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The Parliamentary Under-Secretary of State for Wales (Guto Bebb)
It is a pleasure to serve under your chairmanship this afternoon, Mr Flello. I, too, congratulate the hon. Member for Cardiff South and Penarth (Stephen Doughty) on securing the debate and, indeed, on the fact that today turned out to be an opportune moment to be discussing EU funding and the effect of leaving the European Union on infrastructure investment in Wales.
It is fair to say that there has been a contribution from EU funding into infrastructure investment in Wales. No one who represents any part of Wales would argue that that is not the case, but it is important to place that investment in context, in relation to the south Wales metro, for example, which is a fantastic project that will make a huge difference to south-east Wales and to which the Wales Office and the UK Government are fully committed. The UK Government’s investment in the scheme is £500 million, while that from European funding is £106 million. That £106 million is crucial, but it is important at the outset to clarify one point once again. I regret that, having made this point on numerous occasions, I have to make it again. I must be speaking very improperly if Opposition Members have not understood thus far. The guarantee is in relation to any EU-funded project that is put in place and secured prior to our leaving the European Union.
The decision as to whether a European project in Wales is in accordance with the UK Government’s priorities is based, in effect, on whether the Welsh Government are in favour of the project. European-funded projects in Wales are signed off by the Welsh Government. If the south Wales metro scheme is under way and there is a commitment of £106 million of European funding for the project, that £106 million will be underwritten by the Treasury. I hope that that is clear—it is as clear as I can make it. The Welsh Government make decisions regarding EU funding in Wales, and that might have been part of the problem in the past because, I would argue, the money has not been spent as well as it should have, but it is crucial to understand that if the Welsh Government are in favour of a project and it is signed off before we exit the European Union, that guarantee is in place.
Albert Owen (Ynys Môn) (Lab)
I apologise, Chair, for not being here for most of the debate. I have been in the Chamber trying to catch the eye of the Speaker on this very issue. The Minister is right that many of the infrastructure schemes are projects initiated by the Welsh Government, but Interreg, which has been important to west Wales and links to Ireland, may now be under different criteria. Will the UK Government, as signatories to the European Union, guarantee those projects in future? With today’s announcement of a common travel area, does the Minister envisage special status for west Wales ports?
Guto Bebb
As the announcement was made only today, it would be incorrect of me to respond immediately to the question of special status for west Wales ports. The hon. Gentleman is perfectly right that decisions relating to Interreg funding will remain with the British Government but, on EU structural funds in a Welsh context, I hope that I have offered the clarity that the hon. Member for Cardiff South and Penarth requested.
It is crucial to understand that the investment in the south Wales metro is part and parcel of the electrification of the Great Western main line, because unless that line is electrified the metro system will not work as we envisage. Across the divide in this debate, we should at least recognise that the investment being made in rail infrastructure in Wales, both north and south, is both to be welcomed and crucial.
Stephen Doughty
The point that my hon. Friend the Member for Ynys Môn (Albert Owen) made is absolutely crucial, and it raises a wider question about what the suggestion of engagement, with both the Welsh Government and the Welsh Assembly, means. It is not clear, is it, whether if we did not like parts of the deal—solutions, for example, regarding the common British-Irish travel area—we could dispute, veto or change them in some way? Or is it a like-it-or-lump-it strategy?
Guto Bebb
I sincerely hope it would not be a like-it-or-lump-it strategy, because that would not be proper engagement. Proper engagement means listening to the arguments being made by the devolved authorities and taking their views into account. It is clear that a decision will have to be made on a UK basis. I suspect that the hon. Gentleman is not arguing that we should have different settlements for different parts of the UK in relation to exiting the European Union.
We entered the European Union as a United Kingdom and I suspect we will leave as a United Kingdom, but it is imperative in that debate that we take on board the arguments being made by the devolved Administrations. It is important to highlight that we, as a Government, have set up Joint Ministerial Committees to ensure that those discussions happen on a Minister-to-Minister basis. I have been part of those discussions, as a representative of the Wales Office. So this is not a case of attempting a Westminster fix that ignores the views of the devolved Administrations; it is a genuine attempt to take on board the concerns of those Administrations, to ensure that we come up with an approach that reflects the complexities of the United Kingdom.
Paul Flynn
Does the Minister seriously believe that the problems post-Brexit in the home countries will be the same as the problems in England? A red, white and blue Brexit is an England-centric one. The problems in Wales and Scotland, and certainly in Northern Ireland, are unique to those countries and we need Brexit solutions that are tailor-made for the four home countries.
Guto Bebb
I am somewhat surprised by the hon. Gentleman’s comments, because I do not think he would argue that every single part of England has the same issues. The issues in Cornwall are very different to those in London; indeed, there is a devolved administration in London. Also, we are seeing a devolution process in the north of England and the issues facing the north of England will be very different from those in the midlands. I suspect that the Government have a responsibility to listen to arguments being made by all parts of the country. We are a Government who are listening on this issue.
I go back to the structures that have been put in place. Those structures are working. I have attended meetings with Ministers from Wales, Scotland and Northern Ireland. Unfortunately, such meetings are not currently possible, and that is a regret, but they have been constructive and for a purpose. I can assure hon. Members that views about the priorities are expressed very strongly in all parts of the United Kingdom.
The hon. Member for Cardiff South and Penarth asked whether the engagement is serious, and I argue that it is. Certainly the meetings I have attended have been robust but very worth while.
Nick Smith
I acknowledge that the electrification of Paddington to Cardiff is being seen through, and I hope it will be a great success. However, as the Minister knows, that project has cost a lot of money and has seen significant delays which, I think, have led to the delay in the delivery of the Cardiff to Swansea electrification. I think that the Minister will find that hard to deny. What I want from him today is a guarantee that he will ensure that the UK Government will support the Welsh Government to deliver the electrification of the valleys lines so that that is not shunted off into the middle distance and not delivered.
Guto Bebb
The assurance I can give is that my Department and this Government are committed to the south Wales metro scheme, which includes the need to electrify the south Wales valleys lines. The excitement that is felt about that project is not confined to south-east Wales; as a north Walian, I see it as a coherent strategy to revitalise the valleys. Cardiff is a huge success story, with jobs being created, and the south Wales metro scheme will make it so much easier to ensure that people in the valleys can be part of that. Listening to this debate will perhaps make people forget that we have success stories in Wales. I understand and fully support the view that the project is dependent on the electrification of the Great Western main line, but although there have been delays with that work, that does not prevent this investment.
The £500 million coming from Westminster for the south Wales metro scheme is on top of the settlement for the Welsh Government, and it is important to state that the investment we are seeing in infrastructure such as the railways is complemented by a significant increase in the capital funding of the Welsh Government, which has come through as a result of budget announcements, and which I hope all hon. Members welcome.
In addition, there has been significant discussion about and development of the possibility of a city deal for Swansea and the west Wales region, which is imperative, and work is being undertaken on a north Wales growth deal. What is exciting about the development of a city deal in the north Wales context is the constructive engagement between Westminster, the Welsh Government and partners on both sides of the north Wales border. There is an understanding that a growth deal, and infrastructure investment as part of that, is dependent on co-operation between the north-west of England and north Wales, and between the Welsh and UK Governments. I stress again that the relationships that are being developed as a result of the work on the city region deal in Cardiff, the Swansea city region deal and the north Wales growth deal are building confidence between the Welsh and UK Governments.
Albert Owen
At the inception of the north Wales growth deal, it was envisaged that it would include European money, because it was linking England, Wales and the Republic of Ireland. Is the Minister suggesting that there will be a bid to Europe before we exit the European Union? If that is not the case, does he envisage the UK Government working with the Irish Government and the Welsh Government to get that funding?
Guto Bebb
The hon. Gentleman is well aware that the north Wales growth deal, in partnership with the Mersey Dee Alliance and so on, is dependent on a bottom-up approach. The answer to his question is that if the scheme and a deal are in place in good time to make an application for EU funding, it might be possible, but it depends on the timing. We are not a Government who say, “We know best in Westminster.” We are certainly not a Government who think Cardiff knows best. The city deals are based on growth from the bottom up. They are successful, and I hope they are proving their worth. It is a new way of working, and hon. Members should take it on board.
On investment in infrastructure and the co-operation between the Welsh Government and Westminster, the hon. Member for Torfaen (Nick Thomas-Symonds) highlighted an important point about investment in our digital infrastructure. We should at least willing be to concede that more than 11% of the entire funding at the UK level for broadband connectivity was allocated to Wales. I openly congratulate the Welsh Government on match-funding that investment with European funding. We know that great strides have been made on broadband connectivity in Wales, but more should be done. That is why I was absolutely delighted to be involved in a conference in Cardiff last week—it was attended by the Welsh Government Minister—on how we could further improve broadband connectivity and, more important, ensure that we have adequate mobile communications in Wales. We also need to look at how we ensure that those areas of Wales that will perhaps not be reached by broadband connectivity will be able to access broadband via 4G and, in the future, 5G services.
Money is part of that issue, and there is a need for investment, but there is also a need to look again at planning issues, which are the responsibility of the Welsh Government. A very positive outcome of the meeting was that the Welsh Minister highlighted that the Welsh Government would have a meeting this week with stakeholders in Wales to look at whether the planning infrastructure needs to be changed to make it easier to provide mobile infrastructure.
The key point is that there have been changes to the planning infrastructure in England to allow taller masts without the need for planning permission, but the approach taken by the Scottish Government has been very different, and that is perfectly fine. As we have devolved Administrations within the UK, there is nothing wrong with having a response in Wales that looks at Welsh needs, a response in England to the situation in England and a response in Scotland to the Scottish situation. The key point I stress is that co-operation on the issue between Westminster and the Welsh Government is of vital importance for communities in all parts of Wales and for the economic prosperity of Wales.
Mrs Moon
I totally agree with what the Minister is saying about different views from different parts of the devolved Administrations in Wales, but funding for car manufacturers in the UK is a central Government decision and has nothing to do with the Welsh Assembly. Can I have the assurance that, whatever agreement was made with Nissan, there will be a comparable agreement for Ford and that assurances can be given that Brexit will not impact on the capacity of the Ford plant in Bridgend?
Guto Bebb
I assure the hon. Lady that on the third page of my notes of questions to respond to is the question on Ford in Bridgend. It is not just about Ford in Bridgend; we also have Toyota in north Wales, which is a crucial part of the north-east Welsh economy. I can only repeat what was said to the Cabinet Secretary for Economy and Infrastructure in Wales, Ken Skates, in a meeting that I attended with Lord Price, the Minister of State for International Trade: nothing that was offered to Nissan is not on the table for Ford and Toyota.
I want to correct the hon. Lady, because some of the possible support for Ford and Toyota is a matter for the Welsh Government. Economic development is to a large extent a devolved matter. I fully accept the argument that, although the support might be coming from the Welsh Government, the reassurance has to be at the UK Government-level. I am delighted to say that we were able to say categorically that the deal offered to Nissan is on the table for Ford and Toyota when we were sitting in the office of the Welsh Government Economy Minister. Such businesses are crucial for the hon. Lady’s constituency in the same way that they are for north-east Wales, and we would not want to lose them under any future trading arrangements that we have with the European Union. Those commitments have been made and relayed to the Welsh Government.
Responding to the question that the hon. Member for Cardiff South and Penarth asked about engagement, there is nothing better than taking the trade Minister to see the Welsh Government economy Minister and giving those reassurances in person within a week of the decision being made about Nissan. That decision was welcomed by Opposition Members and by Government Members, because it was a vote of confidence in the workforce of the Nissan plant. That vote of confidence should be given for Ford and Toyota, too.
Kevin Brennan
Just to be clear on that point, is the Minister confirming today that the Government have offered absolutely the same deal to Ford as was offered to Nissan?
Guto Bebb
The hon. Gentleman is clearly attempting to distort my words. The assurances given to Nissan are available to Ford and Toyota in the same way. A meeting has been offered. The Welsh Government Economy Minister is aware that that offer has been made. The hon. Member for Bridgend (Mrs Moon) asked for assurances, and I hope I have offered them in as open a manner as I can.
On infrastructure, we have seen significant infrastructure in north Wales with the super-prison in Berwyn. That was another investment into north Wales by the UK Government over and above any settlement with the Welsh Government. The importance of infrastructure investment as a means of boosting the economy is highlighted by the fact that that prison development has resulted in a significant contract being won by a consortium that included Coleg Cambria, which is based in north-east Wales. We should welcome that success story.
I am running out of time so I will try to respond quickly to the specific questions asked by Members. The hon. Member for Swansea East (Carolyn Harris) is looking at me in anticipation of a comment on tidal lagoons. Those of us who support the concept of tidal lagoons undoubtedly welcome the Hendry report, which was published last Thursday. News broke of Charles Hendry’s positive comments while I was at the mobile infrastructure summit in Cardiff Bay. The report was positive, but it was complex, too, and it needs to be looked at in depth. I sincerely hope that the Government will be able to respond in due course from a financial point of view to the issues with the cost of the tidal lagoon and the impact on the taxpayer and the electricity consumer. There is no doubt that the report was positive and needs to be taken seriously within Government. When the report was commissioned, many people said that the issue was being kicked into the long grass, but if they were looking for a negative report, that was not what they received. We are looking at the matter carefully, but there are no doubt issues still to be addressed over the next few months.
On the European Investment Bank, it is difficult to offer guarantees that the loans in question would be supported, but it is worth highlighting that the Chancellor has announced a £23 billion investment into the national productivity investment fund. We are putting in place alternative options for local authorities and stakeholders in Wales to bid into. Life after Brexit will not be the same as it is now, but that reflects that things will be changing.
I need to draw my comments to a conclusion. I apologise to Members if I have not been able to respond to specific points they have made, but I have certainly attempted to do so. The key point is that the decisions on leaving the European Union will be made on the basis of in-depth, proper consultation with partner local authorities throughout England and with the devolved Administrations in Cardiff, Edinburgh and Belfast. The key thing is that we must do the right thing for the people of the United Kingdom, whether they voted to remain or to leave.