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Volume 617: debated on Wednesday 30 November 2016

The Secretary of State was asked—

Leaving the EU

8. What recent discussions he has had with his Cabinet colleagues on the potential effect on the Welsh economy of the UK leaving the EU. (907486)

The Welsh economy approaches EU exit from a very strong position. Since the vote to leave the EU we have seen economic inactivity continue to fall in Wales while employment has risen to a record high. Businesses continue to show confidence in the economy, with new investment across the UK fundamental to prosperity in Wales.

Wealth inequality in the British state hits Wales hard, with Welsh gross value added just scraping 71.4% of the UK average. EU structural funds have been key to combating this home-grown unfairness. Will the Minister guarantee today continued future UK funding to replace in full the lost EU regional money?

The hon. Lady raises an important issue, and I would say that Wales has been the fastest growing part of the UK outside London since 2010. She makes an important point in relation to the future of structural funds. She will also appreciate that they are meant to be a short-term boost to the economy, but after 16 years and after £4 billion has been spent, west Wales and the valleys have 64% of UK GVA. I am sure we need to use this opportunity to be positive and do something better with similar structural support.

Does the Secretary of State’s answer to that last question imply the Government intend to change the agreed priorities for the spending of the structural funds?

The hon. Gentleman will appreciate both that his constituency has experienced some significant falls in unemployment since 2010 and that after all that money has been spent those areas voted in the strongest numbers to leave the EU. The point I am making is that the current programme has not worked and has not fitted those communities. Exiting the EU presents an ideal opportunity to revisit this and look to see what we can do better for the hon. Gentleman’s constituency and other communities in Wales in need.

Does my right hon. Friend agree that the people of Wales voted clearly for Brexit and they do not need to be represented by the SNP or the Welsh Assembly Government who are ignoring their views, but will be pleased to have a Conservative Government and an excellent Secretary of State for Wales who will carry out their wishes?

I am grateful to my hon. Friend for his kind comments, but of course we have a close and constructive working relationship with the Welsh Government and all devolved Administrations because it is in our interests to get the strongest deal for the whole of the UK. After all, as my hon. Friend will recognise, the most important market for Welsh business is the UK market, and getting the best deal for the whole of the UK is in all our interests.

The automotive and aerospace sectors are of enormous strategic importance for the Welsh economy. Given that Brexit probably will not mean retaining full membership of the single market, will my right hon. Friend nevertheless commit to do everything he can to retain full single market-style benefits for those critically important sectors in the Welsh economy?

My right hon. Friend raises an important point. He recognises the strength of the automotive and aerospace sectors, and I would point to some significant major investments the UK has landed. We are all familiar with Nissan investment in Sunderland, but it is equally important to the Welsh economy—Calsonic Kansei in Llanelli is a supplier to Nissan in Sunderland. We want to maintain the most open market arrangements, and the confidence shown by Nissan demonstrates it understands the priority we are placing on that.

This week Hybu Cig Cymru, the Farmers’ Union of Wales and NFU Cymru have all made the overwhelming case in favour of tariff-free access to the EU for our world-class Welsh red meat. What is the Minister doing to ensure the voice of agriculture is heard in government?

The hon. Gentleman raises an important point and the Under-Secretary, my hon. Friend the Member for Aberconwy (Guto Bebb), was at the winter fair in Builth Wells yesterday in Llanelwedd where he met the FUW and the NFU. We are in close dialogue with the farming unions in Wales and across the whole of the UK. Clearly Welsh agriculture is an important part of the Welsh economy and of our export market, and we want to maintain the most open trading relationship possible in its interest.

Welsh agriculture is spectacularly successful in EU markets; 93% of our excellent Welsh beef and lamb exports go to EU countries. What steps is the Secretary of State taking to ensure French, Italian, Spanish and German people continue to eat Welsh meat in the future?

The hon. Gentleman makes an important point. I too want to ensure that those across the European Union and elsewhere have the opportunity to benefit from the excellent produce that comes from Wales, including Welsh beef and Welsh lamb. We want to be global leaders in free trade. We also want the most open trading relationship with Europe that we can possibly get, and that is our determination and focus in our negotiations.

I ran a manufacturing business in south Wales for 13 years, and it is a great place to do business. We manufactured and sold all over the world. Does the Secretary of State agree that the fall in the pound as a result of the Brexit vote makes it much easier for Welsh exporters to increase their sales?

I am grateful to my hon. Friend for his question, because it gives me the opportunity to highlight the fact that Wales now has 37,000 more manufacturing jobs than in 2010. That demonstrates the strength and vibrancy of the Welsh economy. Clearly we want to do all we can to support our manufacturers. The value of the pound will have positive results for some businesses and perhaps present challenges for others, but those exporters who want to grow are clearly in a stronger position.

The Secretary of State referred earlier to the importance of the automotive industry in Wales. Ford announced in September that it would guarantee around a third of the jobs in its 1,800-strong workforce at Bridgend. Those jobs are vital to the local community and to the supply chain in Wales, but we are still concerned about the lack of commitment post-2020. The lack of any plan from the Government for Brexit is exacerbating the uncertainty and causing doubts about the plant’s future, so will the Secretary of State today commit his Government to giving Ford the same deal that they gave to Nissan in order to secure the future of the Bridgend plant and Ford’s presence in the UK post-Brexit?

The hon. Lady has raised an important point. My understanding of the situation is that Ford is continuing with more than £100 million-worth of new investment in the plant. That demonstrates the confidence that Ford has, not only in the Bridgend plant but in the UK economy. This builds on the strength of the automotive sector, which is extremely important to the Welsh economy and to the UK economy as a whole.

3. What assessment he has made of the potential effect of the UK leaving the EU on foreign investment in Wales. (907481)

The Welsh economy remains fundamentally strong, highly competitive and open for business. We are part of a strong United Kingdom, and leaving the EU offers Wales an unprecedented opportunity to forge a new role for ourselves in the world, to negotiate our own trade agreements and to reap the benefits of foreign investment.

What discussions has the Secretary of State had with the First Minister about the potential loss of links and connections that have been built up through organisations such as the European Committee of the Regions, and how will he seek to maintain those connections after Brexit?

The Welsh Government and I have a warm working relationship. Only last week, two Secretaries of State and two other Ministers met at the British-Irish Council that took place in my own constituency of Vale of Glamorgan. Of course we have strong bilateral relationships, and it is right that we use the Joint Ministerial Council to form the basis of the negotiations as we exit the European Union. I want to maintain the warmest and most constructive relationship possible with the Welsh Government, with all the devolved Administrations and with the Crown dependencies.

But does my right hon. Friend accept that this is not just about manufacturing, and that it is not only the exporters of Welsh Black beef who are important? One of the biggest exports for Wales is tourism. People tell me that, with the lower value of the pound, there are more foreign visitors in Snowdonia than ever before and that overseas companies are making more inward investment in Welsh hotels and marketing.

My hon. Friend makes an extremely important point. Wales has a fantastic record of attracting inward investment projects. He has focused on tourism, which gives me the opportunity to highlight the fact that north Wales has been named by Lonely Planet as the fourth top place in the world to visit in 2017. It is the only part of the United Kingdom to have been chosen, and that is something that we should celebrate and market to ensure that more people come not only to the UK but to north Wales.

Inward investment is a key driver of decisions to invest in particular areas, and the manufacturing powerhouse of north-east Wales needs inward investment not only from the private sector but from the Government. Will the Secretary of State put his money where his mouth is and commit the UK Government to matching Welsh Government investment in new infrastructure, including road and rail, in north-east Wales?

The hon. Gentleman shows a close interest in the Mersey Dee area and has shown particular interest in the north Wales growth deal, which my right hon. Friend the Chancellor mentioned in the autumn statement. We are keen to progress it and are waiting for details of the bid. I am sure that the hon. Gentleman will recognise the major success of that part of the world being chosen for the global F-35 repair centre, which will inject billions of pounds over decades into north-east Wales and MOD Sealand. We should recognise and celebrate that.

More than £2 billion of capital investment has been made over the past decade across Wales in social housing, transport, energy, water and education through the European Investment Bank. What plans has the Secretary of State put in place to mitigate the potentially disastrous consequences of leaving the EU on pre-existing EIB loans to organisations and public bodies in Wales? Crucially, what plans does he have to replace the funding that the EIB has been able to provide?

Our negotiations with the EIB will run in parallel with our negotiations with the European Commission. The hon. Lady has a responsibility to try to instil confidence in investment in Wales, not to undermine it. Only last week, the Chancellor announced a further capital injection of £436 million. I would hope that the hon. Lady would want to welcome that, not undermine investment, employment and jobs—it really does not become her.

Inward Investment

Wales is an attractive destination for overseas investment, and the UK Government remain committed to providing certainty and stability for businesses in Wales. Our country has a tremendous opportunity to forge stronger relations with international partners. I am passionate about selling Wales to the world and continuing to increase global investment in Wales.

Does my hon. Friend agree that recent announcements of investment in Wales, such as the F-35 global repair and maintenance hub in north Wales, represent a vote of confidence in the UK’s economy as a whole?

I could not agree more. Such investment is welcome, and I pay tribute to the Secretary of State for Defence for his part in ensuring that that investment came to north Wales. North-east Wales is an engineering powerhouse in the UK economy, and the investment in the F-35 project is welcome and further enhances engineering opportunities for young people in north-east Wales.

At the beginning of this year, FieldMaster Tractors Ltd, a tractor assembly company in my constituency, signed a joint venture agreement with Longhua, a Chinese company, that would have created 40 jobs in my constituency with aims of expanding. Last week, the owner received notification from China that the deal was off due to uncertainty about our future trading relationship with the European Union. Does the Minister recognise that the UK Government’s dithering over Wales’s future relationship with the single market and the customs union is costing jobs now?

I am disappointed to hear that news and would be more than happy to discuss it with the hon. Gentleman—any loss of investment in Wales is to be regretted. He is wrong, however, to talk about dithering. The Government are clear that we want strong trade relations with the European Union and with the rest of the world. Any Chinese investor looking at the UK knows that this country is friendly to investment from all parts of the globe.

13. Will my hon. Friend update the House on the discussions that are taking place to bring inward investment to Wales and to create more jobs and opportunities for young and old alike, and to allow new firms to develop in Wales? (907491)

I agree with my hon. Friend; investment in Wales is most welcome. We need to diversify the Welsh economy. Manufacturing jobs in Wales have increased and the engineering sector is second to none in the United Kingdom. That is based on attracting inward investment. On a recent visit to Deeside, I saw again how Airbus is acting as a catalyst for small business development in north-east Wales. We need a combination of inward investment and home-grown companies that are able to build on the expertise provided by companies such as Airbus.

Some businesses may not invest inwardly in Wales because they would have to pay two apprenticeship levies: the UK Government levy and the Construction Industry Training Board levy. Under the Barnett formula, that will not result in extra funding for Welsh apprenticeships. Will the Minister reassure potential investors that they will be able to claim all levies for training and will be able to use the money for workforce development with local further education providers?

I am surprised to hear that question from the hon. Lady; the apprenticeship levy is important, but the settlement between Her Majesty’s Treasury and the Welsh Government has been welcomed by the latter as both fair and comprehensive. It is therefore essential that she and other Members call on the Welsh Government to make sure that the money allocated through the apprenticeship levy is spent where it is needed.

Given that the UK Government and, in particular, senior Ministers are currently doing their best to offend the international community, it falls to Wales and the Welsh Government to promote inward investment. So will the Minister join me in congratulating the Welsh Government on the role they have played in promoting Wales and securing the highest level of inward investment on record? Furthermore, what support will he give to ensure that this success is sustained following the UK’s exit from the European Union?

I thank the hon. Gentleman for the question. It is important to state that the relationship between the Welsh Government and the UK Government on this issue is very productive. I recently visited Wales with a Minister for International Trade, and the Secretary of State for International Trade will be in Wales on Friday. We work constructively with the Welsh Government to ensure that we sell Wales and the United Kingdom as a good place to do business. We have a strong relationship, which the hon. Gentleman should welcome.

Prison Estate

5. What assessment he has made of the effect of recent changes in the number of prison officers on the prison estate in Wales. (907483)

We are committed to transforming prisons into places of safety and reform. We recently announced a major overhaul of the prison system, and in the autumn statement we announced funding for 2,500 extra front-line officers across the UK.

The Minister will be aware that it is not just numbers of prison officers, but the skill base they bring with them that is important. Parc prison has a wonderful record with its “invisible walls” scheme in building links between prisoners and their families. More than 500 children a week visit their fathers, and 69% of inmates have contact with their families. Will he work with me to get the Treasury and the Ministry of Justice to provide funding so that the scheme carries on after 2017?

I pay tribute to the hon. Lady for the work she does with Parc prison in Bridgend. The relationship she has with Parc prison is indicative of the way an MP should work with such a facility. I pay particular tribute to Parc as a prison that has highlighted the importance of ensuring that family ties are maintained while prisoners are serving a sentence. The good practice shown in Parc should be repeated across the prison estate, and I would be delighted to co-operate with her in pushing this issue forward.

Over the past five years, the number of violent attacks on prison officers in Welsh prisons has risen by more than 138%. What discussions have Ministers had with the Justice Secretary about tackling violence in Welsh prisons?

My right hon. Friend the Secretary of State has regular discussions with the Department in question on this issue. No member of staff working on behalf of the state should be threatened or subject to violence in their workplace, so it is essential that we support prison officers in that context and crack down hard on anybody who is responsible for violence within or outside the prison sector.

I speak as the co-chair of the cross-party justice unions parliamentary group. HMP Berwyn is due to open in less than three months’ time. Given that the National Offender Management Service is committed to ensuring that it gives equal treatment to English and Welsh in Wales, will the Minister tell the House how he is monitoring the language skills of staff in Wrexham? The MOJ has told me that:

“Data on the number of bilingual Welsh and English speakers…is not collected centrally.”

First, I hope that the hon. Lady welcomes the fact that the prison in Wrexham is being built, as it is a significant investment in north-east Wales and a significant opportunity for the north Wales economy. On the Welsh language issue, it is fair to say that the Department responsible has made it clear that the number of jobs being created at Wrexham will reflect the demographic realities in north Wales, and as a result there will be Welsh-speaking staff in the prison at Berwyn. That will be a great improvement on the current situation, where Welsh-speaking prisoners end up in the estate in England.

Order. A lot of very noisy private conversations are taking place. I must advise the House that we have many distinguished visitors here today, not only from across the country, but from Iraq and Egypt. We wish to show them that in our ancient democracy we can, when we try, conduct ourselves with due decorum, which will now be brilliantly exemplified by Mr Nigel Huddleston.

Leaving the EU

6. What recent discussions he has had with key stakeholders on the potential effect of the UK leaving the EU on Wales. (907484)

10. What recent discussions he has had with key stakeholders on the potential effect of the UK leaving the EU on Wales. (907488)

Since the referendum in June, I have had discussions with a wide range of stakeholders across Wales, from the Wales Council for Voluntary Action, to the farming unions, the CBI Wales and the Institute of Directors in Wales, to hear their views on how to secure the best deal for Wales and the UK as we leave the EU. Those conversations are informing my discussions with Cabinet colleagues, as well as with the Welsh Government.

Does the Secretary of State agree that we should not just focus on businesses as we leave the EU? We should also consider the implications for the third sector, charities, local authorities and universities in Wales.

My hon. Friend makes an extremely important point. I have already talked about my warm relationship with the Welsh Government, but of course the UK Government should also have a warm relationship with universities, charity groups and environmental groups, as well as with businesses directly in Wales. The Welsh Government have an important part to play, but we also have a direct relationship with those key stakeholders.

Does my right hon. Friend recognise that there is more than one voice in Wales and not simply the voice of the Welsh Government, who still cannot accept that the majority of Welsh people voted to leave the European Union? We must therefore engage with all Welsh stakeholders and partners who are key to ensuring that Brexit will be a success for everyone in the UK.

My hon. Friend raises an important point. Of course we engage positively with the Welsh Government, and we will continue to do so. I have already had scores of meetings with key stakeholders in Wales. My hon. Friend the Under-Secretary of State for Wales was at the Royal Welsh Agricultural Society’s winter fair yesterday doing that very thing—engaging with Welsh farmers and with Welsh farming unions.

Given the uncertainty over the single market and the Prime Minister’s failure to raise steel when she met the Indian Government recently, what steps will the Secretary of State take in the near future when he meets trade unions representing the steel industry to discuss the impact of the loss of the single market?

I hope that the right hon. Gentleman will do all he can to instil confidence in our ambitions to gain the most open trading relationship possible. He rightly raises steel. I am sure that he will recognise that we are in a much stronger position now than we were back in March. That is a result of reduced energy costs for the sector of £109 million. We have changed the procurement rules, offered flexibility in environmental packages and implemented strong pan-EU anti-dumping measures, which will reduce the threats of imports by more than 90% in a whole range of sectors.

The success of the Welsh red meat sector has meant that £225 million has been ploughed back into some of the most fragile rural communities in Wales. In his meetings, has the Secretary of State heard that message, and will he push the case for access to the single market to protect those very communities?

Like the hon. Gentleman, I have a lot of confidence in the Welsh red meat sector. I am sure that our European nations do not want to go without our high-quality Welsh red meat. We are determined to support our farmers in gaining the most open trading relationship possible, so that European nations can continue to enjoy the quality of Welsh produce.

7. What assessment he has made of the potential effect of the UK exiting the EU on businesses and employees in Wales. (907485)

I recognise that many businesses in Wales have an important relationship with the EU, but, as a whole, Welsh businesses export more to countries outside the European Union. In leaving the EU, we will seek new opportunities for businesses across the UK, including in Wales, as we build on our strengths as an open, dynamic trading nation.

The Minister will know full well that he has not really answered my question. Can he tell us whether his officials have made any estimate of how many jobs in Wales will be lost if the UK leaves the single market and what he and his Government are planning to do about it?

I am somewhat disturbed by the hon. Lady’s comments. Time and again, I hear Opposition parties talking down the Welsh economy. I want to talk up the Welsh economy, as do the Welsh Government. As we start this process, we have fewer people out of work in Wales now than since 2010, and our economy is growing faster than many parts of the UK. She should be talking up Wales, not talking it down.

I am happy to hear the voice of North East Hampshire on question 7. Mr Jayawardena, get in there.

9. North Wales, which is home to the wings of the Airbus A380, has significant opportunities for trade with Europe and the rest of the world. Will my hon. Friend reassure the House that efforts will be dedicated to ensuring that north Wales and its northern powerhouse links will be trumpeted by this Government? (907487)

My hon. Friend is absolutely right. North Wales has a huge contribution to make in terms of employment not just in North Wales but throughout the UK. The Government’s emphasis on having a north Wales growth deal is dependent on linking north Wales to the northern powerhouse. To develop that link, I was pleased to visit north-east Wales and Chester recently with the Minister responsible for the northern powerhouse. There is an appetite in north-east Wales to work on a cross-border basis for the benefit of our local economies.

Will the Minister confirm the completion date of the rail electrification and all the work that needs to be done between Cardiff and Swansea, please?

My understanding is that the work is progressing well. Again, I highlight the contrast between the situation under this Government and the lack of investment in any railway infrastructure between 1997 and 2010.

What is the Minister going to do with preposterous suggestion that the priorities for future support for farmers in Wales should be decided on the basis of the UK, where there are many millionaire and billionaire farmers, rather than on the basis of Wales, where there are small farmers? Will he stand up for Welsh priorities, made in Wales for Welsh small farmers?

I was at the winter fair yesterday in discussions with farming unions and other interested parties in relation to the Welsh agricultural sector. The agricultural sector in Wales wants a settlement that will be good for the sector in Wales and good for the UK. We know that we can produce the best food in all the world, and we need to ensure that we have opportunities to sell it not only to the rest of the European Union but on a global basis. We are confident we can do that with support from this Government.