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David Cameron warns the UK cannot guarantee Welsh EU funding following Brexit vote

Wales is a net beneficiary of EU funds designed to help economically disadvantaged regions

Caroline Mortimer

Thursday 30 June 2016 08:56 BST

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Cameron can't guarantee Wales funding

David Cameron has warned his successor as prime minister cannot guarantee Wales' EU funding will continue following the Brexit vote.

Speaking at Prime Minister's Questions, he said they did "not know exactly what will happen to our economy in the event of a leave vote" so it was "difficult for anyone to give guarantees".

"As I said throughout the campaign, if the vote was a No vote, I would want to do everything I could to make sure that we continued to help disadvantaged regions and our farmers.

"But it will be a matter for my successor as we leave the EU to make good on what they said at the time".

He was responding to a question from Torfaen MP Nick Thomas-Symonds who asked if the Prime Minister agreed that if his constituency "loses a penny piece of its funding under his successor, that would be a gross betrayal".

52.5 per cent of Welsh voters backed leaving the EU during the referendum last week despite the region enjoying an annual net benefit of £245m from the UK's membership, according to a study by Cardiff University.

Boris Johnson was one of several signatories to an open letter promising to protect Wales' funding in the event of a Leave vote (Getty)

Senior figures in the official Vote Leave campaign, including Boris Johnson, Michael Gove and Chris Grayling, said there would be "more than enough money" to finance the projects currently run by the EU.

In an open letter earlier this month, they stated that all programmes were funded at their current levels up until 2020, and that they could then run them "much more effectively" and free up extra money to spend on "other priorities".

6 ways Britain leaving the EU will affect you

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1/66 ways Britain leaving the EU will affect you

6 ways Britain leaving the EU will affect you

More expensive foreign holidays

The first practical effect of a vote to Leave is that the pound will be worth less abroad, meaning foreign holidays will cost us more

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6 ways Britain leaving the EU will affect you

No immediate change in immigration status

The Prime Minister will have to address other immediate concerns. He is likely to reassure nationals of other EU countries living in the UK that their status is unchanged. That is what the Leave campaign has said, so, even after the Brexit negotiations are complete, those who are already in the UK would be allowed to stay

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6 ways Britain leaving the EU will affect you

Higher inflation

A lower pound means that imports would become more expensive. This is likely to mean the return of inflation – a phenomenon with which many of us are unfamiliar because prices have been stable for so long, rising at no more than about 2 per cent a year. The effect may probably not be particularly noticeable in the first few months. At first price rises would be confined to imported goods – food and clothes being the most obvious – but inflation has a tendency to spread and to gain its own momentum

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6 ways Britain leaving the EU will affect you

Interest rates might rise

The trouble with inflation is that the Bank of England has a legal obligation to keep it as close to 2 per cent a year as possible. If a fall in the pound threatens to push prices up faster than this, the Bank will raise interest rates. This acts against inflation in three ways. First, it makes the pound more attractive, because deposits in pounds will earn higher interest. Second, it reduces demand by putting up the cost of borrowing, and especially by taking larger mortgage payments out of the economy. Third, it makes it more expensive for businesses to borrow to expand output

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6 ways Britain leaving the EU will affect you

Did somebody say recession?

Mr Carney, the Treasury and a range of international economists have warned about this. Many Leave voters appear not to have believed them, or to think that they are exaggerating small, long-term effects. But there is no doubt that the Leave vote is a negative shock to the economy. This is because it changes expectations about the economy’s future performance. Even though Britain is not actually be leaving the EU for at least two years, companies and investors will start to move money out of Britain, or to scale back plans for expansion, because they are less confident about what would happen after 2018

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6 ways Britain leaving the EU will affect you

And we wouldn’t even get our money back

All this will be happening while the Prime Minister, whoever he or she is, is negotiating the terms of our future access to the EU single market. In the meantime, our trade with the EU would be unaffected, except that companies elsewhere in the EU may be less interested in buying from us or selling to us, expecting tariff barriers to go up in two years’ time. Whoever the Chancellor is, he or she may feel the need to bring in a new Budget

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The leader of the Welsh Conservatives, Andrew RT Davies, told the BBC at the time: "Despite the First Minister's fantasy claims, we now know that funding for each and every part of the UK, including Wales, would be safe if we vote to leave.

"The real danger therefore lies in voting to remain, where EU leaders have imposed stringent cuts to regions across the European Union."

Wales' First Minister Carwyn Jones has called for the Welsh government to be involved in negotiations over the terms of Brexit.

Speaking to his cabinet in Cardiff Bay on Monday, he said the final deal must be approved by all four UK parliaments, but the Welsh government ultimately had to respect the vote to leave.

He said his government would use "every lever at our disposal" to protect Welsh communities.

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