Scottish and Welsh governments call for post-Brexit funding clarity

The Scottish and Welsh governments have called for more clarity to be issued over funding after Britain leaves the European Union.

Representatives from both devolved administrations are due to meet with Chief Secretary to the Treasury Liz Truss in Cardiff on Friday.

Ahead of the meeting, Scottish Finance Secretary Derek Mackay and Welsh Finance Minister Rebecca Evans have asked for more clarity from the UK Government on how funding will affect future budgets and public sector pensions among other areas after Brexit.

Mr Mackay is hopeful Ms Truss will "take an even handed approach in meeting all costs'' ahead of March 29.

He said: "Funding from the EU supports jobs in Scotland, from major infrastructure projects to sustaining rural communities and delivering research funding for our world-class universities.

"That is why the Scottish Government is determined to defend its hard-won fiscal responsibility and maintain the benefits that EU funding has provided to many sectors and individuals in Scotland.

"With just weeks to go until the planned EU exit day, we remain deeply concerned about the lack of detail regarding replacement arrangements for EU funding streams given their importance to individuals, businesses and communities across Scotland.

"Today I will be calling on the Chief Secretary to the Treasury to provide reassurance that Scotland should not be financially worse off as a result of the EU exit and to guarantee that all lost EU funding will be replaced in full.

"As the Scottish Government Chief Economist's State of the Economy report set out, Brexit uncertainty is already impacting key economic indicators and a no-deal Brexit would lead to a major dislocation to the Scottish economy.

"The UK Government must immediately rule out the possibility of a 'no deal' Brexit and extend the Article 50 process. However, as a responsible government we will also continue - and indeed intensify - our work to prepare for all outcomes as best we can.''

On Thursday night Theresa May tumbled to another substantial Commons defeat after fewer than 250 of her MPs voted in favour of a motion which backed the Brexit plans endorsed by the Commons on January 29.

An SNP amendment to extend Article 50 was also rejected by 315 votes to 93.

Speaking ahead of Friday's meeting, Ms Evans said she will be "pushing for ongoing and meaningful dialogue... about the challenges we are facing''.

She said: "With the clock ticking as we approach EU exit day, it is absolutely vital we are at the heart of decision making and are able to prepare for the impact of Brexit.

"Alongside this, I will also be pressing for further clarity and assurances about the cost associated with the UK Government's changes to public sector pensions and how it intends to fund it.

"Only last week, the First Minister and local government leaders wrote to the Chancellor seeking clarification. Worryingly, even as local authorities are finalising their budgets, there is still some uncertainty about funding.''

The Federation of Small Business (FSB) has also weighed in ahead of the meeting, having previously been vocal about avoiding a no-deal Brexit.

Colin Borland, FSB director of devolved nations, said: "Avoiding a no-deal Brexit at the end of March is the highest priority for smaller businesses. Elected members at every level need to push hard to avoid this outcome.

"On the other hand, at FSB we would encourage local businesses from Aberystwyth to Aberdeen to check out official sources of advice to ensure they're as prepared as they can be for what could be an abrupt change in trading conditions.

"It is especially important for Welsh and Scottish local economies that we get both replacement arrangements for EU funding streams and our post-Brexit immigration system absolutely right and that neither nation is disadvantaged as a result of Brexit.

"Those in business expect Ministers based in Edinburgh, Cardiff and London to be able to work constructively together to find solutions that deliver for everyone.''

A Treasury spokesman said: "We are working closely with the devolved administrations so they have the resources to prepare as we leave the European Union.

"This includes allocating £55 million to the Scottish Government and over £30 million to the Welsh Government to support Brexit preparations for all scenarios in 2019-20."