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Volume 615: debated on Wednesday 19 October 2016

The Secretary of State was asked—

Infrastructure Investment

1. What recent discussions he has had with the Welsh Government on future infrastructure investment in Wales. (906612)

I am sure the whole House will join me in marking the 50th anniversary of the Aberfan tragedy this Friday. That event shocked not just Wales but the whole of the country and the wider world. I am sure colleagues across the House will pay tribute to the bravery and strong community ties that pulled the people of Aberfan through the immediate aftermath and provided so much support in the months and years that followed.

Wales is benefiting from millions of pounds of UK investment across the country. We are modernising our rail infrastructure, investing in the North Wales prison, and providing significant funding and support to improve internet speeds. This is a clear demonstration of the Government’s commitment to delivering improvements in infrastructure in all corners of Wales.

Wales receives its funding from the Barnett bloc, but does my right hon. Friend recognise that the UK Government have a part to play in UK infrastructure so that it meets the strategic need in the UK as well as in Wales?

My hon. Friend raises an important point. He rightly underlines the Barnett arrangements, and we were pleased to introduce a funding floor that provides Wales with £115 for every £100 that is spent in England. In addition, we have the electrification of the Great Western main line, North Wales prison is a significant project, and we have broadband roll-out. After all, we are interconnected economies, and the Government are determined to do the best for the whole of the UK.

15. May I first associate myself with the right hon. Gentleman’s appropriate remarks concerning Aberfan? I am pleased to hear the emphasis on infrastructure interconnectivity. The Minister will know that the excellent north Wales growth bid—supported by business, cross-party politicians and local authorities in north Wales—needs financial support from the UK Government. Will the UK Government give financial support to the growth bid? (906626)

I pay tribute to the hon. Gentleman for the work he is doing cross-border with the Mersey Dee Alliance and the all-party group on Mersey Dee North Wales. That resonates with our policy to develop a growth deal that works on a cross-border basis. We are working with those who are developing the north Wales growth deal. We are in negotiations on that. We have recently received the Growth Track 360 bid, and we will analyse that in due course. We are keen to work together, and with the Welsh Government.

10. As my right hon. Friend knows, train passengers from and to my constituency use part of the Great Western railway line. When will the new intercity express trains for the Great Western rail line be operational? (906621)

My hon. Friend highlights the investment in the Great Western main line, and much attention is rightly drawn to the infrastructure of the electrification itself. However, it is fair to say that, as soon as we have electrified as far as Didcot or Swindon, the new trains will be operational, so his constituents, my constituents and those in Wales and the south-west in general will benefit from modern trains well before the infrastructure has been completed.

Roads are critical in infrastructural investment—roads on both sides of the border. What conversations has the right hon. Gentleman had with the Welsh Government about the A5/A483, which goes from Oswestry towards the Wrexham area, given the particular road safety problems in the community of Chirk?

The hon. Lady raises an important point. It is something that has crossed the discussions over the north Wales growth deal, and it underlines the interconnectivity of the region she mentions with Manchester, Merseyside and north Wales. We are working closely with the Welsh Government on their infrastructure plan and the national infrastructure plans for the whole of the United Kingdom. It is important that they dovetail appropriately.

12. The Minister will be aware of a range of infrastructure improvement proposals in the north Wales and Mersey Dee taskforce’s Growth Track 360 plan. Could he advise on the merits of seeking funding via a north Wales growth bid supported by cross-border partners to accelerate the delivery of those elements of the plan that are priorities in the short term, and would he help facilitate that? (906623)

I pay tribute to my hon. Friend for the work he has done on this important issue. I think he drew attention to it at one of the first meetings immediately after the general election, and that started the discussions that have led to the Growth Track 360 proposal. There are growth elements and transport infrastructure elements, and it is important that we ensure that those come together for the benefit of the whole region. I am happy to work with him and with the Department for Transport as we approach the control period 6 considerations that will take place in due course.

I, too, associate my party and myself with the Secretary of State’s comments on the Aberfan disaster.

The Treasury aims to pool local government pension schemes in Wales and England to create wealth funds to invest in infrastructure, with each fund containing accumulated assets of £25 billion. Combined Welsh assets amount to £13 billion, meaning that if the Treasury has its way, Welsh funds will be swallowed up by a cross-border pool. Will the Secretary of State demand a specific Welsh wealth fund so that the contributions of Welsh local government workers are used to invest in infrastructure projects in Wales?

The hon. Gentleman raises a fairly technical area of policy. Appropriate economies of scale are involved in this. I am happy to discuss the details with him. The Welsh Government have made their views clear. However, it is not only about “Welsh money for Wales”—which, on the face of it, would sound good—but about having the economies of scale such that we can access funding elsewhere as well. Therefore, it is not necessarily the right thing, but I am certainly not closed to the idea.

Swansea Bay City Deal

2. What recent discussions he has had with the Chancellor of the Exchequer on whether funding for the Swansea bay city deal will be included in the autumn statement. (906613)

I am very supportive of achieving a deal for the Swansea bay city region. However, this is not about Government telling local authorities what to do; it is about empowering them to bring forward bespoke proposals for their region. I welcomed the announcement in the Budget that we were opening negotiations, but it must be the right deal—a well-thought-out deal that delivers for the whole region.

The Minister will know that Brexit will deal a major body blow to Swansea’s universities and the Swansea region overall. What assurances can he give that in the autumn statement the Chancellor will make a firm commitment to put his money where his mouth is, because we want hard cash, not hot air, to provide the required support for jobs and prosperity in the area?

First, I should correct the hon. Gentleman: the city of Swansea voted to leave, so if there was a body blow to Swansea, it was delivered by people in Swansea. On the city deal, he has to be slightly fairer about what this Government are doing. We have delivered a city deal for Cardiff, with over £1 billion of investment, including £500 million from this Government, and a guarantee that the European elements would be supported. If the Swansea city deal is as good as early indications appear to suggest, it can be supported by this Government in due course.

The Swansea bay city deal aims to turn the region, which includes Neath, into a digital super-hub to boost the local economy, transform energy delivery, and improve health and social care. Will the Minister assure the House that this deal will not face the delays experienced by the Swansea bay tidal lagoon and rail electrification projects?

It is important to point out that this was announced in the last Budget and is being taken forward. However, there is a bottom-up approach. This Government do not take the view that Westminster knows best. We believe very strongly that the proposal should come from the region, and it is fantastic to see the way in which the four local authorities are working together. I am confident that the deal brings something quite special to south-west Wales, but let us see the detail. If the detail is persuasive, the support will be forthcoming.

Rail Electrification

3. What recent discussions he has had with the Secretary of State for Transport on rail electrification in Wales. (906614)

This week will see the completion of the engineering work in the Severn tunnel required for the electrification of the Great Western main line. This is a truly historic occasion and a clear demonstration of this Government’s commitment to deliver a rail investment strategy that will benefit the people of Wales in its entirety.

The Secretary of State has spoken of the Growth Track 360 campaign, which, as the Minister will know, has the potential to transform the north Wales and Cheshire area by delivering 70,000 new jobs over 20 years. Improving the Wrexham to Bidston line, which serves Neston in my constituency, has been identified as the first priority for the team. Will the Minister join in the words of encouragement that we have already heard in agreeing to make representations to the Chancellor ahead of the autumn statement so as to deliver some of this much-needed investment?

I am pleased to echo the words of the Secretary of State, who highlighted the Growth Track 360 proposals. These are made in north Wales or made in north-west England proposals which will try to improve connectivity between parts of north-west England and north-east Wales. We are supportive of the proposals. I am pleased to say that this morning the Treasury wrote to the proposers in north Wales stating that support.

Some £738 million has been ring-fenced for the electrification of the valley lines, although that is not expected to be completed until at least 2022 or 2023. What assurances has the Minister had that the £120 million from the European regional development fund will still be forthcoming for this project before the UK leaves the EU?

The situation is very clear. The proposals for the south Wales metro are part of the Cardiff city deal. They are a significant investment, and they include a contribution of around £110 million from the European fund. My understanding from the Treasury is that it will, if necessary, underwrite that element of the contribution, but if the proposals move forward in a timely manner, the European elements will be funded by the European Union.

I associate myself with the words of the Secretary of State on Aberfan. In 1966, I was the same age as the schoolchildren who were killed in that tragedy. My predecessor Cledwyn Hughes, who was Secretary of State for Wales, said that that was the darkest day of his life when Aberfan lost a generation.

On rail integration, can the Minister tell the House whether he has had discussions with the Welsh Government, and indeed the Irish Government, about connectivity between rail and the port of Holyhead?

I assure the hon. Gentleman, who is a keen advocate of rail links in north Wales, that the Wales Office has had discussions with the Welsh Government, with the Irish Government and, just as importantly, with the Rail Minister at Westminster.

Is it not a scandal that during its 13 years in government, Labour failed to electrify a single mile of railway track in Wales?

That is a most interesting point, but it is not germane to the hon. Gentleman’s responsibilities. A brief sentence in response to the right hon. Lady will suffice.

Does the Secretary of State agree that the Department for Transport and its predecessors have prevaricated over funding rail electrification in north Wales for more than 40 years, and can he give us a definite date for the project to move ahead?

I agree with the hon. Lady that the situation in north Wales has been one of under-investment for a very long time, so it is important to highlight the current investments: £43 million for signalling in north Wales, and a significant investment in the Chester links into Wrexham. It is important to look at the Growth Track 360 proposals carefully and coherently to see how we can improve connectivity through rail in north Wales.

I join the Secretary of State in marking the 50th anniversary of the Aberfan tragedy, and I pay tribute to the spirit and resilience of the people of Aberfan.

Rail passenger numbers into our capital city station, Cardiff Central, are forecast to increase to 22 million a year by 2025, so the expansion of the station, in conjunction with the south Wales metro project that includes EU funding, is critical. Will the Secretary of State explain why the Government have been willing to invest in Birmingham and Edinburgh stations but will not confirm funding to accelerate feasibility work on expanding Cardiff Central? Does he want our capital city to have a station that is fit for purpose, or not?

I welcome the hon. Lady to her place on the Front Bench. The situation in Cardiff is another example of the old-fashioned view that Westminster knows best. We are still waiting for the proposals from south Wales for what needs to be done in relation to Cardiff station. This Government are investing in rail in a manner that simply did not happen under 13 years of Labour government. If the proposal from south Wales meets the Government’s expectations, it will be looked at in a constructive manner.

In April’s Welsh questions, the Minister told the House:

“The European Union makes a massive contribution to the Welsh economy: it is our largest trading partner; it supports thousands of jobs; and it provides significant investments for projects all around Wales.”—[Official Report, 13 April 2016; Vol. 608, c.340-341.]

Four months on from the referendum result, what is the Secretary of State’s Brexit plan for Wales to replace that trade, those jobs and that infrastructure? Where is that plan, and when are we going to see it?

I remind the hon. Lady that the people of Wales voted to leave the European Union. I stand by the comments that I made four months ago, but it is important to point out that the Wales Office has been going around Wales and talking to stakeholders, identifying the opportunities as a result of Brexit and trying to provide reassurance. I hope that the hon. Lady will at least welcome the commitment made by the Chancellor to support European funding projects in Wales and agricultural funding in Wales. Those are underwritten proposals from the Treasury that Opposition Front Benchers should welcome.

Swansea Bay Tidal Lagoon

4. What recent discussions he has had with the Secretary of State for Business, Energy and Industrial Strategy on the Swansea bay tidal lagoon. (906615)

I remain in close contact with my right hon. Friend the Secretary of State for Business, Energy and Industrial Strategy on the proposed lagoon at Swansea bay. This is an exciting project for Wales. I am due to meet Charles Hendry tomorrow to gain an update on the progress of the independent review, and I look forward to reading the findings when he reports later this autumn.

Last week, Sheffield Forgemasters and a host of other industrial companies in the northern powerhouse urged Charles Hendry to back a new tidal lagoon project, so I welcome the Secretary of State’s comments. If the Government will not listen to Wales, will they listen to the industrial north and finally get on with the Swansea bay tidal lagoon project ?

I recognise the hon. Lady’s interest in all things environmental, but Charles Hendry’s review has been seen as a positive intervention. The approach he has taken has been welcomed, as has been pointed out, not only by the lagoon company, local authorities and politicians, but by the business community in south Wales and across the northern powerhouse. We recognise the contribution that it could make, and we are looking forward to his judgment.

While it is important to take the findings of the Hendry review into account, will the Secretary of State press for progress on this exciting project as soon as it reports? The project not only has the potential to deliver clean energy, but will continue to build on the success, vibrancy and ambition that characterises Swansea and Wales.

My hon. Friend, like me, looks forward to the Charles Hendry report. There is no doubt that, as a test project, it has great potential for Swansea bay, but he, like me, has an obligation to the taxpayer to ensure that it works for consumers and taxpayers, and that it represents good value for money for all concerned.

13. Having taken a bloody nose for Hinkley and a black eye for fracking, is it not about time that this Government took an energy decision that enjoys the full support of this House and of the population at large? Why hold up any further the British-made, British-owned tidal lagoon projects that could change the fortunes not only of Wales, but of manufacturing businesses across the country? (906624)

The hon. Lady and I agree that we would like something like that to be developed and to go ahead for the prospects and opportunities it will provide, but we have an obligation to the taxpayer: we have to ensure that it provides value for money. Only in recent weeks, the hon. Lady and her colleagues have complained about the cost of energy for Tata and other energy-intensive industries. It is important that we generate energy in a cost-effective way that suits consumers as well as taxpayers.


I pay tribute to the hon. Gentleman for his time as shadow Secretary of State and thank him for his contribution at the Dispatch Box in that role.

As the House will know, tourism is vital to delivering economic growth in Wales. It has been a great year for inbound tourism in the UK and in Wales, with day visits increasing by 24% in the last 12 months.

Will the Minister pay tribute to the magnificent tourist attractions in Newport—Tredegar House, the wetlands, Celtic Manor, and the splendid Roman baths and amphitheatre—all of which increased tourist numbers last year by up to 70%? Will he confirm that visitors to all parts of Wales always praise the warmth of our hospitality?

I clearly agree fully with the comment about the welcome in Wales. In particular, I pay tribute to the South Wales Argus and its “We’re Backing Newport” campaign, which highlights the fact that Newport is not just a great place to live, but a great place to visit.

With B&Bs such as the Old Rectory on the Lake and the Ty’n y Cornel in Tal-y-llyn under new management and prepared, I hope, to do bar mitzvahs and gay weddings, does the Minister not agree with me that Welsh B&Bs offer a warm welcome to the English?

I agree with my hon. Friend that Welsh bed and breakfasts offer a great welcome, whether people are English, Welsh or any other nationality. They are a key part of the Welsh tourism offer, and they are to be applauded for the work they do.

I associate myself and my colleagues with the tribute to the people of Aberfan on the 50th anniversary.

In a previous life, the Minister was a very passionate supporter of the campaign to reduce VAT on tourism. He has made some very pronounced comments about that campaign in the past. Does he stand by them? More importantly, what representations will he make to the Treasury to make such a case to benefit tourism in our communities?

The hon. Gentleman is perfectly right in saying that I am a politician who advocates lower taxes, so I welcome the fact that this Government have cut national insurance contributions for small businesses and are cutting corporation tax for small businesses. There is a case to be made on VAT for many sectors of the economy, and that case will be made by the Wales Office, but there are no promises, I am afraid.

Does the Minister agree that one dividend of Brexit has been the fall in the pound against the euro, meaning that holidays in Wales are now 15% cheaper for our European friends?

Certainly I am more than happy to agree with my hon. Friend that tourism in north Wales has done extremely well over the past few months. Last week I spoke to hoteliers in Llandudno, who were saying that they have enjoyed 90%-plus occupancy during the summer, so there has been a Brexit dividend in that respect.

Steel Industry

I am in regular contact with my right hon. Friend the Secretary of State for Business, Energy and Industrial Strategy, the First Minister and the Welsh Minister for the Economy. We have not lost focus while these issues have been out of the headlines. The Government leave no stone unturned in supporting the steel sector.

What assurances can the Secretary of State give that, in the event of the completion of a joint venture by Tata Strip Products and ThyssenKrupp, commitments will be made on jobs, investment and the continuation of primary steel making at Port Talbot and across Wales?

It is in the UK’s strategic interests to maintain a steel-making capacity, and so quite obviously to maintain that at Port Talbot. The Government stand ready and waiting to support any bidder. It is a matter for Tata as to whether it pursues the joint venture. We are maintaining a relationship with Tata and other potential bidders that were in discussions earlier this year. We are keen to maintain a sustainable future.

Welsh steel is obviously of the highest quality, and I hope that when Heathrow airport is expanded Welsh steel will be used. In that sense, will the Secretary of State have a word with the Prime Minister to ensure that she stops faffing around on Heathrow expansion and that we have a positive decision as early as possible?

The hon. Gentleman tempts me, but he knows that that decision will be coming soon. He makes an important point about the use of steel in infrastructure projects. The UK Government have already changed procurement rules, making it easier for British steel to be used in contracts. For example, Crossrail, Europe’s largest civil engineering scheme, uses almost entirely British steel.

Order. The hon. Gentleman has a very personal constituency reason for wishing to acknowledge the anniversary of the Aberfan tragedy. Let us hear him with the courtesy he warrants.

Thank you, Mr Speaker. As the representative for Merthyr Tydfil and Rhymney, I too would like to associate myself with the comments of the Secretary of State and the shadow Secretary of State, my hon. Friend the Member for Cardiff Central (Jo Stevens), in relation to the 50th anniversary of the Aberfan disaster, an unimaginable loss for the families and, indeed, the whole community.

One major challenge—if not the major challenge—facing the Welsh steel industry is that its energy costs are far higher than those of our competitors. Despite warm words, little action has been taken. What action is the Secretary of State or the Government taking to bring down energy costs faced by energy-intensive industries?

I welcome the hon. Gentleman and his hon. Friend the shadow Secretary of State to their positions. He makes an important point on steel-making capacity and energy costs. He will be well aware that the energy-intensive industry package the Government have brought forward responded to the demands from the industry and from Tata specifically. We have reduced energy costs to the steel sector by £109 million, which has been welcomed and has put the sector in a much stronger position, with a turnaround in finance from a loss of £64 million to an operating profit of £95 million.

Arriva Trains Franchise

The in-principle agreement between the Welsh Government and the Department for Transport to devolve the Wales and Borders franchise was announced on 21 November 2014. We are engaging constructively with the Welsh Government to enable them to achieve the successful procurement of the next Wales and Borders franchise in October 2018.

Labour has tabled an amendment to the Digital Economy Bill to write free wi-fi into the renewal of any rail franchise. Does the Minister agree that this requirement would be welcomed by passengers in Wales and should be included in Arriva’s next franchise agreement?

This is a fair point. That would be appreciated by passengers in Wales. As part of the devolution package, that is something to be agreed between the Department for Transport and the Welsh Government, but I am sure they will have heard the hon. Lady’s comments.

Rural Broadband

8. What plans his Department has to work with the Welsh Government on extending the roll-out of broadband in remote rural areas of Wales. (906619)

Ensuring rural areas of Wales benefit from our broadband roll-out is one of my key priorities. The UK Government have supported investment in broadband across rural Wales, including £14.2 million in Powys and £13.9 million in Gwynedd. The Secretary of State recently had positive discussions with the Welsh Government’s Cabinet Secretary for Infrastructure and the Minister for Science and Skills on future work to roll out broadband in Wales.

I thank the Minister for that reply. Does he agree with me that superfast broadband is a key driver for successful diversification in remote rural economies, and does he agree that it is time BT Openreach raised its game?

I am sure the mailbox of every MP would highlight the fact that it is time for BT Openreach to raise its game. On the importance of broadband to rural economic development, I can only agree fully with my hon. Friend. In my constituency of Aberconwy we have a call centre in Llanrwst, which is only in place as a result of the broadband roll-out encouraged by this Government’s funding.

In a Twitter message to me, the director of BT in Wales said that the

“vast majority of rural Wales, including Arfon, can already access superfast broadband”.

Does the Minister agree with her?

The “vast majority” is perhaps overstating the case, but the improvement over recent months has been spectacular, with rates of 90%-plus in many rural counties. There is still more work to be done, but in terms of rural broadband we are going in the right direction in Wales and the UK.

The main superfast broadband line passes the community of Crymlyn in my constituency, literally at the bottom of the people’s gardens. Many of these people run businesses from home and need to access substantial documents, but the download speed in Crymlyn would be an embarrassment even in the previous century. When will the Minister, or his Labour confederates in Cardiff, actually do something to remove this huge barrier to prosperity and economic growth?

The hon. Gentleman will be aware of the investment in his own constituency, which is approaching £12 million. There are still issues in relation to broadband roll-out in Wales, but sometimes we have to recognise that what has been achieved is tremendous. We are slightly ahead of the situation in England, which is something we should all applaud. However, I make no bones about the fact that more and faster broadband connectivity in Wales is crucial. The Wales Office will carry on pressurising BT Openreach to ensure that that is achieved sooner rather than later.