What I can say to the noble Lord is that we are in new territory. We are leaving the EU and having to construct successor policies and funding streams to deal with what we were accustomed to as a member of the EU. I have tried to explain what the principal strategy underpinning that would be, but as the noble Lord is aware, there are other funding sources. There is the United Kingdom shared prosperity fund, which will be a very important source of the funding streams to which I think he alludes. Before I come on to that, I shall deal with matters raised by the noble Lord, Lord Judd, because they are important.
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In the joint report agreed with the EU and UK negotiators in December last year, we agreed a fair financial settlement with the EU, enabling us to move to the next stage of negotiations. The UK is a significant net contributor to many areas of the EU budget, including the structural funds. We will honour our share of commitments made during our membership but will see the end of very significant sums of money going to the EU every year.
I specifically reassure the noble Lord, Lord Foulkes, that we will continue to benefit from EU programmes under that budget plan. I think that the noble Lord raised specific issues about Cornwall funding. Cornwall and the Isles of Scilly are among the UK’s less developed regions, which benefit from greater levels of structural funds. The Government have guaranteed EU structural fund projects granted before we leave the EU, where they are in line with domestic priorities and offer value for money. The phase 1 Brexit financial settlement, once agreed in the withdrawal treaty, will see the UK continue to receive structural funds until the current programmes close.
I want to make it clear to the noble Lord, Lord Judd, that no UK region will lose out in EU budget funding and anyone who gets European funding can continue to bid for and receive funding until the end of their projects, including for structural fund programmes. That financial settlement, once agreed as part of the withdrawal treaty, will supersede the requirement for the domestic guarantee announced by the Government last year. However, the guarantees already made will stand in the unlikely event of a no-deal scenario. The Government have guaranteed all structural fund projects signed before the 2016 Autumn Statement; they have
also guaranteed structural fund projects signed after the 2016 Autumn Statement and before we leave the EU. So long as they are good value for money and in line with domestic strategies priorities, their funding is assured.
The noble Baroness, Lady Young of Old Scone, raised the future of Interreg funding. The next set of Interreg programmes have not yet been designed, but we will take decisions on participation in future programmes in due course, as proposals are developed. As the Prime Minister said in Florence, the UK is keen to continue to participate in programmes that can benefit both the UK and the EU. I am conscious of time and do not want to dwell on this needlessly but, equally, I want to try to make sure that I provide the information that noble Lords require.
Post leaving the EU, we have an opportunity, and leaving the EU will allow us to develop policy in the funding programmes with the flexibility and innovation required truly to meet the needs of the UK and support our industrial strategy. That brings me to the United Kingdom’s shared prosperity fund, which has been specifically designed to raise productivity and reduce inequalities between communities across our four nations. Unlike structural funds, the shared prosperity fund will be cheaper to administer and much less burdened by bureaucracy. I know that the noble Lord, Lord Foulkes, is impatient to hear more about this, but we have already committed to consult on the precise design and priorities later this year. We will consult widely on the design of the fund and discuss with the devolved Administrations, local authorities, businesses and public bodies how the fund might work. That will give all interested parties the opportunity to contribute their views directly to the Government. As we look at where we can improve on current investment programmes, the devolved Administrations will have valuable lessons they can share with the Government.