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Economy

Volume 608: debated on Wednesday 13 April 2016

1. What assessment he has made of the effectiveness of steps taken to rebalance the economy in Wales. (904360)

As the economy continues to grow, this one nation Government are ambitious for every part of the UK. In Wales, we are regenerating the south-east with a city deal for the Cardiff capital region. We intend to follow suit with a deal for Swansea in the west, and we have opened the door to a growth deal for north Wales.

May I be the first to welcome the Secretary of State and the Minister to their new roles?

Following the announcement of the north Wales growth deal in the Budget, what plans are there for the deal to be genuinely cross-border and to plug into the northern powerhouse, which has the potential to deliver huge benefits throughout the north, not only for the distinct regions like north Wales but for God’s own county of Yorkshire?

As well as seeking to grow the economy across the United Kingdom, all the way to Yorkshire and beyond, we are seeking to move our dependency in Wales from the south-eastern part of the country. Less than two weeks ago, I was in north Wales talking to local authority leaders, businesses and business groups, all of whom were keen to support the north Wales growth deal. It was interesting to note that they called for the deal to take place on a cross-border basis, extending to Cheshire and the Wirral, to ensure that north Wales was plugged into the northern powerhouse.

Given the importance of north Wales, will the Secretary of State press very hard for the establishment of links to Manchester airport and rail links to enable people to benefit from HS2, and would I, as a north Wales MP, be able to vote on such measures?

As the right hon. Gentleman knows, the new cross-border taskforce is making a bid for control period 6 funding from the Department for Transport with the aim of improving links with north Wales. Franchise negotiations are taking place between the Welsh and United Kingdom Governments, and we are determined to ensure that Members are represented properly in those negotiations.

I, too, welcome my right hon. Friend to his position. As he said, the Budget contained excellent news for north Wales in the form of the growth deal announcement, which recognises the region’s close association with the north-west of England, but does he agree that maximising the benefit will require at least an element of political devolution to north Wales?

My right hon. Friend speaks with authority and knowledge of this issue. Devolution to north Wales from what is seen in many quarters as the remoteness of Cardiff Bay is essential. The community groups whom I met in north Wales, whether they were from the north-west, from the border or from the English side of the boundary, wanted the growth deal to work on a cross-border basis, and I am determined to explore that possibility in the interests of the region.

One of the most effective ways of rebalancing the economy is to empower the Welsh Government by giving them the necessary job creation levers, which is why I welcome moves to increase fiscal empowerment for Wales. If fiscal devolution is to work, however, it must be facilitated by the provision of a genuinely no-detriment fiscal framework. The SNP Scottish Government have negotiated such a framework for their country. What is the Secretary of State’s preferred deduction method for Wales?

The hon. Gentleman will be aware of the plans in the draft Wales Bill for the granting of income tax-varying powers for the Welsh Government. We want Wales to be a low-tax economy. Of course, mechanisms will need to be introduced to protect Welsh interests. The hon. Gentleman will be pleased to hear that I met the Chief Secretary to the Treasury earlier this week to discuss early proposals for such mechanisms, and we are happy to engage in further such discussions.

Which sectors of the Welsh economy offer the most exciting prospects for growth to help to rebalance the economy, and what steps is my right hon. Friend taking to encourage them?

As my hon. Friend will know, the Budget focused on the city deal for Cardiff, which is the largest city deal in the United Kingdom, with £1.2 billion covering 10 local authority areas. However, we also have ambitions for the Swansea bay city deal and the north Wales growth deal. We need to remember that this involves UK taxpayers’ money in addition to the Barnett block, which is something that we never saw when Labour was in power.

North Wales growth is interdependent on growth in the Republic of Ireland as well as in England. Will the Secretary of State—and I welcome both him and the Under-Secretary of State to their new positions—ensure that north Wales Labour Members are provided with some details of the so-called partnership, given that we are the partners from north Wales?

I am grateful to the hon. Gentleman for his kind words and support.

We are determined to work on that issue. There has been a bottom-up approach on the growth deal. We have met local authority leaders and businesses from north Wales, and we are determined to pursue that further. I am not sure that I can make the growth deal stretch as far as Northern Ireland and the Republic Ireland, but I would be interested to try to take it across the English border.