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Volume 620: debated on Wednesday 25 January 2017

The Secretary of State was asked—

Infrastructure Developments

1. What recent discussions he has had with (a) Cabinet colleagues and (b) external stakeholders on infrastructure developments in Wales. (908303)

This Government recognise that delivering world-class infrastructure in our transport and digital sectors is vital to improving productivity and driving economic growth. I hold regular meetings with ministerial colleagues and local partners on issues relating to Wales. Earlier this month I convened a mobile summit which brought together key stakeholders from the mobile network operators and the UK and Welsh Governments to explore ways in which we can work in partnership to improve mobile reception for people and businesses throughout Wales.

I notice that the Minister failed to mention the Swansea bay tidal lagoon report. That six-month independent review conducted by ex-Energy Minister Charles Hendry could not have been more conclusive in saying that moving ahead with a pathfinder lagoon at Swansea bay

“as soon as is reasonably practicable”

is a “no regrets policy”. There may be much to digest in the review’s detailed road map for a new industry, but there are no grounds for further delaying the start of that industry. When will the Government give the green light to this crucial infrastructure project?

I am delighted to state that Charles Hendry is in Cardiff Bay today providing more information about his report to the Assembly, and he is being supported there by my hon. Friend the Member for Gower (Byron Davies). The report was comprehensive and detailed on the issues relating to a tidal lagoon. I am sure the hon. Gentleman would agree, however, that any decision must also be good for the taxpayer and good for the electricity end user.

The Minister will be aware of the campaign by the Daily Post newspaper to improve mobile phone notspots. What is he doing to help to improve mobile phone services for voice and data in north Wales?

I pay tribute to the Daily Post’s campaign in north Wales, which has highlighted this issue. That is partly why I was very keen to convene a summit of mobile providers to look very carefully at ways in which we could give them practical support in helping to deal with notspots in Wales. One of the key issues is the planning regime in Wales, which can be much more flexible in ensuring that the money being invested in Wales goes much further and deals with the notspots in all parts of Wales, whether rural or city.

11. EU structural funding has really helped to improve key road routes across Wales. Can the Minister confirm that once we have left the European Union, equivalent funding for projects like renewing the Heads of the Valleys road will continue? (908314)

EU funding has had a clear impact in the hon. Gentleman’s constituency in terms of the Heads of the Valleys road, and indeed investment in the railway infrastructure. The south Wales metro scheme will generate £106 million of support from European funds, although it should be remembered that it is also receiving £500 million of funding from the UK Government. This Government have delivered a fiscal framework to Wales that has been described as both fair and sustainable, and I can assure him that Wales will be protected when we come to the negotiations to leave the European Union.

Happy St Dwynwen’s day, Mr Speaker.

Eighty-four per cent. of Conservative councillors, 83% of Conservative MPs, a former Conservative Energy Minister, both Wales Office Ministers and the Conservative party manifesto all support the Swansea bay tidal lagoon project. The Minister failed to answer the question from my hon. Friend the Member for Ogmore (Chris Elmore), so I will give him another opportunity: when will his Government kick-start the tidal lagoon project?

I restate that this decision will have to be made across Government: other Departments will have to look at the issue. I am sure the hon. Lady would agree that in an age where we are seeing industry in Wales worried about the cost of energy, any deal for the Swansea bay tidal lagoon must not only be good in terms of the tidal lagoon but right for the taxpayer and the energy user in Wales.

Last week in Westminster Hall, the Minister said that

“it is difficult to offer guarantees that”

European Investment Bank

“loans would be supported”.—[Official Report, 17 January 2017; Vol. 619, c. 264WH.]

By that, he meant supported by a guarantee from the Treasury when we leave the EU. What benefits has the European Investment Bank brought to Wales, and how much has it invested in Wales over the past 10 years?

I am sure that the hon. Lady will join me in highlighting the success of the Swansea campus development as an example of European Investment Bank investment in a Welsh context. I am sure that she will also join me in paying tribute to the Treasury and the Chancellor of the Exchequer for securing and guaranteeing EU funding up to the point of departure from the European Union. The key point that she must be aware of is that thus far, this Government have delivered a degree of protection for EU funding in Wales, and in due course further announcements will be made about further funding support in a Welsh context.

Leaving the EU: Business Links

2. What assessment he has made of the adequacy of Wales’s international business links since the UK’s decision to leave the EU. (908304)

5. What assessment he has made of the adequacy of Wales’s international business links since the UK's decision to leave the EU. (908307)

The UK, including Wales, remains the same outward-looking, globally minded country that we have always been. To support Wales’s international business links further, I am jointly hosting a Wales business export summit in Cardiff in early March to ensure that businesses in Wales have full access to UK Government support.

The Republic of Ireland is one of Wales’s most important trading partners, with around 360,000 trucks passing through Welsh ports to Ireland every year. May I encourage my right hon. Friend to get really involved in the discussions about future UK-Irish border and customs controls to ensure that future arrangements not only uphold the peace process with the north, but protect Welsh interests by minimising checks and delays on trucks that use Welsh ports?

My right hon. Friend is a true champion of the port in Milford Haven and the links and benefits that it brings to the Welsh and UK economies, and he has played a significant part in developing it. As we negotiate our exit from the European Union, and the special situation between Northern Ireland and the Republic of Ireland, the Welsh situation is not being ignored. At every Joint Ministerial Committee it has been recognised not only by my right hon. Friend the Secretary of State for Exiting the European Union, but at the Joint Ministerial Committee involving the Prime Minister.

Given the first-class universities in Wales, including my alma mater Coleg Prifysgol Dewi Sant, will my right hon. Friend confirm that he will highlight their expertise as part of his assessment of international business links?

My hon. Friend makes an important point. I have mentioned that the Joint Ministerial Committee involving the devolved Administrations plays an important part, but that does not mean that universities will not have a part to play in influencing the negotiations on exiting the European Union. I spoke to the vice-chancellor of Cardiff University last week. I am happy to maintain a close relationship with my hon. Friend’s former university and to ensure that all universities across the United Kingdom have their say as we negotiate our exit from the European Union.

The Secretary of State’s response to the right hon. Member for Preseli Pembrokeshire (Stephen Crabb) was not good enough, to be frank. We have had the same response to that question for some time now. We are going to have a common travel area, and it is going to impact heavily on Welsh ports. Will the Secretary of State put the case for Welsh ports and meet Welsh Members of Parliament to ensure that that important trade has a Welsh dimension?

I am grateful to the hon. Gentleman for highlighting the issues relating to Holyhead, which are being taken into consideration in our discussions. I will happily meet him and any colleagues he wishes to bring along. The situation in Holyhead and Milford Haven is, absolutely, important to the Welsh and the UK economy, and it has issues in common with Northern Ireland and the Republic of Ireland. We want to ensure that we get a deal that works for all situations.

I am very pleased that the Secretary of State mentioned universities in his response about international business links. Is he aware of the profound concern that is shared by most vice-chancellors, including Professor Hinfelaar at Wrexham Glyndŵr University, about the impact that changes to migration rules will have on students from within the EU and outside it? Will the Secretary of State discuss the matter in detail with those vice-chancellors?

As well as the universities that I have highlighted, I am in close engagement with Universities Wales, which represents all universities, but I am happy to meet any of the vice-chancellors about the situation. Many assumptions have been made about migration controls. Clearly, it is in our interests to ensure that universities can succeed and prosper, and migration and international students are an important part of their model. Controlling immigration does not mean stopping immigration.

I am glad of my right hon. Friend’s concentration on universities in his answers. He will be aware that just before Christmas, Cardiff University school of chemistry was formally presented with a royal warrant, officially awarding the department a regius professorship of chemistry in recognition of the exceptionally high standard of research at Cardiff University. What are my right hon. Friend and the Wales Office doing to make sure that our institutions and professors get such accolades and that we can stand on the international stage?

My hon. Friend makes an important point about the success and the role of universities. The UK Government have a part to play in recognising, championing and promoting that, as well as using Innovate UK money. He is right to highlight the new regius professorship that was awarded to Cardiff University. That underlines its expertise and success in the field of chemistry, and we are determined to ensure that that plays a significant part on the global stage.

As the Secretary of State considers Wales’s business links post-Brexit, will he give the highest priority to the Welsh steel industry, and will he not rule out a trade defence mechanism for steel if that is what is required to save Welsh steelworkers’ jobs?

I thank the hon. Gentleman for raising the steel industry. It is an extremely important industry for communities in Wales, but it is also of strategic importance for the whole of the United Kingdom. Last week, I met all the unions relating to steel, and we discussed the challenges that exist, as well as how the company, the pension trustees, the pensioners and the employees of the steelworks need to work their way through this. The Government stand ready to support the industry—we are determined to find a long-term, sustainable future for the steel industry—and I recognise its importance for Wales and for the UK.

Industrial Strategy

3. What discussions his Department has had with the Department for Business, Energy and Industrial Strategy on ensuring that the Government’s industrial strategy benefits the whole of the UK. (908305)

This Government have put in place an industrial strategy that will work for all people in every corner of the UK. Wales is home to world-leading sectors, be it compound semi-conductors in Cardiff, agri-tech in Aberystwyth or advanced manufacturing in Deeside. We are committed to building on our strengths to create an economy where everyone can share the benefits of our economic success.

One of the most important themes of the Government’s industrial strategy is the determination to ensure that all nations and regions of the UK can benefit from economic prosperity. An important aspect of that is science and research, which I hope the Minister will agree offers real potential for businesses in Wales to prosper and create jobs.

I absolutely agree with my right hon. Friend about the importance of investing in skills and high-tech industries in a Welsh context. I know that our university sector stands ready to support the Welsh economy to ensure that we have such skills.

What representations has the Minister made to his Government about placing steel at the heart of their industrial strategy, and how will the UK Government support the innovative products and projects coming out of Swansea University that will future-proof steel making for many generations?

As my right hon. Friend the Secretary of State has stated, he recently met the trade unions in relation to the steel sector, and one of my first visits as a Minister was to the Tata plant in Deeside, so we understand the importance of steel to Wales. This Government have been unyielding in our support for the steel industry in Wales, and that will continue.

The UK has lacked a strategic approach to industrial policy for many years, and Wales has suffered as a result. What specific measures in the Government’s industrial strategy will be brought in to help Wales?

It is very important to state that the industrial strategy in a Welsh context must be a partnership between the two Governments that Wales has—we have the UK Government and the Welsh Government—and Wales will succeed and prosper if those two Governments work together. I am glad to be able to say to the hon. Lady that in relation to skills for the energy sector, support for the car manufacturing sector and support for the steel sector, the two Governments are working together to ensure the best for Wales in terms of industrial strategy and developing new opportunities for the people of Wales.

As the Minister has said, we have many important employers on Deeside—Airbus, Tata, Toyota—but we also have many companies in the supply chain that are very important. We must not only keep those companies post-Brexit, but encourage more to come in.

I agree entirely with the hon. Gentleman. Deeside is a great success story for the UK economy, not just for the Welsh economy. He is absolutely right that we need to build on that success by drawing in more investment, and that is why the Secretary of State and I will be holding a summit with the Department for International Trade in Wales in the very near future.

One of the biggest infrastructure projects we are about to engage in is the restoration and renewal of the Palace of Westminster. Will the Minister make sure that this is part of an industrial strategy for Wales? We do not have enough people in this country to complete the work, and we need academies in every constituency in the land to give young people the skills they need to work in this building.

The question is certainly part of an ingenuity strategy, on which I congratulate the hon. Gentleman.

I will obviously not comment on the issue of the refurbishment of the Palace, but I agree entirely with the hon. Gentleman about the importance of getting skills that are relevant to the fabric of buildings in Wales, historic buildings especially. I pay tribute to Coleg Llandrillo Menai, which is doing exactly that—training young people not just in building skills, but in traditional building skills as well.

Leaving the EU: Agriculture Policy

We are determined to get the best deal on leaving the EU. We want a world-leading food and farming industry and the cleanest, healthiest environment for generations. Agriculture is clearly a devolved area, and I am keen for Welsh farmers to add value to their products. We have the capacity and scope to be innovative, not only in growing great products and producing great food, but in processing and selling them worldwide.

I thank the Minister for that answer. Will he confirm whether, once the UK leaves the European Union, agriculture policy and funding will be devolved to the regions or remain here with the United Kingdom Government?

It is certainly the case that agriculture policy is currently devolved. Clearly, there will be a repatriation of powers from Brussels to Westminster as a result of the decision to leave the European Union, but there is an ongoing and positive discussion between Westminster and the Welsh Government in relation to where powers will lie. I say categorically that that partnership is essential for the success of agriculture. That partnership must be not only constructive but objective in respect of what works for the farming industry in Wales and the UK.

Many of my constituents farm cross-border and produce excellent, high-quality British agricultural produce. What steps is the Minister taking to ensure there is the widest possible market access for that produce post-exit?

I agree entirely with my hon. Friend, who knows the agricultural sector in north Wales and Cheshire extremely well, and who understands the cross-border nature of much farming in Wales. The key point is that we must be aware that we have a great product to offer the rest of the world. It is essential that we go out and sell that product, which is why the Wales Office is forging such a close relationship with the Secretary of State for International Trade. It is essential that we grow the markets for Welsh products, rather than be defensive about the issue.

Is this not a wonderful opportunity to reform agricultural subsidies to decouple Wales from the system in England that rewards people for owning land and not, as they are rewarded in Wales, for producing food? Should we not end the system of paying millionaires and billionaires up to £1 million each a year, while Welsh farmers have to struggle with small subsidies? Can we have Welsh policies for Welsh farmers?

I assure the hon. Gentleman that the aim of the Government is to have a farming policy that is right for the UK and right for Wales. He was much more positive about our farming industry in a recent Westminster Hall debate and I agree with the comments he made in that debate. It is essential that we support the farming industry in Wales, while moving forward following our exit from the European Union.

Does the Minister agree that Brexit gives us the opportunity to set a new agricultural policy in Wales, starting with positive changes to the common agricultural policy?

I entirely agree with my hon. Friend that, in view of our decision to leave the European Union, it is essential that we develop an agricultural system that works for farmers in Wales and the rest of the United Kingdom. The common agricultural policy was guilty of the fossilisation of Welsh farming, because it encouraged people not to retire. It is essential to look at the problems created by the common agricultural policy while we design a new system for Wales.

12. Sixty- eight per cent of Welsh exports, including those from the Welsh agricultural sector, go to the European Union. Perhaps the Minister can tell us how leaving the single market and the customs union will lead to a better deal for Welsh exporters. (908315)

The hon. Gentleman is absolutely right about the percentage of Welsh exports that go to the European Union, but he should realise that access to the single market is what is now crucial. It was very apparent from the decision to leave the European Union that we will not be a member of the single market. We need to negotiate the best possible access deal with the European Union and I think that will be possible in due course.

Last Friday, I visited Trewen farm in Botwnnog with the Farmers Union of Wales. This dairy farm has contributed over £150,000 to the local economy in the last three years, yet only three years from now Welsh farmers are set to face a perfect storm. Can the Minister reveal what transitional arrangements will be put in place to safeguard our rural economy?

I thank the hon. Lady for her question and the use of the term “perfect storm”. It is an acknowledgement of the press release sent out by the Farmers Union of Wales. I can reassure her that the issue should be about access to the single market, and while the FUW has expressed its concern about the decision to leave the single market, my discussions and meetings with farmers’ unions in Wales, both the FUW and the National Farmers Union, have highlighted access to it as the crucial issue for Welsh farmers.

During Welsh questions last April, the Minister said:

“The extent of Welsh agricultural produce that is exported to the EU shows how important that market is; 90% of Welsh agricultural produce is exported to the EU and we should not risk losing that.”—[Official Report, 13 April 2016; Vol. 608, c. 341.]

Given those comments, will he explain why his Government wish to leave the single market?

At the risk of repeating myself, let me point out that the hon. Gentleman is right that 90% of Welsh farming exports go to the EU, which is why I have repeatedly stated that the issue that farmers in Wales are concerned about is access to the single market. That is the issue that will make a difference to Welsh farmers and towards which the Department and the Government will be working.

I call the hon. Member for Kilmarnock and Loudoun (Alan Brown) and wish him and his colleagues a happy Burns night.

EU Single Market: Jobs

6. What assessment he has made of the potential effect on jobs in Wales of the UK leaving the EU single market. (908309)

7. What assessment he has made of the potential effect on jobs in Wales of the UK leaving the EU single market. (908310)

9. What assessment he has made of the potential effect on jobs in Wales of the UK leaving the EU single market. (908312)

Since the vote to leave the EU, we have seen employment hit record highs, and there are now 4,000 fewer people unemployed than six months ago. Trade with the EU is important to Wales, but it is clear that we need to increase our trade with the fastest-growing markets across the world. It is time for Wales, like Britain, to rediscover its role as a great global trading nation.

I hope the whole Chamber will celebrate Robert Burns today.

This week, Plaid Cymru and the Welsh Government published a White Paper outlining their concerns about Wales and our leaving the EU. What actions will the UK Government take to address the concerns raised by the two largest parties in the Welsh Parliament?

My right hon. Friend the Prime Minister was awaiting the document from the Welsh Government. It was received on Monday, and of course we will work through the details. It will be subject to discussion at the Joint Ministerial Committee on EU Negotiations—the right place for it to be considered and discussed—but much of the language around accessing the single market is not incompatible with what my right hon. Friend the Prime Minister has said.

The Supreme Court ruling yesterday concluded that the Sewel convention was a convention and therefore not a matter on which it could rule. Our friends in Plaid Cymru are moving to table a legislative consent motion in the Welsh Parliament, and the Scottish Parliament will also vote on a legislative consent motion. Does the Secretary of State agree, in the spirit of democracy, that the devolved Governments are best placed to determine the future of the people living and working in our nations? [Interruption.]

It is a matter for the devolved Administrations whether they choose to table legislative consent motions, and yesterday’s judgment was quite clear. The approach of my right hon. Friend the Prime Minister and the whole Government is to engage positively with the devolved Administrations—the Scottish Government, the Northern Ireland Executive and the Welsh Government—but we will also want to engage with other stakeholders in the nations as well.

North Wales has been designated the central maintenance centre for all European F-35 fighters. Can the Minister assure the House that the aerospace companies in north Wales will be given the same assurances as Nissan that leaving the single market will not result in tariff barriers or a loss of access to European skilled labour?

I am delighted that the hon. Gentleman highlights the success of Sealand in winning the F-35 contract. It will be the global repair hub. I was there on Monday celebrating and recognising the effects and the impact that employees had on winning that global contract. The significance should not be understated. It offers positive prospects for the supply chain and that centre for decades to come.

The Prime Minister has talked of a bold new trading relationship with New Zealand. Will the Secretary of State relay to the Prime Minister—she is here, so he can do so directly—the genuine concern of many Welsh upland farmers that they could lose access to the biggest market on the continent in favour of a market, and direct competitor, on the other side of the world?

Welsh produce, and Welsh lamb and beef in particular, is world leading, and there are great opportunities as we exit the European Union to explore and exploit new markets. Hybu Cig Cymru specifically recognised that £20 million could be brought to Wales from accessing the north American market. These are the ambitions that we want to have, and my right hon. Friend the Prime Minister will of course put Britain first in any negotiations.

I am not seeking a running commentary or any detailed negotiating information, but a special deal was cut for the car industry in the north-east. Did the Secretary of State seek a similar deal for the car industry in Wales?

I do not recognise the basis of the question. The automotive sector is exceptionally strong in Wales, partly as a result of the Nissan contract in Sunderland, for which many of the supplier companies are based in Wales. I also draw attention to the great success of my right hon. Friend the Secretary of State for Defence in bringing Aston Martin to Wales. We should recognise and celebrate the fantastic success on that MOD base.

Up to 200,000 jobs in Wales depend on our membership of the European Union, the single market and the customs union. I am not going to go through every sector, but will the Secretary of State seek sectoral deals for important parts of the Welsh economy as we leave the European Union?

It is clear that we want to get the best deal for the whole of the United Kingdom. We want to ensure that the market within the United Kingdom works effectively. After all, the most important market for Wales is the market from within the United Kingdom. The hon. Gentleman can take confidence from the fact that, on the back of this Government’s policy and success, Wales has been the fastest growing economy outside London since 2010.

Order. Colleagues, we are visited today by Speaker Win Myint, the Speaker of the Hluttaw, the Burmese Parliament. He is accompanied by a delegation of his parliamentary colleagues. I am sure the House will wish to join me in welcoming Mr Speaker and his colleagues.