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Volume 613: debated on Wednesday 13 July 2016

The Secretary of State was asked—

Rail Links: Wales and the South-west

1. What assessment the Government have made of the adequacy of rail links between Wales and the south-west. (905783)

It is a pleasure to observe the House’s increased interest in Welsh questions today.

The Government are investing a record amount in the United Kingdom’s railways. The new fleet of inter-city express trains which will be introduced next year on the south Wales and Great Western main lines will significantly enhance the travel experiences of passengers in Wales and the south-west.

The money that has been invested so far has made a real difference to our national transport infrastructure, but does the Minister agree that it is important to ensure that we have the right stations in the right places, so that more and more passengers can have access to trains?

I could not agree more with my hon. Friend, who is well known for his campaigning efforts on behalf of rail commuters. The Government’s investment in the railway infrastructure is at record levels. We are seeing the electrification of the main railway line to Swansea, and we are also seeing great investment in signalling in north Wales. That new capacity will be good for the economy of south Wales and the south-west.

As the Minister will know, there is more economic connectivity between south Wales and the south-west than there is between south Wales and north Wales. Will he undertake to speed up the electrification of the railways, particularly at a time when Brexit is leading to considerable uncertainty about inward investment in Wales?

The hon. Gentleman has made a good point about the importance of rail connectivity to economic development, but I do not think it is a case of either/or. I think it is important to have great connections between north and south Wales, but we should also recognise the need for south Wales to be linked with the London area and the south-west, and the same applies to north Wales. As for “speeding up”, I will take no lessons from the Labour party, which failed to invest a single penny in the electrification of any railway line in Wales during a 13-year period.

By stark contrast with what was done by the last Government, what this Government are doing for the Great Western line—the electrification, and the new trains—is remarkable. Will the Minister meet me to discuss the provision of direct trains from Cardiff Central station to London to build on that capacity and investment?

My hon. Friend is a great champion of railway connections between south Wales and London, and it would be a pleasure to meet him to discuss further developments in a Welsh context. I fully agree that the modernisation and electrification of the south Wales main line will greatly enhance the connectivity between south Wales and London, not least the new link to Heathrow airport.

Improving Cardiff Central station is a vital part of all this. Will the Minister update the House on what recent discussions the Government have had with Cardiff council and others about the modernisation and upgrading of the station?

I can confirm that my right hon. Friend the Secretary of State has met council leaders in Cardiff to discuss the redevelopment of Cardiff Central station. The Government have already invested in enhanced capacity in the form of additional platforms, but the process needs to continue. We recognise the importance of the station to the economy of not just the capital city but the wider economic area that surrounds it, and talks are ongoing.

Plans for future south Wales rail links were heavily dependent on EU cash. Will the Minister ask the Treasury to support rail links such as the metro for the future?

The south Wales metro links will clearly be important to the hon. Gentleman’s constituency, but it should be borne in mind that the amount invested in the Cardiff capital region city deal is £1.2 billion, of which less than 8% is currently earmarked as EU funding, and that the Government have already committed £500 million to that development. I think the hon. Gentleman should be talking up the prospects for the economy of south Wales, rather than highlighting the deficiencies that he sees in the current funding arrangements.

EU Referendum: Political Consequences

2. What assessment he has made of the potential consequences for Wales of the outcome of the EU referendum. (905784)

The British people have voted to leave the European Union, and my right hon. Friend the Prime Minister has made it clear that their will must be respected and delivered. We are now preparing for a negotiated exit from the EU, which will involve close engagement with all the devolved Administrations to ensure that the interests of all parts of the United Kingdom are protected and advanced.

Structural funding for Wales is guaranteed until 2020. Given the substantial budgetary savings that will be made after British withdrawal from the EU, can my right hon. Friend confirm that his office will make every effort to ensure that the current level of funding will continue until at least that date?

The Government have a strong record in guaranteeing funds for Wales, most notably the Barnett floor, which was ignored for 13 years by Labour. That demonstrates that we will work hard in prioritising the areas of the UK that rightly need and deserve support.

Has the Minister had talks with major employers in Wales such as Ford, Airbus, GE, Toyota and Tata to find out what their investment intentions are following the vote to leave the EU?

The hon. Lady raises an important question. Within a week of the Brexit referendum I met a number of business leaders in Cardiff and last week I met a number of business leaders in north Wales. I was struck by their pragmatism and approach—the positivity they were showing. One of the most positive quotes was that entrepreneurs “thrive on change.” They recognise that we are not turning our backs on Europe, but opening up new markets across the globe.

Does the Secretary of State agree that every single Government Minister who has spoken on this issue has expressed their desire to ensure spending remains at exactly the same levels in Wales as it always has done, and that that shows this Government’s commitment to the people of Wales?

My hon. Friend makes an important point and allows me to underline once again the positive financial commitments this Government have made to Wales. In addition to the 115% funding for the Barnett floor that we have introduced, there is a £2.8 billion investment in electrification and £500 million for a city deal, on top of a range of other projects—UK taxpayers’ money being invested in Wales on top of the Barnett consequentials.

Given that Wales will no longer receive funding through the European regional development fund, which is allocated on objective needs-based criteria, and that Holtham saw the Barnett floor as a temporary transition measure, what consideration is the Secretary of State giving to developing a clearly needs-based formula for allocating funding to Wales?

There were many campaigns for a Barnett floor but it was only this Government who delivered on that. On European funds, we have not yet concluded our negotiating position, but simply replacing what are currently EU funds with another source from Westminster misses the point: the EU referendum sent out a number of messages, and those areas that receive most EU funds were the areas, sadly, that voted most strongly to leave the EU. We need to look at models of regional aid in a different way.

The debate on our future in the EU was very badly informed. Will the Secretary of State convene an independent inquiry to identify, quantify and publish the losses, and indeed any benefits, to Wales from leaving the EU and the steps he can take, within his powers, to safeguard our national interest?

A European Union unit is being set up in Whitehall, which will consider all the implications for my right hon. Friend the next Prime Minister in order to form judgments and direct Government policy, but we must recognise that if any country can make a success of leaving the EU it is the United Kingdom, with its proud history as a global trading nation.

I did ask about the Secretary of State’s Department. Anyway, I am concerned about the loss of common agricultural policy and convergence funding, and of research moneys to universities, and about the lost opportunities for young people to live, work and study abroad. But also, being Welsh and European, I feel the closing of our horizons towards a parochial little Britainism. What more can he do to ensure the future of our Welsh cultural London bypass to the rest of our continent?

I am disappointed by the hon. Gentleman’s question. He will understand that I have a close working relationship with the Welsh Government and with the First Minister in particular. What is in Wales’s interest is in the United Kingdom’s interest, and I am determined to do everything possible to maintain that positive relationship as we negotiate to leave the European Union.

The Secretary of State’s answers have been predictably vacuous and ambiguous. I want to give him a chance to boost his promotion hopes today by flouting all parliamentary traditions and giving a straight answer. Brexit is perilous to Wales, especially to the steel industry. There will be an immediate loss of £600 million, and there could be further losses later. The simple question—a one-word answer will do—is this: will he guarantee that under Brexit Wales will not lose any of the funding that it has now?

I can guarantee that Wales will get its fair share, through the Barnett floor and all the other means that I have highlighted. My party can give certainty of leadership with a strong visionary negotiating stance as we approach our departure from the European Union. It is quite obvious that we cannot have that certainty of leadership from the Labour party.

Rebalancing the Economy

3. What assessment he has made of the effectiveness of steps taken to rebalance the economy in Wales. (905785)

This Government are taking unprecedented steps to ensure greater and fairer prosperity right across the UK, and the UK Government’s cities and local growth agenda is revolutionising the way in which we achieve this. The signing of the Cardiff capital region city deal, alongside ongoing negotiations in Swansea and early discussions for a north Wales growth deal, is a clear demonstration of our commitment to rebalancing the economy in Wales.

Does my hon. Friend agree that, in my old home area of north Wales, good transport links are vital to rebalancing the economy? What plans does he have to achieve that in order to attract more investment?

My hon. Friend is absolutely right to highlight the importance of transport links for economic growth in north Wales. Last Thursday, I was at a summit in north Wales with the Welsh Government economic Minister and local government leaders. We discussed a proposal for improving rail and road links in north Wales as part of the north Wales growth deal.

Central to rebalancing the Welsh economy are the metro projects and the city regions. Given that during the referendum campaign 13 Government Ministers signed a letter guaranteeing the continuation of EU funding, will the Minister ensure that none of those projects loses out as a result of our leaving the EU?

I think the hon. Gentleman is asking me to give a guarantee in relation to a future Government. That Government will be established by the new Prime Minister from this afternoon onwards. The key point is that the city deal was an initiative that showed the co-operation between the Westminster Government and the Welsh Government. It showed what could be done when Governments work together. The proposed investment in the south Wales metro is something that was not delivered by the previous Government during the 13-year period in which they could have made a difference.

Given the opportunities of the north Wales growth deal for my constituency and for north-east Wales, what steps is the Minister taking to follow the lead of the Treasury to ensure that women business leaders are fully engaged in the north Wales growth deal?

The meetings that we are having in north Wales have been with council leaders, further education leaders and leaders of Welsh businesses, and I am glad to say that they have involved both male and female leaders. The key point is that our approach in north Wales is inclusive and supported by all stakeholders. People realise the potential of north Wales joining the northern powerhouse for the benefit of all the residents of north Wales.

Exports are central to any rebalancing strategy. Unlike the British state, which has a gigantic trade deficit, Wales has a significant trade surplus. It is the best performing component of the UK. What assessment has the Minister made of the number of countries across the world to which Welsh companies export, and the number of trade deals that will therefore have to be renegotiated? Does he not realise that tariff-free access to the single market is vital to the Welsh economy and that—

I thank the hon. Gentleman for his passionate question. I agree with him that access to the market is important for the Welsh economy, but he should also recognise that the growth in Welsh exports has been faster to countries outside the European Union. We need a balanced approach and to ensure that we have access to markets throughout the world, so that Welsh manufacturing businesses, such as Airbus, can carry on with their recent success.

EU Referendum: Regeneration Projects

5. What assessment he has made of the potential effect of the outcome of the EU referendum on regeneration projects in Wales. (905787)

As Secretary of State I am determined to maintain our recent economic success and to ensure that we manage our transition to the new arrangements in a calm and measured way. As we negotiate our way out of the EU, a whole range of decisions will have to be made in due course.

The A465—the heads of the valleys road—runs through my constituency and has historically had a bad safety record—[Interruption.]

Order. I think the people of Merthyr Tydfil and Rhymney at the very least will want to hear the hon. Gentleman.

Thank you, Mr Speaker. With EU funds, the road has been mostly turned into a dual carriageway, but some phases of the work have yet to start. Will the Secretary of State assure me that he will do all that he can and work with the Welsh Government to provide support and ensure that that project and many like it will not be jeopardised by Brexit?

The hon. Gentleman makes an important point. I underline that we remain full, active members of the EU, with all the benefits and obligations that that brings, for at least two years. The project he highlights is one of the more successful EU-funded projects, but not all of them were as successful but had questionable strategies and woolly outcomes. We need to reassess how we support regional aid programmes.

Can the shadow Secretary of State—sorry, I mean the Secretary of State, who is just a shadow in his own party—give an absolute commitment that no regeneration projects will lose out as a result of the disastrous Brexit result?

I can guarantee that for the next two years at least no EU-supported project will lose out. We have of course not yet concluded our negotiating position, and simply replacing one source of funding with another misses the point. The EU referendum sent out a clear message from the communities that are purported to benefit the most from European aid that they simply did not want what was being offered to them.

Tidal Lagoons

6. What assessment the Government have made of the potential contribution of tidal lagoons to energy production in Wales. (905788)

Tidal lagoons have the potential to make a significant contribution to the UK energy mix, and exciting projects in Wales such as the Swansea bay lagoon deserve serious consideration. That is why we have commissioned an independent review of tidal lagoons, and I look forward to reading its findings in the autumn.

The Bristol channel has the second highest tidal rise and fall in the world. We need to harness that power and we can pay for it over a longer period because it will create power for hundreds of years to come.

I thank my hon. Friend for his passionate remarks. He is right that that potential exists, and that is why we have commissioned an independent review that will report in the autumn. It needs to look carefully at the costs and benefits of a potential tidal lagoon. We are supportive of the concept, but we have to ensure that we balance the development against the cost to the UK taxpayer.

As the Minister will know, many renewable energy projects depend on EU funding—[Hon. Members: “Hear, hear!”] Mr Speaker, I did not know I was that popular! Such projects include the Swansea bay tidal lagoon. Will the Minister provide a cast-iron guarantee that the UK Government will meet that funding if it is lost as we exit the EU?

I can assure the hon. Gentleman that he is not that popular.

The complex tidal lagoon issue is being considered—we are looking at all the issues. I am not aware of any EU funding that was committed to the tidal lagoon project, so I can offer no guarantees.

The Hendry review team has met representatives of business and civic society right across Wales. The tidal lagoon infrastructure project is a massive economic opportunity for Wales and my constituency in particular. Will the Minister assure the House that he will emphasise to the Hendry review how much support and enthusiasm there is for this project, and how important it is that this vital scheme is completed as a matter of urgency?

I welcome the hon. Lady to her place on the Front Bench. I fully accept the comments made about support for the concept in the Swansea area, and I can confirm that my right hon. Friend the Secretary of State has already met Charles Hendry to discuss the project. It is not my position to prejudge an independent report, but I assure her that the views of the residents and local authorities in south Wales are known to Charles Hendry.

Farming Sector

7. What recent assessment he has made of the contribution of the farming sector to the economy in Wales. (905789)

The farming sector is the economic backbone of the Welsh rural economy. The total income from farming in Wales is estimated at more than £175 million, but more important is the contribution that Welsh agriculture makes to our rural communities. It is crucial and this Government will continue to support it. [Interruption.]

Does the Minister share my concerns and those of the Welsh farming unions about the administration of the single farm payment scheme in Wales, particularly in relation to cross-border issues? Will he agree to meet the farming unions at the Royal Welsh show next week to discuss this serious issue?

I agree completely with my hon. Friend that any delays in payments to the farming community are problematic. This issue is devolved to the Welsh Government and it is one I have already discussed with farming unions. My right hon. Friend the Secretary of State will be at the Royal Welsh next week, subject to the decisions of the next Prime Minister, and meetings have been arranged with farming unions at that event, which is undoubtedly the premier farming event of the whole United Kingdom.

Welsh, and indeed British, farmers are responsible for producing some of the finest food in the world. Now that we are to leave the EU, what effort is my hon. Friend making to make sure that the Department ensures that all of the UK’s fantastic home-grown produce is promoted to international markets?

My hon. Friend is absolutely right to say that the quality of food produced in Wales is second to none. We produce the best lamb in the entire world, and the contribution of such produce to the economy is crucial. My right hon. Friend the Secretary of State and I have already met business leaders, including food producers, to give them confidence that they can still access international markets following the EU referendum result.

The Royal Welsh show next week in Builth Wells will indeed show the very best of Welsh agriculture. When the Secretary of State goes there, he will get the same question that I have received in the past few weeks, since 23 June: what guarantees are there that the support for the family farm at its current level will remain in the future to sustain the essential rural economy, in west Wales and more generally?

The hon. Gentleman is a champion of the agricultural sector—there is no doubt about that. I can assure him, once again, that the Wales Office has already had meetings with the farming unions. We can certainly offer the guarantee that the current funding arrangements will be in place until at least 2018, but the ongoing support for Welsh farming will be subject to agreements involving this Government, the way in which we exit the European Union and the decisions taken by the future Prime Minister.

Given that the common agricultural policy and rural development programme contribute hundreds of millions of pounds to the Welsh rural economy, what UK exit scenario could possibly best serve Wales?

As the hon. Lady knows, I argued for Wales and the UK to stay within the EU, but the reality is that Wales voted to leave. It is therefore crucial that we support the industries that are dependent on exporting to the EU. We have a quality product offered by Welsh agriculture, so it is imperative that we talk up that market and support the sector to the best of our abilities. Again, I give assurance to the farming unions that the current funding situation is in place until 2018.

Does the Minister agree that leaving the European Union offers a golden opportunity to assess the level of subsidy paid to farming in Wales to see whether that money can be more effectively and efficiently spent in other areas?

We need to look at the way in which Government spend money. If there is to be a funding mechanism in the future for Welsh agriculture, it must be looked at in the totality of Government spending. However, it is pretty important to state that more than 60,000 jobs in Wales are dependent on the agriculture sector, and it would be short-sighted in the extreme for any Government to turn their back on a sector that puts Wales on the international map.