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EU subsidies in jeopardy for county that voted for Brexit

Fishing, farming and tourism are three of the main industries in Cornwall, England - all of them seasonal and at the mercy of the temperamental English weather. That’s partly why the region has, for decades, been dependent on support, including subsidies by the European Union. Yet 56 percent of residents voted to leave the EU during last month's historic Brexit referendum. What will leaving the EU mean for the people of this county? NewsHour Weekend special correspondent Amy Guttman reports from Cornwall, England.

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  • AMY GUTTMAN:

    In spring and summer, tourists come to Cornwall to visit the pretty ports that line this part of the southwest coast of England. It's a five-hour journey by car or train from London, and attracts people for the sea, the surf, and the food — from fish 'n chips to the world famous clotted cream with scones and Cornish pasties, a meat and potato-stuffed pastry.

    Half-a-million people live in Newlyn and the other towns that make up the county of Cornwall. 56-and-a half percent of them voted last month to leave the European Union. Which was a bit surprising, considering this scenic way of life has recently been sustained by EU subsidies.

    Cornwall relies on fishing, farming and tourism – all of them seasonal industries, at the mercy of the temperamental English weather. That's partly why the region has, for decades, been dependent on government support.

    Because Cornwall's economic output per capita is less than 75 percent of the EU average, it receives millions of dollars in EU aid every year.

    Cornwall has received around 90 million dollars a year from the EU with another 660 million dollars pledged through 2020. Those funds are now in jeopardy.

    This is the bidding for today's catch in Newlyn. All the hake, sole, haddock and other fish is sold in an hour. To be trucked to London and across the Channel.

    Fish wholesaler Matthew Stevens supplies top local and London restaurants. Five generations of his family have fished off Cornwall. His father established their fish merchant business in the 1930s.

  • MATTHEW STEVENS:

    I love doing it. I'm not a sailor, mind. This is quite an exceptional trip for me to be on a boat.

  • AMY GUTTMAN:

    Thank you. We're very grateful.

    Stevens relies on a mostly Eastern European staff, rather than Cornish people, to filet and pack his fish. That's one reason he voted to remain in the EU.

  • MATTHEW STEVENS:

    I'd love to employ 80 Cornishmen, you know, but come on guys, where are you? You know, come to me. We've got work here.

  • AMY GUTTMAN:

    Besides skilled workers, the EU has provided Stevens money to help grow his business through a match-funding grant which gave him 45 percent of the money, about $460,000, needed to equip his factory and buy new machinery. In return, Stevens was tasked with increasing revenue and the number of people he employed.

  • MATTHEW STEVENS:

    I've been able to develop my business from a staff of five to almost 90 staff, multi-multi-million pound turnover business but I've been able to do that with the support of Brussels, or the EU.

  • AMY GUTTMAN:

    While Stevens, now 70-years-old, has prospered, many fishermen in Cornwall are struggling. Most voted to leave the EU saying its conservation quotas limit what they can catch and sell and are based on out of date scientific data. The quotas also require them to observe a "discard ban," which forces them to toss back into the ocean any fish they catch above their quotas or else risk fines.

  • BRACKEN PEARCE:

    We've got a really small share of the quota.

  • AMY GUTTMAN:

    23-year old fisherman Bracken Pearce says the quotas unfairly favor the French over the British, limiting the British fishermen to a lower percentage of the regulated fish.

  • BRACKEN PEARCE:

    Now we got 200 kilos of haddock per month. I could take my boat out in the first tow and in four-and-a-half hours I could catch that, and if we was abiding to the discard ban, I would have to bring my boat straight in and tie it up until the next month's boat was allocated and that would put the whole port out of business.

  • AMY GUTTMAN:

    Once the UK exits the EU, Pearce is counting on continuing to sell his fish to wholesalers in Europe.

  • BRACKEN PEARCE:

    They bought our fish before — the European Union — and they'll buy it afterwards. We all want what's best for our fishing industry, because it's what puts food on our table.

  • AMY GUTTMAN:

    As with its fishing community, there is division among Cornwall's farmers, too. 38-year-old Paul George is a third generation dairy farmer who voted to leave the EU.

  • PAUL GEORGE:

    I believe that our government will look after Cornwall just as well as the EU has been looking after it.

  • AMY GUTTMAN:

    George sells all his milk to a European cooperative called Arla, which pays George 20 percent below the price of his production costs because global milk prices have been depressed for years.

    Ironically, an EU subsidy helps him stay afloat. It's called the "single farm payment," Which is paid to a farmer based on how much land he owns. George says the one size fits all approach isn't fair and that the subsidy should be based instead on how much farmers produce.

  • PAUL GEORGE:

    I don't value the basic payment scheme in my business as highly as some other people. However, every little does count at the moment, and no, I wouldn't want to be without a support package. I think it's supporting the less efficient farmers more so than the more efficient farmers.

  • AMY GUTTMAN:

    Rather than a handout, George is hoping milk prices may rise.

  • PAUL GEORGE:

    The EU money is welcomed in any form, of course it's welcomed. I'm just saying to you now that I think the UK are going to survive outside the EU.

  • AMY GUTTMAN:

    Farmer James Hosking wishes the UK did not vote to leave.

  • JAMES HOSKING:

    Tunnels like this were put up with funding from the EU.

  • AMY GUTTMAN:

    His great-grandfather set up Fentongollan Farm in 1893, where today he raises sheep and grows daffodils, broccoli, and other vegetables. Just like fish wholesaler Matthew Stevens, Hosking took advantage of an EU matching grant program to build and extend plant nurseries and upgrade equipment. After investing more than $200,000 of his own money, Hosking received matching funds from the EU on the condition that he increase production and create five full time jobs.

  • JAMES HOSKING:

    For several years, the amount of money we could afford to grow our business was actually being match funded by europe, so we were growing at twice the speed we would have been able to grow at without it.

  • AMY GUTTMAN:

    He created twenty new jobs, and increased plant production five times over. Without EU money, Hosking says his farm would be half the size. Just as important as the grant for him has been the free migration of workers across borders.

  • JAMES HOSKING:

    Today, there are probably about 30 people working here. There are sort of 15 of our local, if you like, Cornish people here and then probably 15 or 20 Eastern Europeans here are the moment. I voted "in." A lot of people here, now said well actually, I was doing it really as a protest. That we were not happy.

  • SARAH NEWTON:

    All of us know the European Union isn't perfect and needs reform.

  • AMY GUTTMAN:

    Figuring out what comes next is part of Sarah Newton's job. She's a Conservative member of Parliament from Cornwall who voted to remain in the EU.

    Beyond subsidies for the farmers and fisherman, EU money paid for new roads and rail line and high speed broadband internet service.

    In Newton's constituency, the towns of Truro and Falmouth deviated from the rest of the county and voted to remain. There, EU funds helped create a yacht production facility, a performing arts center, and converted an old fishing wharf into an outpost for creative and technology businesses.

  • SARAH NEWTON:

    We're seeing investment and growth in the digital economy. Businesses coming here because they can be based from here and work with people all over the world.

  • AMY GUTTMAN:

    Shortly after Cornish voters decided to leave the EU, the County Council sought assurances that EU funding would continue.

    So, what happens now with many of these EU funded businesses and projects?

  • SARAH NEWTON:

    The money that's already been committed, people will receive. The big challenge now, is for me to make sure that the British government actually replace that money.

  • AMY GUTTMAN:

    Do you think it's more than a little hypocritical that this region voted overwhelmingly to leave and the very next day there was an outcry from the Cornish peoples, saying, 'oh, but can we keep the money?'

  • SARAH NEWTON:

    The whole idea of sovereignty was really important and that was more important than the money that Cornwall receives. I personally felt rather disappointed with the leadership of Cornwall council.

  • AMY GUTTMAN:

    Despite being on the losing end of last month's Brexit vote, Newton doesn't believe there should be a second referendum.

  • SARAH NEWTON:

    Now, the most important thing is to stabilize the british economy and negotiate the best possible relationship we can have with the European Union.

  • AMY GUTTMAN:

    The frayed relationship worries Garry Barter, a 27-year old entrepreneur who returned to Cornwall two years ago. He obtained a business degree in a program paid for by the EU at Falmouth University, where many graduates are finding jobs in a developing local hub of internet-based companies.

  • GARRY BARTER:

    Falmouth was almost a ghost town. There wasn't a lot going on there for the younger generation, and now actually, the whole town is thriving.

  • AMY GUTTMAN:

    Barter co-founded Hertzian, a business that uses artificial intelligence to analyze customer feedback, such as user reviews for mobile games. He now has five employees, but Barter fears a Brexit from the EU will weaken a magnet for young talent.

  • GARRY BARTER:

    The growth of the university has been fundamental to us being able to grow. By removing the EU funding, it could really harm the new businesses in the area.

    Once the EU funding drops, it will be up to the fishermen, farmers, and young entrepreneurs like Garry Barter to make the seeds of that investment grow.

  • GARRY BARTER:

    I think If the funding does dry up, and it's not replaced, then yes, I think we will have to look at relocating. We want to create the Cornish jobs and also supplement them and bring new people to the area.

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