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Volume 606: debated on Wednesday 24 February 2016

The Secretary of State was asked—

Cardiff City Deal

1. What discussions he has had with his ministerial colleagues on proposals for a Cardiff city deal. (903619)

The Cardiff city deal represents a once-in-a-generation opportunity to raise growth levels right across the region, securing Cardiff’s position as one of the best capital cities in Europe and a fantastic place in which to do business. Yesterday, my right hon. Friend the Secretary of State for Communities and Local Government and I met leaders from the Cardiff capital region to discuss the city deal and to ensure that progress and momentum are being maintained.

My hon. Friend the Member for Cardiff North (Craig Williams) has long championed the city deal to help deliver even greater success for Cardiff and Wales, but for it to succeed everyone must be as committed to delivering for Cardiff as he and the Secretary of State so clearly are. What assessment has the Secretary of State made of the Welsh Assembly Government’s commitment to this city deal and particularly their commitment to funding it?

I thank my hon. Friend for his question. I discussed the Cardiff city deal proposal on Monday with the First Minister, and I am pleased and reassured that all parties are now strongly committed to it. I think that there are still some questions to be asked about the nature of the financial commitment coming from the Welsh Government, but there is now momentum behind the deal and we look forward to getting it secured as soon as possible.

On financial commitment, last month, I asked the Secretary of State whether his Government would match the £580 million that the Welsh Government are putting towards the Cardiff city deal. Has he got a cheque from the Chancellor yet?

I am slightly surprised by the hon. Lady’s tone. We have already put £125 million on the table to help with rail electrification. The Welsh Government may want to put that into the pot. We have already put £50 million towards the compound semiconductor catapult centre in Cardiff. There is no question mark over our commitment to securing an ambitious city deal for Cardiff. As I have said, there are some questions about the nature of the Welsh Government’s financial support for such a deal, but I am sure that, with the correct attitude, we can work through those issues and land a deal.

I am sure the Secretary of State will join me in welcoming the massive announcement that Aston Martin will be building its new vehicle in south Wales. Does that not emphasise the important nature of the private sector involvement in the city deal, and what is he doing to ensure that the Welsh Government and local authorities engage with the private sector so that they lever in more money?

My hon. Friend is absolutely right. First, though, let me put on record our congratulations to him and his wife, Clare, as it is a few days after the birth of their second child. It is wonderful to see him taking a break from paternity leave to stand here today championing the interests of his constituents in Cardiff. He is absolutely right on two counts. The first is on the success of bringing the Aston Martin deal to Wales, which is a great example of the Welsh and the UK Governments working together in a true team Wales approach. The second is on the importance of business and the fact that it is right at the heart not just of helping to create the city deal vision, but of delivering it as well.

Let me pass on my congratulations to the hon. Member for Cardiff North (Craig Williams). I also congratulate the workforce in the St Athan area—in the seat of the Under-Secretary of State for Wales, the hon. Member for Vale of Glamorgan (Alun Cairns)—and the Welsh Labour Government on their support for that project, the Cardiff city deal and the Swansea city deal. Will the Secretary of State confirm that the support will be there for Cardiff and for the proposal by Terry Matthews for an “internet coast” that links Swansea and west Wales as well, as that is where we will drive the jobs into Wales?

The hon. Gentleman has raised a number of different initiatives all together in one question. The common thread running through them was the nature of partnership working, and we need to see more of that. I am talking about the Welsh Government, the UK Government and local partners all working together. The Aston Martin deal shows the fruit that can be borne when we have the right kind of attitude and commitment from the Prime Minister, the First Minister, the Ministry of Defence and excellent local MPs such as the Under-Secretary of State for Wales. I have discussed the Swansea city deal with Sir Terry Matthews. We are really interested in understanding it in a bit more detail, and we want to work with the Swansea city deal partners as well as our partners in Cardiff.

Is it not the case that Aston Martin moved to St Athan in the Greater Cardiff region partly because of the success of organisations such as Superfast Cymru, which is delivering fast broadband, and particularly because of the skills that now exist in south Wales?

My hon. Friend, who has a great love for and knowledge of Wales, is right. The most important thing for securing big inward investment projects such as Aston Martin, or the continued inward investment of companies such as Airbus, is the excellence of the skills and the workforce that we have now in Wales. We are not complacent about that. There is more progress that could be achieved, but the reason that such companies choose Wales over locations all round the world is the quality of the skills of the workforce, the quality of the infrastructure and the UK Government’s commitment to creating the best environment for economic growth.

Employment Levels

7. What assessment he has made of trends in the level of employment in Wales; and if he will make a statement. (903626)

Employment in Wales is now at a record high, with more people than ever before having the security of a pay packet to provide for themselves and their family. Aston Martin has been mentioned. That is testimony to the significant investment that Wales is attracting.

As a former student of Aberystwyth University, the oldest and the best law school in Wales, I have been pleased to see that more than 80% of employees in mid-Wales are now employed by small and medium-sized enterprises. Will the Minister join me in acknowledging the significance of that thriving community to the economy in Wales?

My hon. Friend is right and he is a true champion of Aberystwyth and of mid-Wales. He will be pleased to hear that there are 3,500 additional small businesses in that area, with an extra 5,500 people going out to work every day since 2010 as a result of the economic stability we have brought about.

Does the Minister agree that the key to further enhancing employment in Wales is diversification and innovation in the rural economy, just as is happening in East Anglia? What specific measures does he have in mind to increase enterprise in Wales’s more remote areas?

My hon. Friend is a great expert on rural issues in relation to the success in his constituency in North West Norfolk, and I pay tribute to that. Employment growth in rural Wales has outperformed employment increases across the whole of Wales, which demonstrates the dynamism and the broad base on which those policies are being implemented. There is a range of initiatives such as the British Business Bank, the start-up loan scheme and the new enterprise allowance scheme on a UK Government basis, and we are keen to work with the Welsh Government to try to diversify further.

Now that it is official Government policy to support membership of the European Union in the referendum, will the Minister and the Secretary of State produce a report that shows the benefit of the European Union to jobs and investment in Wales?

Our position is clear. The Government support the deal that my right hon. Friend the Prime Minister has negotiated. Of course, Europe is important to our exporters and businesses, but it is also important because of the money repatriated from Europe to Wales and the United Kingdom through cohesion funding.

As Aberystwyth’s MP, I reiterate the comments of the hon. Member for Gillingham and Rainham (Rehman Chishti). If we are serious about creating more jobs, and we are, that means real investment in real infrastructure. Why, then, has the Government’s mobile infrastructure project been such a failure and delivered so little for rural Wales?

The hon. Gentleman raises this issue persistently. As a result of representations from him and others, I met Openreach earlier this week, as well as Broadband Delivery UK. I have plans to meet the mobile operators shortly to discuss what more can be done to improve the mobile infrastructure. With the 4G auction, at least 95% coverage will be gained in Wales. That contrasts significantly with the 3G auction and the low percentage that Wales was left with last time.

Will my hon. Friend join me in congratulating my constituent, Mr Sean Taylor, on the further expansion of his company, Zip World? In four years this company has gone from no staff to 220 staff, revitalising the economy of rural north-west Wales, to the benefit of employment and diversification of the local economy.

Many Members will appreciate the difficulties that zip wires can present, but I pay tribute to my hon. Friend, who is a true champion of zip wires and the success and diversification that they bring not only to his own constituency, but to Arfon. We are keen to see the further support and diversification of that business in his area.

Following the excellent news about Aston Martin, I pay tribute to that company, to our dynamic pro-business Welsh Labour Government and to everyone who was involved in securing the deal. As we are discussing trends in employment, and with around 200,000 jobs in Wales dependent on our EU membership, what does the Minister think would happen to trends in employment if we were daft enough to leave the EU?

I am grateful to the hon. Lady for recognising the efforts that the UK Government have made to attract investment, particularly with the major Aston Martin investment in my constituency. I think those comments should be underlined. Of course, the Government do not plan to leave the European Union; the Prime Minister has made the case, having negotiated a strong deal, and we are confident that the British people will support that when the referendum comes.

Welsh Economy

3. What assessment he has made of the effectiveness of steps taken to rebalance the economy in Wales. (903621)

This Government know that supporting our manufacturing industry is vital for rebalancing the economy. Despite challenging global conditions, we have seen 12,000 new manufacturing jobs created by businesses in Wales since 2010, reversing the decline we saw under the previous Labour Government.

I thank my right hon. Friend for that reply. How will small businesses in my constituency and in the north-west of England be able to benefit from the economic recovery in north Wales?

My hon. Friend is absolutely right about the strength of the economic recovery in north Wales. When I travel around Wales, I see that much of what is innovative and exciting is happening in north Wales. We are clear that the economy of north Wales is integrated in a single entity with the economy of north-west England, so there are lots of opportunities for small and medium-sized businesses on both sides of the border to benefit from the emerging northern powerhouse vision. I met the North Wales Business Council earlier this month and, like businesses across north Wales, it is calling out to be part of the northern powerhouse.

Does the Secretary of State agree that the success of the manufacturing industry in Wales, and across the rest of the UK, reflects a growing global demand for our products and is further evidence of the success of the Government’s ambitious Exporting is GREAT campaign?

My hon. Friend is absolutely right; there is enormous and growing global demand for high-quality products manufactured in Wales. The Government have set ourselves really ambitious targets for increasing the level of UK exports, and I am clear that I want to see Welsh business sharing in that export surge. That is why UK Trade & Investment’s Exporting is GREAT roadshow truck will be in Deeside in north Wales tomorrow, explaining to small businesses there what export opportunities there are around the world.

One way to rebalance the economy is to decentralise enterprise and services. Therefore, why are the Government closing tax offices and courts in peripheral areas of Wales, given the impact that has on the economy? They talk about decentralisation, but they centralise services when they have the opportunity.

The hon. Gentleman should understand that the Government have a sacred duty to take care of how taxpayers’ money is spent. Despite all the problems we were left with in 2010, the truth is that we maintain a very strong UK Government footprint in Wales, and the growth in private sector jobs in Wales over the past five years far outstrips any reductions we have seen in public sector employment.

Partial income tax powers are of course a welcome step in helping the UK rebalance geographically, but it is vital that those powers are accompanied by a fiscal framework that genuinely preserves non-detriment to Wales. Given the Scottish Government’s successful struggle to achieve a no-detriment agreement, what specific representations has the Secretary of State received from the Welsh Government on their chosen deduction method, and what is his chosen deduction method? Is it not the case that partial income tax powers make it more difficult to achieve genuine non-detriment?

The hon. Gentleman is right about the need to get the details right—we have just seen a very prolonged negotiation on the Scottish fiscal framework—but that is further down the line. We still have an ongoing discussion with the Welsh Government. They want to avoid taking on any income tax powers whatsoever. They want to avoid the additional fiscal responsibility that that would entail. They are running from having that fuller financial accountability that we believe is really important for Welsh democracy.

14. Will the Secretary of State confirm that the Severn bridge is key to the economy of south Wales, that the debt will be paid back before the April 2018 prediction and that it offers a golden opportunity to reduce tolls for businesses and hard-pressed motorists in Wales? (903633)

My hon. Friend, who chairs the Welsh Affairs Committee, has been persistent and effective in raising concerns about the burden imposed on businesses and motorists in Wales by the very high tolls on the Severn bridge. We have not made any final decisions about what will happen when the private sector concession ends at the end of 2017, but we and the Treasury will be very keen to hear any specific ideas that he and members of his Committee might have.

Last year, the Secretary of State said his ambition was to secure more balanced growth in the Welsh economy, but on his watch we are seeing the loss of hundreds of jobs in our strategically important steel industry. The Government are being painfully slow to heed our warnings on cutting energy costs, and weak and disingenuous when it comes to standing up to Chinese dumping. With EU backing given in December, how much longer will the Government delay the energy compensation package the steel industry in Wales so desperately needs?

I am really disappointed by the slightly tribal and partisan tone the shadow Secretary of State adopts on this issue. If she wants to talk about what has happened to steel jobs under Conservative and Labour Governments, I am happy to do that, and we can talk about the decline in steel jobs on the watch of previous Labour Governments. I am much more interested in getting answers now to the global storm facing the steel industry. This Government have taken a lead in Europe in changing procurement rules and arguing for protection measures against Chinese dumping. We are making sure that the steel industry in Wales has the best possible chance of a sustainable and profitable future.

The Government also have a key role in commissioning large infrastructure projects, which can boost manufacturing and rebalance the economy. Manufacturers across Wales, who are gearing up in earnest to supply the Swansea bay tidal lagoon, share my deep concern that the Government are now planning a lengthy review, which could scupper the project altogether. Will the Secretary of State now give us an unequivocal guarantee that this vital project will not be sunk by his Government?

I notice that the shadow Secretary of State did not stand up and welcome what we saw yesterday—Her Majesty the Queen naming and opening the new Elizabeth Crossrail line, which, by the way, uses 50,000 tonnes of steel made in Wales by Celsa Steel. The hon. Lady should be absolutely welcoming that as a good example of how UK infrastructure investment can drive growth in the steel industry. On the tidal lagoon review, the chief executive of the Swansea tidal lagoon has welcomed it himself. He welcomes the fact that we are looking into this and exploring all options to see whether the project can be financially viable.

13. Does the Minister share my view that a prime mover behind rebalancing the economy is the sense of fairness? Does he agree that the action taken by the Government in freeing generations of people in constituencies throughout Wales is about making the best use of their talents? [Interruption.] (903632)

Order. The House and the nation should have heard Mr Howell, and I fear they might not adequately have done so. [Interruption.] No, it will do for today—as long as the Secretary of State heard. But courtesy dictates.

I did not hear the full question, but what I did hear was a really important point about fairness when it comes to rebalancing the economy. Unlike previous Labour Governments, who stood by while the economy of the United Kingdom became hopelessly imbalanced towards London and the south-east, we do not think that is good enough. We think that there are talents and resources in the north of England, Wales, Scotland, Northern Ireland and the west of England that need to be captured and enhanced to drive growth in the UK.

Air Passenger Duty

This Government have a proud record on devolution in Wales: establishing the Silk commission, devolving landmark new fiscal powers and taking forward the St David’s day agreement through the new Wales Bill. In that agreement, we committed to consider the case for devolving APD to Wales and this work is currently being undertaken and assessed by the Treasury.

Devolving air passenger duty will create a market distortion favouring a state-owned airport against a private one. It will damage the economic viability of Bristol airport and have consequential detrimental effects in the south-west. When my right hon. Friend discusses this with the Chancellor, will he gently reflect on the fact that, had our colleagues not made such great gains in the south-west, there would not be a majority Conservative Government?

I am sure that my right hon. Friend, like me, welcomes the fact that the Government are cutting APD in all parts of the UK. However, let us be clear: I want Cardiff airport to be a success story, but I also recognise that there are serious concerns about the effect APD devolution might have on competition issues in relation to Bristol airport.

Is the Secretary of State aware that north Wales’s local airports are in Liverpool and Manchester? Will he pull his finger out and have meetings to improve connectivity to Manchester airport by rail from north Wales?

I am very aware of the issues that the hon. Gentleman raises. I recently met the north Wales business council precisely to talk about the importance of a rail link from north Wales into Manchester airport. He makes an important point that we are very mindful of.

Workless Households

6. What assessment he has made of trends in the proportion of households in Wales which are workless. (903625)

Wales is getting back to work. There are 58,000 fewer workless households in Wales since 2010. Our welfare reforms are benefiting the people of Wales, helping them into jobs that will provide a regular wage for themselves and their families.

Does my hon. Friend agree that the far-reaching benefit changes and reforms of the welfare state are encouraging people to get back to work and have the dignity of earning a living rather than living a life on benefits?

My hon. Friend is absolutely right. The unemployment rate in Wales has fallen by more than that in any part of the UK over the last quarter. Welfare reform is key to that. We are determined to deliver a low welfare, low tax, high wage economy.

The Institute for Fiscal Studies warned this month that universal credit will tend to weaken the incentive for single parents to be in work. What assessment have the Government made of the effect that rolling out universal credit will have on the number of workless households in Wales?

Welfare reform needs to be taken in its totality. It is about incentivising work but also about increasing wages and lowering taxes. I would hope that the hon. Lady would reflect on the positive nature of welfare reform in turning around communities, families and society.

Large Infrastructure Projects

8. What recent discussions he has had with stakeholders in Wales on future investment in large infrastructure projects in north Wales. (903627)

The Secretary of State and I regularly meet stakeholders to discuss the Government’s plans to deliver improvements in infrastructure across the whole of Wales. For instance, next week the Secretary of State will meet Hitachi to discuss its proposals for a new nuclear power station at Wylfa in more detail.

Can my hon. Friend confirm that bringing HS2 to Crewe six years early, as part of the Government’s northern powerhouse, will directly benefit the people of north Wales and spur more economic development programmes in Wales, as well as in north-west England and Cheshire more generally?

I am grateful to my hon. Friend for raising this issue. He highlights the fact that the HS2 project is truly a national scheme. The Crewe hub offers significant potential to north Wales and to the northern powerhouse. I recently met the North Wales-Mersey Dee alliance rail taskforce, which also recognises the potential of north Wales for the northern powerhouse and the northern powerhouse for north Wales.

Much is rightly made of trends in employment in Wales, but average full-time workers’ pay in my constituency has dropped by 12% in the past two years. What is the Secretary of State doing to bring infrastructure projects, along with science and technology salaries, to Llanbedr and Trawsfynydd in Dwyfor Meirionnydd?

The hon. Lady is naturally a true champion not only of her own constituency but the whole of north Wales. She will welcome the significant investment in the prison in Wrexham and the £20 billion investment that Wylfa Newydd will bring. She has also shown interest in the modular nuclear projects at Trawsfynydd. I recently met the leader of Gwynedd Council to discuss the prospects that could result from my right hon. Friend the Chancellor’s announcement in the Budget making £250 million available for this scheme.

Macur Review

Lady Justice Macur’s report is being considered as a matter of urgency with a view to publication as soon as possible.

Eight young boys in my constituency were abused in the 1980s. They have waited all this time for some conclusions. It is ridiculous that in the past two months Government Departments have been sitting on Lady Macur’s report. What is going on? I understand that redactions are taking place. What confidence can we have that when the report is eventually published it is a true report without interference from Government?

I thank the right hon. Lady for her question. We are discussing something incredibly serious and sensitive. Let me put on record my thanks to her for the tireless work that she has put in over the years to fight for justice for those who have suffered horrendous abuse. We are talking about some of the most shameful episodes in the history of the nation of Wales.

We have the report, and it is being looked at by the Crown Prosecution Service, the Director of Public Prosecutions and the police. Lady Justice Macur recommended to the Government that certain redactions might need to be made. The commitment that I give to the right hon. Lady and the House today is that we will make redactions only where they are absolutely necessary, and we will provide a full explanation of why we are making those redactions. We owe that to the victims.

12. Does the Secretary of State agree that there is concern about attention in the report to the language issue? The only attention that was given to the language issue in the Waterhouse report was to say that the children swore a great deal, as well they might have. (903631)

The hon. Gentleman is getting into a level of detail about the matter that we can perhaps discuss outside this place on another occasion. Perhaps he and I could meet to talk about that.

The Wales Council for Voluntary Action criminal records unit, which provides free disclosure and barring checks for the third sector, will close on 31 May. The last paper application will be accepted this Friday. The WCVA has provided a bilingual service, which will cease on Friday. Does the Secretary of State share my concern about that cut?

The hon. Gentleman knows that I want the Welsh language to flourish and be used on a day-to-day basis. I am not familiar with the case that he has raised, but if he wants to drop me a note, I will make sure that it is looked into fully.