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House of Lords Hansard
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Brexit: Welsh Economy
13 November 2018
Volume 793

Question

Asked by

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To ask Her Majesty's Government what representations they have received from Ministers of the Welsh Government concerning the impact of Brexit on the Welsh economy.

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My Lords, Ministers from my department and across the United Kingdom Government hold regular discussions with Welsh government Ministers on a range of issues, including EU exit. Most recently the Secretary of State met the Welsh Government’s Cabinet Secretary for the Economy, and at an official level there is an open and continuous dialogue.

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My Lords, have not repeated representations from Wales stressed that the future success of the Welsh economy depends on manufacturing and agriculture having ongoing access to the single market and the customs union? That is vital for companies such as Siemens, Airbus, Toyota and Ford. Is the Minister aware that, over recent months in Wales, polls have indicated increasing support—if such guarantees are not forthcoming—for a people’s vote, and that that becomes overwhelming in the case of a no-deal Brexit?

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My Lords, the noble Lord is right about the importance of Welsh agriculture and Welsh industry. I have no illusions about that. He will know that agricultural spending in Wales is protected until 2022. In relation to industry, obviously discussions are ongoing about the shared prosperity fund. Two weeks ago the Secretary of State and I met the CBI and, although there are challenges, Welsh industry is remarkably up for some of the opportunities that exist.

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My Lords, 18,000 jobs in the Welsh economy are dependent on the automotive sector, which is highly reliant on just-in-time delivery processes. What progress has been made to ensure that our borders continue to function smoothly in the event of no deal, in the light of the NAO report last month which found that 11 of the 12 major projects to replace or change key border systems were at risk of not being delivered on time or not being of an acceptable quality?

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As he has just indicated, my noble friend is aware of the issues and the importance of open ports and borders. Specifically in Wales, we are concerned about Holyhead, Fishguard, Milford Haven and Pembroke Dock in particular; it is important that they stay open. He will be aware of the commitment to that in the White Paper, so that the new arrangements ensure free flow at the borders. Welsh officials and government officials are already talking with stakeholders to ensure that this is the case post Brexit.

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My Lords, the original Clause 11 of the Brexit Bill totally ignored the devolved legislatures. Eventually the Government did a U-turn, following pressure in this House. What is the Government’s reaction to the blockbuster report of this House’s Delegated Powers Committee on the Agriculture Bill, which expresses its dismay at the major transfer of powers to Ministers, bypassing Parliament and the devolved legislatures? Can we expect a U-turn here as well?

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I have the greatest respect for the noble and learned Lord, as he will know. In relation to the legislation he referred to, it was always the case that a legislative consent Motion from Wales was necessary; that Motion was forthcoming, as he will be aware. On the agricultural issues he referred to, discussions are ongoing between officials from the Wales Government and the UK Government. Progress is being made in that regard. I have already indicated that farm support will be protected; it will have the same level of funding as under Pillar 1 of CAP until 2020, and farm support is protected until 2022. A good dose of Welsh and British common sense will see us through on these matters.

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My Lords, speaking of the likelihood of a no-deal Brexit and the possibility of the company abandoning plans to build aircraft wings in Britain, the chief operating officer of Airbus said:

“Far from ‘Project Fear’, this is a dawning reality for Airbus”.

It is also a dawning reality for the people of north-east Wales and the 7,000 Airbus jobs that make such a vital contribution to our economy. If Brexit happens, how do the UK Government intend to create new employment for these workers?

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My Lords, I must take issue with what the noble Baroness said. I have the greatest respect for her local knowledge but I do not think that those jobs are in the serious jeopardy she suggests; they are very valuable and it is not right to create that scare. We must continue with this. She will know that the north-east Wales economy is very buoyant and that we have created jobs there, including recently in relation to the prison that is to go there.

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That may be a matter for jokes to some people but it is very important to the people of north-east Wales and their livelihoods. It is worth noting that the Welsh economy is growing faster than those of the other home economies.

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My Lords, with jobs in mind, will my noble friend join me in commending the announcement from Jim Ratcliffe and Ineos of their plan to develop the Land Rover Defender in the Ford motor factory in Bridgend, thereby preserving the 1,700 jobs that would otherwise be at risk?

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My noble friend is absolutely right. I have no hesitation in saying how welcome that news is, but once again I stress the fact that we are not just protecting jobs in Wales, as many new jobs are being created there. The removal of the tolls on 17 December will be a welcome boost to the south Wales economy. Generally, the position in Wales is very healthy.

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Would Her Majesty’s Government be prepared to publish a document setting out their best calculations on the effect of Brexit on life in the whole of Wales?

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My Lords, that is a constructive and useful suggestion; I shall take it back. It would be very useful in relation to Wales. The Secretary of State will obviously want to consider it.

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My Lords, will the Minister give an assurance that Wales will be fully compensated for the loss of Objective 1 status and the regional benefits that go with it?

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My Lords, the noble Lord is right about the importance of cohesion funding. As things stand, there is no guarantee that Wales will qualify for Objective 1 funding in the next round —in many ways, one hopes that it does not; it is not a badge of pride. In relation to the future of cohesion funding, he will be aware that the shared prosperity fund is being discussed on a UK basis, with full consultation with Wales to ensure that Welsh interests are properly protected.