Wednesday 14 November 2018
[Mrs Madeleine Moon in the Chair]
Former Steelworks Site in Redcar
I beg to move,
That this House has considered the future of the former steelworks site in Redcar constituency.
It is an honour to serve under your chairmanship, as always, Mrs Moon. I pay tribute to all colleagues who are here to support this debate. The former steel site in my constituency has huge implications for the entirety of the Tees valley, so I am pleased that colleagues from both sides of the House are here to work towards the future of the site. As someone once said, we are all in this together. Regionally, locally and nationally, it is vital that everyone does their bit to ensure we build up from the devastation three years ago and get our communities back on their feet. The site is the key to the future of the Tees valley economy.
I secured this debate to draw attention to the biggest opportunity for new industry and jobs in the UK, and hopefully to send a strong message to investors around the world that the Tees valley is open for business and has the Government’s full support behind it. The South Tees Development Corporation site covers almost 4,500 acres on the south bank of the river Tees. It was once the beating heart of industry, with shipyards, blast furnaces and chemical works lining its banks, and employed tens of thousands of people at its peak. On a visit to Teesside during the 19th-century boom, William Gladstone observed:
“This remarkable place, the youngest child of England’s enterprise, is an infant, but if an infant, an infant Hercules.”
Those booming, Herculean years sadly did not last forever. Although the area is still home to many successful businesses, its industrial footprint is significantly reduced and employment opportunities are much fewer. We aspire to rebirth the infant Hercules again by combining our great skills, infrastructure and our location in the north-east to build a new generation of industry and deliver growth across the Tees valley. Again, I welcome the support of colleagues from across the region. The jobs and investment that could be created in the Tees valley are of benefit to workers and businesses in every part of our area, and colleagues from all parties are lobbying hard for our region to get the support it needs.
The steelworks site—the epicentre of the devastation three years ago, from which our local economy has struggled to recover—must be seized as an opportunity to truly realise the northern powerhouse. The first mayoral development corporation outside London, led by cross-party politicians and local business, is working its socks off to realise the site’s potential. Our local master plan for creating 20,000 jobs on the site builds on interest from more than 100 global investors. Those investors and my constituents desperately need the work that I had in mind when I secured this debate.
The master plan demonstrates to the world that we have a clear vision in Teesside for the jobs we want to create. The support we have received so far from the Government, including the measures in the Budget, which I will speak about shortly, is a welcome demonstration that they have an appetite to help us deliver our vision. However, if investors are to commit to invest in Teesside, they need to know, when they head into negotiations with the development corporation, that the Government are fully behind the project. For investors to be confident that Teesside is the place to be, they need greater certainty that the development corporation is equipped with everything it needs to deliver the plan, and that the Government’s long-term financial commitment is certain. I seek those assurances from the Minister today.
First, I want to talk about some of the successes achieved by local people who have rolled up their sleeves and got on with driving our area forward. I am incredibly proud of the local teamwork to support people who lost their jobs at the steelworks, and to help many others into work. After the devastation three years ago, the community, local authorities, and local businesses, partners and politicians rallied together to put in place excellent support services. We did not just sit back, leaving the damage to smoulder.
I just want to send a message of solidarity from Lanarkshire, where Gartcosh closed in 1986 and Ravenscraig closed in 1992. Both are big scars in Scotland, and both are still empty fields. Housing is getting built, but the work promised to us is very slow. I totally agree with my hon. Friend about what we have seen at Redcar. Jobs need to come to the places that jobs were taken away from.
I really appreciate my hon. Friend’s intervention. He makes his case incredibly powerfully. In so many communities around our country—in both England and Scotland—we have seen the devastation that can happen when industry declines and nothing replaces it. The site is of such fundamental importance to our local economy, and we cannot just allow it to smoulder. We cannot allow those jobs and skills to be lost. The next generation must not feel that they have to move away. We have got to accelerate the progress today.
I congratulate my hon. Friend on securing this debate. Following what my hon. Friend the Member for Coatbridge, Chryston and Bellshill (Hugh Gaffney) has said, lots of Scots came to Teesside from Lanarkshire—my home county—to work in the steel industry. We are talking about their future too.
My hon. Friend is absolutely right. Teesside is proud of being somewhere that workers came to from across the country—Scotland, Durham and even the south-west of England—to build the infant Hercules. We are a proud place with people from across the country, who came together to find employment. We want to be a place that attracts people from around the country and the world.
We have used the resources locally that the Government gave us to develop business cases and our skills to drive our economic recovery in the aftermath of the closure. The SSI Task Force—a collaborative effort—has created more than 2,000 jobs, supported 336 business start-ups and overseen the delivery of more than 17,000 training courses to support redundant SSI workers back into employment. Working with private sector partners such as MGT Teesside, award-winning employment and training hubs have ensured that local people are able to benefit from the jobs created by big new investment projects. The Grangetown training and employment hub in my constituency, jointly supported by Future Regeneration of Grangetown, the council and MGT, has already made great progress. Some 2,500 residents have been registered, 1,700 have undertaken training programmes, and 610 have been supported into work, 470 of whom were previously unemployed. A similar scheme in Skinningrove, in the constituency of the hon. Member for Middlesbrough South and East Cleveland (Mr Clarke), has been supporting employees made redundant from the Boulby potash mine, providing access to training, jobs fairs and support for those who want to set up their own businesses.
Local people are taking up the entrepreneurial spirit and setting up on their own. Independent shops and bars are starting to fill some of the empty units on our high streets, and some are run by former steelworkers. Our high streets still need support from things such as business rates, but the energy of local people is already driving their revival. Support from the local council to improve shop fronts, bring empty buildings back into use, and improve and expand accommodation on our industrial estates is also helping.
Big investors are also showing confidence in our area, which speaks well for the potential of the SSI site. MGT is investing £650 million in its new biomass power plant at Teesport. Just down the road in Whitby, in the constituency of the right hon. Member for Scarborough and Whitby (Mr Goodwill), Sirius Minerals is investing $4.2 billion in its polyhalite mine, with the material transported to an processed at Wilton International in my constituency. PD Ports and Redcar Bulk Terminal suffered significantly after the loss of the steelworks contracts. In just three years, they have reversed the damage, and have continued to build their businesses, bringing in millions of pounds of investment. They have not waited around or prevaricated; they have got on with it, showing the resilience and determination of our area.
My hon. Friend is absolutely right. We have had some really positive cross-party discussions about a free port in Teesport. The potential to create jobs, attract investment and elevate the area on the global stage is huge. We have got to ensure we get it right, but there is massive potential there, Brexit or no Brexit.
I want to talk a bit about the opportunities on the SSI site. We are building on a strong foundation of public and private sector talent and on Teesside’s determination. We have the same ambitions for the steel site and a strong local team of business leaders, local authority officers and cross-party politicians, who are all working hard to deliver on those ambitions. There are many innovative projects with an interest in the site—from energy generation and materials processing to rail and renewables—and lots to get excited about. Much of the detail is protected for commercial reasons, but some of the details have been reported in the local media. Metal production could be coming back to the site, with proposals for an aluminium cast-house facility. A £5 billion energy plant focused on clean gas is also in the pipeline, and will potentially create thousands of jobs.
I secured this debate not simply to congratulate everyone and say that everything is marvellous. I am afraid it is not. I am already aware of two big investments that will now go elsewhere, attracted by better support. The first is by the chemicals company INEOS, which was looking to Teesside as the location for its new 4x4 manufacturing plant for Projekt Grenadier. That £600 million investment could have created more than 1,000 new jobs. The South Tees site and a location in Germany were shortlisted, but it was announced just over a week ago that the company may now look to Wales instead. That is a big lost opportunity for the regeneration of the development corporation site and for jobs on Teesside. The car industry is one of our region’s key strengths—the supply chain is well developed and we have a great skilled workforce.
The other lost investment I am aware of is by a major steel company with significant UK operations, which was looking to develop an electric arc furnace on Teesside, building on the excellent research into electric steelmaking by the Materials Processing Institute in South Bank. That would have returned primary steelmaking to Teesside, continuing our long and proud history of doing that. Instead, the company is now looking at a more attractive offer from the devolved Government in Scotland.
We must ask why those companies made those decisions. I believe the Government could have given them more certainty and financial support. I highlight those incidents not to spread doom and gloom—I know how important it is to talk up the area—but we need to recognise what is at stake if we cannot secure the confidence of those who are looking to invest.
The hon. Lady is absolutely right that it is disappointing that the Land Rover Defender plant will not come to Teesside, but does she recognise that the site that has been allocated is an existing Ford automotive plant where there are a lot of skills? No doubt it was that, rather than the fact that the Government were not prepared to support Teesside, that tipped the balance.
I thank the right hon. Gentleman for that intervention, but that just demonstrates the urgency of the need to sort the site out and get it ready. We just cannot compete with other sites if we still do not own the site and it needs huge investment to get it ready. That is why this debate is so urgent.
Brilliant companies are investing in our area. I have mentioned Sirius’s $4.2 billion project. At full production, that will have the ability to increase the size of the Tees valley economy by 18%, and some 800 people are already working on the site. However, to reach its full potential, that project, like others I have mentioned, will require a Treasury guarantee to match commercially raised funds.
I sincerely hope that the Government back up our local ambitions with the finance necessary to support that project and others, and that they avoid their natural inclination to be risk averse when it comes to backing such major projects. I urge them to believe in us in the Tees valley and in the companies that want to invest in great projects there. I am raising a warning flag. The Government must pull their weight and put the required money behind those bids, or we will continue to lose out to devolved or other nations.
The biggest barrier to realising our ambitions is the ownership of the charge on the former SSI land, which remains with the Thai banks. That is holding back progress. Negotiations with those banks are ongoing following the signature of a memorandum of understanding between the banks and the development corporation in May. That was due to expire at the end of October, but I understand it has been extended until early next year, although no press release was issued to acknowledge that. The local team is working hard, supported by funding from the local councils, to conclude a deal for the SSI land and for land owned by others, such as Tata. It is hindered in those efforts by premature announcements of multi-million pound investments that are some way off. Such announcements put at risk the chance of securing an affordable, locally negotiated deal, and risk raising local expectations. Of course, we have compulsory purchase as a backstop should those efforts fail. That process has started—landowners know they will receive nothing for the land should a deal fail.
As a first step, we need the Government to do everything in their power to support ongoing negotiations and ensure that they result in a successful agreement at the earliest opportunity. If that involves providing funding to seal the deal, that option must be on the table. Failure to gain ownership of the land and assets is holding everything back, and Ministers need to go beyond ad hoc funding commitments to provide confidence that long-term support will be forthcoming.
That brings me to funding. Before the Budget, the development corporation had just £5 million to progress regeneration work, which is not enough to get the land ready. Given the complexity of the industrial assets involved and the huge amount of work that needs to be done to clean up the site, that will cost an awful lot of money—£5 million will not stretch far. Although the management funding of £118 million in last year’s Budget was welcome, it was just keep-safe money that the Government had a legal duty to provide to protect the public from industrial hazards. It was the absolute minimum required to keep the site safe and protect the lives of those who work there and of the local community. It was also aimed at reducing the Government’s management costs.
In this year’s Budget, three years on, the Government announced that the site is to become a special economic zone. It is not yet clear what that actually means. At this stage, the extra powers the area will be granted for being such a zone are limited to being able to retain 100% of business rates growth. There is little difference between such a zone and existing enterprise zones, of which we already have plenty around the Tees valley, and that power is already granted to local authorities. Business rates retention will increase to 75% in 2020-21 and to 100% for the pilot schemes that are already under way in 20 local authority areas.
I was concerned that that change would mean taking money that would otherwise have been received by Redcar and Cleveland Borough Council, placing the cost on local people and public services. However, answers to written questions I tabled following the Budget reassure me that that will not be the case. All business rates growth over and above the current baseline will be retained locally and shared between the development corporation and the borough council according to a formula that is still to be agreed.
Although it makes sense that the private sector should help to fund the ongoing development of the site, I am concerned that progress will be extremely slow if that is the main source of funding for regeneration. That mechanism will begin to pay off only when new industries are established, and as we do not yet own the land, that is some time away. We would like reassurance from Ministers that that will not be the limit of central Government’s contribution to the clean-up of the site, not including their long-term legal responsibility to keep the site safe.
I recognise that the Budget also included £14 million to support short-term measures to help unlock two projects on the most shovel-ready land, which is currently owned by Tata. That is obviously welcome, but in the grand scheme of things it is a very limited measure when compared with the many millions that will be needed not only to prepare land but to provide crucial infrastructure.
It is really important that we clarify that that £14 million is instrumental to ensuring that those two sites are available for two metals projects that will create 1,500 jobs. Although in isolation those projects represent small parts of sites, they are viable and ready to roll, and they will create real jobs in a very short period of time.
Absolutely. It is great to see those projects, but three years on we are still waiting for one job to be created. I cannot wait for those jobs to be developed. I welcome the £14 million in the Budget—that is positive—but we want more, and we want the pace to be quicker. That £14 million is not sufficient to undo the damage to the local economy, which lost 3,000 jobs, with the average salary declining by £10,000. The impact of that is not sustainable. We need jobs as quickly as possible. I welcome that start, but we must accelerate.
The £14 million also depends on a successful business case being presented to the Government and on businesses being prepared to invest. I have warned about lost projects for exactly that reason: there is no guarantee that interest will turn into real investment if there is not confidence in the site.
One of our biggest warnings when the steelworks closed was that the longer-term cost of managing and regenerating the site would far exceed the limited funding needed to mothball the blast furnace and keep the coke ovens alive. Given that the Government decided not to do that, despite their offering to step in to save Port Talbot a few months later, the onus remains on them to pick up the tab for the consequences. There can be no backing out. I wrote at the time to the Secretary of State:
“Any attempt by the Government to divest itself of this responsibility, without a proper jointly developed strategy, would be challenged.”
That is therefore what people would expect me to do should I begin to have concerns. I also remind everyone that, after his appointment as Government investment tsar for the Tees valley, Michael Heseltine said:
“The money to clean up the site will be what it costs. No-one knows what the condition of the site is and although there have been estimates, they are estimates based on guess work. So it is much better to make it clear, central government will pay the clean-up costs and underwrite them whatever the bill comes to.”
As we head to the comprehensive spending review in the spring, my constituents and I are looking to the Government to provide the guarantees we need that sufficient funding will be made available to help realise our ambitions. The site is and will remain a high-risk proposition for new investors until the Government confirm that they will provide the financial backing they promised in 2015. That would mean the STDC being able to purchase the land, start real investment in infrastructure, as set out in the masterplan, and ensure that new investors can invest with confidence. Without that, I fear the development corporation will follow the lead of INEOS and turn elsewhere. I really hope it does not come to that. That is why I was so determined to make the case for funding at the time of the Budget and why I secured this debate. We need a guarantee that when we have the land, the Government will stand fully behind us for the long haul.
I want to mention additional powers. Beyond central Government funding, there are other areas where the development corporation needs to be granted sufficient resources to maximise its potential. It needs to be able to offer financial incentives to potential investors so it is on the same level as other areas in the UK. Those may include enhanced capital allowances, which would help businesses on the site to invest in new technology and machinery—especially low-carbon, green infrastructure, on which we are keen to take a lead in the Tees valley. Powers to enhance the development corporation’s ability to raise cash for infrastructure, such as tax increment financing, would also be helpful. This would be a logical extension of the business rates retention scheme that has already been announced. I would like to know that Ministers are looking to expand the powers available through the special economic zone, which would offer further reassurance to investors as well.
Investing in infrastructure will also be an extremely important factor. Remediating the land, where necessary, is the first step. However, turning that land into a modern industrial site, with the roads, rail and services needed to function well and attract new investment, is crucial.
One especially important area is power, as affordable energy is vital if the site is to remain attractive to potential investors. As my Tees Valley colleagues and I have told the Department for Business, Energy and Industrial Strategy, the cap on the amount of electricity that can be supplied without paying supply levies on the private wire network operated by Sembcorp could be a deterrent to new industries.
Our local master plan sets out a vision for mixed energy sources focused on renewables, and includes the potential for either a gas or biomass-fuelled power plant. This will require significant investment, and in the medium term we have an established business here that is ready to invest its own resources in the development of a power plant, which could provide the affordable power needed for new industries looking at the site.
In conclusion, this issue is of overwhelming importance to my constituents. Barely a weekend goes by without people asking me what is happening on the site and when they will begin to see jobs. I know that locally everyone is working their socks off, and I pay tribute to all on the development corporation board, many of whom give up their time voluntarily.
However, I am afraid that I cannot bite my tongue as press releases lauding success continue to fly past when there is not yet a single new job on the site, and when we appear no nearer to a breakthrough on the ownership issue, or to seeing a firmer commitment from the Government on funding the overall clear-up. Although I understand the importance of commercial sensitivities and will always abide by them, it is important for the community and the country that there is some accountability about where we are and what is behind the delay.
I sincerely hope that this speech can prompt a constructive debate that is free from party politicking. No one here is talking Teesside down; we all want the best for the area, and we all know the brilliance and the potential of our constituents and our communities. This effort is a sincere and earnest one to do what I have pledged to do about something that is the responsibility of us all: to fight tooth and nail to secure the jobs and investment for this site and the wider Tees Valley, and to ensure the Government keep their promises and do right by the people we represent.
It is a pleasure to see you in your place, Mrs Moon.
I congratulate the hon. Member for Redcar (Anna Turley) on securing today’s debate. It is on a very important issue—one that goes to the heart of what is happening on Teesside at the moment—and I join her in celebrating the achievements of so many local businesses, large and small, which we get to see week in, week out. They are brilliant and inspirational. I never cease to be amazed at the sheer range, scope and skill of the industrial base of the Tees Valley. It is remarkable; indeed, it is a national asset of the first order.
The hon. Lady’s constituency and mine lie at the heart of the project to deliver growth, jobs and prosperity in Redcar and Cleveland, which centres on the former steelworks site. There is no downplaying the social and economic magnitude of the closure of the steelworks in 2015. Everyone on Teesside felt the consequences, and everyone on Teesside was devastated for the workforce and their families. The closure was not their fault; the truth is that the headwinds confronting steelmaking at Redcar were strong and kept blowing in.
The mothballing of the site was announced in 2009, and after SSI reopened it in 2011 it made a loss in every subsequent year of operation. Amid the desolation that followed liquidation in October 2015, the Government made a promise, which I am proud to say is being honoured. That promise was that a new beginning would be made on this iconic site, underpinned by huge Government support to secure and remediate the land, and anchored in private sector-led growth and investment.
A vast amount of taxpayers’ money has been pledged, with £137 million awarded to the site in the 17 months that I have been a Member of this House. A further £74 million for transport improvements across the Tees Valley has been pledged, which the hon. Member for Middlesbrough (Andy McDonald) will know well, as he is the shadow Secretary of State for Business, Energy and Industrial Strategy.
This funding is being directed through true local devolution, in the form of the Tees Valley mayoralty. The Tees Valley Mayor has a set of powers that are the most extensive of any devolved region of England outside London, backed by the personal commitment of the Secretary of State for Business, Energy and Industrial Strategy, who grew up in South Bank, and supported by the Prime Minister, who came up in person in August 2017 to launch the South Tees Development Corporation, which covers the steelworks site. Over the past year, the Secretary of State and the Prime Minister have been joined by a whole series of ministerial colleagues, all of whom came away from the area with renewed understanding of, and enthusiasm for, the scale of the opportunity represented by the largest brownfield regeneration project in Europe.
The development corporation’s master plan is to create 20,000 skilled jobs on the site over the next 25 years. We are just into the second year of that plan. Surveys of the 2,200 acres of developable land are now 90% complete and 1,500 exploratory holes have been drilled and analysed—the land proving much cleaner than had originally been anticipated.
The first new staff are currently being recruited for MGT’s £650 million biomass plant, which is located at the development corporation. It is the world’s largest biomass plant and is nearing completion; it is now looking for around 50 local workers. Likewise, a £250 million energy from waste plant, run by PMAC Energy, has been announced on the Redcar bulk terminal land, 50% of which is owned by SSI in receivership.
I completely agree with the hon. Member for Redcar that clean energy must lie at the heart of our local economy in future, and it would be remiss not to say a word to the Minister about carbon capture, utilisation and storage. We are entering a pivotal month for CCUS and I really hope that when the Government make their announcement they will back the idea of two dedicated clusters to develop roll-out of the technology; if they do so, I think all of us here today would join together in making the case—already so ably made by the hon. Member for Stockton North (Alex Cunningham), who chairs the all-party parliamentary group on carbon capture and storage—that one of those clusters should be located in the Tees Valley. That would be a fantastic opportunity for both our local economy and the UK’s green credentials, and indeed it would be the only realistic way of delivering on our Paris climate commitments.
I return to the issue of the steelworks site. The combined authority in the area has now received more than 100 serious inquiries about investment on the site, with a first-phase pipeline worth upwards of £10 billion. That is being complemented by other enormous economic ventures. I am delighted to see my right hon. Friend the Member for Scarborough and Whitby (Mr Goodwill) present in Westminster Hall today. The £3.2 billion Woodsmith polyhalite mine, just outside Whitby, is a transformative economic venture; it will add roughly a sixth to the entire value of the Tees Valley economy, and the mineral that it produces will be shipped underneath East Cleveland and taken through to Teesport for distribution across the world. It is incredibly exciting. I visited the site in the summer; it is truly extraordinary and what is being achieved there will be of national significance.
We also have the prospect of a freeport; I was delighted that the hon. Member for Hartlepool (Mike Hill) mentioned that prospect. However, we need to be very clear that it will simply not be possible for us to achieve the type of freeport to which we are right to aspire, if we do not leave the European Union, if we do not leave the customs union and if we do not break free to some degree from the EU state aid rules, which would make it very hard to deliver the freedoms that we want and need to see.
At the heart of all this work, all of which I hope comes off, is Ben Houchen. The leadership that Ben has shown has been transformational. As a colleague, I can testify that he works to the point of exhaustion and displays unceasing commitment to engaging with businesses, foreign investors and the Government, to stand up for Teesside.
The hon. Gentleman has acknowledged the role that Ben Houchen has played. Will he also acknowledge that the Tees Valley Combined Authority is actually made up of the five leaders of the local authorities and the directly elected Mayor, and that together they are contributing to this plan and this development?
I absolutely will. It is hugely important that this work draws together the six figures who make up the board. Ben provides exemplary leadership in his role as the first directly elected Mayor of the area, but he would be the first to say that it would be impossible to achieve anything without buy-in from Hartlepool, Darlington, Stockton, Redcar and Cleveland, and Middlesbrough. It is a team effort. The project transcends party politics. It must; otherwise it will fail.
The hon. Gentleman interrupted my thread about Ben’s role. Let me pick it up by saying that Ben led the Tees Valley’s first trade mission to the far east earlier this year. He led a delegation of local representatives in discussions with the three Thai banks that hold an interest in the former SSI land on the development corporation site. An agreement in principle was reached, which expires in February 2019, to transfer that land and its assets to the local public sector. In parallel, compulsory purchase proceedings have begun, to ensure that the land is back under local control as soon as possible. Separately, there is good reason to believe that a good deal to release the half of the site that is owned by Tata can be achieved in short order.
The Government have put themselves four-square behind the initiative to release that land. When Ben went to Thailand to meet the banks, the full support of the British embassy was thrown behind him. I know that Ben is genuinely appreciative of the massive efforts made by the Foreign and Commonwealth Office, as well as the Department for Business, Energy and Industrial Strategy, to make certain that we communicate to the Thai Government—as well as to the banks—that this issue is of material interest to Her Majesty’s Government, and that there is an international diplomatic aspect to the need to release the land as quickly as possible.
None of this work is easy. The hon. Member for Stockton North is right that some of it will take years; there is no point in sugar-coating that. None of this lends itself to quick fixes, but critical progress is being made. We are much further forward from the ashes of October 2015 than we were in 2017 or 2016, and as a result, Ben’s work has been widely welcomed in our community. In September, he was voted “most inspiring person” by Tees Valley business leaders, and my constituents recognise that he is doing his utmost.
There is an upsurge of quiet positivity on Teesside, backed by analysis from the Bank of England showing that the number of unemployed people in the north-east is down by 18,000 on a year ago, and that our region accounted for almost a quarter of the entire reduction in UK unemployment over the past 12 months. The devolution of skills strategy to the north-east, and the £24 million that has been announced for our local schools through Opportunity North East—which aims to make the transition from primary to secondary education better and more effective, working in the interests of local young people—will add to that positivity, and I stand behind those announcements. As a proud Teessider, I recognise that the South Tees Development Corporation site is a once-in-a-lifetime opportunity for our area, and I am determined that we should seize it.
Here we come to the crux of the matter. I am a realist about elective politics. At present, a gulf exists between the Conservative and Labour parties about our values, our economic strategy and our role in the world; but we have a responsibility to work together, as the hon. Member for Redcar said. It is, of course, the right and the responsibility of the Opposition to hold the Government to account in a spirit of constructive criticism, but we must avoid crossing the line into casting gloom or negativity over our area’s prospects. That is a fine judgment call, but I have the sense that whatever the Government offer is not enough, and nothing Ben achieves is right. That is not because Opposition Members have a better alternative; it is, I fear, because Ben and the Government are Conservatives. We have to push back against that. If the choice is between anger and hope, I am clear that anger will not triumph over the hope of new beginnings and a fresh start for our area. We must not dampen the public’s enthusiasm, and we must not spook investors about the economic prospects of our area.
Following the Budget, we heard a powerful intervention from Steve Gibson—the man who has been a beacon of hope for Teessiders since the 1980s—calling for an end to the downplaying of what has been achieved.
And the same Steve Gibson who endorsed the Labour candidate for the mayoralty of the Tees Valley in those self-same elections that spring. He has done more for our local economy, local football team and local identity than any of us has ever done. He is held in the highest regard and esteem by thousands of people across our area, and he should be listened to on these issues.
Likewise, after the 2017 Budget, the then-managing director of Trinity Mirror, Bob Cuffe, had cause to say:
“Breaking News. Yesterday Teesside was at risk of an outbreak of optimism and hope. Families wondering if potentially good news had broken out. Thankfully Loyal Labour Forces came out quickly with Party Gloom Blankets to try and extinguish the hope.”
Today I add my voice to their pleas: let us draw a line under this before real damage is done. Let us focus on the undoubted opportunity that lies ahead and work together to build a better future for the Tees Valley.
The entire development corporation project and the Mayor’s office are funded publicly, in a manner that is completely open to public scrutiny. As with all devolved administrations across the country, the Mayor’s Office is there to champion the interests of the local area. It requires a certain amount of staffing to do that, but I think that the leadership that is being shown from that office is absolutely integral to our hopes as an area of standing up on the stage alongside big cities such as Newcastle and Leeds, which have traditionally had a much louder voice than areas such as the Tees valley. With the disparate cluster of local authorities, we have not been able to speak with one voice. What has been achieved through devolution has astonished me. I was a sceptic about the devolution model; I thought it might just add another tier of intermediate, ineffective and bureaucratic government. It has done the opposite: it has leveraged an extraordinary amount of localised control and, more than that, has created a platform for Teesside to speak out nationally and internationally. That is a wonderful thing.
I thank the hon. Gentleman for giving way so generously. Does he acknowledge that it was the five Labour leaders of the local authorities who took that bold step in order to achieve the devolution deal, at a time when others were very sceptical about it, and that it is Labour that is making a really good contribution to the future of the Teesside economy?
I welcome the fact that Labour bought into this achievement. It took real vision; the Tees Valley has shown much greater foresight on this issue than Newcastle and Sunderland, which have proven much more sceptical and have accordingly lost time in the move towards devolution. Of course, it would be very remiss not to pay tribute to the hon. Gentleman’s predecessor as Member for Stockton South, James Wharton, who was the relevant Minister at the time. It was his deal that the local authorities signed up to, and it was only thanks to him that powers of such breadth have been devolved and are there to be enjoyed by the people of our area.
I congratulate my hon. Friend the Member for Redcar (Anna Turley) on securing the debate and for talking up our area—the positive things that are happening in our communities—but also for laying out the greater challenges that it faces. We are here to discuss the former steelworks site, where many of my constituents spent their working life before SSI walked out on our community and the Government failed to act to save steelmaking on Teesside. Local people still ask, “Why can Governments bail out banks for billions of pounds, and bail out other industries, including the steel industry in other parts of the country, but when it came to intervening to save that site in Teesside, they just walked away?”
Today’s debate is as relevant to my constituents as it was three years ago, when many of them lost their jobs virtually overnight. It is relevant because the latest statistics, published yesterday, show an increase in unemployment in my constituency. Many of my constituents look to the Government to act, but it appears that the Government have just been putting on an act. A procession of Ministers has visited Teesside to talk the area up, but talk is all we have had. When those Ministers came to the area and made their various announcements, they did not invite Redcar’s local Member of Parliament to join them. We all want to work together, yet we constantly find ourselves excluded. There have been dozens of press releases from the Mayor of the Tees Valley promising investment, but little if any has been delivered to date.
When MPs speak up to ask questions about what is happening and to demand answers, they are accused of talking the area down, putting investment in jeopardy and somehow working against those who are trying to solve the problems that we all face. I am sick and tired of that. None of us went into politics to talk our area down; we went into politics to work with whoever can deliver for our people. If that were not the case—as my hon. Friend the Member for Stockton South (Dr Williams), my near neighbour, has already said—why on earth would our local authorities, which have worked so well together for donkey’s years, press for a devolution deal with a Government they know to have stripped tens of millions of pounds from our local council services? It was because they wanted to achieve something. They wanted the crumbs that were coming from the Government’s table, because they would make that little bit of difference on Teesside.
It is, however, a fact that there has been a real lack of progress in bringing jobs and investment to the site and, for that matter, to other parts of the Tees Valley. Yes, there are legal issues to be resolved and land ownership to be sorted out, but it has been three years since the last steel was produced and not a single long-term job has been created on the site.
My real worry is not just that the Government are failing to deliver for the site, but that the local authorities, in the form of the combined authority and the metro Mayor, will never see the promise of the heavy money to develop the site fulfilled, because that is billions of pounds. Yes, there have been plenty of announcements and repeat announcements, but we need the Government to take real action, resolving the legal problems. We hear that progress is being made and that things are being done behind closed doors. We do not know the detail, but I know that it is not creating jobs.
More than ever, in the face of the uncertainty that Brexit brings, Teesside industry needs assurance and confidence in the UK. The hon. Member for Middlesbrough South and East Cleveland (Mr Clarke) talked about the fact that I chair the all-party parliamentary group on carbon capture and storage, and the importance of a project on that. I also chair the APPG on energy intensive industries. Those in industry on Teesside are beyond nervous about Brexit and what it means for them.
As a result of the proposed changes to the emissions trading scheme and escalating energy costs, we are facing a perfect storm that could land our big industries carbon tax bills running into millions, and cost hundreds more jobs on Teesside and thousands more across the country. We need an environment that can attract investors to the region, but daily news releases promising much but delivering nothing will not do that.
That includes a future for our Durham Tees Valley airport—a future that is more in doubt each day. That airport, and connectivity with London and the rest of the country, is crucial in attracting investors to the Redcar site and to elsewhere on Teesside. The Mayor promised to buy the airport, but we know that there is no more credibility to that plan than to his plan to achieve protected food status for the parmo, which doctors describe as a heart attack on a plate.
On the point about the parmo, I do not believe in the nanny state telling us what we should and should not eat. I love the parmo, and I will be the first to stand up for it. Everything in moderation.
On the airport, a non-disclosure agreement has been signed with Peel, the operators. I really do not think it is helpful or right to prejudice the status of those talks by dismissing the plan as something that will not happen. Precisely that attitude, frankly, led to Ben winning the mayoralty in the first place.
I am sure that the hon. Gentleman is blessed, like me, with a slim figure and a fast metabolism, and will be able to cope with the odd parmo. We have a duty to be held accountable and to hold others accountable for what they have said they will do, and we have to press on whether or not negotiations are going on elsewhere. The plans to develop the airport are shrouded in secrecy. The parties involved are bound by confidentiality agreements, and those of us who are asking questions on behalf of the people we represent are getting very limited answers.
We know some things though. We know that the £5 million grant to create an access road to the south side of the airport to allow further development has been allowed to lapse. Why? In reply to a letter from me, the chairman of Peel Group, which owns 90% of the airport, said that his company has invested £40 million in the loss-making airport in recent years. He does not confirm that the airport will close in 2021 when the current agreements run out, but I fear that that is exactly what is on the cards if the Mayor fails to sort this out.
The final sentence of Robert Hough’s letter does tell a story. He apologies for not being able to be more helpful, and adds:
“We hope that we will receive support from the Combined Authority to take the airport forward in the most sensible and appropriate way, but the ball is not in our court.”
That means that the ball is in the Mayor’s court—the man who blocked a grant to the airport to attract more holiday flights just last year. I have every respect for the Minister, having worked opposite him when he was pensions Minister, and I am sure he will confirm that the Government are not going to bail the Mayor out and use public money to buy the airport. Who is going to buy an airport that continues to lose millions? I certainly do not want Tees Valley council tax payers to pick up that bill. It is time the secrecy was ended and we started to get answers on how the Mayor is going to buy the airport.
Secrecy, however, is the order of the day for this Government. A Public Accounts Committee report published yesterday said that “excessive secrecy” was standing in the way of, among others, the chemical industry preparing for Brexit. There appear to be plenty of secrets around the SSI site too. Budgets have come and gone, with millions of pounds allocated to the South Tees Development Corporation, but we know that most of that was just to cover the ongoing costs of keeping the site safe. Some of the delegated powers, such as devolution of the further education budget, have been delivered, fulfilling part of the agreement made with the combined authority long before we even had a Mayor. I now appeal to the Minister to provide the kind of clarity that we all need, but particularly the clarity needed by the combined authority to make the real decisions that deliver investment and jobs.
Sadly, the upshot of failing to do that could be industry looking elsewhere—we have heard some illustrations of that this morning—rather than waiting for a suitable site that does not appear to be coming to fruition. We have been told that more than 100 investors have declared an interest in the site, but some of that interest is already waning over false promises and a clear lack vision. We do not need another news release. We need the Government to take real, decisive action now.
If the Minister takes nothing else from today’s debate, it should be the commitment of all parties and all players in the Teesside area to ensuring that the site, which sadly no longer produces steel, is seen as a big opportunity, as the hon. Member for Redcar (Anna Turley) said at the start of her speech. With the Mayor of Tees Valley, Ben Houchen, leading on that, we are in a good position to mobilise everyone to make sure that it happens.
The Labour party has learned some harsh lessons about that. I was the candidate in Redcar in 1992, standing against Marjorie Mowlam. I do not think that Marjorie would have stood by in the way that her successor did, and not fought tooth and nail to keep that site. Labour learned that harsh lesson at the ballot box when a large Labour majority was swept away by a Liberal Democrat who did fight for the site.
Does the right hon. Gentleman not agree that the steps taken by the Labour Government at that time mothballed the site and kept it open for another investor to come along and bring it back to life? The problem was that in 2015 this Government just turned off the switch and closed it, when they could have invested and kept it open like the Labour Government did.
I would leave that to the people of Redcar, who took that judgment in 2010 and did not feel that their Member of Parliament at the time had the commitment. I would not lay the same charge at the hon. Lady’s door. She has fought tooth and nail for that site, and has possibly learned some of the lessons of the past. People do understand whether a Member really is committed to the local people and industry, rather than seeing a constituency as a convenient place to get elected and then pursuing their career nationally.
As candidate, I visited the site on a number of occasions. At the time the blast furnace was operating at full bore, having recently been refurbished. I was shown two concrete bases on the South Gare site for the second and third blast furnaces that were due to be installed there. Indeed, we visited the basic oxygen steelmaking plant—the BOS plant—which at the time was colouring everything in the area with red dust, so some people in the area might not rue the passing of that big concrete building, which was where the crucibles of iron were blasted with oxygen and turned into steel.
On the subject of steel, does the right hon. Gentleman agree that thankfully the steel industry still thrives to a degree in Hartlepool, where our 84-inch, 42-inch and 20-inch pipe mills have brought much investment and many jobs to the area? While I have the Minister’s attention, will he confirm that as part of the growth for Hartlepool, a replacement for our nuclear power station is very much online, as per discussions that we have had in the past?
Absolutely. The steel industry has a future in the UK, but it is in specialist products, such as those produced in Skinningrove and Hartlepool. Sadly, we can no longer compete with the Koreans and Chinese in the production of bulk steel. The steel industry was based on Teesside because of the ironstone and coal mines up the coast. Now that we no longer have that resource on our doorstep, it is more difficult to be competitive in the steel industry, but we have expertise in specialist steels, stainless steels and specialist products, which I believe have a great future. Indeed, we have a strong automotive industry in this country to consume the steel that is being produced. I do think that there is a future for steel in the UK, but sadly it is no longer on the British Steel site that I visited with Peter Lilley, the then Secretary of State for Trade.
I mentioned opportunities on the site. The people of Tees Valley have put their trust in Ben Houchen as Mayor because they have memories of feeling let down in the past. They have opted for optimism, rather than for the negativity that was part of the other side’s campaign. I am very pleased that Ben is working collaboratively with local authorities and with the industry to deliver in the area, as my hon. Friend the Member for Middlesbrough South and East Cleveland (Mr Clarke) recounted.
I must mention the Sirius mining project, which will transform my constituency. There are already 600 people working on the Woodsmith mine site, boring a mile down the shaft to the polyhalite—an amazing resource that will make the UK a global supplier of fertilisers once again. The Boulby mine is coming to the end of its natural life and has already ceased production of muriate of potash, but it is getting into polyhalite; indeed, I have bought some to use on my own farm. There are opportunities.
As the Minister is in the room, it is important to acknowledge that we have only two fertiliser plants in the whole UK, one of which is in Stockton North, my constituency. Both plants are run by CF Fertilisers, and both are extremely worried by the Government’s proposals for a post-Brexit carbon tax, which they believe could ruin their business. Will the right hon. Gentleman join me in calling on the Minister for clarity on the matter, so that the existing fertiliser plants can continue to have a future?
Yes. I have visited the Billingham plant, and I know that ammonium nitrate is a very important plant nutrient. The development of shale gas is key. Ammonium nitrate is basically made from air and gas, so without a good, cheap and reliable source of gas, its production is under threat. The sooner we get on with fracking for that gas so that we have our own domestic supply, the better it will be for all the energy-intensive industries on Teesside, not least the fertiliser industry.
The potash site will transform the area by providing jobs, and not only to people in Whitby. Of those who are already working at the Boulby mine, about half are from the constituency of my hon. Friend the Member for Middlesbrough South and East Cleveland, about a quarter are from the constituency of the hon. Member for Redcar, and about a quarter are from my own. We already have a lot of people working in the mining industry, and it is important that they be redeployed as Boulby comes to the end of its natural life. The 23-mile tunnel from Whitby to Teesport is a phenomenal project that people around the world are observing with awe.
We need the Government to get behind the project. The hon. Member for Redcar mentioned Treasury guarantees; this is a very big project for a very small start-up company that will be an FTSE 200 company on the day it opens production. We need that support, because it would be a great shame to see other mining companies from around the world coming in and capitalising on the project after all the work that has gone into it. I hope that my hon. Friend the Minister will pass those thoughts on to the Treasury, because we need that backing. We are talking about 1,000 full-time jobs in the mining industry for at least 100 years. This is a product that people will always need; as long as people are eating, they will need nitrogen, phosphate and potash. The Woodsmith mine is a great source of potash.
Boulby has been losing staff over the past few years and its production is being scaled down. It is already approaching the end of the muriate of potash seam—the potassium chloride seam—and is now in the lower seam of polyhalite, which is what the Woodsmith mine will produce. All mines have a natural life.
There is no question but that Boulby has gone through a profound and difficult transition over the past year, with approximately 90 compulsory redundancies, but the owners would certainly want me to emphasise that they are still looking at a long-term future at Boulby. There may well be a transfer of staff between the two mines, but as far as I am aware, Boulby is not under any threat of closure or loss.
My hon. Friend is absolutely right, but the scale of operation at Boulby has reduced because of the switch from potassium chloride, which requires a lot of processing on the site. Polyhalite is a material that can be used straight away without any additional processing, so it qualifies as an organic fertiliser and many producers of organic food can capitalise on it. Indeed, one of the great things about Boulby’s mining polyhalite is that we can now start to develop markets for it around the world as it becomes available. Otherwise, we would not have had a new fertiliser product that is available for field trials, developing countries and big agricultural economies around the world, and that can be sourced from my constituency and exported to the world through that great facility, the deep-water port on the Tees.
It is a pleasure to serve under your chairmanship, Mrs Moon, and I congratulate the hon. Member for Redcar (Anna Turley) on securing this important debate.
I want to speak about my constituency’s experience of a steel plant closing down, because there are valuable lessons to be learned from it. The Ravenscraig integrated steel mill closed 26 years ago in 1992. That was before devolution, so there was no Scottish Government and all industrial matters were dealt with by the UK Government. In the mill’s last two years, 4,400 people—mainly men—were laid off. Unemployment stood at 15% shortly after the closure and is still higher than average. The constituency still does not have the same number of highly paid and highly skilled jobs that it once had. The former MP for Motherwell and Wishaw, Frank Roy, did a lot of work to try to re-energise and rework the Ravenscraig site and led on a proposal to build a new town on it, but that has never come to pass because of recessionary pressures and local resistance.
Ravenscraig is slap bang in the middle of my constituency, between Motherwell and Wishaw town centres. The SNP Scottish Government made it a national priority in 2007, and lots of money has been poured in from various funds and resources. Ravenscraig Ltd was set up as a joint venture between Tata, Scottish Enterprise and Wilson Bowden when the plant closed. The site now has a new college, a new regional sports centre, less than 1,000 new homes—although more are being built—a pub, a hotel and a building research centre. There are proposals for more new homes and for a civic park. In 26 years, we have not come a terribly long way, given that it is a 1,400 acre site, most of which is covered by roads that do not necessarily lead anywhere yet.
I do not want to sound too pessimistic—as the hon. Member for Middlesbrough South and East Cleveland (Mr Clarke) said, we need to have hope—but when something as big as the Ravenscraig integrated steel mill closes, that is a hammer blow to a community. Not much help, if any, was given by the then Conservative Government; I hope that the Redcar site does not suffer the same fate. North Lanarkshire Council—of which I was recently a member, as the hon. Member for Coatbridge, Chryston and Bellshill (Hugh Gaffney) still is—is spending quite a lot of money on trying to make the site viable.
As the council’s new chief executive, Des Murray, says, it has always been recognised that there needs to be a redevelopment site at Ravenscraig, because it is of symbolic strategic significance, but we cannot live on symbols. The hon. Member for Redcar talked about Redcar as an iconic site, as was Ravenscraig, but people cannot live on such sites. People do not get jobs just because sites are iconic. There needs to be real and continuous development.
I do not want to paint too gloomy a picture, because there are improvements. The new Ravenscraig regional sports centre has hosted international and national events to great success, and the new houses there are lovely. The site building is now creeping forward, and in April there was another planning application put in for a more modified, and probably more likely to be built, new area in Ravenscraig, which now includes industrial and retail centres as well as two primary schools and development of the civic park. This is all good news, but I have to warn people in Redcar that it takes a long time and does not necessarily lead to the kind of jobs that have been lost.
The hon. Lady is giving us a good illustration of why we need big, fast decisions and investment now. I am sure she will agree that Redcar cannot wait 20 years for the Tees valley to secure the good, well-paid jobs that we need. We do not want service jobs; we want good, well-paid jobs like we have had in the past—that needs decisions now.
The hon. Gentleman is absolutely right. I do not have a solution; I can only lay out what has happened at the Ravenscraig site. People have been doing their best, but the recession in 2007 really bit into developments there. When things get delayed, they do not always come back again, which is a real worry for everyone.
I give credit to North Lanarkshire Council, as I always do when it does things right, for continuing to work on the site and for trying to get more investment into it, but I fear that, with Brexit apparently here, this is going to be an ever-growing challenge to local agencies and authorities. Motherwell and Wishaw were iconic not just for Ravenscraig; there were always steelworks in my constituency. The fact that the Scottish Government managed to save what is now Liberty Steel—the DL works—and, in a neighbouring constituency, Clydebridge, is testament to the work that they have done and are trying to do.
We need steel. When I was first elected to Parliament, the all-party parliamentary group on steel and metal related industries was the very first one that I joined. I fought hard to save the steel industry in my constituency, and that was achieved. Ravenscraig does not make steel—it simply rolls plate—but it is still there. That is thanks to the work of the Scottish Government, who were determined to save that site and as many jobs as possible—not only the workers, but, more importantly, the apprentices who were working on the site at the time. It will be interesting to hear whether the Minister can give the same commitment to the industry in England and Wales. There are no longer steelworks in Redcar, but we need these iconic industries at our backs if we are to move forward as a group of countries.
I pay tribute to the hon. Member for Middlesbrough South and East Cleveland for saying that everyone has to work together, which I think everyone realises. It is not a party political issue when something like this happens, but things do move ahead on party political lines. We have to be cognisant of that fact, and people have to keep putting pressure on the Government to make decisions and to treat the area favourably, even if it is not recognised as a really good area for their party.
I go back to 1992, when very little was done by the central Government to support Ravenscraig and the workers who lost their jobs. I moved into the area shortly afterwards, and all I could hear was tales of when the steelworks used to be open and how Motherwell and Wishaw were such thriving, wonderful places. It took a long time for the towns to recover. They still have not recovered totally, because the jobs that people do now are completely different. I think that is what is found in Redcar, too.
Regarding the hon. Lady’s experience, does she sense that there was a loss of skills and a loss of the workforce in any way? My big concern is that the longer this delay goes on, the more people will move away from Redcar to look for work elsewhere, and we will lose our highest-skilled and best workforce.
The hon. Member for Stockton North (Alex Cunningham) has already said that Scots people go all over the world looking for work. Yes, there were people who left and people who retrained. There was a very good deal in those days for the steelworkers who were made redundant; they were given, I think, two or three years’ training, which allowed many to go to college or university and completely retrain. In fact, my predecessor retrained and then became an MP, which was not necessarily what he retrained for, and he moved away—part-time, anyway—down here to work.
It really is important that all parties look at what happened after Ravenscraig shut, because that is comparable and it should be used as a template, in some regards to complement what is still going on there, but in others to look at this and say, “We mustn’t allow that to happen. We mustn’t allow things to stall and nothing to happen for long periods.”
It is a pleasure to serve under your chairpersonship, Mrs Moon. I congratulate my hon. Friend the Member for Redcar (Anna Turley) on securing this important debate. She is a champion not just for her constituents, but for steel communities across our country, and her passion for her local area shone through her speech.
It is clear that, out of crisis, there is an opportunity that must be seized. The news over three years ago that the Redcar blast furnace would be finally turned off was a terrible blow to all of us from steel communities. The closure of SSI marked the time when our country’s steel crisis first made headlines, as steel manufacturing ended in a region that had shaped the industry for 150 years. Despite emerging in the wake of the devastation of such huge job losses, the local master plan represents the best of regeneration. It unites the region around a plan that is ambitious for the communities and businesses of south Tees, and aims to create 20,000 jobs.
As the recent BBC series “The Mighty Redcar” highlighted so well, Redcar is a brilliant town. However, the investment needed to make the plan succeed is enormous. As my hon. Friend the Member for Redcar laid out, there are huge complexities in securing land and delivering plans. There is a simple truth here: in the last two years, the Government have not been shy of announcing funds and special schemes, or of sprinkling ministerial visits to the site, but the words are not yet matched by delivery of anything like the funds needed. As has been said, much of the funding announced is for the most basic security and remediation work. The Government have a legal duty to keep the site safe, so much of the vaunted £118 million in last year’s Budget is to be used to comply with their legal duty to fund the site and to protect the public from industrial hazards.
The money for specific investment schemes is welcome, but it is far too little. Much more finance is required to complete the most basic infrastructure and land assembly works, let alone create an essential and inspiring mixed-use site at Redcar. As my hon. Friend the Member for Redcar said, companies were seriously looking to invest, but now have cold feet because of the Government’s failure to promise the real funds needed for the site.
Public funding has the power to unlock private investment, but it needs to be at a level that gives confidence to investors that the Government stand behind the scheme. Will the Minister use the opportunity he has this morning to outline specifically what further funding the Government will allocate to ensure the efficient and effective delivery of the master plan? Will he also confirm that there will be a commitment to the additional powers suggested by my hon. Friends who have spoken so eloquently today, which could help bring the delays to an end? Will he give clarity on the very serious issues surrounding the airport, as raised by my hon. Friend the Member for Stockton North (Alex Cunningham)?
Examples such as this of essential schemes being delayed by this Government’s failure to commit highlight why Labour’s infrastructure plans are so important. Success with schemes of this complexity and size is not won cheaply. We must invest to get the outcome that Redcar, the Tees valley and the whole country need. The next Labour Government will have communities such as Redcar at the heart of their programme, and I know that as our infrastructure plans are developed in detail, Teesside will not be forgotten.
I want to make something very clear. The closure of SSI was a consequence of a Government with no plan for steel—a Government who stood by as a great industry teetered on the brink and, in the case of Redcar, closed for the last time. This is an important point, because no doubt we are about to hear from the Minister—although I hesitate to put words in his mouth—about millions of pounds committed for Redcar and the site, special economic zones, and the work that the Government are doing. We should remember this: SSI Redcar collapsed because there was no policy to support British steelmaking properly, on energy costs, on taxation or on investment.
The tragedy is that we have seen very few steps forward in the last three years. Energy costs for British steelmakers are still 50% more than for European competitors, and calls for a fairer business rates system for large producers have been met with silence in Whitehall. Crucially, we still have no steel sector deal for our industry to bring together comprehensive action.
I am sorry; we must get on.
We have waited more than a year since steel companies set out what was needed, but we are yet to see action from this Government. Without that and wider industrial regeneration, there is little safety for other steel towns, and there is not the environment that will deliver success for south Tees.
This summer, Labour launched the Build it in Britain campaign, committing a Labour Government to using the capacity and expertise of Britain’s industries to fulfil far more of the country’s infrastructure needs. A Labour Government would have prevented the collapse of SSI Redcar, stepping in where this Tory Government were unwilling to save jobs and expertise to support the economy.
There will be a future for the south Tees site; I am sure of that. With great Labour women such as my hon. Friend the Member for Redcar and council leader Sue Jeffrey fighting for their area, I am confident there can be huge success.
I have to say that I found the remarks by the right hon. Member for Scarborough and Whitby (Mr Goodwill) about the former MP for Redcar, the late Marjorie Mowlam, very distasteful. [Interruption.] You referred to Mo Mowlam.
The remarks were directed at my predecessor, Vera Baird, but my hon. Friend makes an important point, and I totally agree that the remarks were disrespectful; Vera Baird did her best in extremely difficult circumstances. I come back to the point that unlike the Conservative Government, the Labour Government saved the steelworks, which were reopened.
I thank my hon. Friend for that intervention.
To conclude, the Government must properly back this fantastic opportunity, not just for Redcar’s sake, but for our future economy. If they cannot deliver the ambitious plan that the South Tees Development Corporation master plan lays out, a Labour Government will.
It is customary in Westminster Hall debates to say what a privilege it is to appear in front of the Chair. In your case, Mrs Moon, that is absolutely true. I am greatly honoured to do so.
Just currying favour with the Chair—but it is actually genuinely true. One of the most interesting days I have had in this job was spent visiting Mrs Moon and her constituency.
I thank the hon. Member for Redcar (Anna Turley) for securing the debate. These are very important topical points and I congratulate her on the consistency of her representations on this project. The whole area is very lucky to have the MPs that it does—the hon. Lady, my hon. Friend the Member for Middlesbrough South and East Cleveland (Mr Clarke) and the other MPs who have spoken today. It is also lucky to have the Mayor, Ben Houchen.
There is a bit of an undertone of “who said what where”. That is not for me to go into, but I make a plea to all parties, including those not in the room, that these matters are much better dealt with on a consensual, cross-party basis. If anybody feels that I and my office can help in that, I am very pleased to offer that help.
I concur with the Minister’s comments and I reassure him that the reason for calling today’s debate is to try to move on to the substantive issues of the site. I welcome the positive, constructive tone that we have struck today, because I think that is the only way forward.
I thank the hon. Lady for that intervention.
I have visited the site, although not recently—I was 17 at the time. I was brought up in Leeds and went on a school trip to visit the Neddy—the National Economic Development Council—in Newcastle, the steel site and the Wilton ICI chemical works nearby. I have never forgotten the scale of it.
I whizzed past the site in my current job, when speaking at a steel conference just next to it in the constituency of the hon. Member for Redcar. A lot of Members of Parliament have trooped up there, as have a lot of Ministers. There has been talk of hollow words, but it is much better that there is a general awareness throughout the Government. The Mayor and other parties involved with the development corporation are regular visitors to the Treasury and other parts of Government, and so they should be. It is part of our democratic system, and we all co-ordinate together; I hope everyone realises that my office is very much part of that. I have certainly had nothing on my desk to do with this project that has been gratuitously turned down, ignored or not taken seriously.
I have been scrawling furiously during the debate to try to prepare to answer the points that have been made. I will try not to go over the history again, as it has been well covered by other contributors. Perhaps for the sake of Hansard it would be convenient if I did, but I think it has been said very well.
The South Tees Site Company is funded by a grant of £118 million, which was granted in the autumn Budget 2017 and includes £48.9 million for improving the site. The point was made—eloquently—that a lot of that money had to be spent, but it is still taxpayers’ money. It did have to be spent, and I hope that it is the first of very much more to come in the future.
There has been talk of different projects and implications that they have been turned down by the Government. My personal experience of doing this job is that I have spoken expensively—I mean extensively—to Liberty Steel. In its case, both those words might be true! I have spoken to it to get a project, which is still very much in outline. It has not been rejected. There has been nothing put in front of us.
It might have been the hon. Member for Redcar, or another speaker, who said that this project is going to Scotland. That is not the case. I am in regular talks with the company and I have been to its offices. I have met the chairman and other officials, several times, with our own experts, to try to get the project to a state where it can be looked at as a serious proposal. This is not a criticism, but it is not yet at that stage. I hope it will be. We meet regularly, and the company knows that the door is open.
As far as INEOS is concerned, its decision was taken for commercial reasons. As has been mentioned, I think it was more of a question of not wanting a brownfield site and a start from scratch, rather than anything to do with this site, the Government saying no or anything like that.
All in good time. I cannot give the hon. Gentleman a date now, but I will come to that shortly. I will make progress because I want to leave time for the hon. Member for Redcar to sum up.
The £14 million granted by the autumn Budget and the special economic area status for the site are both important. They came about because all those different Departments—including the Ministry of Housing, Communities and Local Government, and the Treasury—are working with South Tees Site Company, the development corporation and the combined authority. We have worked together on the proposals and will continue to do so. The 1,500 jobs quoted are a first step, but I know they are nothing compared to the number of jobs that were lost when SSI went into liquidation and struggled from crisis to crisis.
It is very easy to blame one Government and not the other or to say that the Government could have intervened by putting in a load of money to keep things going, but I have seen the consequences of that. I have seen places in the valleys in Wales where hundreds of millions—if not billions—of pounds were spent on keeping businesses open, and I saw a failed industrial policy in the north of England, where I was brought up. That does not mean that Government do not take part in industry—we are spending more money on research and development than ever before.
I really believe that the industrial strategy, in partnership with businesses, is the future. The reason why there is not a steel sector deal—as the shadow Minister, the hon. Member for Sheffield, Brightside and Hillsborough (Gill Furniss) mentioned—is that industry itself has not come up with its side of the proposals. I am working on this, meeting industry regularly, and am still hopeful, but that is work that must be done in partnership.
The Government responded immediately with support for the site when the closure took place, including a sum of £30 million that was ring-fenced for the statutory redundancy payments. The SSI taskforce, under the leadership of Amanda Skelton, took a leading role and deserves a lot of credit. The hon. Member for Redcar was a member of the taskforce and did a great job.
The clichés about people working together are predominantly true in this case; spats and disagreements come and go. I think it is fair to say that we cannot recreate what was there before—time has moved on. My right hon. Friend the Member for Scarborough and Whitby (Mr Goodwill) made the point about how steel has changed and certain commodity products cannot compete with much lower costs. Of the factors for the industry growing up there—iron ore, steel and water—only one remains. That does not mean that the site does not have a fantastic future—I really think it does. I am delighted that the hon. Member for Redcar quoted Lord Heseltine and former Chancellor George Osborne in different parts of her speech.
The Scottish National party spokesperson, the hon. Member for Motherwell, made a very—
I was abbreviating—my apologies to the half of the hon. Lady’s constituency that I did not mention. The hon. Member for Motherwell and Wishaw (Marion Fellows) made some good points about apprenticeships, and I am very pleased about the way that apprenticeships in steel are going. I was pleased that all the apprentices at Redcar were found alternative jobs and positions. The experiences of Ravenscraig and Consett were fed into the creation of the solution, with the development corporation and so on. That does not compensate for what happened, but it shows that lessons have been learned.
The master plan is excellent, and proposals for additional funding will be carefully considered. They have to meet public funding guidelines, which I know all hon. Members will accept. The Government’s current position is therefore to commit resources in a number of areas. I accept the shadow Minister’s view that some of that is just hot air and announcements, but that is the way that public sector financing works; there is a principle and then there has to be a business case. I make no apology for that—that is the way it has to work. Business cases are not there to be stopped; they are there to be taken on board.
I really am running short of time—that is my own fault for giving too many compliments to most of the other speakers, which I should not have done—so I will hurry up. The subject of the airport, which was raised very eloquently, is not one that I have really concentrated on. Maybe I should have, but I have not. May I suggest a meeting with the hon. Members who are interested in the airport issue, rather than just giving a vague answer today?
We very much believe in the concept of a local solution, and the Government are very open to specific suggestions from private companies or from the development corporation. I hope we see through all the smoke about individuals—who should be in this or that job, or who said this or that—and come to the collective solution that we all want.
The debate has given me the chance to canter over matters. We must remember that the site is the UK’s largest regeneration opportunity, and if the UK is to develop in terms of its industrial strategy, which we hope it will and fully intend it to do, that will be there. The site has received much publicity thanks to the efforts of hon. Members present, the Mayor and everybody else involved in the development corporation. We know what the challenges are in the special economic area in the Tees valley. Even people who did not watch the documentary on television—I was very disappointed about the lack of a starring role for the hon. Member for Redcar; had I been in charge of casting I would have altered that—will know that these things take a lot of time. Decontamination has to happen first, before a deal with the banks, which I am sure will come about—these are very complex matters. It is not as if the banks are a single entity; there are three of them, with very different views.
The Government are determined to see the site redeveloped in an exciting way in the end, so that it is a flagship for our future industrial strategy and an example for the next industrial revolution as it was for the first.
I appreciate the Minister’s response, which was thoughtful and considered, giving us a real sense of positivity. I am glad that he took the trip that he did when he was 17. Everyone who knows our area well knows that it is never forgotten. It is one of the most fantastic places in the country, and the sense of pride, opportunity and passion in our town and area will carry us through this situation and enable us to rebuild.
I thank all colleagues who participated in the debate. We have heard a fantastic range of views and experiences from the past, as well as important challenges and questions from this side of the Chamber. I also thank my colleagues on the Government Benches. As has been said many times, we will make a success of the site—bringing jobs, investment and opportunities for the people we represent—only if we work together constructively. I sought to secure the debate this week in particular because I was, frankly, disappointed at the nature of the Budget debate and the level to which it degenerated. I am pleased about the positive and constructive discussion that we have had today.
It is vital that MPs have the opportunity to represent their constituents and to ask these questions. We live in a democracy in which everyone in a public position is accountable for the decisions that they make. We all know that it will take time to regenerate the site, that the ownership issues are complex and that there are confidentiality issues at stake, but we have a fundamental duty to our constituents to raise these issues and to hold the Government to account. Anyone who knows me or my colleagues knows that we will be holding the Government’s feet to the fire every single day that we are in this job, to get the best for our constituents.
Today’s debate was held to make sure that the Government’s long-term commitment is there and that warm words and positivity are backed up by money. That will be the bottom line in all this. I am very proud of the work being done locally, and of the positive and constructive relationship that I have with Ministers. I am grateful that the Minister’s door is always open. We will continue to work together to champion businesses that seek to invest in our site and I am extremely positive about its future, which could unlock a new industrial renaissance in the Tees valley. The onus is on all of us to work together to drive that, and I thank everyone who has contributed to the debate to make that happen.
Question put and agreed to.
That this House has considered the future of the former steelworks site in Redcar constituency.
Universal Credit Roll-out: Nottingham
I beg to move,
That this House has considered the effect of the roll-out of universal credit in Nottingham.
The latest stage of the universal credit roll-out in my city took place about a month ago, which is why I sought this debate. One of the vagaries of this place is that we cannot always get the debates that we want at the time we want them, so I am pleased to be able to raise the subject at this important early stage of the roll-out.
Some claimants in the city were already on universal credit, but many will remain on legacy benefits for a while longer, until managed migration. For the past month, however, all new claimants in our city have had to claim universal credit. So far, so simple, but having seen how the roll-out has gone elsewhere and its impact in communities that are very similar to mine, my constituents and I are anxious, fearing that this will be anything but simple. We are anxious that it will mean delays, reductions in benefits, debt, rent arrears, visits to food banks and more poverty. My colleagues in Nottingham—I am glad to be joined by three of them—and I do not accept that for our community. I believe that the roll-out should be stopped.
I will talk about experiences in similar parts of the country to ours, and specific concerns that I hope the Minister can address. It seems incredible that universal credit was first announced eight years ago. The rationale was to replace the six working-age benefits. The aim was to simplify the benefits system, improve work incentives, reduce the potential for error and fraud, and mitigate poverty among low-income families. Those are broad principles that we share—I certainly do—but universal credit as it is today is not that system, and it is the most vulnerable people who are suffering and will continue to suffer as a result.
We are pleased to have campaigned for—and, in the Budget two weeks ago, secured—money back into universal credit. That is, however, only a small fraction of the £7 billion in social security cuts still to come by 2022-23, according to Institute for Fiscal Studies analysis. That will both make families worse off and be worse for the Government and the state of the public finances—a point I shall cover later.
I thank the hon. Gentleman for bringing this matter before the House. What he cites is not specific to Nottingham; it applies to other parts of the United Kingdom, including my constituency of Strangford. Does he agree that this “simple” scheme, which is easy for those who are computer-literate, is not so simple for many? More consideration must be given to those who are not able to claim correctly due to genuine misunderstanding and miscommunication, given that they can be penalised with sanctions if they cannot work through the system. The system simply does not work for the ordinary person.
The hon. Gentleman is right that what I have to say about Nottingham is informed by the experience of other parts of the country, so it will be true for every community in the land. Yes, the system is supposed to be simple—we want a simple system that promotes work—but there are lots of pitfalls, which people with the best of intentions are falling into. I completely share his view that such people ought to be supported.
In June, I was startled to read that the National Audit Office had found that universal credit might end up costing more than the existing system, that it cannot prove that it gets claimants into work, and that it is unlikely ever to deliver value for money. We should all look at that.
As my hon. Friend knows, the false economy of some of the new systems worries me. That is one of the reasons why I have always argued that advice services should be a statutory function. Citizens Advice states that for every £1 invested in advice services, we can save £10 from people falling out of the benefits system because of mistakes and so forth. Is not the worry about this particular form of the universal credit roll-out that it is leaving people confused and in a messy situation, without proper advice from the system to fall back on?
I thank my hon. Friend—my neighbour—for his contribution. I absolutely agree with that. I am passionate about advice services. As he knows, in October last year I led a debate in Westminster Hall on advice services in our city. They do incredible work to help people find a way through that fog, but they are clearly under real pressure. Our council is also under extraordinary financial pressures, but has put more into the area, trying to support it when many other services are not being treated similarly. I am pleased it is doing that, but a real need is clearly building up. I will cover much of that.
It is important to understand the context of what has happened elsewhere. The Trussell Trust found that 12 months after roll-out, on average, food banks see a 52% increase in demand, compared with 13% in areas that have had universal credit for three months or less. The Children’s Society has estimated that under the proposal for an earnings threshold, about 1 million children living in poverty will miss out on free school meals. That will almost entirely affect working families. Furthermore, under universal credit, £175 million for families with disabled children will be cut. Analysis by Contact suggests that because of the 50% cut to the child disability payment under universal credit, 100,000 families with disabled children will be worse off by more than £1,750 per year. Also, a report by Policy in Practice has indicated that 750,000 households on “disability benefits” will lose, on average, £76 per week.
What my hon. Friend says is the reality. Whatever the Minister says, the reality for people in Nottingham or my constituency is that they lose lots of money. In many cases, they received x amount under one set of benefits, but lose significant sums of money when they move to universal credit. Instead of living in a parallel universe, the Minister should come to the real world.
I share that view, and it saddens me. I have been a Labour party member for all my adult life, and I am proud to be a Labour party Member of Parliament. The meaning of “Labour” is work, so we believe that work is good for people. We want people to work, so when we hear of a welfare system that promotes work but provides a safety net, we think, “Yes, that’s good. Even better, it’s going to be simple.” What was and is never explained is the bit after the asterisk: “Also, it’s going to be a vehicle for reducing the benefits bill”—even though there is no evidence to suggest that it will succeed. That is why we have a lot of the challenges and the chaos. The Library estimates that in February this year, nearly 13,000 people were not paid in full on time, and 7,500 people did not receive any payment at all.
Not only are people not paid on time, but many people have their claims rejected. They then have to go through the process of seeking mandatory reconsideration and sometimes an appeal. A large proportion of those appeals are successful, but in the meantime people have racked up debts, and in some cases even been evicted from their home. That has a significant impact on them, their families and their mental health. Is not that failure to maintain someone’s benefits during an appeal a problem with the system that the Government should address?
I completely agree. When claimants are successful on appeal or at tribunal, they get their payments backdated, and I sometimes read, “So that’s all okay, then.” It is not, because in the meantime that has put extraordinary pressure on people who are, by definition, vulnerable. That is not to mention the anxiety. I am grateful to colleagues for their contributions.
I have listed quite a few numbers; it is important to start with the context and what has happened elsewhere, which is what I think is coming to us. We have to remember, too, that behind every one of those statistics is a human being, a family and a life. We in this place have a real duty of care to ensure that we look after those people, and that the changes that come about from legislation from this place support them.
In my constituency, about 20,000 people either already receive universal credit or—the bigger chunk—are on the six legacy benefits and will move on to universal credit at some point. That is about one in four eligible adults. The issue is significant, so it is important for me to focus on it in my role. We hear the stories about what has happened; they show the devastation of lives and the injustice.
I have received support and information from local advice services; my hon. Friends the Members for Nottingham East (Mr Leslie), for Nottingham South (Lilian Greenwood) and for Gedling (Vernon Coaker) and I recently attended a meeting with Advice Nottingham. We were grateful to hear the direct experiences of those who give advice and those living in the benefits system. Beyond “Brexit”, “hostile environment” must be the defining political term of the year. I contend that the term applies not just to the Home Office’s immigration policies and Windrush, but to welfare. Having talked to those individuals, I felt that they were the victims of such an environment. Slightly beyond universal credit, my friends at Disability Direct in Nottingham say that at tribunal, they are successful between two thirds and 70% of the time. If those who appeal at tribunal are winning more than two out of three times, the system does not work.
I would like the Minister to consider a couple of practical issues that have been raised with me. The first is on digital support and access to online services. Nottingham City Council has very helpfully provided a list of public access computers to try to quell worries. Advice Nottingham says that it was assured by the Department for Work and Pensions that support would be available from work coaches at all jobcentres, and that any new universal credit claimant needing support would be able to get help from a jobcentre on demand. We have three jobcentres in Nottingham city: two in the city centre and one in Bulwell in my constituency. Those are obvious locations for a jobcentre, but we are a big city, so many people must travel more than half an hour by tram or bus to get to them. There is a real cost implication for vulnerable people, especially if multiple visits are needed. That needs consideration.
We are in the very early stages of universal credit, but I have already heard an example from Advice Nottingham of how it is not working in the constituency of my hon. Friend the Member for Nottingham South; I hope she does not mind my borrowing it. A client wanted to make a universal credit claim and had no digital support at home—no computer or smartphone. They travelled for 35 minutes, mainly by tram, to their nearest jobcentre, as they had been told to, at a cost of £3.50 for a day ticket. When they arrived, the work coach told them to visit their local advice agency, which was Clifton Advice Centre, where they would get help. No one at the jobcentre offered to help them complete their application or pointed them in the direction of the local library, where they could get digital support. Instead, they travelled back home and made an appointment to see a welfare benefits adviser, losing time, money and peace of mind in the process. The system is not working.
I have spent time with my local jobcentre staff, and I know them to be committed folks with the best of intentions who are making the best of a difficult situation, but they must have the right skills.
My hon. Friend makes an important point about people’s access, even to make a claim. My constituent Errol Richards spent the whole of the last two weeks trying to make an initial claim, without success. He initially tried to register his claim at Jobcentre Plus, but his claim crashed before he could attempt to submit his identification documents, and there was no scanner available. He then made two lengthy visits to different libraries in Nottingham, but still could not submit the initial claim because the universal credit system crashed again. Should the Government have not addressed those problems and ensured that their IT systems were sufficiently resilient before trying to roll out universal credit to thousands of additional claimants?
I am very sad to hear that contribution. Clearly, that individual is trying to do the right thing, and the system is not supporting them. That is not particular to Nottingham; it has happened throughout the roll-out process. It is not acceptable to impose universal credit on our community while knowing that these challenges would happen. Accessibility is a real issue. The one-size-fits-all approach of digital technology must be considered, because that poses a challenge in communities such as mine.
My advice to constituents on all big changes such as these is to engage and be proactive, and not to put letters in a drawer. When people come to see me at surgeries, I wish, as all other hon. Members do, that I could have seen them two weeks earlier, or one letter left in a drawer earlier, because that would have helped. I was talking to a colleague last night while rehearsing some of my arguments. His constituency is further ahead in the roll-out, and he said that a constituent had tried to be proactive because, having heard about all the challenges, they did not want delayed payments. The person was on legacy benefits and did not need to transfer, but they transferred anyway, so their universal credit application was, in essence, a new claim. That unnecessarily kicked them off the old legacy benefits and into the new system, which meant that they would lose their transitional protection. Even when we try to help, the perverse incentives in the system mean that there is a risk that we do more harm than good.
Christmas is coming, and in Nottingham we have big retail and services sectors, which will mean that for many constituents and residents in the city, there will be a chance for extra hours. There is not enough awareness of, and support for people to understand, how changes in their income will affect their universal credit. The money comes into their bank, and they realise they are not getting what they had banked on, because those extra hours do not necessarily mean the extra income that they thought they would get. I have been contacted by the GMB trade union. I refer colleagues to the Register of Members’ Financial Interests, because I have long history of campaigning with it. It has produced useful advice, because it fears that staff will not know about that. Across the system, we need people to understand that if they do more, they must factor that into the calculation; otherwise, they will get a nasty surprise.
I feel particularly strong about my final point. Many aspects of universal credit are exceptionally important, which is why we are having this debate. They get a lot of coverage, but the issue of joint claims and split payments does not. At the moment, when applying for universal credit, couples make a joint claim and a single benefit award goes to the household—either to one recipient or into a shared bank account. In the past, at least child tax credit could be expected to have gone to the woman or the mother. I was responsible for domestic abuse services in Nottingham for a number of years; that money would offer a way for a woman to leave an abusive situation, because it would allow them to pay for petrol, or a train or bus ticket, so that they could get out of that situation.
The single payment creates an opportunity for abusive partners to exert financial control over their spouse by withholding funds and making it difficult for them to access money to meet their and their children’s needs, or to leave the situation. Refuge reports that one in five women and one in seven men experience that type of financial abuse. Survivors of domestic abuse can request that their payments be made separately as part of an alternative payment option, but the guidance given to work coaches is that split payments can be considered only where the claimant notifies the DWP of financial mismanagement, financial abuse or domestic abuse in the household. The work coach then makes a decision on whether to grant that split payment, but the other member of the household can request that the single payment be reinstated.
Eight-five per cent. of women surveyed by Women’s Aid said that requesting separate payments would worsen the abuse at home. People live in a dangerous fantasy land if they think that a woman will march down to the jobcentre, possibly with her abuser, and request that payments be split because at some point she might want to leave that abusive relationship. That is unnecessary and damaging, and it needs to be resolved straight away. The Scottish Parliament has already passed legislation to split payments by default; the implementation is yet to be finalised, but it is vital that the Government pay full attention to that and seek to replicate it as soon as possible.
We want a welfare system that promotes work, but protects people in tough times; however, we have made our safety net out of barbed wire. That is wrong. Advice services in Nottingham are doing their best to help; Nottingham City Council is doing its best; DWP staff will do their best to make it work. Fundamentally, the system does not work; it should not be imposed on my community until it does.
It is an absolute pleasure to serve under your chairmanship, Mrs Moon. The hon. Member for Nottingham North (Alex Norris) gave us an interesting contribution, and we heard interventions from a number of colleagues. I will respond to those, but I start by putting into context where we are in terms of job figures.
I suspect we all agree that ultimately we want a welfare system that supports individuals, is fair to taxpayers and helps people into work. Yesterday, the Office for National Statistics published employment statistics that showed more people in work now than at any time. The rate of women in work is at a near record high. The employment rate for people with ethnic minority backgrounds is at a record high. Youth unemployment has halved since 2010. Since 2013, almost an extra 1 million people with disabilities have come into the workforce.
Some 3.3 million jobs have been created since 2010. There is always a discussion about what kind of jobs those are. Some people suggest that they are low-paid jobs that are not permanent, but that is not the case: 75% of the jobs created since 2010 are full time, permanent and in higher-level occupations that attract higher salaries—not my statistics, but those of the Office for National Statistics.
I am sure we have all heard what the Minister has said. Of course we welcome the fact that more people are getting into work, but many of the cases that we deal with in our constituencies are of people who are on universal credit not because they are out of work, but because they are in work and simply not earning enough to support their families. Many of the ways in which universal credit works do not support people who are in work, so people who have a fixed pay date but get paid early one month because the date falls on a weekend or a bank holiday find that they get two pay sessions in their universal credit assessment period and lose their universal credit altogether. Why is the Minister not addressing those concerns for people who are in work but not earning enough to be out of poverty?
I had just started to set out the case. Opposition Members have made a case, and I am responding to it.
I return to the point about the jobs that are being created. There is always a lot of noise about zero-hours contracts, and I am pleased that we as a Government have banned exclusivity in them, but in the economy right now, fewer than 3% of jobs are classed as zero-hours contracts and those individuals are working an average of 25 hours a week. The number of zero-hours contracts has come down this year.
I hope we are all pleased that wages are growing at the fastest rate in almost a decade. That is an incredibly positive development and I hope it will continue. I do not want to be churlish, but several hon. Members who were here in 2010 will remember that we were told by Opposition Members that 1 million jobs would be lost as a result of the Government’s policies. That has not happened. We have a buoyant jobs market with more than 3 million jobs created since 2010. Our welfare reforms have played a big part in ensuring that we are helping people get into work.
When we talk about universal credit, we have to compare it with the legacy benefit system that it replaces. As constituency MPs, we know that the legacy benefit system is incredibly complicated, with six benefits delivered by three different Government agencies, effective tax rates of 90% for some people and cliff-edges that disincentivise people from taking on work beyond a certain number of hours. As a result, 1.4 million people were trapped in benefits for almost a decade. Hon. Members talk about the amount of money in the system, but under the legacy benefit system, £2.4 billion of benefits are not claimed. That will change under universal credit, which will benefit 700,000 households to the tune of an average of £285 a month.
When it comes to universal credit, we are providing that support. I know that the hon. Member for Nottingham North has visited his jobcentre and sat with jobcentre staff. I am pleased that he has praised their work. He will know, because he has sat in on those interviews—as I saw in his newsletter—and seen the interaction, that for the first time in the welfare system, we are ensuring that one-to-one support is provided to the individuals we are interacting with. As part of my role, I regularly go up and down the country visiting jobcentres. Invariably, I hear from jobcentre staff that they feel that this system allows them to do what they came into the system to do—provide that one-to-one support. I find that incredibly heartening.
As I said, the cliff-edges are gone and we have a smooth taper. Under universal credit, people are getting into work faster, staying in work longer and earning more. In terms of support in the system, we introduced an extra £1.5 billion of support earlier this year. I am disappointed that Opposition Members did not vote with us on that, because it meant that the seven-day waiting period was abolished; two weeks of run-on in housing benefit was made available, which does not have to be repaid; and people can now get 100% advances on day one, if that is what they need, to help with any cash-flow issues. We can see that that is working, because 60% of people who are now coming on to universal credit are taking up advances. That is a result of the support that their work coaches are providing.
In last month’s Budget, another £4.5 billion net was injected into universal credit. Work allowances are up by £1,000, which will benefit 2.4 million families up and down the country, particularly those on low incomes, to the tune of £630 a year. In terms of helping individuals, as we have ensured that there is a two-week run-on for those who are on housing benefit coming on to universal credit, we shall also ensure that there is a two-week run-on of out-of-work Department for Work and Pensions legacy benefits for those who come across to universal credit as part of the managed migration process. Again, that will help more than 1 million households throughout the country.
Many people will have welcomed the Chancellor’s announcement that the universal credit work allowance was to be raised by £1,000, but it was raised for only some universal credit recipients. Admittedly, it increased for people with disabilities and parents with current responsibilities for children, but low-paid working couples whose children have left home or who do not have children were excluded. Poverty is poverty. Why was support provided for some families and some individuals but not others? Why did those working families not benefit from the £1,000 increase?
I would have more sympathy for the hon. Lady’s argument if she had voted to support the Budget, which Opposition Members did not do. I feel strongly that although it is right that hon. Members on both sides of the House raise the issues they have with any system or policy of the Government, the point where money is being put into the system to support their constituents and mine is the point at which they have to follow through and support those policies.
The hon. Member for Nottingham North has engaged with his jobcentre by visiting and taking part in a Disability Confident event organised by it, but that is not the same for all hon. Members present. I would encourage every single hon. Member—[Interruption.] I did not allude to the hon. Member for Gedling (Vernon Coaker), but there are hon. Members who have raised issues in the debate who have not visited their jobcentres recently. I encourage all hon. Members to engage with their jobcentres.
Where hon. Members have individual issues, they should raise them directly with the jobcentre and they should feel free to write to me as the Minister responsible. Again, I do not wish to be churlish, but—if I may put it like this—there has not been a large amount of correspondence about universal credit from hon. Members representing Nottingham, but where there are issues, they should feel free to raise them.
In terms of preparation by the local jobcentre, I had an opportunity yesterday, ahead of the debate, to speak to the district lead for Nottingham who is responsible for the three jobcentres. There has been a huge amount of engagement: 350 stakeholders have been met and eight or nine stakeholder events have taken place, including meeting landlords. That is all part of ensuring that we deliver what we all want for our constituents—a system that works.
Whatever our political differences, one thing that we can unite on is that we want a system that delivers, particularly for the most vulnerable, which is precisely what universal credit is doing. We want a system that supports the most vulnerable, that is ultimately fair to taxpayers, and that helps people into work.
Question put and agreed to.
M4 Upgrading: South Wales
[Siobhain McDonagh in the Chair]
I beg to move,
That this House has considered financial support for the upgrading of the M4 in South Wales.
It is a pleasure to serve under your chairmanship for the first time, Ms McDonagh. I am pleased to see the Minister in his place. I appreciate that this subject is slightly off-topic for him, but in the absence of a Wales Office Minister or a Treasury Minister, we appreciate his presence. I ask that he feeds thoughts, remarks and insights from the debate to relevant colleagues.
I want to return to a subject that has been discussed many times over the years, in this place and the Welsh Assembly. It is a subject that every Welsh Secretary in the past 30 years and every First Minister of Wales during the devolution era has had to consider at some point. It is probably the largest and most controversial infrastructure project on the table in Wales; it is certainly the longest running. I am talking about the proposed upgrade of the M4 motorway around Newport to tackle severe congestion on a part of our road network that is vital for the whole south Wales transport corridor.
Most recently, the M4 project featured in last month’s Budget statement, when the Chancellor stated that he was willing to consider increasing Welsh Government borrowing powers to support the delivery of a new M4 relief road. That decision should receive scrutiny in the House.
Overall competence for road improvements in Wales lies with the National Assembly in Cardiff, and the decision on whether to go ahead at all with the M4 proposal is for the Welsh Government and Assembly Members alone. However, given the ongoing discussions with Her Majesty’s Treasury about the Welsh Government’s financial powers in relation to the scheme, the announcement in the Budget, and the UK Government’s overall responsibility for the health of the UK economy, it is right that our Parliament—especially Members from Wales—has an opportunity to comment on the matter. This is certainly a timely moment to do that.
I congratulate the right hon. Gentleman on securing the debate. He rightly mentioned the long history of this matter, but does he agree that, given that tolls are about to be taken away from the Severn bridge, it is imperative that a solution is found on the issue of the Brynglas tunnels?
The hon. Gentleman makes a vital point, which I hope to make myself later. He is absolutely right. There is an urgency to this issue that certainly seizes the business community and that we in the House should all be aware of, too.
I am told that we are just weeks away from a binding vote on the scheme in the Senedd, with the Welsh Government due to announce their response to the public inquiry that ran from February last year to March this year. Members of this place have no reason to be neutral on the outcome of that vote. We are not disinterested bystanders. Every single current Labour and Conservative Member of Parliament from Wales stood on a manifesto commitment to fix the M4 problem. My party’s 2015 manifesto stated that a Conservative Government at Westminster
“will continue to work with the Welsh Government to deliver major improvements to the M4”.
Our track record of willingness to work to give new financial powers to Wales demonstrates that we are indeed doing that. My party’s Assembly election manifesto in 2016 contained a pledge to
“start work on an M4 Relief Road within 12 months of forming a government.”
Welsh Labour’s manifesto at that election stated:
“We will deliver a relief road for the M4”,
and its general election manifesto just last year repeated that promise to deliver a
“new relief road for the M4”.
Politicians from both major parties and at both ends of the M4 have campaigned for and made promises about the upgrade project. Furthermore, the UK Government’s responsibility for the Prince of Wales bridge, which connects this section of the M4 to the wider UK motorway network, and our decision to remove the tolls on that bridge next month, which the hon. Gentleman rightly mentioned, mean it is important for the House to debate this matter.
Just so we are clear, we are not discussing a project of special interest to just one or two constituencies. Indeed, my constituency is about as far from Newport as Newport is from London. Even so, numerous businesses in my constituency rely on being able to get through the M4 bottleneck. It is hard enough for a business to stay competitive when it is on the geographic periphery and faces additional transport costs anyway without congestion problems undermining its position further.
Mansel Davies & Son, which is probably Wales’s most important road haulage firm for the dairy industry and is the largest employer in north Pembrokeshire, runs 40 lorries each way through this section of the M4 every day. Every one of its drivers would be able to describe far better than I can the problems they face negotiating that section of the motorway. Such is the strategic importance of the M4 corridor, which links Wales to the rest of the UK, to Ireland via the ports of Fishguard and Pembroke Dock in west Wales, and, crucially, to the continental mainland, that this should be considered a project of true national significance. I am pleased that we have the opportunity to discuss it today.
The key issue is that this vital section of the M4, which is one of the most heavily used roads in Wales, is not for fit for purpose. It does not meet modern motorway design standards, and the resulting congestion causes unreliable journey times. That has direct economic impacts on south Wales. The M4 between junctions 28 and 24 was originally designed as the Newport bypass, and design amendments in the 1960s included the first motorway tunnels to be built in the UK, which are now known as the Brynglas tunnels.
This section of the M4 has many lane drops and lane gains, resulting in some two-lane sections, and it has an intermittent hard shoulder and frequent junctions. It is often congested, especially during weekday peak periods, resulting in slow, stop-start conditions, with incidents frequently causing delays. It has been like that for many years, and the problems are getting worse.
In the closing remarks to the public inquiry that ended in March this year, the Welsh Government’s QC, on behalf of Welsh Ministers, called the traffic delays a
“pressing problem demanding a solution”.
Former Prime Minister David Cameron used even more graphic terms when he visited a haulage firm in south Wales in November 2013, saying congestion on this section of the M4 acts as a
“foot on the windpipe of the Welsh economy”.
Strong words—but he only echoed the kinds of words that businesses right along the south Wales corridor use about the M4.
The managing director of a major south Wales haulage firm told me recently that this section of the M4 is becoming a “no-go area”. He said:
“From 7.30 to 10 o’clock in the morning, and then from 4 o’clock to 6.30, it’s like a car park.”
He described how it often pays for his heavy goods vehicle drivers to park up at the motorway services for an hour or two to save their stipulated driving hours, so they are not used up crawling along in near-stationary traffic. That is not an efficient way of running a logistics operation. In an economy that increasingly demands just-in-time delivery, a key transport corridor that grinds to a halt twice a day is certainly bad for business.
Ahead of the debate, I received a helpful note from the Freight Transport Association, which backs the need for new investment to fix the M4 problem. It stated:
“The Welsh supply chain moves goods by road much more than other modes, and so maintaining targeted roads investment is vital to securing Wales’ economic future.”
It added that
“the M4 in South Wales forms part of the Trans-European Transport Network, which provides connections throughout Europe by road, rail, sea and air. The M4 plays a key strategic role in connecting South Wales with the rest of Europe…It is a key east-west route being the main gateway into South Wales…It is important therefore that development of the M4 around Newport is not viewed as a ‘local’ issue…The strategic importance of the M4 requires that it be viewed in the national context.”
Yet the truth is that this vital route does not have a proper motorway right now. The section we are discussing would not be allowed to be built today, given that it does not meet modern design standards. CBI Wales director Ian Price said business have been “crying out” for a relief road for more than 10 years. He added:
“The M4 is responsible for two-thirds of our national GDP and a relief road is projected to return to the Welsh economy £2 for every £1 invested.”
We could spend all day talking about the different ways in which businesses in Wales are affected by the problems with the M4, and why there is such a strong economic case for investing in a relief road, but I want to flag up one of Wales’s special strengths. We are incredibly good at hosting major national and international events. It is really good for the whole of Wales that the capital city, Cardiff, is increasingly recognised as a fantastic city in which to host events such as the Champions League final, the rugby world cup, Ashes cricket tests and—depending on our taste—Ed Sheeran concerts. I would love to see the Commonwealth games come to Wales, too. We also want more of those events to spread along the south Wales corridor and involve Newport, Swansea and places further west.
The hon. Lady makes an important point about the new convention centre. We have all seen it being built while driving along the M4, and we have been encouraged by how it has come on. It is a major new asset for business in south Wales, but if it is to achieve its potential, we need that traffic to flow much better.
Can my right hon. Friend confirm that when that wonderful new convention centre opens, one of its clients might be the Conservative party? It could host one of its next conferences there. Would he welcome that? Perhaps we could invite the hon. Member for Newport East (Jessica Morden) along as well.
Nothing would please me more than seeing the hon. Member for Newport East (Jessica Morden) formally open a Conservative party conference in south Wales. I have no particular influence over where Conservative party events are held, but the Minister is listening with wide open ears, and I am sure he will feed those views through to the party chairman.
When it comes to major events, however, everyone knows that our Achilles heel is our transport problems. Of course we welcome the UK Government’s decision to scrap the tolls on the Prince of Wales bridge, which is estimated to save regular commuters up to £1,400 a year. We want that to attract new investment, jobs and tourism to Wales. The Welsh Government’s report suggests that our action on that will boost the Welsh economy by £100 million. However, as the hon. Member for Torfaen (Nick Thomas-Symonds) said, modelling predicts an increase of up to 20% in traffic as a result of the tolls being removed. The congestion issues around the Prince of Wales bridge and Newport are already severe, and the increased traffic will create further problems, without there being additional infrastructure in place. As the Freight Transport Association says,
“This places greater emphasis on ensuring that the M4 upgrade is fit for purpose.”
The UK Government have shown that they are committed to boosting the Welsh economy, helping commuters and businesses, and increasing investment. We need the Welsh Government and the Assembly to step up and deliver the M4 upgrade.
As many hon. Members will be aware, a solution has been on the table for more than 20 years. In March 1989, the then Secretary of State for Wales commissioned the south Wales area traffic survey of possible solutions. The subsequent 1990 report identified the need for substantial improvement to the M4. As a consequence, a proposal for a relief road around Newport, a new dual three-lane motorway to the south of Newport, which was later known as the new M4 project, was included in the Welsh trunk road forward programme in 1991. An M4 relief road preferred route was published in 1995 and amended in 1997.
There were further iterations of the relief road plan over the years once responsibility for the road was devolved to the Welsh Assembly, but essentially the plan has followed the original work done in the mid and late ’90s. A draft Welsh Government plan was published in September 2013 and was the subject of public consultation from September to December that year.
Five years on, we are still waiting for a decision by the Welsh Government. That brings us to the question of financial powers and the limits on Welsh Government capital borrowing, which was referenced in the Budget. I am aware of the argument that occurred immediately after the Budget between Welsh Ministers and UK Ministers about whether an extension of borrowing powers should be linked to the delivery of the M4 relief road. I have no interest in getting involved in that, other than to note that the use of the M4 upgrade as a justification for securing new powers from Westminster has been a long-running feature of the devolution debate.
Indeed, upgrading the M4 may have been used as an argument in the original referendum campaign for why an Assembly was needed in the first place. It was certainly used as an argument in the debate in 2013 about full law-making and financial powers that led to the Silk Commission, in which the First Minister said:
“We literally could not do things. We could not improve the M4 without borrowing powers—it will not happen.”
The 2013 deal between the Welsh Government and the UK Government was to give the Welsh Government early access to those original borrowing powers precisely so that the M4 project could get going.
The project is now being used as an argument for securing even more borrowing powers. I can understand the need to extend the capital borrowing limits, given that the projected costs of the M4 upgrade are now higher, but part of me is starting to question whether some are using the project as a fig leaf to enable agreement on more powers and debt for the Welsh Government, without there being any serious intention of getting the M4 fixed. Given the passage of time, I can understand the considerable scepticism in some circles about the project. I hear the phrase, “It will never be built”, quite a lot around Cardiff.
My right hon. Friend is making an important speech about the importance of the M4 to the south Wales economy, and his point about the Welsh Government is well taken. Is the A55 in north Wales not also an example of an issue on which promises have been made consistently? It has been promised for years that two roundabouts in my constituency, which are on a recognised European expressway, will be dealt with, but we are still waiting. Are the same excuses not being used in north Wales as in south Wales?
I agree with my hon. Friend. The A55 project is overdue, as is the M4 project, and I will go on to make the same point about the dualling of the A40 in my constituency. There is a shopping list of projects that need to happen for the Welsh economy’s benefit.
I recognise that big infrastructure projects are challenging, costly and controversial, that they require difficult trade-offs with other priorities, and that important environmental and conservation issues have to be taken into account, but they are still essential for improving the productivity and economic wellbeing of our nation. Two things are vital for any nation that wants to throw off the shackles of poverty: investment in skills and investment in high-quality infrastructure to boost economic performance.
I am fed up of seeing Wales languishing towards the bottom of all UK economic league tables, and of the fact that parts of Wales are known for being poorer today than parts of the former Communist bloc. That does not have to be our future, but changing it requires making choices and taking action. Spraying grants around to attract trophy projects to Wales, or to prop up certain companies that enjoy particularly good insider relations with the Welsh Government, does not amount to an economic strategy, and is no substitute for choosing to take difficult decisions about investing in long-term infrastructure assets.
As we all know, the truth is that the M4 relief road should have been built by now and we should not be here today talking about this. It is almost 30 years since the late Peter Walker, then Conservative Secretary of State for Wales, commissioned that original south Wales area traffic survey to look at solutions for the M4. It is a full quarter of a century since a public consultation was launched on possible solutions. It is 23 years since another Secretary of State for Wales, William Hague, announced his preferred route. It is five years since former Prime Minister David Cameron and former Deputy Prime Minister Nick Clegg went to Cardiff to announce new financial powers for the Welsh Government to enable the M4 upgrade to happen. Everyone knows that it should have been done by now, and that we should look at other key projects, such as the A55 upgrade, mentioned a few moments ago, and the dualling of the A40 between St Clears and Fishguard. Those are important infrastructure projects too, but they are stuck in the queue because of the lack of progress on the M4.
When I was an Under-Secretary of State at the Wales Office—I think it was in 2013—I was asked about the M4 upgrade. William Hague, who was Foreign Secretary at the time, was sat next to me on the Front Bench. After I had taken the question, he leant across to me and said, “Are we still talking about that? It was an issue when I was Secretary of State.” It would be a huge shame if in 20 years, when Carwyn Jones, the First Minister, is retired and in the House of Lords, a question was asked about the relief road around Newport, and Lord Jones of Bridgend leant across to whoever he was sat next to and said, “Are we still talking about that? I thought it had been dealt with during my time as First Minister.” It would be such a shame if nothing was done and people were still talking about the need for an urgent solution in 20 years.
My friendly message to colleagues of all parties in the Assembly is that we recognise that this is their decision to take, but I urge them to be bold and make a decision that is right for future generations, so we are not still talking about this decades from now. If we are not going to get the relief road built, and if the outcome of the current process is that the collective decision of the Welsh Government and Assembly Members of all parties is that it is too difficult and too controversial, and that they are going to kick the decision even further down the road, they need to be honest about that and about the consequences of that decision. Someone will probably have to walk up to the Prince of Wales bridge and plant a sign that says, “Wales is closed to future new business for the time being.”
I apologise for needing to leave early, but I have to be in a Committee at 3.30 pm. I am really sorry that I will not be here for the winding-up speeches. Other hon. Members from Wales are upstairs in a Delegated Legislation Committee at the moment, and I am sure they will come down when that is finished. Thank you for letting me contribute, Ms McDonagh.
I commend the right hon. Member for Preseli Pembrokeshire (Stephen Crabb) for securing this debate, not least because the issue is devolved to the Welsh Assembly, and therefore no hon. Member in this Chamber will have a vote on or a direct say over it. If we respect devolution—and I do—we must respect the fact that the Assembly and the Welsh Government will make the decision on relieving congestion on the M4. Although the UK Government grant borrowing powers, that borrowing will ultimately need to be repaid by taxpayers.
I have a close constituency interest in this issue. The right hon. Gentleman rightly spoke up for businesses in Preseli and for wider Welsh interests—it is clear that the whole of south Wales has an interest in this issue, and the solutions found in Cardiff to the well-documented and horrendous traffic issues will directly affect Newport and Severnside.
As all hon. Members will agree, the M4 around Newport is a route of strategic importance and critical to the Welsh economy, but it is also an absolute nightmare for many of my constituents and businesses to navigate. If there are serious incidents—and there are, frequently—they bring our part of south Wales to a halt, causing misery for people trying to get to and from work, and resulting in a big cost to business. I have constituents, family members and friends, as well as colleagues working in my office, who commute, so I understand the cost all too well.
The M4 motorway between Magor and Castleton does not meet modern motorway design standards, yet it carries a greater volume of traffic than it was designed for. Some sections of the motorway—particularly the Brynglas tunnels and junction 29 Castleton—regularly approach near-peak capacity. That does not just cost time and money, but has a big impact on air quality.
These long-standing, continuing problems need a solution that delivers an integrated and sustainable transport system in the long term. We have been discussing solutions for 30 years. The most recent public inquiry was held up because the Department for Transport changed the way it calculated traffic forecasts. We have had a public inquiry, and we are now waiting for Government officials to finish analysing the report. Everyone has had the chance to have their say about whether this project, alongside the south Wales metro, is a long-term sustainable solution. Bodies such as the CBI, the Institute of Directors, the South Wales chamber of commerce, the haulage industry and many more have made their views clear.
My constituents, businesses and campaign groups have also set out their positions. CALM—the Campaign Against the Levels Motorway—has argued against the M4 proposals on the grounds of cost, damage to the unique environment and climate change. For businesses such as Roadchef, which runs outlets at services, the problem is that there will be no westbound access if the black route goes ahead, which means no services for nearly 50 miles. Groups such as the Gwent Wildlife Trust and the Royal Society for the Protection of Birds, which have reserves in my constituency, describe the proposal as massively damaging for the unique wildlife and landscape. They say it is totally unsuitable and uneconomical, and that the route will destroy an irreplaceable and precious area of the Gwent levels forever.
The option outlined in the Welsh Government’s proposal is not easy and is costly. It will affect communities such as Magor, which have been blighted for many years, and run across sites of special scientific interest, but I recognise that alternative routes would bring even more traffic close to communities in the city of Newport.
The public inquiry has gathered all that evidence, and the inspector’s report is with Ministers. The Welsh Government have committed that the report will be open to scrutiny, debate and a vote by AMs before the final decision is made. It will then be up to those elected to the Welsh Assembly to make the decision. I do not envy them that, but that is the process. If the decision turns out to be no, alongside the no there will need to be a comprehensive plan, as demand for private and public transport is set to increase by at least 150% by 2030. We need something like the metro, but more of it and quickly. The south-east Wales metro can certainly help the process by providing the basis for modern, forward-looking and integrated public transport infrastructure for Gwent.
In my constituency, there has been a 103% increase in demand at the Severn Tunnel Junction railway station in the past decade. Services are overcrowded and unreliable, and commuters are frequently not able to board trains to work. Ministers can support the economy of south Wales and help my constituents get to work by addressing the issues they are actually responsible for and sorting out rail capacity on cross-border services. This issue is devolved, but cross-border services are in the Government’s hands.
On the question of addressing growing demand for public and private transport in south Wales, my Newport East colleague in the Assembly, John Griffiths, has spoken of the need for better traffic management to accompany new, better public transport. My other Newport Labour colleague, Jayne Bryant, AM for Newport West, rightly said that inaction is not an option and that doing nothing would be hugely costly for residents, businesses and commuters. They are both right.
People who regularly use the M4, and people who do not, want politicians to make an informed decision with all the facts at their disposal. I do not envy Assembly Members that decision, but I know they will make it with integrity after careful consideration.
I commend my right hon. Friend the Member for Preseli Pembrokeshire (Stephen Crabb) and the hon. Member for Newport East (Jessica Morden) for the way they put their points across.
No less a figure than the late Rhodri Morgan, former First Minister of Wales, described the M4 as the great infrastructure project in Wales of the 20th century. He recognised that the M4 is not just a matter of local convenience for people living in and around Newport; it also has a huge impact on the whole Welsh economy. Those of us from the Newport area know what it has done for that area. We have seen the development of Severnside, and my right hon. Friend mentioned the major sporting and musical events that now take place in Cardiff. I very much hope that the convention centre will host the Conservative conference sometime soon—I am told that it is the largest conference, and the one that generates the most income locally, so I am sure the whole of Newport would welcome it. We want to see that happen. We have also seen the development of the haulage and warehousing industry along the M4, particularly in the Severnside area.
The M4 has wider implications as it is one of the European Union’s critical routes. Although it is not labelled as such, it is part of the E30, which stretches all the way from Cork to Omsk, so even the European Union recognises its importance. As a great fan of the European states—it is important that we trade with all of them—I very much hope that, if they are going to tie us up in red tape, they insist that we maintain that critical piece of infrastructure.
We all know that there are many problems with the M4—other hon. Members have highlighted them—and this is not just about the Brynglas tunnels area. There are massive and unnecessary delays westbound, towards the Coldra roundabout—unfortunately, right where the convention centre is—and eastbound, coming out of Cardiff towards Tredegar Park, which has an impact on residents of Cardiff.
I apologise for not being here at the start of the debate. I was in a Delegated Legislation Committee. The hon. Gentleman is making a very important point. Clearly, the road infrastructure around the east of Cardiff has a huge impact on my constituents. I consider myself an environmentalist. I want more investment in rail, cycling and pedestrian opportunities, but we have to recognise that there is an environmental consequence to all that traffic queuing into the east—particularly around Rover Way, Splott, Tremorfa and those eastern links. Does he agree that that can have a serious impact on air quality?
Absolutely, I do agree. I am also an environmentalist who recognises that to protect the environment we have to generate the funds, and to generate funds we have to have a thriving economy. That is why, generally speaking, the western European and wealthier nations have a better environmental record than some of the poorer nations in the rest of Europe. I very much agree with the hon. Gentleman’s point.
I am concerned not just about the increase in traffic that we will see as a result of the Conservative Government’s welcome decision to end the tolls on the Severn bridge—we will see the benefits of that only if this road is upgraded—but about the possibility of a major problem happening in the Brynglas tunnels, which would effectively shut the M4 and close off one of Wales’ major pieces of infrastructure. We need to have that alternative because the day will come when major work will have to be carried out in the Brynglas tunnels, and if there is no M4 relief road there when that happens the result could be absolutely devastating for the whole economy.
I very much hope that the Government in Wales get on with this. They have been given the powers and the money to do it. If they decide to go ahead I hope they will learn a few lessons from what has been going on slightly to the north where we have seen, I am afraid to say, a practice of Ministers turning up to be photographed in hard hats and high-vis vests for the dualling of the heads of the valleys road—a very welcome project—but not wanting to meet with residents who have been negatively affected by the work that has taken place.
Obviously, whenever a major piece of road infrastructure is built there will be inconveniences for local residents. It is important that those are recognised and dealt with by the responsible Ministers. I think we have agreed, on all sides, that there is a real problem here and there is a solution on the table. The only solution, I believe, is the black route. We have had experts poring over all the alternatives and we have had various people coming up with all sorts of schemes, involving trams and Lord knows what, but the reality is that there is only one scheme that will do it.
My understanding is that there are three candidates waiting to take over from the First Minister. Of those three, only one has given a 100% commitment to building this route. I hope that the Minister will do everything possible to ensure that the Welsh Government have all the power and money they need to build that road, and encourage them to do so as quickly as possible, given the welcome decision his Department has made about the tolls.
I urge my friends opposite, if I may call them that, to do whatever they can to influence the result of their own election and make sure that the candidate who wins is the one who is going to build this road. I am absolutely convinced that after the next Welsh Assembly election we are going to end Labour party rule in Wales. We are going to get rid of one-party rule and we are going to have a Conservative First Minister, but the M4 relief road cannot wait for that. Since we are going to end up with a Labour First Minister, we might as well have one who is going to take one very useful decision.
I express my support as a north Wales MP. Quite often in Wales, we have the argument that all the funding goes down south, but the view in north Wales is that we will not see major updates to the A55 until this project is off the ground. The view in north Wales is that if we are going to have the improvements to the A55 that we need, we need to see the decision taken on the M4 relief road sooner rather than later.
I thank my hon. Friend for giving a superb speech, as always. It would be a pity if mid-Wales were left out, if north Wales is being mentioned. One might wonder why an MP for mid-Wales is keen to see the M4 relief road happen. Last week, a haulier from mid-Wales described to me how, because of the Brynglas tunnels, most of his drivers now have to go up to Abergavenny, across to Merthyr Tydfil and down to Carmarthen, before going back on to the main road to get to west Wales. That is putting extra burden on other parts of Wales. This relief road is long overdue and I hope we will see it come forward very shortly.
A good speech usually requires a good peroration and two of them have now been blown out of the water. I very much hope those drivers are using HGV sat navs, not ones designed for cars, so they are not responsible for driving straight through the centre of Abergavenny, which is causing a separate pollution problem.
What can I say? I have said it all. That road needs building as soon as possible and I very much hope that heads will be put together in all parts of the House—and on both sides of the River Severn—to sort this out as quickly as possible.
It is, as always, a pleasure to serve under your chairmanship, Ms McDonagh. I congratulate the right hon. Member for Preseli Pembrokeshire (Stephen Crabb) on opening today’s debate and enabling a strong debate on the urgent need for transport investment in south Wales.
The right hon. Gentleman represents a beautiful peninsula in south Wales and a vital transport corridor, which I have no doubt will be in more demand following the UK’s leaving the EU; but without the right infrastructure in place, it could result in a massive impact on his constituency and throughout the south Wales corridor. This level of detail has been ill-conceived by the Government. As 29 March next year is rapidly approaching, I urge the Minister to ensure that the risk analysis for all parts of his portfolio, including the impact in south Wales, is clearly attended to.
My fear is that the Prime Minister's plans will not contain anywhere near the level of detail needed, whenever we get to see them—maybe later today. I have also heard a real call for better connectivity to the whole of south Wales, and rightly so, not least from my hon. Friend the Member for Newport East (Jessica Morden). We know that the Welsh economy has been seriously challenged by poor connectivity, and that recent decisions made in Westminster—not in the Senedd—have had the worst impact, not least on rail.
We will never forget how in 2017, the day after Parliament rose for the summer recess, the Secretary of State snuck out the announcement that he would cancel the rail electrification project in south Wales. That would have been a game changer to all communities in the region and would have enabled faster, cleaner and more efficient rail services to the valleys and conurbations. However, in writing off south Wales he has singly made the most detrimental decision to stem the potential of the Welsh economy and sustain a transportation challenge in the region.
My hon. Friend makes the point about the cancellation of electrification beyond Cardiff. Does she share my concern about the delays that there have been to the electrification as far as Cardiff? We have seen that put off again and again, with delay after delay. People are enduring really poor service on the Great Western main line, which has a huge impact on transport infrastructure.
My hon. Friend makes a really important point. I feel great pain as he speaks about the delays in improving the railway network. The situation is unsustainable. We should be investing in high-quality digital rail, which would build far more capacity across the network, as well as upgrading rail networks through electrification projects. That is why I believe that people in Wales will focus on this issue at the ballot box at the next election.
I want to put it on record today that Labour, in government, in Westminster, is fully committed to expansion of electrification and digital rail projects in south Wales. We believe in optimising every economic opportunity for the population of Wales. Further, our renationalisation programme for rail will be a serious game changer for all rail operations across Wales, including those in the M4 corridor, both in Wales and leading into England. That connectivity will move forward the economy in that part of the country.
I now turn to the wider transport brief. It was so important for me to start my contribution with a focus on rail because connectivity is not about segregated transport systems, with rail in one silo and roads in another, as the Government place them; it is about a joined-up approach to ensure that business, commuter and leisure passenger movements can be made with maximum ease and minimum expense. Labour has clearly set out how we will put a real emphasis on bringing about modal shift, helping to decongest our roads and create greater reliability. The sheer misery—which we have borne witness to in today’s debate—of those using the strategic road network in Wales has been palpable. It will be important, therefore, for the Minister to tell us how he will provide short-term relief for that, as well as long-term solutions.
In an age when climate change is having a devastating impact on our planet, and when cars are logjammed on our roads, as highlighted by my hon. Friend the Member for Cardiff South and Penarth (Stephen Doughty), the current situation is polluting our atmosphere today and causing major air quality problems to residents along the M4 corridor. We know that that hits the most deprived communities the worst. We need an urgent resolve to get quick relief.
The current proposal for a 14-mile stretch of road around the south of Newport is expected to cost around £1.4 billion. Since 2016, the proposal, which has been on and off the table for the best part of 30 years, has been the subject of consultation, with the final decision to be made in the coming months. The pubic consultation closed this spring. The so-called black route has been the preferred route and the Welsh Government have stated that it is vital that the route resolves issues of capacity, safety and resilience along the M4 corridor in south-east Wales. As with any road project, clearly strong arguments will be made on all sides—and I have read them—both on the economic and transportation challenges and on the environmental case.
Some £50 million has already been offered to offset the carbon cost of the project. There is recognition that the project will have a serious environmental impact, as we have heard today. We would be disingenuous, therefore, if we did not all recognise that it is a difficult decision. On the one hand, we have pollution as a result of congestion, delays as a result of queues, and 100,000 vehicles using the route every single day. There is an urgent need for better transportation—better connectivity between sea, rail and active travel—and there is an opportunity to be grasped. For every £1 spent we will see £2 returned to the economy. Perhaps the greatest prize will be the 300 accidents that the project prevents. We cannot wait until 2023 to see that number fall dramatically.
On the other hand, there is serious environmental concern. We are familiar with the evidence highlighting the impact of induced capacity, which draws vehicles on to major routes, causing them to become a source of major pollution and future congestion. The Welsh Labour Government have done more than any other to impact-assess their policies against that, through the Wellbeing of Future Generations (Wales) Act 2015 and the Environment (Wales) Act 2016. The figure that perhaps we should all focus on, here in Westminster and in the Senedd in Wales, is that the project is cited as becoming carbon-neutral by 2072. With nations that face catastrophic flood and drought, every decision we take must also seek to enhance our climate and focus on the humanitarian consequences. I know that such concern will be at the forefront of the Welsh Government’s thoughts as they conclude their deliberations.
It is a pleasure to serve under your chairmanship, Ms McDonagh. I congratulate my right hon. Friend the Member for Preseli Pembrokeshire (Stephen Crabb) on securing this debate on financial support for upgrading the M4 in south Wales. Given today’s news, I think everyone in this Chamber shares my view that we should salute the integrity and quality of the Clerk of the House of Commons, but we should no less salute my right hon. Friend’s ingenuity in managing to get this debate past the Clerks and into the Westminster Hall Chamber so that we can discuss it.
As my right hon. Friend will know, upgrading the M4 around Newport is the responsibility of the Welsh Government, so I am sure that he and other colleagues around the Chamber will understand my extreme care and circumspection in addressing this issue. It has to be said, and he has said, that upgrading the M4 has been identified by businesses and commuters as a priority for many years. Business organisations have made clear that uncertainty around the project is affecting business across south Wales and, as my hon. Friend the Member for Brecon and Radnorshire (Chris Davies) mentioned, mid-Wales.
My right hon. Friend the Member for Preseli Pembrokeshire was instrumental, when he was Secretary of State for Wales, in steering the Wales Act 2014 through this House, providing the Welsh Government with capital borrowing powers to help to deliver improvements to Wales’s infrastructure and the M4 in particular, given their potential to boost economic growth and ease congestion. The Welsh Government have requested an extension to their borrowing powers to fund the M4 improvements, and I am sure hon. Members across the Chamber—we have been a little unclear in some respects about the degree of support from Opposition Members; perhaps they would like to clarify that—will therefore welcome the Chancellor’s announcement at Budget that there will be a review of the Welsh Government’s capital borrowing powers to support the delivery of a proposed relief road.
The review will consider whether the borrowing cap should be increased by up to £300 million to support this vital project. The UK Government have thus provided the Welsh Government with the levers that they have told us they need to deliver a new motorway. If the Welsh Government wish to deliver that motorway, now is the time for them to do so.
At Budget, the Chancellor also announced that from 2020 to 2025, £28.8 billion will be invested in England’s road infrastructure via the national roads fund, of which £25.3 billion will be spent via the second road investment strategy, RIS2, the rest being invested into large local major road schemes and the newly conceived major road network. This represents a pivotal moment for the future of roads in England, allowing the UK Government to continue to develop a long-term vision for those roads. Part of that vision, of course, must be working with the Welsh Government to identify where our priorities meet, join and can best be collectively exploited. The border between Wales and England, as I know full well from my constituency, is crossed by a number of important road links, and both Governments will feel the need to ensure that their investment decisions in this area take account of the needs of road users on both sides of the border.
I will also discuss the abolition of the Severn tolls from 17 December. The Severn bridge and the Prince of Wales bridge are vital pieces of cross-border infrastructure, which Highways England manages for the benefit of both nations. More than 80,000 vehicles cross the bridges every day. The end of tolling on these bridges will support motorists, local residents and cross-border business across Wales and the west of England. I think I am right in saying that the Welsh Government supported that decision, and I welcome their support.
The decision will help to transform the economy in the region, putting over £1,400 a year back into the pockets of families and delivering a boost to the economies of south Wales and south-west England. It will also alleviate congestion on the bridges. Road users will no longer have to stop to pay the tolls, which can cause queues during busy periods.
However, I do recognise that there are concerns that the removal of tolls will cause an increase in traffic at the crossings and on other roads in the area, as more people will be able to afford to cross the border in both directions to seek job and trade opportunities. I want to reassure right hon. and hon. Members that our analysis shows that the bridges have sufficient capacity to cope with the traffic growth forecast, but if there is a knock-on effect on the M4 at Newport, it can only strengthen the case for a relief road, especially since the Welsh Government have supported the decision to end the tolling. We will also continue to work with the Welsh Government to manage the impact of the abolition of the tolls on the road networks on both sides of the border.
Technical analysis by Highways England, working with other highways authorities and local business organisations, suggests that the initial impact on traffic conditions away from the crossing will be limited. There are a number of congestion hotspots near the crossing, and to some extent the problem there may be exacerbated. As part of the autumn 2016 statement, an additional £220 million to tackle pinch points on the network was announced, of which the south-west has been allocated £32.1 million for this roads period, from 2015 to 2020, but the Government are also looking at the investment needs of the south-west as part of RIS2.
Picking up on some of the themes mentioned today, I must say that there is a need for clarification: if it is true that people in political parties either side of the border wish to support this relief road, then now is the moment for them to make that position public and clear, without equivocation, bearing in mind all the other considerations that have been mentioned in the debate. On the basis of the discussion we have had, I look forward to the Welsh Government’s forthcoming debate on improving the M4, and to hearing how they will deliver the improvements that the people and businesses of Wales seek.
I do not intend to take the full 43 minutes remaining in this debate to sum up. I thank all right hon. and hon. Members who have participated. I offer my thanks and appreciation again to the Labour Front-Bench spokesperson and the Minister for their interest in this debate. I particularly thank the Minister for the pragmatic and co-operative approach that I know he takes in his dealings with the Welsh Government, and recognise the way that the wider Department works with the Welsh Government.
This has been a useful debate. We have recognised that the key decision on whether to go ahead with the M4 upgrade is for Welsh Assembly Members and the Welsh Government alone, but we also recognise the key role that the UK Government play in terms of the request for further financial borrowing powers, on which the Chancellor of the Exchequer and the UK Government will have to take a decision.
In response to the point made by the Labour Front-Bench spokesperson about electrification, I have commented on that issue in another place. On the question of public transport, the truth is that we need the M4 upgrade and better public transport across south Wales; it is not an either/or. The people and businesses in Newport need public transport alternatives, but that strategic transport corridor, which, as my hon. Friend the Member for Monmouth (David T. C. Davies) said, links the west coast of Ireland with eastern Europe, deserves a decent motorway that meets modern standards. It does not have that at the moment, and that is creating problems for the Welsh economy.
We are at a moment that requires a difficult and challenging decision from the Welsh Government, but my hope is that they will make the right decision in the interest of future generations of Welsh people.
Question put and agreed to.
That this House has considered financial support for the upgrading of the M4 in South Wales.
[Mr Philip Hollobone in the Chair]
I beg to move,
That this House has considered the future cost of Hinkley Point.
I am delighted to serve under your chairmanship, Mr Hollobone.
To start with, may I praise the Minister for coming down to Hinkley Point with the Secretary of State and having an excellent visit, which went down extremely well at C station? This afternoon, I am delighted to celebrate the progress of Britain’s first nuclear power station in a whole generation. Hinkley C is absolutely smack in the middle of my constituency and it is important to the local economy. Indeed, the importance of its development cannot be overerestimated. It is a huge project that has already cost—I say this so that people are aware—billions of pounds.
The subject of my debate—the future cost of Hinkley Point—has raised eyebrows, including, I think, those of the Minister. I want to make it clear that the investment will pay substantial dividends for decades to come. Hon. Members should need no reminding that every penny of the price to complete Hinkley is coming from the developers. The exact amount, believe it or not, is £20 billion, plus an additional £300,000; I do not know what the £300,000 is for, but there you are.
There is no public money at stake; the venture is financed with EDF’s euros and a small portion of Chinese yuan. The risk takers are two of the world’s biggest nuclear players. They have the backing of their own Governments, and they are big enough and robust enough to battle it out with the best—and, importantly, win. Hinkley is definitely a win-win construction for us in Bridgwater and West Somerset.
Hinkley is already providing thousands of new employment opportunities and sowing the seeds for world-class nuclear training at Bridgwater and Taunton College; the Minister was able to see a small part of that. Hinkley is attracting talent from all over Britain, but EDF is rightly proud of the fact that so many of its keen young recruits have been found within just a few miles of the site. Perhaps that is not surprising, as there has been a nuclear power station at Hinkley Point for 61 years. Entire generations have lived with, and worked in, Hinkley and learned to rely on it. Nuclear power commands enormous respect in my part of the world; it is in our blood. We know that it makes sense, now more than ever before.
The necessity of additional electricity generation in these islands is not in question. All our remaining coal-fired power stations, and there are only seven of them now, are carbon-guzzling—dare I say it? I mean this in the right way—museum pieces that we have agreed to commit to history over the next six years.
Most of the UK’s electricity is produced by burning fossil fuels, mainly natural gas. That is both wasteful and costly, particularly to the environment. Gas-fired power stations amount to 40% of UK power generation. Wind and solar already provide roughly 28% of the nation’s needs; that is, of course, whenever the wind blows and the weather allows it. Our old fleet of nuclear power stations appear to be trailing, as they supply just 19%. That leaves a gap that can be filled only by importing power from France and the Netherlands via cables, which is hardly ideal when we stand on the brink of Brexit. In other words, we are not running on empty, but we need some quick fixes to make sure the lights stay on.
The golden advantage of nuclear power is that it produces electricity even if the sun does not shine and the wind stops blowing—surprise, surprise. It also involves an enormous number of people—in designing, building, maintaining and developing. Nuclear is a major national employer. It is a clean, green energy source. It is carbon-neutral. Nuclear is not cheap to develop, as it can take a decade to install, but it lasts for generations. Nothing in life is perfect, but in my humble opinion, nuclear power is pretty darn good.
What has happened in my constituency is nothing short of revolutionary, and I know that the constituency of my hon. Friend the Member for North Devon (Peter Heaton-Jones) has also experienced the benefits. Bridgwater used to be an avoidable town in many ways, with a lot of factories making things such as cellophane, with its unforgettable smell—I know you have never suffered it, Mr Hollobone, but I can assure you that it was interesting—as well as water pumps, believe it or not, and, yes, we were the home of bombs. The material for the famous bouncing bombs used by the RAF in the dam buster raids was actually made in Bridgwater.
Our town is used to getting its hands dirty and it has a highly skilled workforce, which, of course, my hon. Friend the Member for Wells (James Heappey) knows so well; he is my next-door neighbour. Then, however, we had severe recessions. The bomb factory closed and the cellophane plant shut; the little industries began to thin out and melt away. I invite all hon. Members here to come and see Hinkley C. It is quite remarkable. It is no exaggeration to say that the area is booming. The shops are busy; the big stores are arriving; there are new hotels and new housing; and there has been a restoration of pride and purpose.
Most importantly, there are jobs—lots of them. They are good, skilled, long-lasting jobs. There is also a fully functioning national college that has developed to teach new nuclear skills to the next generation. Much praise is due to the present and past principals of Bridgwater and Taunton College, who have helped to put in place a world-class education programme and forge links with major employers.
At last, there are proper careers in an industry that may have been around for 60 years, but has come back to Bridgwater with renewed vigour. That is the reality. That is what can happen; and it will continue to happen when the reactors are completed. When they are switched on, we will see the proof of what we have achieved.
At that point, Hinkley C will meet up to 7% of all of Britain’s electricity needs. That may not sound much, but let us put it in perspective. Hinkley will be able to power 299 million light bulbs at once; it will also allow 58 million people to watch “Bake Off’ at the same time, hopefully—boom, boom!—without a soggy bottom. [Interruption.] I know—sorry. If any teenagers arrive home in the middle of the show, Hinkley will still be able to fill up the batteries of 640 million iPhones without any bother at all.
I am, as Members have probably gathered, a nuclear enthusiast. I have watched the progress of Hinkley throughout 17 long years in Parliament—they have been long—during which time EDF developed its plans, invested in detailed research, and patiently consulted and worked with local authorities, especially Sedgemoor District Council. EDF has had its critics, but nobody can fault its extraordinary patience over a very long period. It has waited and not been frustrated by Prime Ministers, past or present, who could or would not take the decision to go nuclear—and they all did that.
By the time the Government gave the green light, EDF had actually sunk £2 billion of its own money into the project, which might have been cancelled overnight. However, that is the way that companies such as EDF work; they are in it for the long term. Planning a new power station takes years; building it will take a decade.
Understandably, EDF is still learning lessons about how to build more efficiently. However, if one were to consider the progress already made on the site in less than three years, one might wonder if any additional improvements were possible. Believe it or not, EDF is using 3D modelling on a massive scale, to take the worry out of getting major engineering decisions spot-on. It has already sunk 235,000 steel bars into concrete, and the best way to ensure that those bars are in precisely the right place is by using 3D modelling. Also, major parts are prefabricated away from the site, to minimise disruption and increase productivity. As a result, EDF has done the digging 15% quicker than anywhere else, laid concrete 30% faster, and actually cut out mistakes, which is a remarkable achievement.
My hon. Friend is making a very good speech. Hinkley Point is in his constituency, which neighbours mine, and I have also been to see the site. I can say just how impressive it is; everything that he has described is correct. Does he agree that Hinkley Point not only generates vital baseload electricity, but boosts the local economy in our constituencies and those of other hon. Friends who are here—and not only during this construction phase? When it is operational, that will continue. The boost to employment and the local economy in North Devon and throughout the area will be considerable.
I thank my hon. Friend for that intervention. He has represented his constituents so well on so many issues, and we join on this. I am grateful to him for his thoughts. I am also very grateful to my hon. Friend the Member for Wells, who has supported Hinkley since he has been an MP. He has made an enormous contribution; indeed, both my colleagues have.
The point my hon. Friend the Member for North Devon makes is absolutely right. The opportunities for learning and gaining skills in our area are really quite phenomenal. Exmoor is perhaps not—dare I say it?—the richest area, but it has already benefited from Hinkley Point, even though it is a long way away. That means that we are able to spread out the goodies of Hinkley Point, not only to our neighbours, but to a much bigger area.
The hon. Member for Ynys Môn, actually, although Wylfa is in my constituency. I congratulate the hon. Gentleman on raising this issue. Regarding community benefits, he is right to talk about the construction jobs, the high skills, and the longevity of the project. However, the community has had an upheaval, and it is important that community benefits come from Government. It is good to see the right hon. Member for Sevenoaks (Sir Michael Fallon) here, because he made a statement in July 2013 about a mechanism to ensure that happens. Does the hon. Member for Bridgwater and West Somerset (Mr Liddell-Grainger) agree that the Government must restate that commitment, so that the host communities in his constituency and mine benefit for generations to come?
The hon. Gentleman has made an enormous contribution to the nuclear debate, and I am grateful to him. He is absolutely correct. I am also delighted to see my right hon. Friend the Member for Sevenoaks (Sir Michael Fallon) in his place.
The hon. Member for Ynys Môn (Albert Owen) is quite right: at the end of the day, this is a team effort. No nuclear area is doing anything other than what all nuclear areas are trying to do, whether in Dungeness, Wylfa, Hartlepool, or anywhere else. We are trying to work together to spread the benefits of nuclear across the United Kingdom, and we have to get that right for the communities. Hinkley is the first of these projects, but that does not mean it will be the last: Sizewell is next, then Wylfa, and then we will go wherever we are going, whether that is Sellafield, or somewhere else. The Government have to make a decision, as I will discuss a little bit later, and I am sure that the Minister will pick up on this exchange. We need a clear understanding of the business rates over the long term, as there has to be some mechanism that brings the benefits of the nuclear production of electricity back to the local community.
Just two weeks ago, I had the opportunity to meet a representative of one of the power companies involved in this project, and he outlined the benefits to the economy in terms of jobs and the pound in your pocket. Does the hon. Gentleman agree that, as the hon. Member for Ynys Môn (Albert Owen) said, this is about involvement with the community? It is not a question of them and us. Rather, it is about how companies involve themselves with and endear themselves to communities, and encourage them. It is obvious from the presentation I saw that there will be great benefits to the local economy, but this is about community involvement and making sure that communities benefit directly.
I thank the hon. Gentleman; I know this is not his area of expertise, but he is absolutely right. I reiterate that this is a team effort, and the whole of the United Kingdom must benefit from it. It is iniquitous that we are buying electricity from France and the Netherlands; we should be producing our own electricity for our own people. The jobs and skills are interchangeable: the skills that a person learns as a steel fixer, a concrete pourer, an electrician, or anything else at Hinkley can enable them to go anywhere in the United Kingdom. Those people are trained to the highest level of engineering that we can achieve. The only thing that they cannot do is welding the nuclear flask, but they can do everything else, and that is important for our area.
It is a delight to contribute to my hon. Friend’s debate, as he contributed to my debate on broadband yesterday. There is huge opportunity in Somerset for upskilling of individuals, and for businesses to upgrade their capabilities in order to contribute to the nuclear supply chain. It is important that those individuals and businesses are able to access the Hinkley programme, but does my hon. Friend agree that it is equally important that the industrial strategy for our region helps to deliver follow-on industries in Somerset and the south-west, so that those skills can be employed within our region, rather than seeing them move on with the nuclear caravan when the nuclear new build programme moves elsewhere in the United Kingdom?
I thank my hon. Friend; he has been an incredible advocate for nuclear, and has worked tirelessly. This has not been easy, but my hon. Friend is absolutely right that we are creating something for the future, and it is going well. The Minister is fully aware of that, and of how much work has been done locally, both in North Devon and in Somerset.
For every nuclear job, we must create a non-nuclear one. My hon. Friend the Member for Wells (James Heappey) covers Burnham and Highbridge—it is in his constituency, and on the border of mine—and it is important that we create jobs in Morrisons distributions, Wiseman’s milk, Yeo Valley dairy products and Mulberry handbags. The development at ROF Bridgwater in Puriton, the bomb factory, is 626 acres of industrial space, right on our joint border. We are making strides to ensure we keep that legacy going for generations to come. The Minister has been briefed on that, and is fully aware of it.
Some 95% of everything at Hinkley C is delivered right on time, which is an amazing statistic for an engineering job on this scale, and lends credibility to EDF’s belief that the next power station built in the UK can be done 20% quicker and cheaper than Hinkley. That is a phenomenal statistic. The cost of Hinkley C, as far as the British Government are concerned and as we all know, is locked into something called a strike price: how much we are prepared to pay for every volt generated. The price was agreed several years ago, and some people argue that it is high, but Hinkley was never planned to be a one-off. EDF is already well advanced with plans for Sizewell C, on the Essex coast, and my hon. Friend the Member for Wells has been a great advocate for that as well. That development will be, in effect, Hinkley C mark 2. It will offer the same job opportunities, as well as economies of scale, supply, licensing, and design. Those savings are likely to be reflected in the price that EDF receives for the electricity produced, but the financial risk—and this is important—remains primarily EDF’s, not ours. The experience of Hinkley C in Somerset continues to be critical for Britain’s nuclear future.
Hinkley could not have proceeded without the intelligent local authority support of Sedgemoor District Council, which my hon. Friend the Member for Wells and I share. It was the council that negotiated the generous compensation from EDF, and we know that that there will be a community financial benefit when the plant starts generating power, because the Government have already promised it. It would be helpful if the Minister could provide some pointers about that; I realise that it is early days, but a bit more flesh on the bones is always helpful from any quarter, and the council and many others—including my hon. Friend the Member for Wells and I—would be very interested to hear about it. It was Sedgemoor that insisted on sensible traffic management, and Sedgemoor that smoothed out the planning obstacles without, most importantly, surrendering proper oversight. As I hope my hon. Friend would agree, Sedgemoor has been an exemplary council.
My hon. Friend assents from a sedentary position. Sedgemoor has significant experience, which all other English councils will wish to imitate when they deal with nuclear plants in the future, and I know that Sedgemoor would be happy to help. I just wish that Somerset County Council had the same enviable reputation. The unions at Hinkley tell me that there is now real concern about Somerset County Council’s financial problems and the impact those could have on Hinkley C. I realise that this is not the Minister’s direct responsibility, but it is important that he hears it. Somerset County Council is severely stretched; actually, it is almost broke. It is about to make savage cuts to essential public services, and it cannot afford—so it says—to finance new schools. There are also worries about threats to the learning and skills service. Hinkley’s job opportunities are attracting families to settle locally, which means a housing boom for our area and our county, but it could mean a crisis if there are not enough schools or public services.
I know that the Government are being lobbied hard by Somerset County Council, and badgered by its leader, to create a new unitary authority. This is not the time or the place to analyse what has gone wrong, but Somerset County Council’s attitude, I am afraid, is not helpful. It is already blaming Sedgemoor District Council for allowing too many new houses, which is absolute madness. As the Hinkley unions emphasise, where are the thousands of nuclear workers expected to live? That point has been made in this debate by hon. Members from all over the UK. I do not believe that incompetent financial management of the county should put any part of Hinkley’s future at risk. That would be bad for the United Kingdom, as the economic rewards of Hinkley are far too important to us all.
I have just returned from China, which I visited with a group of colleagues from the all-party parliamentary group on nuclear energy. We were guests of EDF’s Chinese partners, CGN. Its engineers have worked hand in hand with EDF to develop as a major nuclear player, as well as develop its own reactors, and we were taken to see the working EPR in Taishan. It is very good; it does the job that CGN set out for it to do. While we were away, we heard the sad news that Toshiba was abandoning its plans to build a new reactor at Moorside, near Sellafield. We know that Toshiba has been facing financial problems, but the potential loss of any new plant anywhere in the country is obviously serious.
The future cost of Hinkley, and all nuclear installations that follow, will be high. In the specialist field of energy production, quality, long life, efficiency and safety will not come cheap at the moment, but they will become cheaper. I thank the Minister for all his support.
It is, as always, a great pleasure to serve under your very competent chairmanship, Mr Hollobone, as I have many times. I hope that the rest of the debate will not be too stressful for you, given the spirit in which my hon. Friend the Member for Bridgwater and West Somerset (Mr Liddell-Grainger) intends it, for which I thank him. He has consistently and regularly demonstrated a keen interest in the Hinkley Point C project—formally, at the meetings we have had together, and on visits, and more or less every time I have a cup of tea or coffee in his immediate vicinity. I congratulate him on that.
I also congratulate the other hon. Members who contributed to the debate: my hon. Friend the Member for North Devon (Peter Heaton-Jones), the hon. Member for Ynys Môn (Albert Owen)—it took some time to learn that constituency, but I think I know it now—and, of course, the ubiquitous hon. Member for Strangford (Jim Shannon).
My hon. Friend the Member for Wells (James Heappey), who is also a regular contributor, taught me something that conditioned my view of Hinkley Point and other projects when I had just taken on the portfolio. He told me about his fear that the local content would comprise, basically, a sandwich van at the end of the site. I say that because my hon. Friend for Bridgwater and West Somerset talked about wet bottoms.
I shall have to check Hansard. I appreciate your leniency, Mr Hollobone—I am sure Mr Speaker might have thought that was unparliamentary language, but it was not intended to be so.
The serious point I am making is that in all my dealings with EDF, and in all my visits down there and visits to suppliers, I am always keen to stress the point made by my hon. Friend the Member for Wells about the local supply chain, and the fact that these are real jobs. That reflects the points made about the national impact, which we always have to think about.
I am proud to be part of this Government and I asked for the nuclear portfolio—not because it was part of my general energy portfolio, but because I believe it is a brilliant industry in its own right for the future. It has everything that we look for in our industrial strategy: quite apart from the energy side, the industry creates good-quality, high-level employment, and that energy, if produced in bulk—obviously, not hundreds and hundreds of these, but more than one—can reduce the price by 30%. It also has supply chain and export, and is high tech. Before we even get on to the green point, the baseload point and all the other things that are so important, it has a lot going for it.
That is why I was pleased when the Secretary of State and I went to—I must warn you, Mr Hollobone, that this could be difficult for me to pronounce—Trawsfynydd, in Snowdonia in north Wales, to launch our nuclear sector deal. The hon. Member for Ynys Môn nodded, so I am pleased I got the pronunciation right. It has a great future. We have mentioned different parts of the country today, including north Wales and Wylfa, which are important.
Indeed, the hon. Gentleman and I have discussed community benefits for Anglesey. Obviously, the community benefits for Hinkley Point are further down the line because the development is well under way. Those are important community benefits and it is right that those decisions should be made locally. Of course, that can lead the Government into lots of problems, because local communities do not have a consistent view, depending on area.
The question I raised regarding the announcement made in 2013 by the then Department of Energy and Climate Change still stands, and I know that the communities of Bridgwater and of Anglesey are concerned that nothing much has happened since then. Will the Minister reiterate his commitment to that formula so that the Ministry of Housing, Communities and Local Government and the Welsh Government can work with his Department, the mechanism can be put in place and, when the stations are generating, the communities can get the full benefits?
I am happy to confirm that. I have already met with one chief executive and one lead councillor from the hon. Gentleman’s area, but I would, of course, be delighted to discuss this with him at any time.
The main point today, which my hon. Friend the Member for Bridgwater and West Somerset expressed so eloquently, is how important the nuclear industry is as an industry in its own right to local economies and to the national economy. As far as I can see, EDF is doing an excellent job. There are many British and Northern Irish employees, some of whom I met down there, of different skill levels, and I was pleased to see the number of young girl apprentices, which is also part of our nuclear sector deal.
I am not at all complacent. I think the deal struck at Hinkley Point C was sensible from the taxpayer’s point of view, as my hon. Friend mentioned, because it completely de-risked the taxpayer. We can do other interesting deals in the future for nuclear. At the moment, nuclear power is roughly 22% to 24% of the power output that we need. By 2030 to 2040, as the original power stations are decommissioned or reach the end of their life, that will drop with Hinkley to—again, these are very rough numbers—5% to 7%. There is a big gap.
Does the Minister agree that the true value—that might have been a better title than “cost”—of the Hinkley project will not be known until we see some of the cost savings that will be realised at the second station that EDF has built, and indeed in the sequencing of stations that will be built after that?
My right hon. Friend makes an excellent point, with which I fully agree. On my first visit to Sellafield I was shown the original Calder Hall reactors that were opened in the ’60s. The then Minister said that the electricity would be so cheap that it was not even worth metering it. We have moved away from that, but I believe that, in the long term, this will be low-cost power. As everyone knows, the up-front costs are significant. After that, the marginal costs are comparatively low. As long as there is a reasonable way to finance the up-front costs—which, as the technology becomes more modular and more commoditised, we will be able to estimate more accurately—I totally agree with my right hon. Friend’s point.
I am pleased to respond to today’s debate. I will not forget Hinkley Point C, which is one of the most significant visits I have ever made. It is calculated that 64% of the construction contracts there—it is a huge project—will go to UK companies, and that £4 billion will go into the regional economy over the lifetime of the project. We will not forget that; it is very important to us. I am extremely grateful to my hon. Friend the Member for Bridgwater and West Somerset for bringing the debate to the Chamber.
Question put and agreed to.
Shared Prosperity Fund: Wales
I beg to move,
That this House has considered Wales and the Shared Prosperity Fund.
It is a pleasure to see you in the Chair, Mr Hollobone. I welcome the new Minister from the Wales Office; I think this is his first official appearance at the Dispatch Box. He will find us a welcoming but challenging bunch in Wales. I am sure that we will have a good debate, and that his noble Parliamentary Private Secretary, the hon. Member for Montgomeryshire (Glyn Davies), will look after him just as well as he has looked after the Minister’s many predecessors.
One of the extraordinary aspects of the Government’s approach to Brexit is their failure to address some of the fundamental reasons for the leave vote before the act of leaving. Obviously there is a lot happening as we speak on that issue, but on major areas of policy—such as immigration policy—we still do not know what the Government propose for the post-Brexit world. A hugely important area that they are not speaking about is regional funding, which we will address today. I hope that this will be the beginning of a debate about changes to regional funding that takes into account the views of Members right across the United Kingdom and right across Wales—this is a very important subject in Wales.
It is true that Wales has been one of the major beneficiaries of EU structural funding. Between 2014 and 2020, west Wales and the valleys will have benefited from investment of more than £2 billion from the European Union.
I congratulate my hon. Friend on securing this important debate. My constituency in the valleys has benefited enormously from structural funding. Does he agree that one of the problems with UK priorities, and with the shared prosperity fund, is that areas that have benefited have no guarantee of benefiting to the same extent in the future?
Absolutely. Certain areas of Wales have benefited much more than others. East Wales received £406 million in investment between 2014 and 2020—a lot less than west Wales and the valleys. Investment is determined by rules set at EU level that govern the distribution of state aid and are intended to compensate for regional disparities.
Since the 1980s, one of the fundamental drivers of the UK national economy has been the inexorable rise of south-east England. The huge investment that it has received at the expense of the rest of the country has had a long-term negative effect on many of the areas that we represent. EU structural funds have gone some way towards compensating for its dominance, but have failed to check it altogether or to bring about a fairer long-term distribution of wealth and investment across the UK. If we are leaving the EU, we need that move to achieve a benefit for our constituents in the future. It is imperative that a system is put in place to benefit the regions of the UK that have been left behind by economic development.
It is unfortunate that notwithstanding the importance of the issue, the Government have given very little indication of how the UK regional prosperity fund will operate. I do not believe that they have even given a commitment that the amount of money distributed to Wales will not fall. I have asked the Secretary of State for that assurance and for more detail on what the fund’s rules will be, but I have had very little information from the Government. It is high time for it, because we are at a hugely important moment and lots of businesses and organisations in all our constituencies are interested in exactly what will happen. Will the Government please answer some of our questions?
Does my hon. Friend share my concern that many regeneration projects in Merthyr Tydfil and Rhymney and across Wales simply would not have happened without EU structural funds? That makes it all the more important that we get some certainty about the prosperity fund. Wales needs to play a part in how the fund is managed.
Certainty is something that all our constituents and all the businesses in our constituencies crave, but it has been sadly lacking in the period since 2016, so I would like the Minister to provide some in his début today. First, can he assure us that Wales will not receive less in funding under the new UK regional prosperity fund than it does under EU structural funds? Secondly, and importantly, will the rules of the UK prosperity fund be set at UK level, with the same rules applying across the devolved nations and regions? Will there be any difference between rules in Scotland, in the regions of England, in Wales and in Northern Ireland, or will the rules apply in the same way as the current EU rules?
I think we all welcome the fact that a prosperity fund is to be created. Following on from my hon. Friend’s argument, does he accept that the sensible and most effective thing would be for the Welsh section of the fund to be administered by the Welsh Government? That would ensure that the fund enhances the work that the Welsh Government have already conducted.
The hon. Gentleman is making a very interesting speech, but does he not see the advantage of having the UK shared prosperity fund administered centrally, to ensure that it has the depth and breadth to fund the projects that are needed around the United Kingdom? For example, tidal power schemes may need more than the amount that would be allocated on a devolved nation basis. Secondly, does he not appreciate that as we leave the European Union, it is a good time for Members of this House to strengthen our own Union by advocating that projects be funded directly here in Westminster?
It is interesting, isn’t it? The EU rules apply EU-wide, so there is a certain logic in a UK prosperity fund having UK rules that apply across a single market within the United Kingdom. I would not want a race to the bottom as a result of rules being applied differently in different countries of the United Kingdom, so I understand the argument for applying a single set of rules so that we do not have state aid in one area being weighed against another—just as the same general EU rules have applied across the UK despite devolution.
This debate is an important one, but we have not had it yet. That was a big mistake, because we could have spent the past 18 months or two years discussing these hugely important issues. I would like that to start today, and I will be very interested to hear the contributions of colleagues.
The hon. Gentleman is right to say that this is important. The issue is of concern to local authorities and further education colleges in north Wales, but does he agree that, as a result of the efforts to get the north Wales growth deal on board, it is at least being discussed by the relevant stakeholders there? It is therefore a very opportune moment to ensure that comments made in north Wales are listened to, both in Westminster and in Cardiff Bay.
The hon. Gentleman has read my speech, too—I was planning to go on to the north Wales growth deal. I am passionate about regional policy and devolving powers to the nations and regions, but the Government should be giving a lead. It is their responsibility to compensate for market failures with engineering investment to improve a part of our economy that the market on its own would leave behind.
There is agreement across the political spectrum that the present system has not worked as it should for the benefit of all the nations and regions of the UK. We need to reflect on the result of the referendum and ask why investment from the structural funds, for example, has not achieved as much as we would all have liked.
My hon. Friend is making an excellent speech. Surely the best way to ensure the best possible outcomes for our programmes and projects is to decentralise and devolve, empowering local authorities, local stakeholders and the practitioners who will ultimately deliver the projects to design measures and outputs. The people on the ground know best what works and what does not.
That is my next paragraph, which I shall read. As someone who believes in devolved decision making, I believe that decisions relating to investment in Wrexham and north Wales should be made by people who are close to our local economy and community. Historically, the EU’s structural funds system did not work well for my constituency of Wrexham.
Let me give one example. Wrexham Glyndwr University was established in 2008—the first time in our history that we had a university. That was a strategic moment for Wrexham and hugely important. As I said when I was a Minister within the Department for Business, Innovation and Skills, universities are at the centre of developing economies in the modern world. The establishment of Wrexham Glyndwr University was a really important period, but between 2008 and 2014 it received no structural funds at all. The Wales European Funding Office tells us that, in the same period, Swansea University received £89 million, the University of Glamorgan £41 million, Cardiff University £29 million and Bangor University £47 million. There was a lack of investment from the source that was supposed to be supporting the development of the economy in the area that I represent. That was a missed opportunity and will have had a negative impact on the university that we are developing as part of the local economy.
That lack of investment is mirrored in funding for north-east Wales generally. Neath Port Talbot Council received over £89 million between 2007 and 2014, while Flintshire received £3 million. Incredibly, Wrexham received only £446,000. After Brexit, we will need a new system of funding and a fair allocation across Wales. As the hon. Member for Aberconwy (Guto Bebb) said, we have shown the way in north Wales: from the bottom up, local government, MPs, Assembly Members and universities have worked together to produce a growth bid for north Wales to remedy the failings that we believe exist within our local economy. We put forward that growth bid on behalf of the community that we represent; it is very much devised and put together by the local players.
I still get frustrated at having to go with a begging bowl either to the Treasury across the road or to Cardiff Bay to beg for investment. I want those decisions about investment and the power to raise money to be devolved to places such as north Wales, because I have lot of confidence in the north-east Wales economy. Despite the fact that we have not benefited from a lot of the funding that other parts of Wales have had, the economy in north-east Wales has developed during the period that I have been privileged to represent Wrexham. We need to address the defects in our local economy in transport and digital infrastructure. In the future, we will have an insight into our local economy to see where the defects are and to begin to address them.
My hon. Friend is making an excellent speech. Do he and the Minister agree that we need to guard against reverse devolution? If we do leave the EU, we need to be guaranteed of those funds in Wales and across the UK. They must also be distributed by the Welsh Government, because they understand how our local communities work, and they can then further devolve such decisions to places such as Wrexham and local authorities across Wales.
Absolutely. I have already asked for an assurance that Wales should receive no less money. As I have just said, I do not want this decision made in Cardiff Bay or in the Treasury; I would like to see it made on a devolved basis. There needs to be more devolution. When I speak to my constituents in north Wales—my hon Friend knows the area well—I find that their perception is that we need to have more local decision making. The end of the restrictive and fixed rules that have previously existed could be an opportunity, as the Federation of Small Businesses in Wales has highlighted. It said:
“The removal of European boundaries also opens up geographical possibilities…Post-2020 there will be opportunities to refit the business support environment to modern economic boundaries, including…the emerging economic regions.”
I agree entirely with that. We need a structure that accords with the economic action plan of the Welsh Government, which is a very far-sighted document by the excellent Economy Minister, Ken Skates, who is contributing massively to creating a growth-driven, inclusive economy in north Wales. We need to develop that and work within the confines of that economic action plan, working with the Welsh Government rather than sticking to the outmoded geographical model that we had previously, which was restricted by inappropriate local government boundaries. Certain local government areas attracted funding, while others did not. For example, the journey to north-west Wales from north-west England requires going through north-east Wales, which could not attract funding for projects in that area, so the transport system in north-east Wales has not really developed in the way needed to develop the local economy.
I certainly want an assurance from the Government that under any new system they will commit to no less investment for Wales. I also want the new First Minister, when we know who that will be, to commit to a new funding formula that means fairer funding right across Wales. I have spoken many times before about devolution in Wales, the fact that north Wales sometimes feels left behind, and the need to create new structures by working with local government, local businesses and institutions such as universities across Wales to develop an inclusive economy. We must carry forward that devolved system of addressing economic failings in particular areas of Wales.
This is an important debate. We need to grasp and grapple with it in the weeks, months and years ahead. I will be listening intently to the Minister’s response, to try and get some flesh on the bones of what the prosperity fund will look like, and I will also be listening carefully to my Opposition colleagues to hear what they say on the matter. This is an overdue debate, but it is of enormous importance to our constituents.
The debate may last until 5.30 pm. I am obliged to call Her Majesty’s Opposition spokesman at no later than 5.12 pm, which gives us about 20 minutes of Back-Bench time. Five members are standing, so that means you each have four minutes. I first call David T.C. Davies.
Thank you very much for calling me to speak, Mr Hollobone.
I thank the hon. Member for Wrexham (Ian C. Lucas) for introducing the debate and add to his call for the Government to ensure that Wales continues to receive the same amount of money. We will certainly have that when we leave the European Union—we will have a lot more money to spend. I differ from him on one important point, though, because I think he was arguing for a system where we simply hand over money to the Welsh Government and allow them to get on with it. We know that at the moment the European Union has some control over how that money is spent in two ways: first, it sets the rules of the game on state aid or anything else and, secondly, it has the powers to investigate when money has been misspent. It is vital that we maintain some form of central control, and here I must be a little critical.
The Welsh Assembly Government have failed on numerous occasions properly to monitor how money that has been spent in grant funding has been used. We have seen some quite scandalous decisions taking place. Some might be down to monumental incompetence; others, I fear, are due to out-and-out corruption. I will run through a couple of them and I challenge anyone to suggest that this sort of thing is right.
There is the Lisvane land deal. The Welsh Government had £20 million-worth of land—if it were good just for agriculture—that was sold at agricultural value to an organisation based in the Channel Islands. Within a matter of months, it received planning permission for housing, meaning that the Welsh taxpayer lost out on tens of millions of pounds.
There is the decision by Welsh Assembly Ministers to go into the film business, which began, as the auditor’s report shows, with the decision to buy a premises down near Newport, in Wentloog. Approximately £40 million was spent making films, and the auditor’s report says rather coyly that not much money has been recouped. About £4 million has come back. The rest of the films have either not been made or have not been seen by anyone. One of the excuses for its failure was that the Welsh Government had decided to get involved in another film studio elsewhere in south Wales. They handed over a couple of million pounds in the form of a grant, much of which appears to have been paid to the directors. There is a string of these decisions going on.
I do not know the exact amount, because we are dealing with many millions of pounds here. What I do know is that if we are going to allow the Welsh Government to have a large amount of money to spend on giving out grants or putting it into infrastructure, we need to be absolutely certain that some central authority can monitor how that money is spent.
With all due respect, perhaps the hon. Member for Caerphilly (Wayne David) would like to cast his mind back to the disgraceful situation with Circuit of Wales, where £9 million was handed over to the director of a company—a director who had been making donations to the Labour party. Some of that money was then taken and given to another company, which that same director was also the director of. There was no proper tendering procedure. If anyone has any doubts about this, the whole thing is written up in the Welsh auditor’s report. What we saw happening was that £1 million went over, in the form of an untendered amount of money, to a company that was owned by the person who had received the grant in the first place. There were no proper checks and balances. The same person was able to go and buy a motorcycle company based in Buckinghamshire.
I would regard nothing that Mr Davies has said thus far as out of order, but I note Mr David’s objections and I am listening closely to all contributions made by all Members. I draw Mr Davies’s attention to the clock. He has just over a minute left.
None of these is an accusation. They are all in the Auditor General’s report, which only came about as a result of the information that I gave them, because nobody in the Welsh Assembly—neither Members nor Government—was particularly interested in the fact that millions of pounds of their money was being spent. The reason I sent the information off was that the directors of that company came into my office and told me that their project was being backed by BMW and General Electric. It was not, because I checked with them afterwards. Then the directors sent their lawyer, Jonathan Coad, to try to take legal action against me, Martin Shipton and Trinity Newspapers, for falsely alleging General Electric and BMW’s involvement, but they did not realise that my tape recorder had accidentally been left on at the time and I had the whole thing on tape.
I say to hon. Members that the Welsh Assembly Government have failed over and over again. At least one civil servant’s name comes up every single time, many of the people involved in the decisions are all known to each other, and a lot of them have links back to the Labour party. I have touched on only three or four projects, but we all know that there are various others—Kukd was another one, as well as Kancoat and Blurrt. One after another, projects have received large amounts of funding, often running into millions, from the Welsh Government, and no proper checks and balances have been pursued.
Diolch, Mr Hollobone. It is a pleasure to serve under your chairmanship. I congratulate the hon. Member for Wrexham (Ian C. Lucas) on securing this important and much-needed debate. Those of us representing constituencies in Wales will be all too aware of the importance of regional and structural funding schemes, and consequently that the design of the new shared prosperity fund will largely determine the prospects for our communities for decades to come. It is essential, therefore, that the new fund serves the people and communities that we are elected to represent.
Almost four months have passed since the Secretary of State for Housing, Communities and Local Government confirmed in a written statement the UK Government’s commitment to the UK shared prosperity fund. The days are getting shorter, the autumn Budget has passed and, if nothing else, Christmas will soon be upon us, yet we are still awaiting quite basic details about the new fund. What will the total quantum be? When, and how, will the funds be allocated? What activities will be eligible for support, and which bodies will oversee the decisions?
As has already been mentioned, at present west Wales and the valleys receive a significant amount of funding, as our low GDP per head qualifies us as a less developed region. Over the current cycle, Wales will receive approximately £2.7 billion from European structural funds. A majority of the Welsh population—63% to be precise—lives in this less developed region of west Wales and the valleys, where the funding goes a long way to sustaining the rural and underdeveloped economy.
While it is good that regional and structural funding programmes have been available to us, it is nevertheless a shame that our constituencies have continued to qualify for them. That is not surprising, of course, when we consider that, on the whole, UK economic development has typically focused attention and investment on urban centres, and priorities for rural areas have amounted to little more than improvement of existing connections between the countryside and the cities, so as to accelerate the trickle of prosperity from the economic engines and powerhouses to the rural periphery. The result is that the productivity of rural areas is consistently below the UK average, in stark and rather depressing contrast to that of larger towns and cities.
As the MP for Ceredigion, and as there are few signs of there being a change to UK economic strategy in the near future, I must stress that whatever the methodology used by the new shared prosperity fund, Wales must not be left financially worse off. If rumours are to be believed, and the shared prosperity fund is also to finance other responsibilities such as the old pillar two programmes of the common agricultural policy, for example, its budget will need to be proportionally larger so as not to constitute a real-terms cut.
I agree wholeheartedly with the hon. Gentleman. If the Barnett formula were applied to the shared prosperity fund, that would be nothing short of a disaster for our communities. We need to make sure that whatever the methodology, it is focused on the need of communities, rather than on simple population share.
I must labour the point: if the fund is to be used for other responsibilities, it cannot be reduced to a convenient tool for hard-pressed Departments to realise budget efficiencies via consolidation. The funding will be a lifeline for our communities, so it must provide Wales with no less, in real terms, than the total allocated by the EU and UK funding streams it replaces.
Furthermore, I believe the UK shared prosperity fund must operate on multi-annual financial allocations of at least seven years. Inconvenient though that may be for the Treasury’s spending review cycles, it would allow recipient organisations and groups the time for proper planning and implementation of larger scale and transformative projects—the types of project needed seriously to ratchet up jobs, wages and living standards in constituencies such as Ceredigion. We cannot settle for mere tinkering around the edges. What is required is a programme that allows for substantial and prolonged investment, so that our areas are no longer less developed and eligible for such assistance.
As the hon. Member for Caerphilly (Wayne David) mentioned, in terms of the shared prosperity fund’s administration, important aspects of economic development are devolved, so the Welsh portion of the new fund should be devolved to the Welsh Government, potentially, as the hon. Member for Ynys Môn (Albert Owen) just mentioned, as an additional, separate block grant from the Treasury, so that we may bypass the Barnett formula.
Time is against me, so I will conclude with a question to the Minister, who I welcome to his place in the Welsh Office. Will he guarantee that the UK shared prosperity fund will be, in real terms, at least equivalent to the funds that it is replacing, and that its budget will be proportionally increased if other EU—or, for that matter, UK—competencies are to be blended into the fund?
It is a pleasure to see you in the Chair, Mr Hollobone. I congratulate my hon. Friend the Member for Wrexham (Ian C. Lucas) on securing the debate. He has had far more luck in securing the debate than I have had in getting answers from the Secretary of State and his conveyor belt of Welsh Office Ministers to my 18 questions on the shared prosperity fund over the past 13 months.
Two years and five months on from the referendum, we know precisely three things about the fund. We know what it will be called; we know it will be run by the England-focused Ministry of Housing, Communities and Local Government; and we know that there will be a consultation at some point. That is it. I appreciate that the Minister is new to his position—I welcome him to it—but hopefully today he can give us more than the woefully superficial information we have had so far. The Government do not seem to appreciate that the fund will be replacing one of the biggest underwriters of investment in Wales.
The European regional development fund and the European social fund have alone provided £2.1 billion to Wales between 2014 and 2016, and inspired a further £1.1 billion in match funding. In 2016, when I spoke in the House about the importance of Cardiff University’s Brain Research Imaging Centre in my constituency, I made the point that that had only been possible thanks to £4.5 million of ERDF funding. European Union funding is the lifeblood of the three universities in my constituency and that is why, every single week, researchers from those universities contact me with their concerns about the Government’s failure to commit to underwriting funding after the end of Horizon 2020, which is already impacting on funding bids. They also tell me that the Government’s proposed salary cap on EU citizens permitted to work on research in the UK after Brexit will decimate international research collaboration because that cap would be too high.
Universities are the largest group of direct ERDF recipients; around £240 million of ERDF money has been awarded to Welsh universities for the period 2014 to 2020, to strengthen regional economic success and improve social cohesion. They have also received over £50 million from the ESF, which is an investment in people with a particular focus on improving employment and education opportunities. Those university-led ESF projects have promoted routes into higher education and supported graduate retention rates in economic growth areas that are so important to my city’s economy, such as professional services, creative and digital industries, and life sciences. That funding does not fund only big infrastructure projects. Last week, I went to four primary schools in my constituency—Adamsdown, Albany, Marlborough and Springwood—and I noticed in every school a sign that said that the children had a carton of milk every day through the European Union school milk scheme. We know that the Conservative Government have never been fans of children’s school milk, but can the Minister guarantee that those children will continue to receive their milk every day after 29 March 2019?
We know that we cannot rely on this Government for the green light to vital projects in Wales. The Swansea Bay tidal lagoon is one example, and electrification between Cardiff and Swansea is another. From a Welsh perspective, the shared prosperity fund will not be properly shared, will not deliver prosperity and will probably contain less funding for Wales than we receive as members of the European Union. That is why I hope we stay in the European Union.
It is a pleasure to serve under your chairmanship, Mr Hollobone. I congratulate my hon. Friend the Member for Wrexham (Ian C. Lucas) on securing this important debate.
The 2017 Conservative manifesto promised to set up a new UK shared prosperity fund to replace EU funds, with the intention that the new fund will
“reduce inequalities between communities across our four nations”
and will be
“cheap to administer, low in bureaucracy and targeted where it is needed most”,
so we know how to measure the promises that the Conservative Government are now making. Two and a half years later—not from the manifesto but from the referendum—we still do not know how much funding will be available, how it will be divided across the country, what activities will be eligible for support or who will take the decisions on how the money is spent. There is a huge fear that that will be not just a financial grab, but also a power grab, and that the Conservative Government will use this opportunity to reduce funding for areas that need it most and to claw back powers that sit naturally with the devolved Administrations.
That concern drove us to create the all-party parliamentary group on post-Brexit funding for nations, regions and local areas. In that spirit, we worked with the Industrial Communities Alliance and launched a national inquiry to help us understand the wide-ranging views on the key questions that I have highlighted. That involved inviting a large number of organisations to submit evidence to the inquiry about what they wanted from the shared prosperity fund. Respondents included local authorities, local enterprise partnerships, the TUC—including the Welsh TUC—mayoral combined authorities and devolved Administrations. Such was the huge interest and concern that we received submissions from over 80 different bodies across England, Scotland, Wales and Northern Ireland. Many hon. Members present here are members of the APPG. The report will be published on Friday, but I will give a brief summary of the key recommendations.
There is an overwhelming consensus that the shared prosperity fund must not comprise a penny less than what the EU would have invested in Britain from 2020 to 2024. The Government must, above all, prioritise narrowing the differences in prosperity across the UK. In England, the funding should be allocated to local areas on the basis of a robust formula and up-to-date statistics. In Scotland, Wales and Northern Ireland the UK Government should respect the devolution settlement and any guidelines should therefore be kept at a strategic and broad level, and agreed with the devolved Administrations, who should keep responsibility for detailed design and delivery. Those findings all reflect my own concerns. The report has been signed off by all vice-chairs of the APPG, so it is a cross-party report; we shall send it to the relevant Secretaries of State and seek follow-up meetings.
Westminster must not use Brexit and the end of the EU’s regional funding as an opportunity to short-change the poorest parts of the UK. The UK Government must not preside over a Westminster power grab, whereby devolved Administrations are denied the appropriate control over funds. The Government have promised their own consultation—I am sure the Minister will tell us more about that—which I understand will be launched before Christmas. It is very important that they take the recommendations in our report into account, particularly as they reflect the views of more than 80 organisations at the coalface of those issues. The design must not be dreamed up in Westminster or Whitehall bubbles, but driven by the practitioners—the people who really know what works, and what does not, in their communities.
It is always a pleasure to serve under your chairmanship, Mr Hollobone. I welcome the Minister to his place and congratulate my hon. Friend the Member for Wrexham (Ian C. Lucas) on securing the debate. I am disappointed that the hon. Member for Monmouth (David T. C. Davies)—the Chair of the Welsh Affairs Committee—chose to talk about other things when the topic of the debate is so important for the future of Wales.
My constituency has been a major beneficiary of both European structural funds and the European regional development fund. In the 1980s, my constituency had twice the national average of unemployment—mass unemployment and mass depopulation, which is why it qualified with low GDP for European structural funds. Objective 1 has been a success in my area and it has helped repair communities through its social cohesion funds. It has also helped port communities with infrastructure—the main gateway between Wales and the rest of Europe—and helped the agricultural, food and farming sector.
As my hon. Friend the Member for Cardiff Central (Jo Stevens) said, the further education and higher education sectors have also been major beneficiaries. There have been real, tangible outcomes in my constituency, such as energy centres, food technology centres and job creation, and Wales and the valleys are benefiting from this.
However, we still need to reflect on how we are going forward, because my area is still a low area of gross value added—GVA—and that needs to change. That is why we need a further commitment from the Government for post-2020: that the circumstances will not change and that there will be real growth. Unemployment in my area is now below the national average, when in the 1980s it was double the national average. That is job creation helped by European structural funds—real people benefiting from real jobs in my area. That is why I am a big supporter.
Even today, we have great investment coming in. In 2015, we had a brand-new, state-of-the-art, innovative science park, which was part funded by the Welsh Government and attracted private investment, but it would not have been possible without the grant from the ERDF. In 2017, we got a business park at Llangefni, which now works closely with colleges and universities to ensure that we get top-quality jobs coming to my area. Again, that did not happen in the ’80s, before the structural funds were put in place in the ’90s. A tourist package worth £1.7 million will help the port of Holyhead, which was damaged by storm—again, some of that money comes from the European social fund. It is a good thing. Energy companies are investing in my area, such as Minesto from Sweden, and a not-for-profit organisation has been set up—an indigenous company in Wales—because of ERDF funding.
Does my hon. Friend agree that the determination of companies and institutions throughout north Wales to work together is a massive attraction to outside businesses to come to our area? We have shown that we work very effectively together and can plan the north Wales growth bid.
Absolutely. That is the next point that I want to move on to. I am a strong supporter of devolution—I have fought for it in referendums, and I have seen its enhancement—but devolution is no good just going from Whitehall down the M4 to Cardiff Bay. It needs to go throughout the areas of Wales, including to north-west Wales and north Wales generally. Real devolution is about empowering people in their local communities. My hon. Friend is right: we have a structure in the north Wales growth bid. We have a board set up, with business and local authority representatives, and they have the ability to be a mechanism for distribution of the new growth fund in the future. I hope that the Minister will take that on board. I know that he is visiting my constituency in north Wales shortly, and he will hear about that.
I want to quote the remarks referred to by the hon. Member for Ceredigion (Ben Lake), in which the Secretary of State for Housing, Communities and Local Government stated:
“The UK Shared Prosperity Fund will tackle inequalities within communities by raising productivity, especially in parts of the UK whose economies are furthest behind…It will have simplified administrative arrangements aimed at targeting funding effectively; and…It will operate across the UK. The UK Government says it will respect the devolution settlements in Scotland, Wales and Northern Ireland, and will engage the devolved administrations”.
I want those words to be put into action. I want the new Minister to take that on board and to work with us, as Welsh Members, to ensure that areas such as mine continue to grow and will benefit from the shared prosperity fund. I do not want to see this Government pull the rug from under the feet of the poor communities, education communities and farming communities that have benefited since 2000. Europe based its European structural funds on need, and that is what we need: to establish the needs of areas throughout the UK, including periphery areas such as the one that I represent, to show that we will go forward, that we do share prosperity and that we share it at a pace equal to that in the south-east of England. At the end of the day, we want a more equal society, economically and socially.
It is a pleasure to serve under your esteemed chairmanship, Mr Hollobone.
I welcome the Minister to his place, for the second time this afternoon. He is the fourth Minister in one year; let us hope he stays around during this crucial period in our political history. I give a big thank you to my hon. Friend the Member for Wrexham (Ian C. Lucas) for securing the debate and for speaking so lucidly. A reflection of the importance of this debate can be seen in the number of Labour Members who attended it—nine MPs, I believe, which is almost a third of the Welsh parliamentary party.
My hon. Friend the Member for Wrexham made an excellent speech in which he drew out some important issues, such as the lack of clarity in the whole Brexit process—I share that concern—and ensuring that Wales stays a net beneficiary of the funding. He also, rightly, talked about the disparity within Wales, between east Wales, and west Wales and the valleys.
The hon. Member for Monmouth (David T. C. Davies) went off on one, I think. He had an opportunity to highlight some important issues, but he made some unsubstantiated claims and did not even mention the issue of EU funding. He was one of two Conservatives who argued for extra centralisation of powers with the shared prosperity fund. That worries me.
The hon. Member for Ceredigion (Ben Lake) mentioned the importance of rurality—I share those concerns too, as I have a rural constituency myself—and the fact that he does not want the shared prosperity fund to be Barnettised. My hon. Friend the Member for Cardiff Central (Jo Stevens) mentioned the importance of funding for universities and schools. That is key, because our universities should be driving our 21st-century economy.
I pay tribute to the work of my hon. Friend the Member for Aberavon (Stephen Kinnock) on his all-party parliamentary group for post-Brexit funding, which is taking a cross-party approach, which is the way it should be. He drew out several points: that the devolution settlement should be respected, that there should be no power grab or financial grab, that we have had a lack of detail so far and that we do not want Wales to suffer financially as a result of voting for Brexit.
My hon. Friend the Member for Ynys Môn (Albert Owen) listed the many benefits of being a member of the European Union and a recipient of the highest levels of European grant in the whole of Europe. He is a great campaigner on energy, which is his specific focus, and he dreamt up the name “Energy Island” for Ynys Môn—he is Mr Energy Island himself. He said that there should be more devolution to the areas of Wales. All around, we had some excellent contributions.
From my own perspective, I am very worried about the slipping timescale for the consultation on the shared prosperity fund. There have been 113 written parliamentary questions about the shared prosperity fund, two of them from me about the timing. We were promised that the consultation would take place in 2018, but on the last day in Parliament before the summer recess, it was slipped out that the consultation would be by the end of 2018. We are now almost at the end of 2018 and there has been no mention yet. Please, may we have some detail on the timing?
I share concerns expressed around the Chamber about how much funding we will receive. Before the Brexit referendum, the Brexiteers came into Wales to say, “Wales will not suffer. It will have exactly the same funding after Brexit as it did before.” We want to ensure that that will be the case. Another of my concerns about the European funding is that we had both capital funding under the ERDF and revenue funding under ESF. We want to ensure that that continues. In Wales, we benefited tremendously from it.
This is not all just from a party political perspective, so I will finish with the words of the Federation of Small Businesses:
“The FSB calls for the devolved nations to retain the powers to set their own allocations and frameworks for how funding should be prioritised, which takes account of local economic needs.
Regional policy is fundamentally about balancing economic outcomes. As economic development is a devolved function, we believe Welsh Government are best placed to deliver any replacement funding through the Shared Prosperity Fund”.
So please, no power grab by the centre. Leave those powers and that finance in Wales.
It is a pleasure, as always, to serve under your chairmanship, Mr Hollobone. I congratulate the hon. Member for Wrexham (Ian C. Lucas) on securing this debate. I know him from my time on the Select Committee on Digital, Culture, Media and Sport, but he probably does not realise that I visited Wrexham for the first time when I was eight, to watch my local non-league team, Goole Town, play Wrexham at the Racecourse Ground in the 1974 FA cup. We managed to get a one-all draw—sadly, we got stuffed in the replay.
I do not think I have, but I am sure it will be on my agenda shortly. I am looking forward to going to north Wales, and I was in Cardiff on the second day of my appointment.
I thank all hon. Members for their contributions, and for their kind wishes on my appointment as Parliamentary Under-Secretary of State for Wales. It is a great honour to be asked to join the Department and to carry on the work of my predecessors. Although I have not yet been in the job a week, I understand and recognise many of the issues that have been raised. Someone said that they are a passionate lot in Wales; that has been exemplified this afternoon, and it is an incredibly important debate to have.
As the hon. Member for Wrexham pointed out, Wales has been a net beneficiary of funding from the EU. By the time the current cycle finishes in 2020, Wales will have received more than £5 billion. The hon. Gentleman’s constituency has benefited from that funding to the tune of more than £14 million between 2005 and 2016. Projects such as the community resource centre in his constituency, Coedpoeth Enterprise and Lifelong Learning Centre, and the west Wrexham learning project have received funding from Europe. It is understandable that they, like other organisations in Wales, both large and small, will want to know what comes next.
The hon. Member for Aberavon (Stephen Kinnock) mentioned that as part of our 2017 manifesto, we set out proposals for a UK shared prosperity fund, which would
“reduce inequalities between communities across our four nations”.
As part of that commitment, we recognise the role that the Welsh Government and other devolved Administrations have played in delivering structural funds over the last 20 or so years. We are absolutely committed to engaging with them as we develop the proposals. The Government have already begun discussions, which will continue, at official and ministerial levels.
Since 2016, we have worked together to agree deals; the Cardiff and Swansea deals are together worth £2.5 billion. We are working on a £120 million deal for north Wales, which I have already had a briefing on and am very keen to get involved in, to see what I can do to help deliver those projects. That was announced in the Budget, as Members will be aware, along with a commitment to start work on a deal for mid-Wales. Those are examples of our Governments working together across administrative boundaries to strike deals that will power economic growth throughout Wales.
The shared prosperity fund provides the UK with an enormous opportunity to redefine the way we invest our money in line with priorities unique to the people, communities and businesses across all nations of our Union, not least Wales. It is right that these groups be afforded the chance to express their views directly to all Governments on the priorities and most effective structures for future funding. Our forthcoming public consultation is an important first step in shaping those discussions, and will ensure that interested parties from across the UK are given the opportunity to inform the debate.
This debate is a starting point, but the consultation will begin before the end of the year. It will be for others in Government to announce the date, but given that we are halfway through November, it is probably easy to work out that the hon. Gentleman will not have long to wait for the consultation to begin.
I am not criticising the Minister, because he has only been in the job a short time, but it is the duty of Wales Office Ministers to stand up for Wales. We are having this debate to put pressure on him, so that the Welsh voice is heard loud and clear in this debate. It is not for others to decide; it is for Government to decide, and he is our voice in that Government.
I completely agree. I see myself as a champion for Wales in Westminster. That is incredibly important and must be my priority. I cannot tell the hon. Gentleman the exact date, but I can say that it will be this year, which indicates that it will be incredibly soon. I hope he takes me at my word when I say that the consultation is about to start.
Given the significance of the shared prosperity fund, it is right that questions about the size, structure and priorities for investment develop as we approach next year’s spending review, which will determine the amount of money that will be discussed.
On the spending review, should we be concerned that it seems that responsibility for this fund has been given to the Ministry of Housing, Communities and Local Government, rather than the Treasury? Might that suggest that it is not as big a pot of money as we would hope?
I certainly do not write the comprehensive spending review—well, not yet. I ask the hon. Gentleman to bear with, to coin a phrase. I do not think he has anything to be concerned about in terms of MHCLG being involved in this process—it is only right that it be involved.
In the time I have left, let me turn to specific points raised by hon. Members. In his eloquent speech, the hon. Member for Wrexham spoke passionately about his constituency and his area of north Wales. He asked whether the same rules would apply across the UK. We will absolutely respect the devolution settlement and work with the devolved Administrations. As I said, we are committed to consulting before the end of the year—in the next few weeks—and people will have that opportunity to set out their views on the fund.
The hon. Gentleman rightly commented that the system has not always worked as well as he had hoped. He said that investments had not always delivered the expected return in gross value added terms, that some EU funding had not worked particularly well for Wrexham, and that there had been a bit of a missed opportunity. That is absolutely right. That is why we should have this debate, and why we should all contribute to the consultation.
The hon. Gentleman and the hon. Member for Aberavon, whom I thank for his work on the all-party parliamentary group on post-Brexit funding for nations, regions and local areas, said decisions should be made locally. They both made very valid points in that respect. In my view and that of the Government, EU exit provides an excellent opportunity to reconsider how funding for growth is delivered across the UK. The consultation will be a great opportunity to start that conversation.
The hon. Member for Ceredigion (Ben Lake) and others asked when we would publish the details of the fund. As I said, we will do that in the next few weeks, before the end of the year. We are absolutely committed to that. That will give everyone across the UK the opportunity to contribute their views, and to help those views to form Government policy on this issue. Decisions on the actual spending will be made in the spending review next year.
I would have liked to respond to one or two other hon. Members, but I want to give the hon. Member for Wrexham the opportunity to respond to the debate. I thank everyone for contributing. We want an economically strong Wales in a prosperous United Kingdom. Working alongside the Welsh Government through the shared prosperity fund, we can ensure that becomes a reality.
A number of Members asked for a commitment that Wales would not receive less under the UK shared prosperity fund than it currently receives. I note that this commitment, which has been asked for ever since the general election, still has not been given. There is great concern about that.
It is pretty fundamental that we do not want Wales to lose out. I think I speak for everyone who participated in the debate when I ask the Minister to convey to the Government, on behalf of Wales, that the sum must not be less than it is currently. As we heard, there are different views about how the fund—
Motion lapsed, and sitting adjourned without Question put (Standing Order No. 10(14)).