Politics

Which UK regions receive the most EU funding?

And which of them voted for Brexit?

September 07, 2016
Foreign Secretary Boris Johnson waves a cornish pasty as he campaigns for "Leave" in Cornwall in the run-up to the referendum on Britain's membership of the European Union ©Stefan Rousseau/PA Wire/Press Association Images
Foreign Secretary Boris Johnson waves a cornish pasty as he campaigns for "Leave" in Cornwall in the run-up to the referendum on Britain's membership of the European Union ©Stefan Rousseau/PA Wire/Press Association Images
Read more: David Davis doesn't understand

The five areas of the UK that receive the most funding from the European Union all voted "Leave," while four of the five areas that receive the least voted "Remain."

In the wake of the referendum on Britain's membership of the European Union, there have been many attempts to explain why Britain voted for Brexit. With them have come breakdowns of the demographics: who were the people that voted "Leave"? A consensus has begun to emerge on this question: it was the people who themselves have not benefitted from EU membership—who have been "left behind."

This analysis is, in one sense, correct. 58 per cent of households with incomes below £20,000 per year voted for Brexit, while only 35 per cent of households with incomes above £60,000 did. The pattern is clear: poorer people were more likely to vote "Leave."

But here's the weird bit: while those who voted "Leave" are more likely to live in disadvantaged areas of the UK, they often live in areas that receive a large amount of EU funding. This phenomenon—which has previously been dubbed "Brexiting yourself in the foot"—is worth looking at more closely.

The EU gives funding to the UK through various channels, the main ones being the European Regional Development Fund, the European Social Fund and two agricultural funds. It was set to give the UK €11.8bn under the first two of these by 2020, which would then have been matched by a British co-funding organisation such as the Department for Work and Pensions. Let's look at how this EU funding breaks down.

Cornwall gets more funding than anywhere else in Britain: the county has received more than £1bn of aid from the EU over the past 15 years, and was due a further £400m more by 2020. This works out as more than €1000 per person. West Wales was also set to receive more than €1000 per person in EU funding by 2020. The Highlands and Islands of Scotland were set to receive €430 per person, while East Wales was set to receive €370 per person.

Between 2007 and 2013 the north east of England received over £200m of European social funds to provide training and apprenticeships for the unemployed. It also received £320m from the European Regional Development Fund—the two figures combined make £520m. In Tees Valley the EU spent €300 per person. By 2020 the north east was set to receive a further £733m from the EU.

But when we look at which areas of the UK voted "Leave" in the referendum and compare them with the areas that voted "Remain," the pattern that emerges is the opposite of what one would expect. In Cornwall, 56.5 per cent of voters opted for "Leave." Now look at west Wales: in Pembrokeshire the figure was 57.1 per cent, and in Carmarthenshire it was 53.7. Almost all areas in the north east of England voted "Leave," too. Indeed, Newcastle was the only part of the north east that did not.

The most recent tranche of EU funding was given to local enterprise partnerships (LEPs)—organisations that bring together business leaders and local authorities—with the understanding that they would distribute it. When the vote in the referendum is broken down by the areas covered by individual LEPs, the picture is stark. The five LEP areas that receive the most EU funding all voted "Leave." These include Cumbria and Lancashire. In contrast, four of the five LEP areas that receive the least funding voted "Remain." These include Thames Valley Berkshire and Oxfordshire.

Of course, there are regions of the UK which receive lots of EU funding but which voted "Remain"—the Isles of Scilly, to pick an example. But that any heavily-EU funded areas voted "Leave" is remarkable. The fact that so many did is really quite astonishing.

And the weirdness of the situation runs deeper. Upon seeing the figures listed above, one might think something along the following lines. "OK, lots of regions voted 'Leave' despite receiving lots of EU funding. But perhaps they have lost out from EU membership in some broader economic sense. Maybe their economies have benefitted very little from EU membership in terms of, say, exports."

But this argument does not stand up. As John Springford expertly explained in the run-up to the referendum, there is a positive correlation between how eurosceptic a region is and that region's level of economic integration with the EU. It isn't just that some regions voted against the organisation that dishes out the odd bit of cash; rather, they voted against an organisation that is their main economic partner in all senses.

The other potential explanation for this bizarre trend is that regions voted "Leave" despite knowing that it would harm their economies, in order to escape high immigration from the European Union. But this argument does not hold up either. Areas with low immigration—say, Great Yarmouth—were more likely to vote "Leave" than areas with high immigration—like London.

How should we interpret all of this? One potential explanation is that those who voted "Leave" despite benefitting from EU funding made a categorical error of judgement. They decided that they would be better off outside of the EU and were point-blank wrong. This clearly isn't a very charitable answer. But there may be another way to explain these bizarre statistics. Perhaps many of those who voted "Leave" did not see the referendum as being only on the European Union, but as being on the modern world. On this interpretation, "Leave" voters aren't just idiots. Rather, they were crying out for help, and thought that the referendum was their only opportunity to make their voices heard. They then channelled all of their grievances—concerning things like the decline of manufacturing—into it.