EU Referendum: Wales & The EU

(Title Image: ITV)

The EU referendum will be UK-wide and the result will be carried by the votes from the whole UK (and Gibraltar). Nevertheless, as you would expect me to do I’m going to take a look at what the EU means to Wales alone.

Wales’ place and role in the EU

Wales isn’t a full EU member state. We’re represented via the UK with most of the big decisions at the top tables  addressed by UK Government representatives (with some Welsh input when it comes to devolved matters like agriculture).

The main impact the EU has on Wales is economic. As that’s what it was created to do it’s not a surprise.

In 2015 (xls), Wales imported £3.55bn worth of goods from EU member states and exported £5.02bn (41% of all exports), meaning Wales is one of the few nations and regions of the UK that’s a net-exporter to the EU.

This changes the dynamic of the argument for EU withdrawal in Wales because many leave campaigners, based on England’s net-importing from the EU, think that the EU needs “the UK” to sell its products to. This would give the UK an upper hand in exit negotiations because “they need us more than we need them”. In Wales it’s the other way around as we the EU buys our products which, along the same lines of logic, means a Brexit would give Wales a weaker hand.

Companies headquartered in other EU member states are important employers. There are claims and counter claims on how many Welsh jobs rely on access to the single market (as opposed to the EU), but most quoted figures are somewhere between 100,000-200,000.

These companies include Airbus in Flintshire and Testia in Newport (Airbus Group being a pan-EU aerospace and defence conglomerate). Admiral Group also has at least six operations in other EU markets : Balumba (Spain), Qualitas Auto (Spain), Rastreator (Spain), ConTe (Italy), L’olivier (France), LeLynx (France).

Wales is also a major European base for many other large businesses headquartered outside the EU, like Bridgend’s Ford engine plant and Toyota’s engine plant on Deeside. Tata Steel’s plants in Wales would be another obvious mention, but the situation there is still fluid.

The EU’s Social Union

European Health Insurance Card (formerly E111) – A free-of-charge card that entitles the holder to free or reduced-cost medical care in any other EU member state, normally on the same terms as a citizen of that country. So if a citizen of a country has to pay a small amount towards medical treatment costs (as happens in some EU countries), the card will ensure the holder pays the same amount.

Embassy protection – Citizens of EU member states can request consular assistance from the embassy of any other member state.

Consumer protection – The EU’s consumer protection legislation ensures food safety, minimum safety standards for cars (EURO NCAP), guaranteed fair treatment under the Charter of Fundamental Rights and protections against things like misleading advertising and unfair contracts. The most high-profile recent example is with regard mobile phone roaming charges in EU member states, which will be axed by June 2017. There are also moves to standardise  regulations relating to “sharing economy” businesses like Uber and AirBnB – currently there are 28 different sets of rules in the EU.

Environmental protection
– Many of our clean air laws come from EU directives, while the EU has played a leading role in reducing greenhouse gas emissions, improving water and soil quality and addressing climate change – it’s often far more effective to do such things in co-operation with other countries than each country acting in its own interests. The most famous example is the blue flag beach and water quality scheme.

Protections for workers
– There are a number of measures to improve health and safety such as reducing exposure to chemicals, safety sign standards, working at heights, safety equipment etc. that simply didn’t exist before. Modern UK equalities laws – like the Sex Discrimination Act – were essentially passed to meet the requirements of EU membership. Things like statutory maternity pay are also a direct result of the EU. There are also protections for part-time and agency workers which means they can’t be treated any differently to full-time staff.

Human rights guarantees Note : The European Court of Human Rights and European Convention on Human Rights (ECHR) have nothing to do with the EU. They’re separate from it and actually pre-date it. However, all EU member states – as a condition of membership – have to apply human rights laws as embodied in the EU’s Charter of Fundamental Rights.

The Bosman Rule – Famously brought in to enable football players in the last year of their contract to negotiate a free move to another club at the end of their contract. It only exists because of EU freedom of movement and freedom of trade rules. If you want local examples of those who’ve benefited from it, there’s Swansea City’s Andrew Ayew (and Batefemi Gomis previously) while Joe Ledley used to rule to move from Cardiff City to Celtic.

The EU : Welsh Farming & Fishing

Two of the biggest priority areas of the EU – both in terms of policy and spending – are agriculture and fisheries.

Agriculture falls under the Common Agricultural Policy (CAP). The CAP’s goal is to ensure farmers produce enough food to meet European needs, provide protection for farmers against sudden changes in prices, promote environmental protection, guarantee animal welfare standards and ensure food is safe to eat.

The main feature of this policy are farm subsidies in the form of Common Agricultural Payments, which are distributed by the Welsh Government. According to the recent Wales Governance Centre research paper (pdf),Common Agricultural Payments were worth £260million to Welsh farmers (Pillar 1) and rural development schemes (Pillar 2) in 2014. Since 2010, CAP payments have totalled £1.46billion.

The EU also has a Common Fisheries Policy (CFP). Controversially, this creates a single pan-EU fishing zone, meaning registered fishing trawlers from any EU member state can fish in the territorial waters of any other EU member state as long as they’re at least 12 nautical miles from the coast (or 100 nautical miles in outermost regions); the Spanish are notorious for fishing in UK and Irish territorial waters.

The CFP also, and just as controversially, sets quotas for fishermen which mean they can’t collectively catch more than a certain weight of a certain species in certain areas of the sea (Total Allowable Catch – TACs). This is to protect fish stocks from over-fishing and has actually been quite successful, but from a business perspective it does tie the fishing industry’s hands.

The Welsh fishing industry is probably the smallest of the UK’s nations and regions anyway, though they’re seeking to grow – with some measure of success.There’s also an EU Fisheries Fund available to pay for things like vessel upgrades.

EU Structural Funds in Wales

Aside from farming, probably the most visible sign of the EU in Wales are structural funds – money used to help social and economic development in the EU’s poorest regions, which includes West Wales & The Valleys. It used to be known as Objective One, but is now called the “convergence objective”.

It has two main branches:

  • The European Regional Development Fund (ERDF) – To support innovation, digital technologies, research and development, small and medium-sized businesses.
  • The European Social Fund (ESF) – To support people into employment, tackle poverty, invest in skills/education.

The Wales Governance Centre paper states Wales received £396million in EU Structural Funding in 2014, and a total of £1.43billion since 2010. The funding itself is administered by the Wales European Funding Office (WEFO), and the criteria to be awarded funding are often quite strict and narrowly-defined, plus they can only be spent in the West Wales & Valleys region. It also often has to be match-funded by the Welsh or UK governments (for every £1 the fund spends, £1 has to come from the government).

There are other significant schemes, such as:

  • Horizon 2020 – Dedicated to research, science and technology in key sectors such as space, nanotechnology, biotechnology and materials science. This also includes research into important economic and social policy areas like health, transport and the environment. There’ve been criticisms that the programme is too bureaucratic.
  • Trans-European Transport Networks (TEN-T) – A series of road, rail, air and sea routes/networks which are seen as vital to pan-European travel. Although Wales has been left off the map more than once, the A55 and M4/A48 corridors (as well as major ports and rail lines) are considered part of the network. The EU provides funding for the development and upgrade of TEN-T routes and several Welsh projects have been identified as eligible for funding.
  • COSME– A fund aimed at improving competitiveness of small and medium-sized enterprises.
  • Creative Europe – A fund aimed, unsurprisingly, at creative industries. Hinterland/Y Gwyll received €500,000 funding for its third series.
  • Erasmus+ – A pan-EU student exchange programme aimed at providing placements for students abroad to volunteer, study or play sport. In 2014 Wales was awarded €4.1million (£3.1million) under the scheme.

There’s definitely an argument that the funds haven’t had the desired impact in Wales or have been mismanaged. Despite receiving structural funding for 16 years, Wales remains rooted towards the bottom of the UK’s economic tables and the economy of the West Wales & Valleys region has barely changed at all in that time.

A lot of the money has gone to universities and the public sector, with very little going to businesses themselves.

There are examples of “hard infrastructure” being supported by EU funding – like the A465 dualling (Road to Somewhere?).

There are plenty of other examples of money being wasted, not utilised effectively, or even being used for semi-corrupt purposes – the most notorious being the RIFW scandal and some dark corners of the Third Sector (which has done very well out of the European Social Fund) like AWEMA.

EU Immigration & Wales

The only report I can find was dated from 2009 (pdf). It estimated that between May 2004 and December 2008 around 25,000 EU immigrants moved to Wales. They predominantly moved to areas that had previously been associated with immigration (Cardiff, Newport, Wrexham, Flintshire) as well as Carmarthenshire. Some official estimates put the figure of the number of EU residents in Wales at around 80,000 (about 2.6% of the population).

In the 2011 census, one of the key findings was that up to 88% of the increase in the number of people resident in Wales being born outside Wales was down to EU migrants.

According to the Wales Immigration Partnership (pdf), EU migrants have made little impact on unemployment figures as they tend to take up low-paid, hard-to-fill vacancies. Weekly wages for migrant workers were said to be 17.7% lower than the Welsh average.

In addition, Oxford University research (pdf) suggests migrants have paid £2.5billion more into the UK tax system than they’ve take out in benefits and services.

Nevertheless, there has been reported strain put on public services, particularly in Newport and Wrexham. Migrant workers themselves also complained about unscrupulous employers, illegal practices and poor language skills.

In 2013, it was estimated migrants from Western Europe and the 2004 EU ascension countries made up about 2.4% of the workforce. There were actually more migrant workers (2.8% of the workforce) from non-EU countries in Asia and Australasia.