of this is clearly a United Kingdom issue, and the Minister has made it clear that these funds are and always have been reserved items. However, there is a tension regarding the local impact; other speakers made points on how the further you go from the centre of Whitehall with this, the easier it is to see the discrepancies and differences that need to be addressed, with funding of this nature coming, as it does, with a focus on trying to level up rather than reinforce existing divisions.

I was therefore intrigued to see in paragraph 4.3 of the Explanatory Memorandum:

“Devolved Administrations were involved in the preparation of this instrument.”

Can the Minister indulge us by explaining what that meant? Were they shouted at, engaged, and were there meetings or a discussion? I would really like to know. Contrast that with paragraph 10.1 in particular, which says that there was “no formal consultation”—presumably this was done with ties off, in an informal situation—but:

“Devolved Administrations have all provided consent letters from their ministers to the laying of this SI.”

That is a novel way of doing it. I am intrigued by this; it is a new process, which I have never seen before. Perhaps the Minister would be prepared to share those letters with the Committee. If he is not able to, perhaps he could explain in another letter what was going on here. I am not interested in prying into confidential details but I would like to know how the process works in practice.

All speakers mentioned it, but my noble friend Lord Foulkes and the noble Baronesses, Lady Ritchie and Lady Bowles, went into some detail about how we are going to be fed information about the shared prosperity funds that replace all the existing funding. As I said, £9.5 billion is a lot for even this Treasury to find on the money tree. The case has been well made for early notification about the thinking behind this and the consultation process going into it. Tying it to some feature of the calendar that allows a Minister to say something more concrete than just “It’s coming soon” would be good.

It is important to get assurances from Ministers that there is going to be a fund of this nature, size and reach, to understand better how constraints will apply to how much it is expected to do and how that will be done, whether there will be partnership arrangements—as was expressed by the noble Baroness, Lady Ritchie—and whether there will be a bidding process or top-down delivery. We do not need firm details, but it would be interesting to know which way the Government are thinking.

I follow that with the astute observation of the noble Baroness, Lady Bowles, that we might need to think harder about what might happen to us if the situation affecting the withdrawal agreement continues and the EU takes sanctions against the UK for its approach so far. If the first port of call is the retention of previously allocated structural funds, perhaps not this SI but the previous one will need to be repealed and we will have to go back to the first version. SI 625 may indeed have a longer life than we originally thought. I do not expect the Minister to go all the way down the track on this, but it would be helpful or reassuring to us if we knew that he had thought this through and that there are plans in place.

As I said at the beginning, we are talking about substantial sums of money, hard-wired into the way our country operates. It may not be the best or a long-term solution, but I appeal to the Government to think carefully about changes, as they come forward. It is important that we learn the lessons from the ESIF and its various formulations over the years. Bringing it all into one fund might be attractive, but the appetite to stop term funding is not there, and they will need to think carefully about how to share this money in a way that is effective and efficient, in terms of its overall goals, and that does not cut out partnership and local intelligence in how it is best applied.

Lord Callanan Portrait Lord Callanan (Con) - Hansard

I thank noble Lords again for their valuable contributions to this short debate. Now that the UK has left the European Union, one of the opportunities that we have is to design and implement our own regional funding programmes. Through the UK shared prosperity fund, the Government can cut out bureaucracy and create a fund that invests in UK priorities and is easier for local authorities and areas to access.

I know that there have been queries on our future participation in EU programmes but, to reiterate, the UK will not participate in any future ESIF programmes, apart from the PEACE PLUS programme mentioned by the noble Baroness, Lady Ritchie. The UK Government have committed to contributing to PEACE PLUS until 2027, as part of their unwavering commitment to uphold the hard-won peace in Northern Ireland following Brexit. PEACE PLUS will succeed the current PEACE scheme, which has helped promote economic and social progress in Northern Ireland and the border region of Ireland since 1995. The current programme, run with funding from the UK, Ireland and the EU, will end in 2020. The Special EU Programmes Body will continue to act as managing authority for these PEACE PLUS programmes. Discussions around shaping the proposal and the wider regulations are ongoing and the UK is participating in these.

The noble Lord, Lord Foulkes of Cumnock, in his usual combative tone, asked about timings for the allocations. I assure him, the noble Baronesses, Lady Bowles of Berkhamsted and Lady Altmann, and other noble Lords that the 2019 Conservative manifesto—of which the noble Lord, Lord Foulkes, is a strong supporter —committed to at least matching the funding for EU structural funds to each nation in the United Kingdom. In response to their questions, I say again to the noble Lord, Lord Foulkes, and the noble Baronesses, Lady Bowles, Lady Kramer and Lady Ritchie, that final decisions on the allocation of the UK shared prosperity fund will be taken following the cross-government spending review, which is in progress. When that is completed, we will have further announcements to make. The Government have been working closely with interested parties across the UK, while developing the fund.

In response to my noble friend Lord Naseby, who asked whether it is the Government’s intention to apply for new projects for the remaining three and a half months, I say yes. The Government will be signing new projects during 2020 to make the most of the available European funding, which is recycled British funding in real terms. On the question from the noble Lord about Wales, I assure him that the SI indeed applies to Wales. On his question about ERDF and ESF, £9.5 billion is the agreed amount of EU funding for ERDF and ESF for the 2014-20 multiannual financial framework.

The noble Baroness, Lady Ritchie of Downpatrick, asked how it will be resourced. The intention is for the fund to be resourced centrally and then allocated to the devolved Administrations. The noble Baroness and other noble Lords also asked about co-operation with other devolved Administrations. It will operate across the UK, and UK government officials regularly speak to their counterparts in the devolved Administrations to discuss any updates to their concerns or queries about the proposed fund. Similarly, Ministers also meet their counterparts in the devolved Administrations. I assure all noble Lords that these matters are raised regularly, and that Ministers from the devolved Administrations regularly air their concerns.

The noble Baroness, Lady Altmann, asked whether the sums agreed under the withdrawal agreement could be withheld. The answer is no. Article 138 of the withdrawal agreement states that the UK will continue to have access to European structural funds until the end of the current multiannual financial framework funding cycle. Funding to the UK SPF will be realigned to match domestic priorities, with a focus on investing in people.

There were also multiple queries about how the new fund would be operated and whether it would target by need. As I said, it will be driven by domestic priorities with a focus on investing in people. It will, at a minimum, match current levels of funding to each nation from the structural funds. We strongly believe that leaving the European Union provides us with a fresh opportunity to create a fund that invests in our priorities and targets funding where we decide it is most needed, while maintaining support for businesses and communities.

My noble friend Lady McIntosh of Pickering asked about rural areas. The European agricultural fund for rural development is outside the scope of this SI. The original SI, which it revokes, repealed regulations for the European regional development fund, the European Social Fund and the European territorial co-operation fund only.

The noble Baroness, Lady Kramer, asked about the impacts of Covid-19. We will continue working closely as one United Kingdom to understand the changing needs of local and regional economies. In our response to the impact of Covid-19, including the role the UK SPF will play, we have a great opportunity to design a fund driven by domestic priorities. As I said earlier, the decisions on the quantum of the fund will be made through the spending review.

I know that all queries have been about the shared prosperity fund. I have tried to aid noble Lords by responding to them, but they have nothing to do with the statutory instrument, which revokes the original no-deal instrument to ensure that our legislation is compatible with the arrangements set out under Article 138 of the withdrawal agreement. If the original no-deal SI were not repealed, it would confuse the statute book and cause potential conflict with these provisions. The Government fully recognise the role that structural funds play in supporting vital jobs and growth opportunities across the UK. I commend this SI to the Committee.

Motion agreed.

Sitting suspended.