Brexit: Government guarantees for post-EU funds – BBC News | The Knowledge Dynasty

Brexit: Government guarantees for post-EU funds – BBC News

Image copyright PA, Getty Images

Chancellor Philip Hammond is promising to replace European Union funding for farmers, scientists and other projects after a British exit from the bloc.

In a move which could cost up to 4.5bn a year, the Treasury will guarantee to back any EU-funded projects signed before the Autumn Statement.

Agricultural funding now provided by the EU will also continue until 2020.

The UK has not yet triggered the negotiation process for leaving the EU, following the referendum vote in June.

Voters backed leaving the EU in the 23 June referendum but Prime Minister Theresa May has indicated the UK government will not trigger Article 50, which would begin a two-year process to leave, during 2016.

Mr Hammond said: “The UK will continue to have the all of the rights, obligations and benefits that membership brings, including receiving European funding, up until the point we leave the EU.

“We recognise that many organisations across the UK which are in receipt of EU funding, or expect to start receiving funding, want reassurance about the flow of funding they will receive.”

Image copyright TOBIAS SCHWARZ
Image caption During a visit to Berlin in July, Theresa May indicated the UK would not trigger Article 50 during 2016

BBC economics correspondent Andy Verity says EU-funded projects are expected to cost the Treasury about 4.5bn a year if the taxpayer has to fund them in full.

In addition, says our correspondent, 1.5bn of funding for scientific research might have to be found.

Research funding

The Treasury is expected to announce that all structural and investment fund projects signed before the chancellor’s Autumn Statement later this year will be fully funded, even when these projects continue beyond the UK’s departure from the EU.

This would include agri-environment schemes, such as land management schemes to protect biodiversity.

The Treasury said it would assess whether to guarantee funding for certain projects “that might be signed after the Autumn Statement, but while we remain a member of the EU”.

Image caption The chancellor of the Exchequer will deliver his Autumn Statement to MPs later this year

And organisations such as universities bidding for EU funding before the UK leaves would have that money underwritten by the government.

The EU’s 80bn euro (69bn) Horizon 2020 programme awards funding for research and innovation and is open to UK institutions while the country remains a member.

At present, farmers receive subsidies and other payments under the EU’s Common Agricultural Policy (CAP).

Mr Hammond added: “The government will also match the current level of agricultural funding until 2020, providing certainty to our agricultural community, who play a vital role in our country.”

Last month the chancellor said he might use the Autumn Statement to Parliament to “reset” Britain’s economic policy.

The comments saw shadow chancellor John McDonnell respond: “This means that Britain is on hold until Philip Hammond makes up his mind. The Tories clearly had no plan for Brexit and are making it up as they go along.”

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