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Volume 662: debated on Wednesday 26 June 2019

The Secretary of State was asked—

Leaving the EU: Manufacturing

1. What recent assessment he has made of the potential effect on manufacturing in Wales of the UK leaving the EU without a deal. (911489)

The manufacturing sector is of vital importance to the Welsh economy. The UK’s modern industrial strategy plays a key part in supporting industry. We want to get a deal with the European Union to give a smooth and orderly exit.

The Secretary of State says that he wants to get a deal, yet he is backing a candidate for the Conservative leadership who advocates no deal. With the news from Ford, Airbus, Honda and Nissan, and from so much of the Welsh manufacturing industry and the steel industry, how on earth can he, as Secretary of State, justify that position? Or is he simply trying to keep his job?

The hon. Gentleman is highly selective in what he cites. If he heeds the calls of some of the employers he mentioned, he will know that they supported the deal that came before Parliament and urged him to vote for a deal. By definition, his voting against the deal made no deal far more likely.

Does my right hon. Friend agree that the opportunities for manufacturing in Wales when we leave the European Union will be to supply the rest of the United Kingdom with goods and services?

My hon. Friend is absolutely right. Manufacturing in Wales is more productive than the UK average, so is well placed to take the new opportunities both in the UK and globally that will arise as a result of our leaving the European Union. Like both leadership candidates, I would prefer to have a deal than not to have one.

How many Welsh exporting manufacturers are moving workers to the EU27 to set up front offices, distribution centres and so forth, and what help are the Government giving them to export Welsh jobs?

I am grateful to the hon. Gentleman for providing me with the opportunity to highlight the Welsh economy’s export record. Exports are now at £17.7 billion—that is a 7.5% increase, which highlights how the Welsh economy is exporting strongly and at record levels.

As someone who started his working life at Ford in Bridgend, may I ask the Secretary of State what he is doing to ensure that high-quality, high-value manufacturing jobs are going to continue at that excellent site, which has such good rail and road connections?

I am grateful to my hon. Friend; with his local knowledge, having worked at the plant, he truly understands the value of the skills that the people there bring. Those skills are a real incentive to attract further investment. Along with the Welsh Government, we have set up a joint taskforce that will be led by Richard Parry-Jones, an industry expert who is best placed to make recommendations to the Government. We look forward to receiving that report shortly.

Given the almost daily news of business closures in Wales as a result of Brexit uncertainty, and the real prospect of no deal, how can the Secretary of State justify his support for a candidate to be Prime Minister who is prepared to sacrifice thousands of manufacturing jobs in Wales to further his own personal ambition? Does the Secretary of State think it is a “do or die” Brexit?

I am disappointed that the hon. Lady looks to undermine the Welsh economy. She needs to recognise that unemployment is at record low levels, economic activity is at record high levels, exports are growing and manufacturing is prospering. When it comes to Brexit, she also needs to recognise that when she voted against the deal on 29 March, she was the one who increased the prospect of no deal.

The last thing I would do is undermine Wales. I am proud of my country and I am proud to have represented Wales many times. When you pull on that red jersey, Mr Speaker, there is nothing like it.

I will try again: given the Secretary of State’s apparent support for a no-deal Brexit as a price worth paying to keep his own job, what can he possibly say to people in Wales who stand to lose their manufacturing jobs as a result of his Government’s catastrophic mishandling of the Brexit negotiations?

I highlight the fact that manufacturing is doing well in the Welsh economy, with 12,000 more manufacturing jobs in the economy now than there were in 2010. There are now 4,000 more manufacturing jobs in the Welsh economy than there were last year. Manufacturing employers would like to see a deal with the European Union; perhaps the hon. Lady should explain why she has voted against a deal with the European Union. Furthermore, she needs to explain why she is rejecting the will of the Welsh people, who voted in stronger numbers than the UK average to leave the European Union.

EU Withdrawal Agreement: Welsh Economy

2. What recent assessment he has made of the potential effect on the Welsh economy of the withdrawal agreement on the future relationship between the UK and the EU. (911490)

The Government are clear that the best outcome for Wales and the Welsh economy is that the UK leaves the European Union in an orderly manner with a deal. That is why I voted for one on three separate occasions.

The Secretary of State knows that, if we stay within the EU, British people will get a 20% uplift in structural funding to £440 per person. Will he ensure that, in the event of our leaving with a deal, that money is sustained completely with a new UK prosperity fund? If we have a no-deal outcome, there will, quite simply, be no structural funding and we will hit a cliff edge, and more firms like Tata, Airbus and Ford will leave on his watch.

I do not recognise any of the hon. Gentleman’s comments. Let me ask him this one question: does he recognise that Swansea voted to leave the European Union in higher numbers than the national average, and, if so, why does he reject the will of his constituents?

Many Welsh businesses will be able to cope with a no-deal Brexit, but one sector that the Secretary of State and I know will not be able to cope is sheep farming. Will he confirm whether he has had any discussions with the Secretary of State for Environment, Food and Rural Affairs about an income protection measure or a compensation package for hill farmers when their industry gets decimated under a no-deal Brexit?

My right hon. Friend makes an extremely important point and highlights the importance of the agriculture sector, specifically sheep farming, to the Welsh economy. Clearly, it is our will to protect that sector in every possible way that we can, but the best way to protect it is to get a deal with the European Union. I have voted on three separate occasions for the deal. I think that Opposition Members need to explain why they have voted against a deal, because, by definition, that creates a higher chance of our leaving the European Union without a deal. They would need to explain that to their constituents.

12. Yesterday, I met a managing director of a local manufacturing company who imports most of his goods through ports. He is stockpiling raw material at the moment, which is affecting his cash flow and his future plans. The Secretary of State went to Holyhead in April and spoke about the importance of ports, saying that we needed a deal. Now he has said recently that we need to prepare for no deal. I must tell him that his comments have deeply concerned that chief executive officer. If we do end up with a no deal, what would he say to him? (911500)

I want a deal with the European Union. I have voted for a deal with the European Union on three separate occasions. I suspect that the employer to whom the hon. Gentleman has spoken would have supported a deal with the European Union. Perhaps he should have explained why he voted against that, because that has clearly increased the uncertainty, which is not good for anyone. He needs to look at himself and his colleagues and consider why they voted to block the deal.

Along with the Secretary of State, I supported the withdrawal agreement the three times it came before Parliament because of the impact that it will have on my constituency, and particularly on the sheep farming industry. Will the Secretary of State go to the Royal Welsh show and explain to the farming unions that he, I and both of the candidates who might be Prime Minister are very supportive of reaching a deal with the European Union that will protect the future of my constituency and the sheep farming industry in particular?

I pay tribute to my hon. Friend for his strong record in this area. Yes, I am looking forward to my visit to the Royal Welsh show. That will give me an opportunity to continue my ongoing proactive dialogue with the agriculture sector and with the farming unions in particular. I have spoken to both leadership candidates, and both recognise the importance of agriculture to the UK economy and the significance of the agriculture sector in Wales. They believe that it is best to leave the European Union with a deal, but will take positive steps to protect those industries in the absence of a deal.

14. Brexit has serious implications for Welsh farmers, with an average of 80% of a farmer’s income in Wales coming from direct payments received through the EU’s common agricultural policy. The Secretary of State is backing a contender for Prime Minister who, during the referendum campaign, promised farmers that their subsidies would remain as they are after Brexit. Can the Secretary of State give a guarantee that the right hon. Member for Uxbridge and South Ruislip (Boris Johnson) will not pursue any Brexit policy that harms the lives and the livelihoods of farmers and that impacts on the agricultural sector? (911502)

I am excited about our prospects outside the European Union—clearly having had the privilege of travelling internationally. A deal on beef exports was agreed last week between China and the UK, and we continue our dialogues in relation to other products and foodstuffs. That demonstrates the markets that are available. The hon. Gentleman is absolutely right that it is better to get a deal with the European Union, because that would give us a smooth and orderly exit, but if he will continually vote against the deal with the European Union, by definition he will increase the chances of a no deal.

The Secretary of State is easy about a no-deal Brexit, which threatens to create a perfect storm for sheep farmers in Wales—and his Government are going to have to own it. Tariffs of 46% are set to kick in on 31 October, to coincide exactly with the season when mountain lambs come to market for export. There is a mart in Bala on 31 October. Will he join me there and tell farmers to their face why the value of their lambs has gone through the floor?

I remind the right hon. Lady that farming unions in Wales strongly supported the deal agreed by the Prime Minister and the European Commission. Would she stand at their mart, look them in the eye and tell them that she voted against their wishes and for a no-deal position? That is exactly what she did on three separate occasions.

So that is the Secretary of State failing to take responsibility, then. He talks up the threadbare benefits of his insular Union while denigrating the real rewards of the European Union. The majority of Tory party members would sacrifice the United Kingdom for Brexit. Will he therefore tell me which is closest to his heart—his beloved Brexit, on which his career depends, or his precious Union?

There is no doubt that Wales prospers fantastically through being part of the United Kingdom, and there are great opportunities for the United Kingdom outside the European Union. I want to maintain a very close trading relationship with the European Union, which is why I would strongly prefer to have a deal. As a passionate Welsh lady, the right hon. Lady will recognise that Wales voted to leave the European Union. We are trying to honour the outcome of the referendum and maintain a close trading relationship so that farmers, manufacturers and service providers in Wales can continue to trade with the European Union and globally.

Industrial Strategy

3. What recent discussions he has had with (a) Cabinet colleagues and (b) the Welsh Government on the effect of the industrial strategy on the Welsh economy. (911491)

4. What recent discussions he has had with (a) Cabinet colleagues and (b) the Welsh Government on the effect of the industrial strategy on the Welsh economy. (911492)

We continue to work closely with colleagues across both the UK and Welsh Governments to ensure that the industrial strategy continues to deliver for Wales. We have already made funding available for a number of projects for Wales, including recently providing a further £1.4 million to support innovative battery technology through the Faraday battery challenge.

Will the Minister confirm that by refusing to invest in major opportunities such as the Swansea Bay tidal lagoon, the UK Government are denying the Welsh steel industry a significant opportunity to innovate and create quality jobs that would support a new industry with global growth potential?

I am afraid I do not recognise that description, given that the National Infrastructure Commission supported our decision. It is worth noting that the tidal lagoon project would be three times more expensive at producing electricity than other alternatives.

In the light of the very concerning news about the number of jobs that could be lost at the Ford engine plant in Bridgend, and reports of the impact that similar announcements by Nissan in my region and Honda will have on the supply chain companies in Wales, what assessment has the Minister made of the impact that Brexit is already having on the automotive sector in Wales? What discussions has he had with the Department for Business, Energy and Industrial Strategy to provide support to the sector in Wales via the industrial strategy?

It is worth saying that Ford has said that the decision is not linked to Brexit; if Opposition Members are interested in the views of Ford, it said to vote for the deal on Friday 29 March. Let me be clear that there is positive news. Only this month, Aston Martin started production of a new line of vehicles in St Athan in south Wales—in the Secretary of State’s constituency. That shows what can be done when there is positive work on behalf of local people.

The design of the shared prosperity fund will be crucial to Wales’s industrial strategy. Communities and business shareholders are clear on what the fund should look like—not a penny less, nor a power lost for Wales. The consultation on the fund was in the 2017 Conservative manifesto, and was mentioned in a written statement in July last year and by the Secretary of State at the Dispatch Box last October. Can the Minister confirm that this consultation has now been withdrawn?

We continue to work on the shape of the UK shared prosperity fund that will come forward after Britain leaves the European Union. We look forward to providing more information in the spending review later this year.

Infrastructure Resilience

5. What recent discussions he has had with the Welsh Government on the resilience of infrastructure in Wales. (911493)

10. What recent discussions he has had with the Welsh Government on the resilience of infrastructure in Wales. (911498)

We have regular discussions with the Welsh Government’s Minister for Economy and Transport on a range of matters, including infrastructure in Wales. We are committed to ensuring that Wales prospers on the back of a strong and resilient infrastructure base, supported through our modern industrial strategy and national infrastructure delivery plan.

The Assembly Government have good plans for the Treherbert line, which serves Rhondda Fawr, but people who live in Rhondda Fach and at the top of Rhondda Fawr who need to go over the Rhigos road to get to work, or indeed to the maternity unit at Prince Charles Hospital, need significant investment in the roads. It must surely be unfair that it takes many people in Rhondda, including expectant mothers, four buses to get the hospital, which might mean that a woman would not get there in time to deliver safely and that babies might not live.

I recognise the strength with which the hon. Gentleman has put forward his constituents’ case. Roads and highways are obviously in the devolved space, but I would certainly be more than happy to meet him to discuss what we can do to support his cause.

The European regional development fund has made a huge contribution to the development of infrastructure in Wales. Will the Minister give a commitment that resources from the new shared prosperity fund will be allocated on the basis of need and not through competition?

We will decide on the future of the UK shared prosperity fund, which I touched on earlier, through consultation and through the comprehensive spending review later this year. What would make a huge difference to roads in south Wales would be getting the M4 relief road back on track. If that was our decision, Wales would now be on the highway to the future; sadly, as it is a devolved one, it is now on the road to nowhere.

9. Two years ago, there was no broadband at all in the Dysynni valley in Gwynedd, in the constituency of the right hon. Member for Dwyfor Meirionnydd (Liz Saville Roberts). Now, there is fibre going direct to premises, delivering a minimum of 75 megabits per second download. What more can the United King-dom Government do to deliver high-speed broadband to rural Welsh businesses? (911497)

At the autumn Budget, we announced £200 million for the hardest to reach areas, and Wales will be included in the first phase of this work. Tomorrow, I will be in Wales with my counterpart in the Welsh Government talking about the north Wales growth deal, and digital connectivity is a key part of that. In addition to the funds in the growth deal, there will be £8 million from the local full fibre networks challenge fund to support increased connectivity.

Ports infrastructure is essential to the economy of Wales and the United Kingdom. Holyhead port is a gateway from the Republic of Ireland. What discussions has the Minister’s Department had with the Irish Government to ensure that there are adequate facilities in place before Brexit, because the Irish Government are planning to detour freight direct to mainland Europe?

I am sure the hon. Gentleman will be pleased to know that there are ongoing discussions with the Irish Government to ensure that whatever scenario there is for Brexit, there will not be so much disruption at Holyhead. He will also be pleased to note that potential investment in Holyhead port is part of the north Wales growth deal, which I will be discussing tomorrow.

Steel Producers

The Government are extremely supportive of the Welsh steel sector. Since the European Commission blocked the Thyssenkrupp joint venture, I have met unions and management to discuss the challenges and opportunities.

As well as the success of the industrial strategy in supporting UK steel making, and the adoption of the new UK steel charter, what more can we do to support and promote the whole UK steel supply chain through the GREAT Britain campaign?

I again pay tribute to my hon. Friend for his in supporting the steel sector in Corby. He will be well aware that five major steel producers have come together on this. In addition, the Government are supporting a sustained manufacturing hub led by Swansea University that will not only be of direct benefit to the steel industry in Wales but will have a significant impact on the steel sector in his constituency. That demonstrates the great strength of the industrial strategy.

Tata’s Cogent Power in my constituency has huge potential to develop electrical steel in the automotive industry and electrification, but it needs Government support to help to develop the supply chain, which I wrote to the Secretary of State about recently. Will he come and see for himself by visiting the Orb plant?

I would be happy to support the hon. Lady and Orb in Newport. It is an important site that employs 350 people. As the manufacturing sector is doing well in Wales, I think there is a great future for the plant.

Ford in Bridgend: Welsh Economy

7. With reference to the closure of the Ford plant in Bridgend, what assessment he has made of the strength of the Welsh economy. (911495)

I am extremely disappointed with Ford’s intention to close its Bridgend plant in 2020. However, this bad news is not a reflection of the Welsh economy as a whole.

No wonder the Secretary of State does not want to answer the question, because the Government are being totally complacent. I have no doubt that the closure of the Ford plant in Bridgend will have huge consequences along the M4 corridor, damaging our economy, including in Bristol South. Just when will we see the start of any kind of industrial strategy? Right now, with continued closures and the impact of this closure on the supply chain, we are going backward, not forward, and that damages the economy in Bristol South.

The manufacturing sector is extremely important to the UK economy and Wales specifically. There are 4,000 more manufacturing jobs in the Welsh economy now than there were this time last year, but that is not to undermine the importance of those Ford jobs. The Welsh Government and I are working closely together. We have commissioned Richard Parry-Jones to come up with recommendations for how we can best promote the plant, but I am encouraged by the early discussions we have had with potential investors. Some of those discussions are more mature than others, but the hon. Lady should recognise that they are private and confidential at this stage.

I join the Secretary of State and the hon. Member for Bristol South (Karin Smyth) in their deep disappointment at the closure of the Ford factory in Bridgend. Does he agree that there is huge potential on the M4 corridor for the development of electric cars and automotive technology of all kinds, right down as far as my constituency in Wiltshire?

My hon. Friend makes an extremely important point. The UK’s industrial strategy has invested £1.5 billion in automotive research and development, to ensure that we maximise the opportunities of the shift from petrol and diesel engines to electric vehicles. A great demonstration of the success of that is that 20% of electric vehicles sold in Europe are manufactured here in the UK.

Former Phurnacite Works, Abercwmboi

8. What recent assessment he has made of the potential merits of redeveloping the former Phurnacite works in Abercwmboi; and if he will make a statement. (911496)

I pay tribute to the right hon. Lady for the proactive approach she is taking to redeveloping this site, which has been an outstanding issue for decades. I was pleased that we were able to bring together the current owners of the site with her to come up with a positive plan for the future.

I thank the Secretary of State for coming to the area and knocking heads together in a way that we have waited for for 30 years. The people of Abercwmboi have lived in dirt and dust on the site of what was the worst industrial polluter in the whole of Britain. I am grateful for the interest he has taken and the way he has managed to knock heads together.

I pay tribute to the right hon. Lady, who has highlighted this issue for some time. I am keen to work closely with her to bring the landowners together and see what plans can be made. The local authority is playing a key part. We need to establish a clear plan of action, and we are well on our way to delivering that.

Mid-Wales Growth Deal

11. What recent discussions he has had with (a) businesses, (b) local authorities and (c) representative groups on the mid-Wales growth deal. (911499)

I am grateful to the hon. Gentleman for the constructive approach he has taken to working with all partners involved in the mid-Wales growth deal. My ministerial colleague in the other place has undertaken extensive engagement with local authorities and the private sector in mid-Wales, most recently at Welshpool on 26 May 2019.

The University of Aberystwyth and the internationally acclaimed Institute of Biological, Environmental and Rural Sciences—IBERS—are both key partners in the mid-Wales growth deal, and the facilities at the new Gogerddan innovation campus will cement their place as leaders in the areas of agri-food and biotechnology and allow the area to become a centre for expertise in controlled environment agriculture and vertical farming. The benefits that this would bring to the agricultural industry are significant, but rather than take my word for it, will the Minister visit the Gogerddan campus, so that he can see for himself the world-leading research being undertaken in Ceredigion?

That is certainly an invite any Wales Office Minister would find hard to refuse; we will try to co-ordinate. It is vital that the mid-Wales growth deal focuses on sectors such as agri-tech, where there is a significant opportunity to introduce transformational economic change. We encourage our partners to work closely with research institutions such as IBERS to put together a compelling case to both Governments.

13. Given that a western rail link to Heathrow would connect south Wales stations such as Swansea, Cardiff and Newport directly to Heathrow, cutting up to half an hour off journey times, and mean London and south Wales would be better connected, benefiting businesses, tourists and the Welsh economy— (911501)

What representations has the Secretary of State personally made to the Chancellor and the Department for Transport to support this scheme?

The hon. Gentleman was meant to say “Question 13”, but he was so overcome with excitement that he neglected to do so. Never mind. We will take it as part of Question 11.

As the hon. Gentleman will know, I am quite a fan of the potential benefits of the western rail access to Heathrow, which could unlock more growth and opportunities across the area served by Great Western. Regular representations are made, and I am sure the Chancellor, who is now on the Front Bench, will have heard those the hon. Gentleman has just made.

The reality, with the potential closure, is 1,700 jobs gone at Ford and between 6,000 and 7,000 in the supply chain. It is no good the Secretary of State saying manufacturing is buoyant, with all these potential job losses coming. We need economic stimulus packages from the UK Government in support of the Welsh Government. What is the Minister going to do about it to protect these jobs?

The Government are active in ensuring economic development in Wales, but the hon. Gentleman may wish to reflect on what was said by a Welsh Government Minister yesterday in relation to how they know what is going on.

Assembly Members: Diplomatic Support

15. What recent discussions he has had with the Secretary of State for Foreign and Commonwealth Affairs on diplomatic support for Assembly Members. (911503)

The UK Government’s extensive network of diplomatic staff regularly provides support to Welsh Ministers for overseas visits relating to devolved matters. However, we will not support activities intended to undermine the United Kingdom.

Earlier this month, the Foreign Office blocked diplomatic assistance to the First Ministers of Wales and Scotland. In the light of this action, which was an affront to our democratically elected First Ministers, can the Secretary of State explain how this United Kingdom is a partnership of equals?

We will always provide the extensive network of FCO posts abroad and the good offices of the Department for International Trade to support representations from devolved areas, but we will be a platform for the success of Wales, not for separatism in Scotland.

I congratulate the hon. Gentleman, who is proudly sporting a “Free Nazanin” badge, accompanied by many colleagues.

I received excellent support from the diplomatic service abroad when I was the shadow Middle East Minister. May I commend the diplomatic service for working closely with all elected Members of Parliament, the Assemblies and the Scottish Parliament to preserve the integrity and strength of the United Kingdom?

I am pleased to hear about the hon. Gentleman’s experience. As I have said, we will always look to provide support to promote the success of Wales and the success of this United Kingdom, but not to undermine it.