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Finance ministers meeting

Published: 11 Jul 2016 17:47

Devolved administrations ask Chancellor for talks on EU vote.

Finance Ministers from the three devolved administrations have written to Chancellor George Osborne seeking an urgent meeting to discuss their concerns around the EU referendum result and the resulting impact on devolved budgets.

Welsh Government Cabinet Secretary for Finance Mark Drakeford, Scottish Government Finance Secretary Derek Mackay, and Northern Ireland Minister of Finance Máirtín Ó Muilleoir MLA met in Cardiff.

The Finance Ministers agreed to continue to work together on important financial issues of common interest, in particular against further cuts that might be pursued post referendum by the UK Government and to seek firm commitments on continued EU related funding streams.

Mr Drakeford said:

"The referendum result has raised a number of uncertainties common across all our devolved administrations. It is clear that it will have an impact on the UK's fiscal position and this will inevitably impact on our devolved budgets.

"Today's meeting gave us an opportunity to come together to share our concerns and to explore how we can speak with one voice in our talks with Westminster. That is why we have written to the Chancellor requesting a meeting to raise our collective concerns and to seek assurances for our people, communities and businesses.

"Wales is a net beneficiary from the European Union with the millions of pounds we receive helping people into work and training, supporting businesses and regenerating communities. The UK Government must now guarantee that Wales will not lose a penny of this crucial funding as a result of leaving the EU."

Mr Mackay said:

"I firmly believe that membership of the European Union is in the best interests of Scotland, which is why the Scottish Government is absolutely committed to pursuing all possible avenues to maintain our place in the EU, in line with the way people in Scotland voted.

"We remain unclear on the likely impact of Brexit on UK Government finances, and we are already seeing the UK Government suggest changes to future spending plans as well as considerable concern over the economy and investment levels.

"The devolved administrations need urgent answers from the UK Government on the impact that the Brexit vote could have on future budgets, and that is why it is crucial that we meet with Mr Osborne imminently.

"I have already expressed concerns about the impact this will have on this year's Scottish budget process, and given this uncertainty, there is a strong case for publishing a one year rather than a three year budget this year."

Finance Minister Máirtín Ó Muilleoir said:

"It is vital that the interests of the people across the devolved administrations are protected and that we work together on areas of common interest. Together we are seeking assurances from the Westminster Government around budgets and that the levels of current significant EU investment will be sustained.

"Obviously the potential economic impact on the border region, which has greatly benefitted from European funding is of particular concern.

"Across these islands, we all share a desire to provide clarity amidst the uncertainty that the EU Referendum has created. As devolved finance ministers we have agreed to act resolutely to protect the interests of all our people especially against further austerity policies that might be pursued as a result of the referendum."

Background

Notes to editors

TEXT OF LETTER TO THE UK CHANCELLOR:


Dear Chancellor,

IMPLICATIONS OF EU REFERENDUM

Following the outcome of the EU referendum we have discussed the implications for the Devolved Administrations and have agreed to register our collective thoughts and concerns.

We appreciate fully that there exists a vast array of uncertainties as to the consequences of the referendum decision. However it is clear that the Devolved Administrations now need an immediate meeting with you to discuss our concerns. There are a significant number of common concerns – most obviously relating to the fiscal position and uncertainty surrounding the Spending Review settlement. This includes clarification on the plans to reduce Revenue DEL by a further £3.5bn in 2019-20.

In the current climate and in light of the referendum result, we urge the new UK Government to take the opportunity to think again about its economic and fiscal policy.

We are determined to act resolutely to protect the interests of all our people, especially against further austerity policies that might be considered as a consequence of the referendum result. This is particularly relevant in the context of the majority vote in both Scotland and the North of Ireland to remain within the EU.

It is essential we assure potential investors, the business community and those in receipt of European funding that we will endeavour to put in place the necessary measures to safeguard our interests; and certainty on future budgets will underpin those assurances.

We agree on the importance of maintaining investment in vital infrastructure to boost growth and restore confidence. We call on the UK Government to give a clear commitment that devolved administrations will not lose a penny of the EU related funding streams.

We also seek your support for our planned engagement with the European Investment Bank to take forward a collaborative approach to infrastructure enhancement in our economies, a large fund across administrations bringing significant reductions in finance costs.

In light of the above, we now request an urgent meeting with you to consider the implications of the EU referendum outcome.

At that meeting we should also discuss the Chief Secretary to the Treasury's (CST) recent letter to us on a range of public finance issues. This has profound implications for all of us – implications compounded by the referendum outcome.

Mark Drakeford Máirtín Ó Muilleoir Derek Mackay