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Volume 630: debated on Wednesday 1 November 2017

The Secretary of State was asked—

Swansea Main Line: Electrification

1. What recent assessment he has made of the effect on the Welsh economy of the Government’s decision not to electrify the main line to Swansea. (901487)

4. What recent assessment he has made of the effect on the Welsh economy of the Government’s decision not to electrify the main line to Swansea. (901490)

15. What recent assessment he has made of the effect on the Welsh economy of the Government’s decision not to electrify the main line to Swansea. (901501)

Before I respond to questions, I would like to convey the thoughts and prayers of the whole House to the families and community in Llangammarch Wells following the tragic fire earlier this week.

The Government are delivering the biggest rail investment programme for more than a century. The Great Western modernisation programme includes £5.7 billion of investment in new trains. It will cut journey times from south Wales to London by 15 minutes, which will make south Wales more attractive to investors, and bring significant benefits to our economy and passengers alike.

May I associate myself with the Secretary of State’s comments? I offer my deepest condolences.

The Government’s decision not to go ahead with electrifying the main line to Swansea has been a bitter blow to south Wales. My constituency is less than 20 miles from north Wales, and many of my constituents have written to ask me what steps the Government are taking to electrify the north Wales coast line. Can the Secretary of State provide any clarification today?

The hon. Lady will be well aware that advances in bimodal technology mean that electrification between Cardiff and Swansea would not save passengers any significant journey time. She makes an interesting point about north Wales, and I hope that she is aware of the £43 million of signalling improvement that has taken place in north Wales to improve speed and reliability along the line. In addition, the Crewe hub offers great potential for bringing the benefits of HS2, a major UK rail investment programme, to north Wales as well as to the north of England.

What will the Secretary of State be doing to create a more competitive and cost-effective environment for rail infrastructure in Wales?

A major multibillion investment programme is benefiting rail passengers in Wales. Earlier this year, the Public Accounts Committee asked us to reassess the electrification programme on a stage-by-stage basis, and that was what we did. We are therefore using the latest advances in modern technology to ensure that passengers in Swansea and west Wales get the benefits of the most modern trains on the network immediately, rather than perhaps waiting for the traditional technology of electric-only trains.

On 16 May, the Transport Secretary said that electrification was definitely happening and that he wanted to see an end to “smelly diesel trains”, so there was widespread disappointment on 20 July when electrification was cancelled between Cardiff and Swansea, and also for the midland main line, with Ministers citing the fact that new technology made electrification unnecessary. Can the Secretary of State satisfy the House that this is not another cynical broken election promise by outlining what technological breakthrough was made after the ballot boxes closed?

One of the strong advocates for electrification was Professor Mark Barry, but he said that the bimodal fleet neutralised the case. The hon. Gentleman makes an interesting point about diesel trains because these bimodal trains will use the latest and most environmentally friendly diesel generators. The latest trains can even exceed the maximum speed that could be achieved between Cardiff and Swansea. Of course they will stick to the maximum speed along that route, but that demonstrates their flexibility.

The benefits of the Crewe hub station rely on a business case of five trains an hour to deliver improvements to not only to my constituents in Eddisbury, but north Wales. What is the Secretary of State doing to support that case?

My right hon. Friend the Secretary of State for Transport and I meet regularly to discuss the whole range of rail infrastructure programmes in Wales. The integrated way in which the network works via the Crewe hub offers potential not only to my hon. Friend’s constituency, but to north Wales, because bringing the benefits of high-speed rail to Crewe will benefit north Wales as well.

I was a member of the Public Accounts Committee when it came up with its cross-party recommendations in February, so I am pleased to hear the Secretary of State cite them. Does he agree that any future electrification needs to be based on a robust assessment? It is worth bearing in mind that the bimodal trains that he proposes for Swansea are exactly what most other parts of the Great Western network, including Plymouth and Torbay, will be getting anyway.

My hon. Friend makes a logical, reasonable and helpful point in recognising that by using the latest technology we are offering more capacity and much faster trains, which is a major benefit to Swansea and to west Wales. Criticising the decision to use the latest technology on the line to Swansea does nothing more than undermine investment in the city.

12. Rail electrification from London to Cardiff will save 15 minutes of journey time, but the new Swansea metro proposal would save half an hour between Cardiff and Swansea. What is more, the city deal will create 10,000 jobs and more passenger demand. Will the Secretary of State look again at the business case for an electrified metro between Swansea and Cardiff that will provide an environmentally friendly and stronger future, and offset the negative impacts of HS2 on investment in south Wales? (901498)

Clearly the Swansea metro is a different proposal, but I am keen to meet Professor Mark Barry to discuss its potential. It is an interesting addition to a wide-ranging debate in which there are also proposals to improve the frequency of trains to Carmarthenshire and Pembrokeshire. At the moment, passengers from west Wales often drive to Port Talbot to get on the train, but I think that we can come up with much more imaginative solutions. The metro is an additional solution to consider as part of that debate.

The Secretary of State will be aware that in addition to deep concerns about the failure to electrify beyond Cardiff, there is a worry that Great Western Railway will apparently not offer a bilingual service on main line trains operating into Wales. Has he had a discussion with GWR about that? Other rail companies, such as Arriva, have been offering a bilingual service even on trains that go between Wales and England.

I have noted the public statements that have been made by the Welsh Government and the comments that the hon. Gentleman has made, and I suggest that he raises the matter with First Great Western. Arriva is also making a change. Clearly this is a matter for the operators, but I think that the proposal is positive.

I associate myself and the Opposition with the condolences paid by the Secretary of State to those affected by the fire—our thoughts are with them.

Does the Secretary of State for Wales agree with Andrew R. T. Davies, the leader of the Welsh Conservative party, who said this week that electrification of the line to Swansea would be beneficial to Wales and should still take place? He said that he had not

“given up the ghost of fighting that campaign”,

and I assure the Secretary of State that neither have Labour Members.

I hope that the hon. Lady recognises that we are using the latest technology so that we have more capacity and faster trains going to Swansea. She needs to consider the fact that the original plans involved 15-minute savings between Swansea and Paddington, but the bimodal trains will still bring about 15-minute savings. We are bringing in the most modern technology and the most modern bimodal trains on the network now, rather than waiting another couple of years and causing Swansea additional disruption.

With reports that HS2 will cost more than £100 billion, alongside £15 billion for HS3 and another £30 billion for Crossrail 2, it is an absolute scandal that the British Government have broken their promise to electrify the main line to Swansea, despite the fact that that would cost only £400 million. Given the priorities of the British Government, is it not the case that the only way to ensure that Wales gets its fair share of rail investment is to devolve full responsibility for rail infrastructure?

I am surprised by the hon. Gentleman’s tone because the bimodal trains will improve connectivity to his constituency and west Wales. His constituents would not have benefited from the previous proposal for electric-only trains to Swansea. Of course, the network in Wales is part of the UK network, and when he compares spending, he needs to think logically. For example, he has been supportive of the Halton curve, which is in England but will bring major benefits to the network between north Wales and Liverpool.

Heathrow Expansion

2. What discussions he has had with Cabinet colleagues on the potential benefits for Wales of the proposed expansion of Heathrow airport. (901488)

My right hon. Friend the Secretary of State has regular discussions with Cabinet colleagues on a range of different UK investment projects, including the proposed expansion of Heathrow airport. Estimates suggest that Heathrow’s proposed expansion would require 370,000 tonnes of UK steel, securing 700 British steel jobs, which would be welcome news for communities such as Port Talbot.

In addition to the benefits to Wales from construction related to the expansion of Heathrow, does my hon. Friend agree that there are opportunities for Welsh industry to support the ongoing operation of Heathrow when the expansion is complete, as many of my constituents in East Ren do for nearby Glasgow airport?

I agree entirely with my hon. Friend. The development of Heathrow offers significant opportunities for Wales and for the supply chain in Wales. That is why the Wales Office, working with the Welsh Government, have been involved in ensuring that we have roundtable discussions and “meet the buyer” events with Heathrow in Wales—south Wales and north Wales—so that Welsh companies will be in a position to benefit from investment in Heathrow.

Hub airports are more important than ever, so will the Minister join me in congratulating the Welsh Government on purchasing Cardiff airport, which has led to a great increase in passenger numbers? Should not the Tory party back that as well?

The hon. Gentleman raises an interesting point. The Wales Office is very proud of its involvement in the Qatar decision to have direct flights from Cardiff airport. The hon. Gentleman is right about the importance of hub airports, and a recent meeting I had with Heathrow highlighted the possibility of direct flights from Liverpool to Heathrow, which would be a significant advantage for businesses in north Wales.

I am delighted that my hon. Friend agrees about the importance of hub airports to the regions. Will he keep up pressure on his colleagues to give slots to the distant regions in the north and in Wales?

Again, I agree with my hon. Friend. The importance of hub airports is understood by businesses across the United Kingdom. It is therefore imperative to have regular flights into Heathrow, which is one of the reasons why we need the expansion of Heathrow. That expansion will be good not only for the United Kingdom, but for regional economies, as connectivity into a major hub airport such as Heathrow will be beneficial to our local economies.

Trade unions, the CBI and local authorities all support the potential £6.2 billion of investment that Heathrow expansion will bring, but that depends on two things: the extension of HS2 to the Crewe hub; and a final decision on Heathrow. When are they both going to happen?

The right hon. Gentleman makes a really important point. I hope that the decision on Heathrow will be forthcoming very soon. I agree entirely with him about the Crewe hub. A development in Crewe that links HS2 services into the north Wales main line represents a real opportunity for north Wales. We in the Wales Office have been involved in that with our colleagues in the Department for Transport.

Infrastructure Investment

3. What recent discussions he has had with the Chancellor of the Exchequer on infrastructure investment in Wales. (901489)

6. What recent discussions he has had with the Chancellor of the Exchequer on infrastructure investment in Wales. (901492)

I hold regular discussions with Government Departments and the Welsh Government about infrastructure investment in Wales. We have invested £212 million in the new HMP Berwyn and committed more than £600 million to city deals in Cardiff and Swansea. Just last week, my right hon. Friend the Secretary of State was in Swansea to announce our £800,000 investment in important innovative infrastructure—the UK’s first energy-positive office, which is capable of generating more energy than it uses.

Lasting economic success will come only from a long-term approach to major economic decisions, which is why it is so great that the Welsh Labour Government are supporting strategic investment in infrastructure. A Labour Government will ensure that they work with rather than against the devolved Governments. Is that the same for the Conservatives and, if so, will the Minister assure the House that Wales will get its full Barnett consequentials funding from HS2?

The hon. Lady raises an interesting point, but I regret to say that it probably shows that she does not really understand the relationship between the Wales Office and the Welsh Government. It is fair to say that infrastructure investment in Wales does depend on a partnership approach, which is why the growth deals secured for Swansea and Cardiff have been crucial examples of co-operation, and why I am working so closely with the Economy Minister to develop a north Wales growth deal.

Like many constituencies across Wales, Merthyr Tydfil and Rhymney has seen huge benefits from European structural funds, but there is great uncertainty about the future. Will the Minister assure the House that the level of financial benefits that we currently enjoy from structural funds will be replicated when we leave the European Union?

The hon. Gentleman makes a point about structural funds, but the reality is that structural funds in Wales did not make the difference that we anticipated. This Government are committed to a shared prosperity fund for the entire United Kingdom. Communities such as Merthyr Tydfil want good long-term jobs—the type of jobs I saw when I visited General Dynamics, which is recruiting apprentices and creating quality jobs in Merthyr Tydfil. That is exactly what the south Wales economy needs.

The excellent History of Parliament website yesterday tweeted a link to a 1606 Bill to build a new bridge at Chepstow. Does my hon. Friend agree that it is a pity that those involved did not add an amendment calling for a M4 relief road, because by now the Welsh Assembly Government might have got their act together and actually built one?

I thank my hon. Friend for that comment. It is indeed disappointing that we are still waiting for a relief road for Newport. I understand that the Welsh Government are going for another consultation, but it is imperative for the sake of the economy of south Wales and the south Wales valleys that we see action on a relief road for Newport sooner rather than later.

11. I was pleased that the Minister mentioned the north Wales growth bid. It is now 10 years since the step change in services between Chester and Shrewsbury that was caused by the introduction of an hourly service. Does he agree with everyone else in north Wales that it is high time that that step change was repeated through the reintroduction of the north Wales growth bid and better transport services across the border? (901497)

The hon. Gentleman is a key supporter of better transport links in north Wales, and his work on Growth Track 360 is appreciated by the Department. The north Wales growth deal is a key priority for the Wales Office. Cross-border connectivity is crucial to that growth deal, and I agree that we need to improve transport links, whether road or rail, as part of the development of the north Wales growth deal.

I would like to add my condolences, and those of Labour Members, to all those affected by the heartbreaking tragedy at Llangammarch.

Wales is one of many areas in Europe that have received EU structural funds to help to improve their infrastructure. After 2020, will Wales receive the same funding as those comparator regions of Europe or will there be a reduction in funding to Wales by this Conservative Government?

The hon. Gentleman raises the question of EU structural funds as if they were a success story in the Welsh context. They were actually a failure: £4 billion of investment, yet our comparative economic performance fell. This Government are committed to the UK shared prosperity fund, which will work for the benefit of the Welsh economy, rather than being wasted in the way in which the Welsh Government wasted our structural funds over the past 18 years.

I am afraid that the Minister did not answer my question, so I will come back to it. There is a lack of clarity about what will happen in Wales after 2020. I thank the Secretary of State for meeting me to discuss these issues, but will he and the Minister convene a meeting of the Wales team, the shadow Wales team and the Chancellor of the Exchequer to sort these issues out so that there is absolute clarity for the people of Wales?

The offer of a meeting is something I would always be happy to accept, but it has to be at the right time. In the context of structural funding, the key thing is that, for example, a strategic approach across north Wales was not possible because four counties were receiving European structural funds and two were not. We now have an opportunity for a strategic approach across north Wales, which will be supported by a UK shared prosperity fund in due course.

Leaving the EU: Inward Investment

5. What assessment he has made of the effect of the UK leaving the EU on inward investment in Wales. (901491)

Wales remains a great place to invest. As we leave the EU, we will continue to support existing investment relationships and work to attract new projects. I am working closely with the Department for International Trade to deliver this.

The Secretary of State will know that the Welsh Labour Government have been very successful in attracting businesses such as TVR, Aston Martin and General Dynamics. All that foreign investment could be at risk if there is a no-deal Brexit. What is he specifically doing to reassure the business community that Wales is still open for business?

The hon. Gentleman is absolutely right that Wales is a great place to invest. Last year, 85 foreign direct investment projects came to Wales, 95% of which were supported and facilitated by the Department for International Trade. I have been to Qatar and Japan to talk to investors, and I am encouraged by their optimism and the flexibility that the Welsh economy can bring.

I will happily take the hon. Member for North East Hampshire (Mr Jayawardena) on this Question.

7. Will the Secretary of State reassure us that the two important markets that he visited recently—Japan and Qatar—are committed to their current international business links with Wales? What plans do they have to expand that involvement? (901493)

As I mentioned to the hon. Member for Islwyn (Chris Evans), I am encouraged by their interest and commitment. Japanese companies, by tradition, make long-term investments. The first was in Bridgend—Sony was one of the first—in 1973, and they have similarly committed that they want to remain with us for the long term to come. [Interruption.]

Order. There are very many private conversations taking place, but I think it is fair to the Secretary of State if we are able to enjoy the product of his lucubrations. He spent a lot of time preparing for this session; it seems a very great sadness if his observations cannot be properly heard. Liz Saville Roberts.

Diolch yn fawr. A report earlier this year found that foreign direct investment to Wales declined by 44% during the EU referendum year, with what are described as “geographically peripheral” regions lagging even further behind. What will it take for the Secretary of State to admit that the only way to protect jobs and wages is to maintain economic links with the EU by staying in the single market and customs union permanently?

As I mentioned, last year was another successful year: 85 projects came to Wales, creating 2,500 new jobs. I would also point to the latest export data: exports to the EU were increased by 15%, but exports outside the European Union increased by 20%. That demonstrates the great flexibility of businesses in Wales, keen to explore the new opportunities that exiting the European Union brings.

For a meaningful vote on the final deal to be exactly that—meaningful—we must not allow Parliament to be threatened with the prospect of condemning the UK to a no-deal scenario, should that final deal prove unsatisfactory. Would it not be more prudently conservative and economically wise of the Government to explore any legal flexibilities surrounding article 50, to appease businesses across Wales and avoid a damaging cliff edge?

I hope the hon. Lady will take great reassurance from the fact that we are doing everything we can to get a good deal for the whole United Kingdom as we leave the European Union. Of course, it is also prudent—that is the word that she used—to prepare for all outcomes, and we have to prepare for every potential eventuality because we need to preserve the integrity of the UK market, a relationship with Europe and the new opportunities, as we leave the EU, with markets around the world.

10. Will the Secretary of State encourage the Department for International Trade to give a high priority to Wales as part of the Government’s efforts to bring prosperity to every corner of the kingdom? (901496)

I am grateful to my right hon. Friend for her question. I think the Department for International Trade is already doing that, but there is always more that we can do. My right hon. Friend the Secretary of State for International Trade and I met the First Minister on Friday to consider the trade White Paper, as well as the new opportunities, and the establishment of the UK Board of Trade, which includes strong representation from Wales, is an important part of that work.

Leaving the EU

8. What recent discussions he has had with Welsh business groups, universities and the Farmers Union of Wales on the effect of the UK leaving the EU. (901494)

Since the referendum, the Secretary of State and I have discussed the impact of the UK’s exit from the European Union in meetings with stakeholders across Wales. We have met businesses, universities and farming unions, among others, and the next meeting, the Secretary of State’s expert panel on EU exit, will take place on Monday.

I thank the Minister for his answer, but does my hon. Friend agree that this needs to go even further as negotiations with the EU continue? Will he encourage other Cabinet Ministers to come to Wales to hear the views of Welsh business, Welsh farmers and Welsh universities first hand?

I thank my hon. Friend for his question. He is a champion for the agricultural industry, which is no surprise in view of the constituency he represents. I can assure him that the discussions with the farming unions will intensify, and I am very pleased to announce that the Secretary of State for International Trade will be in Wales this week.

I am very pleased that the Prime Minister is here to listen to my question, because on a number of occasions I have asked her about the importance of the port of Holyhead in my constituency to Irish trade. Last week, a company from Ireland suggested a new route to Holland and Belgium, circumnavigating Britain. Stakeholders in my constituency are concerned about that. The Irish Government are concerned about that; so are the Welsh Government. When will the UK Government wake up?

The hon. Gentleman raises an important point about the port of Holyhead and the concern is shared by my right hon. Friend the Secretary of State for Wales, who visited the port with him. These concerns have been heard in the Wales Office; we have met stakeholders and Irish businesses. I can assure him that our intention is to ensure a frictionless border in Holyhead, in the same way as in Ireland.

EU students contribute upwards of £130 million to the Welsh economy, and thousands of academic staff from across Europe have been vital to the success of Welsh institutions. Given that we already know of an 8% decline in applications from EU students to Welsh universities, what discussions has the Minister had with Cabinet colleagues to ensure that visa arrangements do not further harm our higher education sector?

The hon. Gentleman makes an important point about the universities sector in Wales. I recently visited Bangor University and Aberystwyth University and discussed these matters. I can assure him that the Wales Office is in constant discussions with other Departments on the issues raised by the sector, including EU visas.

I welcome the fact that the UK and devolved Administrations have agreed the principles on which the common frameworks will be constructed, which will be of particular interest to business groups, universities and the National Farmers Union of Wales. I encourage the Minister to continue these exchanges with the devolved Administrations, so that we can reach agreement on how the common frameworks should be established.

I agree with my right hon. Friend on how important it is to continue having deep engagements with farming unions and the universities sector in Wales.

Leaving the EU: Balance of Powers

9. If he will hold discussions with the National Assembly of Wales on the effect of the UK leaving the EU on the balance of powers held between the UK Government and the Welsh Government. (901495)

13. If he will hold discussions with the National Assembly of Wales on the effect of the UK leaving the EU on the balance of powers held between the UK Government and the Welsh Government. (901499)

I hold regular discussions with the First Minister and Assembly Members, as well as with local authorities, industry representatives and third sector organisations, on matters relating to the UK leaving the EU.

Following the last Joint Ministerial Committee on EU Negotiations meeting of Welsh, Scottish and UK Governments, an agreed set of principles on areas where EU law currently intersects with that of devolved competence was published. Will the Secretary of State please update the House on what tangible actions the UK Government have taken to institute those principles?

There are 64 areas of law that intersect with the Welsh Government, and I think that there are 111 that relate to Scotland. There is an awful lot of technical work going on between officials in the Scottish and Welsh Governments and the UK Administration. There are many functions beneath that, but we are working positively to establish which of them can be devolved as quickly as possible when powers are returned from the European Union to the UK.

Will the right hon. Gentleman, like the Secretary of State for Scotland, promise the Welsh Assembly a powers bonanza following Brexit, and if so, unlike the Secretary of State for Scotland, can he name one power that will actually be devolved?

I have mentioned that officials are working on 64 areas, and we want to move forward so that the powers of the Scottish and Welsh Governments will be extended, but we also need to maintain the integrity of the UK market. We need to remember that everything we are doing needs to suit business, because we want business in Scotland to continue to export and work throughout the UK, but we also want business in Wales to have the opportunity perhaps to take some of the Scottish market.