Is Wales getting the best deal out of the EU?

13 June 2014

 "Wales is a net beneficiary from Europe"

Hywel Williams MP, 5 June 2014 

We heard a lot in the run up to last month's European elections about the UK's contribution to the EU budget - the UK government contributes about £8.6 billion (€10.6 billion) a year more than it receives. But on last Thursday's Question Time, the Plaid Cymru politician Hywel Williams claimed that the opposite is true when you look just at Wales.

No official figure exists for the overall investment that Wales receives from the EU, since funding is calculated on a UK-basis and Wales benefits from a number of multinational programmes which are difficult to quantify by country. Wales also doesn't give money to the EU itself - the UK government makes the contribution.

Accounting for the variety of estimates that we do have available, the annual investment received by Wales could be an estimated €653-747 million per year, compared to an estimated annual contribution of €630 million. So, based on this method, Wales does seem to receive more financially than it contributes.  

Wales receives investment of about €653-747 million per year

Plaid Cymru's statistics come from an analysis by Jill Evans MEP, mainly relating to EU funding for the 2007-2013 period. This calculated the amount of money invested in Wales through things like agricultural funds, structural funds and funding received through the Erasmus programme for students in 2010/11 - reaching a total of approximately €747 million received per year.

The analysis is now slightly dated, so we pulled together the latest statistics provided to us by the European Commission, as well as other sources included in Ms Evans' research.

To put this in context, in 2012 the UK as a whole (both the government and the private sector directly) received around €6.9 billion from the EU.

Fund Estimated investment received by Wales per year
European Fisheries Fund Estimated €2.4 million
European Agricultural Fund for Rural Development Estimated €54 million
Erasmus (student and teacher exchange programme) Estimated €2.0 million (2011/12)
Structural funding (administered through the Wales European Funding Office) Estimated €314 million
European Agricultural Guarantee Fund (includes funding from the Common Agricultural Policy) Estimated €260 million or €353.3 million Note: Ms Evans' analysis calculates this as €353m, but this hasn't been published so we're unable to verify it. The Welsh government says the fund will pay agricultural businesses around €260 million a year. It's possible that this isn't the only investment received through the fund which may explain the discrepancy in the figures.
Other student funding Estimated €20.8 million


A point of contention in the figures surrounds the €353 million assigned to the European Agricultural Guarantee Fund. Ms Evans' office informed us this figure was supplied to it by the Welsh Government, but the figure had not been published.

The Welsh government has mentioned a smaller figure: €260 million, which it describes as 'direct payments [to] agricultural businesses'. We're waiting to hear back from Plaid Cymru on why their figure is higher.

This means, adding up the alternative totals, Wales' receipts from the EU could be estimated at anywhere between €653 million and €747 million per year.

Still, the true figure could be outside this range since there's no exhaustive list available of the funding that Wales receives from the EU, as Ms Evans states in her analysis:

"it must be noted that the list above is not exhaustive, there are other EU funding streams which Wales receives money from but these figures are not readily available."

The European Commission confirmed to Full Fact that they have no definitive list, but that Ms Evans' analysis was probably a fair estimate of the funding sources that we are able to quantify.

EU projects for which we can't quantify the investment that Wales receives are international programmes such as Horizon 2020, which invests in higher education.

Wales 'contributes' approximately €630 million per year

Comparing Wales' estimated receipts from the EU to its contributions is awkward given the investment happens over a seven year period, whereas contributions happen each year. What's more, contributions happen at the UK level rather than regionally.

Taking figures from Eurostat, the UK as a whole has contributed on average around €13 billion to the EU per year since 2007. The population of Wales accounts for around 4.8% of the UKs, so on this basis Wales has contributed the equivalent of €630 million, or around €200 per head.

Plaid Cymru use a slightly lower figure of €196 per head a figure provided to them by the European Parliament research services for 2010/11. Given that we're using more up-to-date EU financial figures, this may explain some of the difference.

Either way, an analysis using these methods suggests Wales does receive more in investment than it contributes per year, if seen as a proportion of UK payments.

But measuring the relative financial costs and benefits of the EU to Wales is still subject to estimations and assumptions on both sides. It's difficult, for instance, to assign funding precisely at a regional level. Asking whether Wales is a net beneficiary from Europe as a general question which extends beyond financial gains can't be answered well from these estimates alone.

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