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Wales

Volume 720: debated on Wednesday 19 October 2022

The Secretary of State was asked—

Freeports

I am honoured to take my first questions as Secretary of State. I ask the House to remember that Friday will mark the 56th anniversary of the Aberfan disaster, which, even with the passage of time, remains searingly painful. We will never forget, and we will still mourn, all those who lost their lives.

My Department has worked alongside the Department for Levelling Up, Housing and Communities to ensure that the freeport offer works for Wales. Over the summer, we successfully agreed a prospectus for Wales with the Welsh Government, which was launched in early September. This takes us one step closer to investment, growth and long-term prosperity.

May I be the first to welcome my right hon. and learned Friend to his place and to align myself with his comments about the Aberfan disaster? I remember being taught about it in school as a child of roughly the same age: it made a deep, profound and lasting impression on me.

By making it easier and cheaper to do business, freeports drive not only local and regional growth, but national growth—growing the pie, as we have learned to call it. Will my right hon. and learned Friend give further details on how freeports in Wales can help to level up local areas and help their prosperity?

We are committed to establishing at least one freeport in Wales by the summer of next year, with £26 million in seed funding. The bidding process is still open; I am sure that we will see some excellent bids. The estimates for the Teesside freeport and Freeport East initiatives are that they will both create more than 18,000 jobs and provide a £3.2 billion boost to their local economy. I anticipate a similar boost to the Welsh economy.

I have just returned from the World Trade Organisation in Geneva as a rapporteur for the Council of Europe. There is some concern there about how freeports might undermine internationally agreed labour standards and might be a safe haven for carbon-intensive production. What meetings has the Secretary of State had with the WTO about the matter? Will he meet me about it? Can he give an assurance that there will be no reduction in labour standards and no dirty production in these freeports?

I am always happy to meet the hon. Gentleman, with whom I have enjoyed lively exchanges over the years. I assure him that in the prospectus he will see a specific reference to the Senedd’s Well-being of Future Generations (Wales) Act 2015. Along with giving assurances as to our UK Government’s standards, I can assure him that the sort of concerns that have been outlined are unfounded and that he will find encouragement in the green initiatives that I am sure will thrive with the freeports project.

May I say on behalf of the Labour party, and particularly my hon. Friend the Member for Merthyr Tydfil and Rhymney (Gerald Jones), that we are all thinking of the community of Aberfan this week?

I welcome the Secretary of State to his new role. He must be very pleased, following his summer U-turn, that the Prime Minister has been taking daily lessons from him. The Welsh Government’s Minister for Finance and Local Government, Rebecca Evans, is now dealing with her sixth Chief Secretary to the Treasury. Can the Secretary of State explain how it is possible to progress the Welsh freeports prospectus with such an appallingly chaotic and unstable UK Government ahead of the 31 October Budget announcement?

I assure the hon. Lady that the time that I have had as Secretary of State has been time well spent. Throughout the summer, I made sure that the prospectus process for the freeports initiative was maintained. I worked with the then Secretary of State for Levelling Up, Housing and Communities, my right hon. Friend the Member for Tunbridge Wells (Greg Clark), to make that so.

I assure the hon. Lady that we have not lost a beat in my time in office. The fact that there may be changes in personnel does not change the Government’s growth strategy, which remains on course and which I think deserves the support of hon. Members on both sides of the House.

The Budget has been ripped up and the manifesto has been ripped up, but there we go. The UK Government’s original approach was to ignore devolution and impose a freeport on Wales; the Welsh Government put a stop to that and to the harm to the environment, to workers’ rights and to Wales’s finances that it would have caused. The UK Government’s latest version of freeports appears to be investment zones. Has the Secretary of State actually seen any evidence that proves his Government’s claim that they create growth, rather than just displace it?

I find it concerning that the hon. Lady does not share my enthusiasm for freeports and investment zones. I think of examples from the past in Wales, when inspirational Secretaries of State such as the late Lord Crickhowell, Peter Walker and Lord Hunt of Wirral demonstrated that, through enterprise zones and, for example, the Cardiff Bay Development Corporation, the economy could be transformed and regenerated. I am confident that our approach to investment zones will ensure that Wales shares in the growing prosperity that we want to see throughout our United Kingdom. I believe it will generate more investment and grow that economic pie, which is the aspiration of this Government.

This Government have been forced to U-turn on their fundamental ideology that slashing taxes magically leads to economic growth. That same ideology underpins freeports and investment zones. Both will shrink the UK Government’s tax revenue and, in turn, the Welsh Government's budget, which is already facing a £4 billion shortfall. With inflation now over 10%, what is the Secretary of State doing in the Cabinet to protect Wales’s budget?

I yield to none in my admiration for the right hon. Lady, but she has just laid bare Plaid Cymru’s ideological approach. Her party believes that there should be an ever-shrinking share of wealth, which means that our public services would decline. We on this side of the House believe that the way in which to pay for public services is to grow our economy, and it is through initiatives such as the freeports and investment zones that we will do just that. I hope that the Welsh public will note Plaid Cymru’s ideological opposition to growth.

The Secretary of State is on record as saying that he believes it is right to make cuts in public spending—and that was before last week's multiple U-turns. According to the Glasgow Centre for Population Health, the last Tory austerity experiment led to 335,000 excess deaths. How many excess deaths is the Secretary of State prepared to justify this time round?

I am sorry, but hyperbole from the right hon. Lady does not help her case at all. We are not talking about so-called austerity; we are talking about ensuring that the money allocated in the public spending round that was agreed last year is spent efficiently and wisely. I said that it was right for each Department to look carefully at its priorities to ensure that frontline services—the sort of services in which I know she and I believe—are maintained for the benefit of the citizens whom we serve.

Cost of Living Crisis: Devolved Budget, Households and Businesses

2. What assessment he has made of the potential impact of the cost of living crisis on (a) the devolved budget, (b) Welsh households, and (c) businesses in Wales. (901665)

5. What assessment he has made of the potential impact of the cost of living crisis on (a) the devolved budget, (b) Welsh households, and (c) businesses in Wales. (901668)

11. What assessment he has made of the potential impact of the cost of living crisis on (a) the devolved budget, (b) Welsh households, and (c) businesses in Wales. (901674)

15. What assessment he has made of the potential impact of the cost of living crisis on (a) the devolved budget, (b) Welsh households, and (c) businesses in Wales. (901678)

We have taken action to support households and businesses across Great Britain, including Wales, through schemes such as the energy bill relief scheme and the £400 energy bill rebate. The Welsh Government have been very well funded to deliver their devolved responsibilities, with the largest ever block grant of £18 billion in the 2021 spending review.

The Secretary of State’s U-turn during the Tory leadership election was indeed truly eye-catching, but the U-turn about which people in Wales are most concerned at the moment is the Government’s U-turn on properly protecting benefits and pensions against skyrocketing inflation. Will the Minister be U-turning on that commitment as well, or will he fight the good fight in favour of proper uprating?

This Government will always be committed to supporting the least well off, which is why we have come forward with schemes such as the £650 payment for those on benefits, the £300 for pensioner households and the £150 for those who are disabled. If the hon. Gentleman is really worried about the cost of living, perhaps it is time he persuaded his Government to start supporting new nuclear and the new oil and gas fields that we so desperately need for the energy that people want.

I have just come from chairing the all-party parliamentary group on poverty, which has heard that the cost of living crisis will exacerbate the digital divides experienced by so many people in poorer communities. Will the Minister agree to meet the APPG to discuss how that affects people in Carmarthenshire, in Carmyle, and throughout these islands?

I meet stakeholders who are dealing with poverty all the time, but if the hon. Gentleman is interested in dealing with poverty, perhaps he will be able to find out from his own Scottish National party Government why poverty levels in Scotland are rising, and why even the Labour party in Wales is making a better job of dealing with child poverty than his Government.

The Secretary of State loves to tell a good story, does he not? The UK Government have already slashed devolved budgets by billions this financial year, and on Monday the Chancellor announced that plans for the millions of pounds that were meant to go to devolved nations for cost of living support were now to be abandoned. How does the Secretary of State think that slashing devolved budgets supports the supposed levelling-up agenda?

The hon. Lady gave me a bit of a promotion there; I am the Minister, not the Secretary of State. I am not telling stories. The figures about child poverty in Scotland come from Audit Scotland, which is responsible to the Scottish Government. I suggest that she takes a look at the other figures, which show that far from cutting Wales’s devolved budget the UK Government have increased it every single year, and did so by £2 billion in the last financial year.

Hundreds of thousands will find themselves in fuel poverty should average energy costs rise next April to the estimated £4,347 a year, as a result of the Government rowing back on their own proposals. How can the Minister claim that his party is fighting the cost of living crisis, when his Government are cutting back on the few measures that they have announced before they are even implemented?

I am afraid that I did not hear all of the question, but I believe the hon. Gentleman mentioned fuel poverty. I remind him again that the Government are doing everything possible to ensure that people in this country can access the cheap gas, cheap electricity and cheap petrol that they need. It is members of his Government in Scotland who are doing their best to prevent that from happening.

In welcoming the contributions from our friends from the Scottish National party to Wales questions, may I politely remind them that in March 2020 the Government stepped in to save thousands of businesses in every single one of our constituencies, protecting hundreds of thousands of jobs? Does that not demonstrate the value of staying part of a strong United Kingdom, and that the Government do not walk away from serious challenges but meet them head on?

My right hon. Friend makes an excellent point. I could not put it better myself. The Government will stand up for the Union, and for the least well-off in society.

Nearly 60% of my constituents on Ynys Môn rely on off-grid energy for heating. The average cost of filling an oil tank has almost doubled in the last year. On behalf of my constituents, will the Minister look at more targeted support for those on off-grid heating and liquefied petroleum gas?

My hon. Friend makes a very important point. The Government have already come through with a £100 payment for those who are off-grid, but I believe that there are genuine issues there, and she makes a very good point. I am sure that our colleagues in the Department for Business, Energy and Industrial Strategy and the Treasury will look carefully at what she has said.

The Minister referred to the significant increases in the Welsh block grant over the past 10 years, which equate to £120 for every £100 spent in England. In spite of that very fair settlement, accepted and recognised by the Welsh Government, health waiting lists are longer, education standards are falling compared with the rest of the United Kingdom, and the economy is growing at a much slower pace. Does he agree that the Welsh Government need to focus on the right priorities: investing in public services and getting value for money?

My right hon. Friend was responsible for ensuring that the Welsh Government got a more generous package than they had previously—£1.20 for every £1 spent in England. It is therefore very hard to understand why, under a Welsh Labour Government, health service waiting lists and ambulance response times have got longer. People have lower standards of healthcare in Wales than they do under a Conservative-run NHS in England, and Welsh Labour needs to take responsibility for that.

Rail Infrastructure Funding

3. What recent discussions he has had with Cabinet colleagues on funding for rail infrastructure in Wales. (901666)

The Secretary of State and I regularly engage with Cabinet Ministers on a range of transport measures. Over £340 million has already been provided for rail enhancements in Wales, including at Cardiff Central station and for the electrification of the Severn tunnel.

Will the Minister explain why Wales is not receiving the £5 billion of consequential funding from HS2 that it is entitled to under the Barnett formula, and will he review that decision, as the Welsh Conservative party is also calling for?

HS2 is of course a UK-wide project, which is partly being brought forward in order to enable the maximum number of people to get out of their cars and on to the trains, to use public transport, which I hope the Liberal Democrats would fully support. At the same time, the UK Government have been spending money to improve not only the rail service in Wales but rail services for travellers who go from Wales into England, such as through the Severn tunnel electrification. The UK Government have an extremely good record on supporting railways in Wales.

Avanti trains sometimes trundle along the rail infrastructure of north Wales, but these days it is an increasingly infrequent occurrence. Avanti has provided a shockingly poor service to the people of north Wales, and many of my constituents were deeply unhappy when the Department for Transport decided to extend its franchise for a further six months to give it a further chance. Will my hon. Friend please urge his counterpart in the Department for Transport to make sure this is Avanti’s last chance?

A number of colleagues from north Wales have discussed Avanti’s performance in colourful terms, and I am sure Avanti will have listened to what my right hon. Friend has had to say, as will the Department for Transport, which I can confirm will be assessing Avanti’s performance before any further contracts are given out.

It seems that rewarding failure is this Government’s guiding principle, and even Conservative Members agree. Avanti West Coast is the worst performing operator on the rail network, but Ministers spent an eye-watering £4 million of taxpayers’ money on bonuses to company executives for

“customer experience and acting as a good operator.”

Does the Minister agree that this is simply not good enough for the businesses and people of north Wales?

I have already said that I accept many concerns have been raised about Avanti’s performance, but it all goes to show why it is important to modernise the rail network across the whole of Wales. That is exactly what the UK Government are doing at the moment.

Mortgage Interest Rate Rises

4. What discussions he has had with Cabinet colleagues on the impact of rising mortgage interest rates on households in Wales. (901667)

I have regular discussions with Cabinet colleagues on a range of topics. Of course, interest rates are rightly a matter for the independent Bank of England. We have announced unprecedented support for households and businesses. Through our cut to stamp duty, the Welsh Government are expected to receive £70 million, enabling them to follow suit with cuts to land transaction tax in Wales.

At the weekend, I met a young couple in their early 30s who are coming off a five-year fixed mortgage rate. Their mortgage is going up by more than £300 a month, and they squarely blame the Government and the Prime Minister’s poor mismanagement of our economy. It is the Conservative Government’s U-turn that caused economic chaos, it is the Conservative Government who caused mortgage rates to go through the roof and it is the Conservative Government who are causing mortgage firms to withdraw all their support. Will the Secretary of State now apologise to my constituents and people across the land who are being crippled by huge mortgage increases every single month due to this Conservative failure?

It is a Conservative Government who, through Help to Buy, have helped more than 361,000 first-time buyers on to the housing ladder. It is a Conservative Government who led to unemployment at record lows. It is a Conservative Government who have increased the national living wage to £9.50 an hour. And it is a Conservative Government who will lead to interest rates being controlled, which will help mortgage holders, too. The hon. Gentleman’s hyperbole does not serve him well.

Domestic Energy Costs: Differential Between Wales and Rest of UK

6. What recent estimate he has made of the differential in domestic energy costs between Wales and the rest of the UK. (901669)

Most recent data demonstrates that households in Wales pay a price broadly on par with the average across Great Britain for variable unit costs and standing charges for gas and electricity. Our energy price guarantee will save households hundreds of pounds this winter compared with current wholesale cost projections.

My constituent Mr Evans in the town of Kidwelly cannot benefit from a lower tariff for the electricity he uses in off-peak times because, as the engineers have explained to him, the smart meter he needs will not function owing to the almost non-existent mobile phone signal in the area, which is due to the UK Government’s failure to roll out mobile phone technology, while allowing smart meters that work only on mobile phone signals. Will the Secretary of State now have urgent talks with ministerial colleagues to put it right and end this discrimination?

I will be interested to take up that case in more detail with the hon. Lady. However, the Government, in acting radically on energy price intervention and with our Energy Prices Bill, which seeks to break the link between electricity and gas prices, are taking the sort of action that is absolutely necessary to help households such as her constituent. Of course, I will be happy to talk further about the particular disadvantage that her constituent faces.

Cost of Living Rise

7. What discussions he has had with the Chancellor of the Exchequer on helping people in Wales with the rising cost of living. (901670)

I have frequent discussions with ministerial colleagues on a range of matters, including the cost of living. As I have previously said today, we are supporting households and businesses across Wales with the cost of living challenges, including on energy costs.

People in Carmarthenshire who are off the gas grid have seen huge increases in heating costs—for oil, LPG and solid fuels. The alternative fuel payment of £100 does not seem to be equivalent to the cap for gas. Will the Minister write to Welsh MPs outlining the methodology used by the British Government to calculate the AFP rate?

I am sure that my Treasury colleagues will be able to help with that, but there is one thing that the hon. Gentleman could do as well if he wants to support people on the cost of living challenges in Wales: persuade his Plaid Cymru colleagues to vote against Welsh Labour’s proposals to revalue council tax bands in Wales, which are going to be catastrophic for the finances of hundreds of thousands of people across Wales.

Police Funding

8. What discussions he has had with Cabinet colleagues on the adequacy of levels of police funding in Wales. (901671)

The four Welsh police forces are adequately funded and will receive combined funding of up to £826.7 million in 2022-23, an increase of up to £45.1 million on the previous financial year. Gwent’s funding will be up to £159.1 million, an increase of £9.1 million on the previous financial year.

South Wales police’s area contains Cardiff, the capital city of Wales, yet it gets no extra resources for the extra responsibilities that comes with that. Will the Secretary of State make representations to his Government colleagues to address this anomaly?

South Wales police’s funding will be up to £352.5 in 2022-23, an increase of £19 million on the previous financial year. If the hon. Gentleman wants to do something to support police forces in Wales, may I suggest that he talks to the Welsh Labour Government about their failure to hand over the apprenticeship levy, which is being held back by them and should be passed on to police forces so that—[Interruption.]

Order. When somebody is answering the question, will Members please wait until it has been completed? Mr Davies was answering Mr David’s question. I call Selaine Saxby.

Floating Offshore Wind Locations in Celtic Sea

10. What assessment he has made with Cabinet colleagues of the potential merits of establishing floating offshore wind locations in the Celtic sea. (901673)

Floating offshore wind projects in the Celtic sea will contribute to our net zero ambitions and our energy security, and will generate economic growth and create highly skilled jobs in our coastal communities. I regularly meet the Crown Estate to discuss progress on bringing forward the ambition of 4 GW of projects by 2035.

In order to realise the full potential of the Celtic sea, we need a timely consenting process from the Welsh Government. What discussions has my right hon. and learned Friend had with his Welsh counterparts on the consenting process for the development of floating offshore wind sites?

I congratulate my hon. Friend on her consistent advocacy for projects in the Celtic sea as chair of the all-party parliamentary group on the Celtic sea. The necessity for securing timely consents is an imperative, and I will continue to work with the Welsh Government and all stakeholders to ensure that the huge opportunities that this presents are capitalised upon.

North Wales Growth Deal

The Wales Office has been fully supporting the north Wales growth deal as it begins to deliver projects on the ground, and my officials will work closely with all partners in north Wales to ensure that the deal continues to deliver growth and investment across the region.

I thank my hon. Friend for that answer. Perhaps inevitably, not all projects initially identified for delivery through the north Wales growth deal can be progressed, and that applies to the Bodelwyddan key strategic site. Will he encourage a flexible approach to diverting the £10 million of funds that had been earmarked to Bodelwyddan to other economic development projects within Denbighshire?

Obviously, it is for Ambition North Wales to bring forward projects for the UK Government and the Welsh Government to approve, but we have taken a very flexible view of the whole thing. I assure my hon. Friend that despite the international financial problems, which all countries are facing at the moment, this Government remain absolutely committed to support jobs, driving growth and levelling up across the whole of the United Kingdom, including in his constituency.

Investment Zones: Impact on Welsh Economy

13. What assessment he has made of the potential impact of investment zones on the Welsh economy. (901676)

Investment zones will be created right across the UK, and our intention in Wales is to design and deliver the policy by working with the Welsh Government and local agencies to increase growth.

I thank my right hon. and learned Friend for that answer. Is it not incumbent on the Welsh Government to co-operate fully with the UK Government in order to ensure success for all the people of Wales?

My hon. Friend puts it extremely well. We have a good example with freeports. I very much hope that the Welsh Government step up to the plate on investment zones.

Before we come to Prime Minister’s questions, I would like to point out that a British Sign Language interpretation of proceedings is available to watch on parliamentlive.tv.