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Economic Rebalancing

Volume 591: debated on Wednesday 21 January 2015

1. What assessment he has made of the effectiveness of steps taken to rebalance the economy in Wales since 2010. (907058)

The previous Government were content to allow the British economy to become dangerously imbalanced with far too much reliance on the financial sector in London and the south-east. During this time Wales became poorer and fell to the bottom of the economic league tables, but we are determined to turn that around and achieve a stronger and more geographically balanced economy through a long-term plan, which is already starting to bear real fruit for Wales.

I thank my right hon. Friend for that answer—and offer him belated birthday wishes.

With regard to the rural economy of Wales, I heard talk when I recently returned to St David’s university college in Llanbedr Pont Steffan of moves to reopen the Carmarthen to Aberystwyth railway line that passes through the Teifi valley. What effect does my right hon. Friend think this would have in reinvigorating the local rural economy, and might it help to rescue my alma mater from the parlous state various vice-chancellors since Lord Morris of Castle Morris have allowed it to descend to?

I thank my hon. Friend for his question and his good wishes. I am a believer in investment in infrastructure. I recognise the important role investment infrastructure plays as a driver of economic growth. We have discussed at previous Wales Office questions the reopening of the Aberystwyth-Carmarthen line. He will be interested to know that I will shortly meet the campaign group Traws Link Cymru to discuss the business case for reopening the line and what support we can give, if appropriate.

I am sure the Secretary of State agrees that one of the best ways of rebalancing the economy is to ensure the interface between universities and the private and public sectors, and I know he recently visited my constituency and the new Swansea university campus at Crymlyn burrows. I am also sure he would wish to join me in congratulating the leader of Neath Port Talbot county borough council, which has developed a wonderful partnership with the university, and Councillor Ali Thomas on the honorary fellowship he will receive next week at Swansea university.

I thank the hon. Gentleman for that question, and I absolutely do concur with his sentiments about the role local partners have played in taking forward the bay campus development. I was there on Friday, at the hon. Gentleman’s recommendation, and it is indeed a truly fine example of partnership-working. We know that success in the 21st century will belong to those economies that can harness knowledge and innovation, and having world-class university sites is part of that.

Has my right hon. Friend noted the recently published report of South Wales chamber of commerce, which notes that confidence in the Welsh economy has been high throughout 2014 and that it looks to remain the same for 2015? Is he as pleased as I am that real business people in Wales are so enthusiastic and keen to talk up the Welsh economy, unlike the hon. Member for Pontypridd (Owen Smith), who devoted his recent article in the Western Mail to talking it down?

I thank my right hon. Friend for that question, and he is absolutely right: the sentiment among businesses in north Wales, south Wales and west Wales is very confident and optimistic, and what they tell me every week as I criss-cross Wales talking to them is in stark contrast to the message we hear from the Opposition, who regularly now talk down the Welsh economy and the efforts of Welsh business.

On the economy, how does the right hon. Gentleman respond to today’s research by the university of Oxford and the London School of Hygiene and Tropical Medicine that only a fifth of claimants who have had their benefits sanctioned and then taken away have found work? Surely this will not rebalance the economy or make it stronger, let alone make it just, and it is diabolically punitive.

I have not seen that report so I am not going to get drawn into commenting on the specifics, but I have seen the latest figures for the performance of the Work programme in Wales, which should give us encouragement that we have a set of measures in place that is helping to bring down long-term unemployment.

The right hon. Gentleman shakes his head, but I encourage him to look at the figures for long-term unemployment in Wales: they are coming down yet again this month, which is positive news. There is much more to be done, but the emerging picture is a very strong and positive one.

Tourism is very important to Wales, and to rural Wales in particular. It has been suggested that reducing VAT on visitor attractions and accommodation, as other EU countries have, would stimulate tourism and result in a higher tax-take. Does the Secretary of State agree with that view?

I am familiar with the VAT arguments from the tourism sector. Of course these matters are the responsibility of the Chancellor of the Exchequer and he keeps them under review, but I would just point out to my hon. Friend the most recent tourism visitor figures, which showed about an 8% increase last year in international visitors coming to Wales. That has to be a good sign that the tourism sector is on the up in Wales.

12. The new year has seen another rise in the tolls on the Severn bridge, and many businesses across Wales tell me that the bridge is now becoming a barrier to business and trade. Will the Secretary of State have urgent talks with the Chancellor of the Exchequer about reducing VAT on the tolls? (907069)

The hon. Gentleman is right to talk about the burden that the increased tolls place on businesses and on visitors to Wales. We recognise that that is happening. They are, for example, a major burden on the small vans crossing the bridge. I have asked the Under-Secretary of State for Wales, my hon. Friend the Member for Vale of Glamorgan (Alun Cairns), to lead a body of work to look into the options for the Severn bridge, and he is having discussions with the Department for Transport. We also look forward to hearing the views of Members on both sides of the House.