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Volume 628: debated on Wednesday 6 September 2017

The Secretary of State was asked—

Economic Opportunities: South Wales and the South-west

1. What steps his Department is taking to foster economic opportunities between south Wales and the south-west. (900689)

I am keen to strengthen the relationship between south Wales and the south-west. After all, Bristol is the most productive city in England outside of London. Abolishing the Severn tolls will strengthen the links between communities and help to transform the joint economic prospects of south Wales and the south-west of England.

Will the Secretary of State be a strong voice in Cabinet not just for Wales, but for the regions of our country, especially for places such as—oh, I don’t know—Cornwall? Will he also make sure that the shared prosperity fund is distributed fairly and on the basis of genuine need?

I am grateful to my hon. Friend for his question because his area, like large parts of Wales, benefits from the current European Union structural funds. The shared prosperity fund offers great prospects of a much more streamlined approach to supporting some of the most needy parts of the United Kingdom. I am determined to ensure that the shared prosperity fund is a much more efficient delivery system with fair distribution around the UK—to serve my hon. Friend’s region, as well as Wales.

What would have strengthened Wales’s economic development links was the electrification of the railway between Cardiff and Swansea, which the previous Tory Prime Minister described as “vital”. By scrapping that, have not this Tory Government once again let down Wales?

I am sure that the hon. Gentleman recognises that advances in bimodal technology mean that electrifying the line between Cardiff and Swansea would not save passengers any journey time. In fact, there would be significant disruption and delay, adding costs to travellers and businesses alike without any time saving. The advances in bimodal trains mean that we can take the most modern fleet of trains further in west Wales than we would otherwise with solely an electrified railway.

The scrapping of the Severn tolls is a huge benefit to businesses across Wales. Does my right hon. Friend agree that it is also of vast benefit to businesses in places such as Wiltshire, where HGV operators have been paying £20 a time to get across the Severn? All of a sudden, they will be able to do business in Wales much more profitably.

My hon. Friend has rightly recognised that scrapping the Severn tolls is a significant boost not only to the south Wales economy, but to the economy of the south-west of England. He welcomed it along with the South Wales chamber of commerce, Business West and many others. It seems that the only people who have not welcomed the scrapping of the Severn tolls are the Labour party and the Welsh Government.

Further to the Secretary of State’s first answer, will he give a categorical commitment that all areas in Wales that are in receipt of European structural funds will continue to be eligible in the near future?

The UK shared prosperity fund can do even more because we will not have the same restrictions that the European Commission puts on European structural funds. It hardly makes sense that some of the most deprived parts of Wales are excluded from the European structural funds map as it stands because of European rules. The UK shared prosperity fund allows us to introduce a much more efficient and responsive scheme.

One project that could provide significant economic opportunities on both sides of the Bristol channel is the provision of a regular ferry service between Ilfracombe in my constituency and south Wales. It has been considered by a commercial company. What support could the Wales Office give to that idea?

I will happily meet my hon. Friend to discuss the prospects. Like me, he recognises the major economic opportunities of binding the regions together. Between the south-west of England and the south Wales economy, we have one of the largest digital clusters and one of the best cyber-security clusters. We can do more to encourage economic growth, including the sorts of subject I have mentioned and tourism, which would benefit from the Severn crossing we have talked about.

Transport Infrastructure

2. What discussions he has had with Cabinet colleagues on transport infrastructure in Wales in the last 12 months. (900690)

I hold regular discussions with Cabinet colleagues and the Welsh Government on improving transport infrastructure in Wales. The UK Government are investing significant sums in infrastructure, delivering improved journey times for passengers on the latest trains. This will provide tangible benefits to people and businesses in south Wales and boost access to jobs and new opportunities.

Has the Secretary of State specifically discussed with his Cabinet colleagues funding for the redevelopment of Cardiff Central station in my constituency? Will there be redevelopment funding—yes or no?

I am grateful to the hon. Lady for the question. Yes, I have discussed with Cabinet colleagues the need for investment in new stations in Wales. There is the prospect of new stations, and there is the prospect of further investment. I have met Cardiff Council to talk about that. I have spoken about it to the Welsh Government. I am keen to explore the opportunities that exist there, and also the opportunity to attract private investment, so I have also spoken to the private developer around that site.

Returning to the subject of electrification, it is true that the bi-mode trains are good, but they are a second-best solution. However, looking to the future and further rail infrastructure investment in Wales, does my right hon. Friend agree that there are major questions to be asked about Network Rail’s ability to deliver projects on time and control its costs? What more can be done to create a more competitive and cost-effective environment for rail infrastructure investment in Wales?

My right hon. Friend makes an important point about the efficiency of Network Rail. Earlier this year, the Public Accounts Committee called on the Government to reassess the case for electrification on a section-by-section basis, partly as a result of the increased costs that have been delivered by Network Rail. However, to improve rail access to west Wales—to Pembrokeshire, Carmarthenshire and other places—we have the opportunity to explore opportunities for new stations, which could well deliver bimodal trains on a regular basis to parts of Wales that do not access fast trains at the moment.

12. Following a delegation I led in 2014 of four councils, two universities, many AMs and MPs, industry and Admiral, the then Prime Minister, David Cameron, pledged to extend electrification to Swansea, saying it would have a huge economic impact on developing employment in an area of neglected infrastructure, so will the Secretary of State stand up to the Prime Minister, as the previous Secretary of State did, and deliver the promises of the previous Prime Minister on electrification, which we so urgently need? (900700)

That was far too long. I will not call the hon. Gentleman again in a hurry if he is going to be so long-winded. He has got to do better than that.

I hope the hon. Gentleman will recognise that the new, most modern trains will be available and in service in Swansea within a few weeks. Swansea will benefit from the latest, most modern trains and from 15 minutes of saved journey time when the project is complete. There would be no time saving—in fact, there would be significant disruption to Swansea—if we continued with the electric-only model he seems to be advocating.

Is it not the case that Swansea’s connectivity will be improved by the new Kingsway project, which is creating a digital district? Is it not a shame that Opposition Members do not recognise this important move? Perhaps they do not know what a digital district is.

My hon. Friend has great expertise in all things Welsh, but particularly in relation to digital projects and the Kingsway project he talked about. The Swansea Bay city deal is an exciting project that will complement the private activity that is taking place, and that will improve connectivity by digital means, as well as rail connectivity, with new trains in operation very soon.

Thank you, Mr Speaker. I love the new haircut and the tie. You look great.

Before the summer recess, the Transport Secretary—the Secretary of State’s Cabinet colleague—sneaked out news that the UK Government would break their promise to electrify the main line from Cardiff to Swansea. People in Wales are now rightly asking whether the Government can even be trusted to deliver electrification as far as Cardiff. Will the Secretary of State promise that that electrification will go ahead and not join the ever-growing list of broken promises the Government have made to the people of Wales?

The hon. Lady will be well aware that work is under way on electrification to Cardiff. The bimodal trains will affect service times and when the project is completed it will be of major benefit not only to Cardiff, but to Swansea. The major advantage of the bimodal trains means that we can take the latest rolling stock further in west Wales, whereas the electric-only project would have meant that any benefits stopped in Swansea.

Funding in Wales

3. What discussions he has had with Cabinet colleagues on whether additional funding announced for Northern Ireland in the Government’s deal with the Democratic Unionist party will have consequences for funding in Wales. (900691)

The agreement with the Democratic Unionist party is about delivering for the whole of the United Kingdom so that we can get on with our plan to get the best Brexit deal for our country and create an economy that works for everyone. It is part of the Government’s commitment to support growth across all parts of the UK, including commitments to investment in city deals in Wales and the introduction of the Barnett floor to provide the Welsh Government with fair funding for the long term.

Given the cash deal with the DUP to prop up the Government, did the Secretary of State demand an increase for Wales under the Barnett formula, or was he simply sidelined?

I remind the hon. Gentleman that the Secretary of State and I have been successful in achieving city deals for Cardiff and Swansea, and we are working towards a north Wales growth deal as well. That additional funding from Westminster was not subject to any Barnett consequentials with regard to any other part of the United Kingdom.

Does my hon. Friend agree that last year’s fiscal framework agreement secures long-term, needs-based funding for the Welsh Government, and that that can act as an enabler for improved public services across Wales?

I thank my hon. Friend for her question. She is absolutely right: this Government have delivered a fiscal framework for Wales that was called for for 13 years, when the Labour party did absolutely nothing. That fiscal framework gives certainty of funding for Wales and the people of Wales, and it will be beneficial to the development of the Welsh economy.

The Secretary of State and the Minister have been having some problems with the Conservative party in Wales. Does the Minister agree with its leader, who said:

“Any potential incentives considered for one nation in securing the majority must also be considered for Wales”?

When are the Secretary of State and the Minister going to do their job and at least follow the line of their leader in Wales on securing additional funding for the people of Wales?

The leader of the Assembly group in Wales has the right of his own position, but the situation is very clear: this Government’s commitment to Wales is unprecedented. We delivered a fiscal framework when the Labour party did nothing. We have delivered city deals for Cardiff and Swansea, and we will deliver a growth deal for north Wales. This Government’s track record is one of additional investment to Wales, which needs to be matched by the Welsh Government.

As part of their arrangement with the DUP, the UK Government will contribute £150 million over two years to the improvement of broadband in Northern Ireland. As I am sure the Minister will be aware, of the bottom 10 UK constituencies for average download speeds, more than half are in Wales. What discussions has he had with Cabinet colleagues to ensure similar funding to improve broadband infrastructure in Wales?

I welcome the hon. Gentleman’s question and I welcome him to his place. The situation is very clear: constituencies such as Ceredigion and my own of Aberconwy have lagged behind in broadband connectivity in a Welsh context. He will be aware that broadband roll-out in Wales is the responsibility of the Welsh Government. It is interesting to note that Labour constituencies in Wales were prioritised over constituencies such as Ceredigion and my own of Aberconwy.

The May magic money tree, celebrated by the Tories during the general election, has been found planted and flourishing in Northern Ireland. Meanwhile, Wales withers under Tory austerity. Some Tories have taken a principled stand on the use of pork-barrel bungs to Northern Ireland. The Tory Secretary of State for Scotland said that there should be no “back-door funding”, and the Tory leader in Wales, Andrew R. T. Davies, said:

“Any potential incentives considered for one nation…must also be considered for Wales.”

When is the Secretary of State for Wales going to do his job and stand up for Wales?

I welcome the hon. Gentleman to his new position on the Front Bench, and I welcome him back to the House. I will repeat the comments that I have already made. For 13 years between 1997 and 2010, he was a Back Bencher when there was a Labour Government in this place. That Labour Government did not deliver any change to the Barnett formula, and they did not deliver a fiscal framework for Wales. This Government are delivering for Wales, and we will deliver a north Wales growth deal, which will be beneficial to his constituents.

Hendry Review: Tidal Lagoons

4. What discussions he has had with the Secretary of State for Business, Energy and Industrial Strategy on the date of publication of the Government response to the Hendry review on tidal lagoons. (900692)

The Wales Office has had close discussions with ministerial colleagues following the publication of the Hendry review. The lagoon at Swansea is an exciting project, but it is essential that it delivers value for money for the energy consumer and for the taxpayer.

It is nine months since the Hendry review strongly endorsed the tidal lagoon at Swansea, where the rise and fall in the tide is the second highest in the world. It would unlock power for generations, not only on the Welsh side but on the other side of the Bristol channel. When are Ministers going to make a decision?

My hon. Friend is undoubtedly a champion for this new technology. However, it has to be stated on record that although the Hendry review was supportive of a tidal lagoon in Swansea, no real financial issues were dealt with in that report. It is necessary that we make the right decision not just in terms of the concept of a tidal lagoon in Swansea, but for the energy price that the consumer will pay and for the taxpayer. We will make the right decision in due course. [Interruption.]

Order. There are far too many noisy private conversations taking place in the Chamber. I want to hear the views of the hon. Member for Ynys Môn (Albert Owen) on the matter of tidal lagoons.

As has been indicated, the Hendry review was set up by the Conservative party, and the framework to finance these big projects was set up by the Conservatives. It is time, now, to stop talking and start delivering for Wales. I urge the Wales Office to stand up for Wales on this project and deliver for Wales.

The hon. Gentleman is undoubtedly a champion of energy projects across Wales and, indeed, in his own constituency of Anglesey. He will understand, as I do, that such decisions must be right in relation to the costs for the taxpayer and the energy consumer. We will ensure that the decision, when it is made, takes all issues into account, and that it is right for the energy consumer and the people of Wales.

Will the Minister make renewable energy in Wales a priority so that it can play its full part in delivering our important goals on energy security and tackling climate change?

The development of energy policy in Wales is about energy security. It is about securing our energy supply for the future, which is why I and my colleague in the Wales Office are always involved with projects such as the new Wylfa power station in Anglesey. We are looking at small modular reactors for parts of Wales, and we are, indeed, still looking at the tidal lagoon in Swansea.

Wales has a once-in-a-generation opportunity to become the world leader in tidal lagoons. The Swansea Bay tidal lagoon alone will generate 2,000 jobs and contribute £300 million to the Welsh economy during its construction. Welsh Labour MPs, the Welsh Labour Government and many public faces and campaigners have declared that they “Love the Lagoon”, so why are the Government refusing to publish their response to the Hendry review and, in so doing, putting the project at risk?

At the risk of repeating myself, I have to say that the hon. Lady highlights the fact that there is support for the concept in Wales—indeed, there is. But she also needs to be honest about the fact that the Labour Government in Wales, Labour MPs from Wales and Labour Assembly Members from Wales have highlighted the danger of high energy prices for the steel industry, for example. We need to make a decision that is right for industry in Wales and for the Swansea Bay tidal lagoon, but we need to do that on a calculated basis, looking at the facts. That is what we will do.

Renewable Energy Projects

The Government are committed to supporting renewable energy to deliver more secure, cleaner energy. For example, in March we gave consent for the Glyn Rhonwy pumped storage project, which will support other renewable technologies by capturing and storing excess energy from solar or wind. It will support 250 full- time jobs at peak construction, and it is a great example of the essential role that Wales plays in energy supply.

Following on from questions from the hon. Member for Tiverton and Honiton (Neil Parish) and my hon. Friends the Members for Ynys Môn (Albert Owen) and for Neath (Christina Rees), the issue of the tidal lagoon does need a response from the Government. It is eight months since the review. Will the Minister say now when the Government will publish their response? There is a very real risk that the investors that are needed to fund the project will walk away unless a decision is made very soon by the Government.

In the previous Parliament, the hon. Lady was an Opposition Front-Bench Treasury spokesman, so she will be aware that we need to analyse the benefits and costs of a tidal lagoon. The decision will be made and announced in due course by the relevant Ministers.

There is great support for the tidal lagoon in my constituency, where GE Energy would manufacture the turbines. Is the Minister concerned that our lead in this sector might be lost if we do not make a swift decision?

Having read the Hendry review, I am aware of the technology’s possible benefits to industry across the UK. That is why we are giving such serious consideration to the report produced by Charles Hendry.

Community hydro schemes throughout Wales have faced business rates increases of up to 900%. In Scotland there is 100% relief and in England there is a cap, but Labour Ministers in Wales are sitting on their hands. I am told that the basic problem is made here in London because of the regulations. Will the Minister meet me and representatives of the sector to seek a full and quick solution?

The hon. Gentleman’s constituency, like mine, has a number of hydro projects, and I would be more than delighted to meet him to discuss where the problems lie. My understanding is that the problems lie in Cardiff, with the Labour Government, but I am more than happy to meet the hon. Gentleman to make sure that we deal with this.

Exiting the EU: Welsh Economy

6. What discussions he has had with the Secretary of State for Exiting the European Union on the potential effect of the European Union (Withdrawal) Bill on the economy in Wales. (900694)

I have regular discussions with my right hon. Friend the Secretary of State for Exiting the European Union on how all aspects of our exit from the EU will affect Wales. The European Union (Withdrawal) Bill will maximise certainty to individuals and businesses across Wales and the rest of the UK.

Fifteen months after the referendum result, progress on Brexit is still too slow. About two thirds of Welsh exports go to the European Union and thousands of Welsh jobs depend on this trade, so what is the Secretary of State doing to ensure that our Welsh economy is not wrecked by a cliff-edge Brexit that would damage these vital ties?

The hon. Gentleman will be well aware that the European Union (Withdrawal) Bill will be debated tomorrow. I hope that he will support that Bill because of the certainty and security it provides by closing loopholes and ensuring that we have appropriate frameworks in place. Those in themselves present the issue of a cliff edge that he mentioned.

Since the referendum result, we have seen record inward investment in Wales, record levels of employment and a proposal to scrap the Severn bridge tolls. Does that not show that under the Conservative Government the future for Wales is very good indeed?

I am grateful to my hon. Friend for his question. He is a passionate campaigner for not only the UK and Wales, but the benefits of leaving the European Union. We want a stronger, fairer, more united and outward-looking Union, and Members on both sides of this House have a role to play in that.

One hundred years ago, y Gadair Ddu—the Black Chair—was posthumously awarded at the Birkenhead Eisteddfod for Hedd Wyn’s awdl “Yr Arwr”. I would like to congratulate the poet’s nephew Gerald Williams and Parc Cenedlaethol Eryri on safeguarding for Wales the family farm, Yr Ysgwrn, which will be opened officially today.

This month also celebrates the referendum 20 years ago that brought devolution to Wales. The European Union (Withdrawal) Bill is a bare-faced Westminster bid to take back control against the will of the people of Wales. Will the Minister tell the House what his Government will do when Wales denies consent to the Bill later this year? Would it not be political folly to press ahead in such circumstances?

Order. I am most grateful to the hon. Lady. If colleagues could show some sensitivity to time, that would be appreciated.

I would certainly underline many of the points that the hon. Lady made in relation to Hedd Wyn, whose former home is being opened today.

The hon. Lady will recognise that withdrawal is about creating the smoothest form of exit that we can possibly deliver. My right hon. Friend the First Secretary of State and I met the First Minister earlier this week, and we are keen to deepen our engagement even further. We want the Welsh Government to respond so that we can come up with the sort of frameworks that will work for every part of the United Kingdom.

The Secretary of State has said in the past that there will be more powers for Wales, but is not his banal rhetoric undermined by the Government’s record of broken promises? The tidal lagoon—no decision; S4C funding—slashed; rail electrification—cancelled. Will he list the powers that Wales can look forward to and say when we will hear what they are?

I am disappointed by the tone of the hon. Lady’s question. She is well aware of our strong record on devolution. Earlier this year, we passed the Wales Act 2017. Last December, we agreed a new fiscal framework, which gives Wales a very fair settlement, and we are trying to work as closely as possible with the Welsh Government to deliver an exit from the European Union that works for every part of the UK. Wales is obviously my interest in that.

I am sure that the Secretary of State knows that the Welsh economy could be damaged by careless talk about Brexit. The public narrative from the Welsh Government is often alarmist and could even scupper future foreign investment. What can my right hon. Friend do to reassure potential foreign investors that Wales is open for business and remains a first-class destination for foreign investment?

My right hon. Friend is absolutely right. It is a shame that many Opposition Members and remoaners fail to recognise the opportunity that leaving the European Union creates. When my right hon. Friend the Prime Minister was in Japan just last week, she announced a deal in relation to Aston Martin—yet another significant trade arrangement with Japan on the back of those with Nissan and Toyota—and the Vale of Glamorgan and the midlands will benefit further from it.

Employment Trends

In the past year, the employment rate in Wales has reached a record high. Wales benefits particularly from thriving tourism, which, with the help of UK Government initiatives, such as the coastal communities fund, grew by a massive 36% last year. Ten per cent. of Welsh workers are now directly employed in tourism—up from 7% in 2014.

Does the Minister agree that, post-Brexit, it is essential to maintain the current level of rural agricultural support to Wales? What will he do to try to ensure that that happens?

The Wales Office is committed to maintaining the employment growth stats that we have experienced in Wales in the past seven years. The investment that the Secretary of State mentioned from Aston Martin is a fine example of our ability to attract investment into Wales that will create high-quality jobs.

Employment trends within Wales are important, too. What on earth, as a north Wales MP, is the Minister doing supporting the transfer of Her Majesty’s Revenue and Customs jobs from Wrexham to Cardiff city centre?

There will be more HMRC jobs in Wales as a result of the reorganisation than is currently the case. I assure the hon. Gentleman that the situation in Wales is one of employment growth—99,000 more jobs than in 2010, and 119,000 more jobs in the private sector. The employment story in Wales is a success of which the hon. Gentleman should be proud.

Today’s important report from the Institute for Public Policy Research provides a damning indictment of direct Westminster rule over the Welsh economy. Does the Minister agree that the only solution is greater economic powers for Wales?

The hon. Gentleman is like a stuck record on this issue. Rather than citing reports from high-flown companies, he should highlight the real, on-the-ground success story: unemployment in Wales is falling and fewer people are dependent on welfare. We are creating jobs and a successful economy in Wales. The hon. Gentleman should celebrate that.