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House of Commons Hansard
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18 July 2018
Volume 645

The Secretary of State was asked—

Leaving the EU

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1. What recent assessment he has made of the effect on the Welsh economy of the UK leaving the EU. [906435]

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7. What recent assessment he has made of the effect on the Welsh economy of the UK leaving the EU. [906441]

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9. What recent assessment he has made of the effect on the Welsh economy of the UK leaving the EU. [906443]

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Wales approaches Brexit from a position of strength with a growing economy and falling unemployment, and our plan for Brexit will allow us to shape our own ambitious trade and investment opportunities, putting Wales and the wider UK at the forefront of global trade.

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The Welsh Affairs Committee has now joined in the calls for the retention of membership of the single market and customs union to protect the agricultural sector, in which 80% of Welsh exports go to the EU. Will the Secretary of State confirm what representations he made to the Prime Minister ahead of the Chequers agreement for continued membership for the agricultural sector?

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As the House would expect, I looked closely at that report, but of course the outcome that the hon. Gentleman suggests would mean that we could not honour the expectations of the British people following the referendum decision to leave the European Union; it would mean retaining free movement of people. The Chequers agreement protects the agricultural sector so that it has the opportunity to trade frictionlessly with the European Union.

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By 2020, the Welsh economy will have been supported by almost £150 billion of investment through EU structural funds. The Government committed to replacing that funding, along with support for farming and the English NHS, with money from the mythical Brexit dividend. Now that it is clear that the UK will not receive a single penny back from Brexit, will the Secretary of State confirm that there will still be money for Wales?

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The Government have committed to consult later this year on the UK shared prosperity fund, which will be a Brexit dividend. We are already seeing a Brexit dividend with the £20 billion increase in health spending, which will have considerable consequences for Scotland and, rightly, for Wales. As their budgets are protected, Wales, Scotland and Northern Ireland will benefit significantly from that.

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The Secretary of State’s answer directly contradicts the UK Government’s own analysis, which shows that Wales and every other part of the United Kingdom will be badly hit by their plans for Brexit. If the Government do have a plan for Brexit, we would love to hear it—and is there any economic analysis for it?

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The hon. Gentleman ignores the hard data, which shows record numbers of people in employment and sharp falls in unemployment. I have met a whole host of international investors from the US, Qatar, Japan and elsewhere, and we are seeing significant foreign direct investment projects coming to the UK. That shows the great opportunities there are as we leave the European Union.

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rose

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rose—

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We will hear from Mr Elphicke, but it is very nice to see you, Mr Graham.

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Thank you, Mr Speaker.

Does the Secretary of State agree that the most important market to the Welsh economy is the internal market of the United Kingdom? That is also true for Scotland, which is why it makes no sense that the Scottish National party wants to peel Scotland away from the United Kingdom and the success of this nation.

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The hon. Gentleman makes an extremely important point. He is right to say that the UK market is more important to the Welsh and Scottish economies than any international market is. It has already been demonstrated that Scotland sells four times more to the rest of the UK than to any international market. That dependence on the UK economy is greater for the Welsh economy.

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Does my right hon. Friend agree that the economic benefit of the city deals that have been agreed in Wales and Scotland is evidence of what is possible when the UK Government and the devolved Administrations pull together in the same direction?

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May I pay tribute to my hon. Friend, who has worked so hard on the Stirling city growth deal? That exciting prospect, will offer real opportunities for long-term economic regeneration. I take the opportunity to highlight the fact that Wales will be the only part of the UK that is entirely covered by city deals and growth deals. That meets the UK Government’s ambitions to close the wealth gap between the most prosperous and most deprived areas of the UK by raising the economic prospects of some of the poorest parts of the UK.

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Given the impact of Brexit uncertainty on the Welsh rural economy, the Minister will surely agree that technology and science opportunities must be seized. What is he doing to ensure that Snowdonia Aerospace at Llanbedr becomes the UK’s first horizontal-launch spaceport?

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The hon. Lady is absolutely right. Llanbedr offers great opportunities. The Secretary of State for Business, Energy and Industrial Strategy and I have spoken on a number of occasions about this, and I hope that the hon. Lady will welcome the statement that was made last week and the additional money that is being made available to exploit the opportunities in Llanbedr. I am excited by this prospect, and we will put the hon. Lady’s constituency at the forefront of space technology.

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Let us hear more about the horizontal port situation.

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I will say more about the situation of the rural economy, given that the former Wales Office Minister, the hon. Member for Aberconwy (Guto Bebb), stood down this week to oppose the Brexiteers’ wrecking amendments. At next week’s Royal Welsh show, will the Secretary of State announce his resignation in protest at the Government’s policy of wrecking Welsh livestock farming?

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First, I pay tribute to my hon. Friend the Member for Aberconwy (Guto Bebb) for his excellent work at the Ministry of Defence in supporting the defence services across the whole UK, as well as his role in looking after agriculture as a Wales Office Minister. The hon. Lady will be well aware that the Chequers agreement provides a frictionless trading opportunity for Welsh farmers that will allow them to continue to sell Welsh beef and lamb, and other Welsh produce, to the European Union as they do at the moment.

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In calling the hon. Member for Vale of Clwyd (Chris Ruane), I congratulate him on what I understand is, unbelievably, his 60th birthday.

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It’s a hard life!

The shadow Wales team recently met Farmers Union of Wales representatives, who are desperately worried about the future funding of Welsh agriculture post Brexit. If future farm funding is allocated using the Barnett formula, Welsh farmers will lose £133 million a year, taking £1 billion out of the Welsh economy. That would decimate rural communities and thousands of family-run farms. What steps is the Minister taking to guarantee Welsh agriculture the same level of funding post Brexit?

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I, too, congratulate the hon. Gentleman on his significant birthday. The Under-Secretary of State for Wales, my hon. Friend the Member for Pudsey (Stuart Andrew), and I meet Welsh farming unions regularly, and we also meet them jointly with the Welsh Government’s Agriculture Minister. That demonstrates the collaborative approach that we are taking. If I have said once, I have said 100 times that we will not be using the Barnett formula to distribute agricultural spend. Clearly, the current level of spend is the starting point, and we will be consulting in due course. The financial protection that the UK Government have given to Wales, whereby Wales now receives £120 for every £100 spent in England, demonstrates the priority that we put on protecting Wales’s interests.

International Trading Opportunities: Promotion

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2. What recent steps he has taken to promote Wales’s international trading opportunities. [906436]

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My Department continues to work closely with the Department for International Trade on promoting Wales’s trading opportunities. During my recent trips to Qatar, Kuwait, Hong Kong and the US I saw at first hand the enthusiasm for Welsh exports as well as the potential for foreign direct investment projects to come to Wales.

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Given Wales’s connectivity on the M4 corridor, does my right hon. Friend agree that we can truly capitalise on trading opportunities internationally for Wales and, indeed, the Thames valley by improving the Reading to Gatwick road corridor?

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My hon. Friend will be aware that I have been a strong supporter of the third runway at Heathrow because it is important to the Welsh economy, and connectivity to airports is vital to deliver its prospects and objectives. He is right about the M4 corridor. With the abolition of the Severn tolls, it creates an opportunity for a natural economy to develop between Bath, Bristol, Newport and the south Wales economy in general, to create further economic growth.

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The Secretary of State knows that Airbus is one of Wales’s most important trading entities and companies, so does he think it is a good or bad sign that the chief executive of Airbus is so worried about the Government screwing up Brexit that he is now stockpiling goods that he feels he will not be able to get in to make his finished products?

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I think the hon. Gentleman is out of date. The latest statements from Airbus have welcomed the Chequers agreement, because it will allow the company to protect its supply chain. That demonstrates the positive relationship that we have with large international companies, in seeking to protect their interests but taking the opportunities of leaving the European Union and looking to new markets elsewhere.

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15. Is it not the case that following the passing of the Trade Bill yesterday, Wallonia, a region of Belgium, will have more influence over EU trade policy than Wales will have over post-Brexit UK trade policy? [906449]

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My right hon. Friend the Secretary of State for International Trade announced that we will have the widest, most extensive consultation in relation to future trading arrangements. We will not only talk to the devolved Administrations regularly, as I always do, but talk to key stakeholders in Wales to ensure that we respond to their priorities. We are determined to have the widest consultation to ensure that people have the facts at hand rather than sometimes inaccurate reports.

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The expanding digital economy will bring further opportunities for Welsh businesses, yet they tell me all the time that broadband speeds are still too slow to trade. What are the Government doing about this?

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On average, the superfast broadband threshold in Wales is higher than it is across the rest of the UK, but the hon. Gentleman is absolutely right that more work needs to be done. Significant sums have been available, with £69 million going to the Welsh Government from the Department for Digital, Culture, Media and Sport, in addition to the £56 million of gainshare that has come from that. Of course, the priority for how the Welsh Government spend that has largely been driven and directed by them. I am keen to work closely with them to see that we can get to the communities that have not yet received superfast broadband, because clearly that brings them opportunities economically.

Cross-border Rail Services

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4. What discussions he has had with the Secretary of State for Transport on improving cross-border rail services to and from Wales; and if he will make a statement. [906438]

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The Government recognise that cross-border connectivity is critically important. That is why my right hon. Friend the Secretary of State and I have regular meetings with my right hon. Friend the Secretary of State for Transport to look at what improvements can be made to support better journeys for Welsh and English passengers.

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People in Neston are concerned that the rail timetable to be introduced by the new operator on the Wrexham to Bidston line may lead to an inferior service on the English side of the border. When I asked the rail Minister about that recently, he told me that it was the Welsh Assembly’s responsibility, not his; but my constituents have no representation there. Who is accountable for services on the English side of the border within this Parliament?

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The hon. Gentleman will know that the Wales & Borders franchise is part of the Government’s commitment to devolving powers, so there is a joint responsibility between the two Governments. If he wants me to make representations on his behalf to the Welsh Government, I would be more than happy to do so.

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Has my hon. Friend had the chance to speak to the management of Great Western Railway about the total shambles that was its rail service last Sunday afternoon, when thousands of passengers faced cancelled or disrupted trains due to staffing problems arising from the World cup final? England did not qualify for the final and Wales was not even at the tournament, so it should not have led to meltdown on the rail network last Sunday.

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My right hon. Friend raises a very important point. When these services do not run effectively, that has a massive impact on his constituents and all commuters. I would be happy to meet him to discuss this further, so that we can take it up with the people responsible.

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My constituents were promised electric trains running into Cardiff Central by last year. This week, we found out that they will not even be coming into Cardiff Central by the end of next year. When will the Minister sort out the shambles that is the Great Western Railway line from London to Cardiff?

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It is important to recognise that we are investing a massive amount of money to ensure that the electrification brings about improved journey times. The Welsh Government have come up with some suggestions about how we might resolve these issues, and we will work with them collaboratively on that. Let us not forget, though, that this Government are making a massive investment in the railway system.

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How is work progressing to develop the business case for the north-east Wales metro?

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My right hon. Friend will know that we are looking at a host of different projects that will improve journey times for passengers in north Wales, such as the Wrexham to Bidston line. On the specific issue that he raises, we are looking at that across the board, including through the growth deal that we are developing at the moment.

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Order. In generously but appropriately congratulating the Minister not on his birthday but on the magnificence of his tie, may I urge him to face the Chamber so that we enjoy the benefit of his mellifluous tones?

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It is not just the cancellations and the delays to electrification—it is the short trains, the short-staffed trains, the lack of reservations and the lack of catering. Great Western Railway is an absolute shambles. What on earth is the Minister going to do about it? Is he going to talk to the Secretary of State for Transport, as it is his responsibility?

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I am glad that you like my tie, Mr Speaker.

First, I point out that the Government are investing more in our railways than any Government since Victorian times. I accept that there may be some issues with the service, and I will happily arrange to meet GWR to raise the points that the hon. Gentleman made.

Leaving the EU: White Paper

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5. What discussions he has had with the Welsh Government on the UK Government’s White Paper on leaving the EU. [906439]

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6. What discussions he has had with the Welsh Government on the UK Government’s White Paper on leaving the EU. [906440]

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10. What discussions he has had with the Welsh Government on the UK Government’s White Paper on leaving the EU. [906444]

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In line with commitments made by my right hon. Friend the Prime Minister, the Government shared the White Paper on our future relationship with the European Union with the Welsh Government in advance of its publication. This followed a regular dialogue with Welsh Ministers as the paper was being drafted.

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The Government have proposed 26 policy areas where joint arrangements will be necessary with the Welsh Government after Brexit. Given the proposal in the Chequers agreement and the White Paper for a common rulebook with the EU, in how many of those areas will such arrangements no longer be necessary?

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The hon. Gentleman refers to an ongoing relationship and dialogue with the Welsh Government. He will be aware that the Welsh Government were happy to give a legislative consent motion to the European Union (Withdrawal) Bill as it passed through the Palace of Westminster, which demonstrates the mutual respect and ongoing productive relationship that we have. I only wish that the Scottish Government would work in the same constructive, positive way.

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The White Paper’s mobility proposals for business visitors and intra-company transfers might be all right for large multinational companies in London, but they offer nothing to small businesses in Wales and important public services. What is the Secretary of State doing to ensure that they can still recruit the EU workers they need, if Brexit happens?

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I have referred on several occasions to the expert panel I formed, which is being extended, and to joint meetings I have held with Welsh Government Ministers. We are keen to engage with businesses of all sizes. Large companies such as Airbus often receive much attention, but it is only right that small businesses, which often depend on their supply chains, receive a similar amount of attention.

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I do not think even the UK Government still believe that the Joint Ministerial Committee on Europe is fit for purpose. Does the Secretary of State agree that it is time for it to be replaced by a statutory forum that gives equal power of esteem to all four nations in these islands?

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A previous Joint Ministerial Committee committed to look at intergovernmental arrangements and how we can best develop and evolve them in the light of our exit from the European Union. My relationship with the Welsh Government is positive. It takes a lot of hard work on both sides, and I am keen to maintain the warmest sort of arrangements because we respect the outcome of the referendum and the importance of the UK internal market.

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The Secretary of State is stoical in the circumstances, but there is an excessive number of rather loud private conversations taking place. An air of solemnity should descend on the House as we are about to hear from the Chair of the Select Committee.

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12. We are seeing record numbers of people in work in Wales and record amounts of foreign direct investment, and we have a set of proposals that will allow Wales to benefit from access to the single market and new trade deals across the world. Is it not about time that Members of Parliament on both sides of the House got behind the Prime Minister and the Secretary of State for Wales as they lead Wales to a better future outside the European Union? [906446]

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My hon. Friend is right, and I pay tribute to him for his work as Chair of the Welsh Affairs Committee. Not only does the UK remain the No. 1 destination for foreign direct investment, but Wales has seen a 20% increase in the employment created out of that investment. Our exports are growing to record levels and, interestingly, those to areas outside the European Union are growing at a faster rate than those to the European Union.

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The White Paper is a little light on the benefits of World Trade Organisation rules. Will the Secretary of State discuss the benefits of those rules with the Welsh Government alongside the White Paper?

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I will naturally continue an ongoing dialogue with the Welsh Government about a whole host of issues. My right hon. Friend the Secretary of State for International Trade yesterday agreed to and committed to consult widely, including with the devolved Administrations. My hon. Friend is absolutely right that there are great opportunities as we leave the European Union to look at new markets, but nor should we undermine the existing complex supply chains that have built up over 40 years. The Chequers White Paper, I believe, allows us to do both.

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Will my right hon. Friend reach out beyond the Welsh Government to businesses in Wales to exemplify the opportunities that will be created as we leave the European Union?

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My hon. Friend is absolutely right. We often, rightly, give a lot of attention to the devolved Administrations because they are elected bodies in the nations themselves, but businesses in Wales depend on the UK market and their view is also important as we develop and evolve our policy towards the negotiations to leave the European Union.

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I join in the birthday wishes to my youthful shadow Minister, my hon. Friend the Member for Vale of Clwyd (Chris Ruane).

It has been two years since the Prime Minister met the First Minister of Wales in Cardiff Bay and stood on the steps of the Senedd, telling politicians and journalists how important the Union is and that she wanted the Welsh Government to be involved in Brexit discussions, so why was the White Paper not shared with the Welsh Government until barely 12 hours before its publication?

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The hon. Lady is right that the document was shared with the Welsh Government before it was published. I can also say that many extracts—[Interruption.]

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Order. I apologise to the right hon. Gentleman. The microphone is not functioning as well as it should be, and I therefore suggest that a modest bellowing by the right hon. Gentleman will suffice.

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Thank you, Mr Speaker. I can point out to the hon. Lady that not only was the document itself shared with the Welsh Government before publication, but—I would say, probably more importantly—as the document was being drafted, various extracts were shared with the Welsh Government and their input during the drafting stages contributed to the document in its totality.

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It is not good enough. The Secretary of State knows the terms of the JMC, which state that the UK Government will work with the devolved Administrations

“to agree a UK approach to…Article 50 negotiations”.

After two years of broken promises on Brexit talks, who should the people of Wales blame for the contempt shown to them—the Prime Minister, the Secretary of State for Wales or both?

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The hon. Lady is ignoring that we shared the drafting of the document with the Welsh Government before we had concluded the document itself. They had an integral part in contributing and sharing their views. I would also say that it was considered at length at the JMC that my right hon. Friend the Chancellor of the Duchy of Lancaster chaired days before the document was shared.

Welsh Guards: Afghanistan

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8. What recent discussions he has had with the Secretary of State for Defence on the Welsh Guards’ tour of Afghanistan. [906442]

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I have regular discussions with the Secretary of State for Defence about the armed forces in Wales, including about my recent visit to Kabul to meet the Welsh Guards. During the visit, I saw at first hand the important role that our servicemen and women play in the UK’s operations, and I pay tribute to them.

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Does my right hon. Friend welcome the Prime Minister’s announcement of an added commitment from the Welsh Guards to secure and to help NATO’s capacity-building mission in Afghanistan?

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Having seen the Welsh Guards in action in Afghanistan, I have nothing but admiration and respect for the work that they do. The additional support to help them embed and the important steps they are taking to support the ongoing work of the Afghan Government will be extremely important, and I pay tribute to them for the work that they do.

Universal Credit

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11. What recent discussions he has had with the Secretary of State for Work and Pensions on the roll-out of universal credit in Wales. [906445]

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Universal credit is already operating in 24 jobcentres across Wales, with a further two scheduled to roll out this month. The number of people receiving universal credit in Wales is over 44,000, and 36% of these are in employment. Wales jobcentres are in the latter part of the roll-out schedule, with full roll-out to be completed by the end of this year.

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I thank the Minister for that answer. Early indications show that there are huge problems in implementing universal credit, with the Flintshire citizens advice bureau, for example, receiving 340 new cases—serious cases. What is he doing to make sure that our hard-pressed citizens advice bureaux are not overwhelmed when universal credit is fully implemented?

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It is important to recognise that universal credit is a transformational benefits system that is working to get people back into work. The recent employment figures, showing that employment in Wales is up by 5,000, are a significant step, but the issues that the hon. Gentleman raises are exactly why we have been careful. We have made significant changes as we have carefully rolled out the project.

Transport Infrastructure: North Wales

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13. What discussions he has had with Cabinet colleagues on upgrades to transport infrastructure in north Wales. [906447]

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The Secretary of State and I hold regular discussions with Cabinet colleagues and the Welsh Government on Wales and road infrastructure, and we recognise the benefit to communities on both sides of the border.

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The M56 is the main arterial route not just through Cheshire but into north Wales. What discussions has the Minister had about upgrading the M56 as part of the next road investment strategy for Highways England?

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The hon. Gentleman is absolutely right to highlight the importance of the M56 and the whole of the cross-border connectivity routes, because the amount of people who live in Wales but work in England is significant. That is why the Secretary of State recently met the Under-Secretary of State for Transport, my hon. Friend the Member for Hereford and South Herefordshire (Jesse Norman), to discuss these issues—[Interruption.]

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Order. These matters are of the utmost importance to the people of north Wales, and the question and the answer must be heard.

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My daughter, Fiona, celebrates her birthday today, along with my hon. Friend the Member for Vale of Clwyd (Chris Ruane) and the late, great Nelson Mandela, who would have been 100 today.

The north Wales economy depends on the port of Holyhead as the main port from the Republic of Ireland. Many businesses are concerned about a no-deal Brexit scenario. Will the Minister tell us whether there is a contingency plan for a no deal and if not, why not?

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First, may I wish the hon. Gentleman’s daughter a very happy birthday?

As an Anglesey boy myself, I know how important the port of Holyhead is not just to the Isle of Anglesey but to the whole of north Wales and the whole of the country. That is exactly why this Government are working closely with ports around the whole country as we prepare for our exit from the European Union.

Cross-border Transport Links

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14. What assessment his Department has made of the (a) adequacy of cross-border transport links to and from Wales and (b) effect of those links on economic growth. [906448]

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Abolishing the Severn tolls will drive the biggest economic stimulus Wales has seen in decades and create the most natural cross-border economic growth corridor, spanning Cardiff through to Bristol and Newport. The UK Government are looking at the capacity and investment needed for roads in the south-west of England once the tolls are abolished.

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I thank my hon. Friend for his answer. The value of removing those tolls to the economies of both south Wales and south-west England cannot be overestimated. What, in his assessment, would be the impact on economic growth of removing those tolls on the bridge?

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My hon. Friend is absolutely right. This is a significant announcement. The fact that people will be able to cross the border between Wales and England and not have to pay a toll will, we hope, increase economic activity and improve the number of people who enjoy tourism in both the south-west and Wales.