Leaving the EU: Wales

Albert Owen Excerpts

Tuesday 25th October 2016 Westminster Hall

[Stephen Kinnock (Aberavon) (Lab)]

I beg to move,

That this House has considered the effect on funding for Wales of the UK leaving the EU.

It is a pleasure to serve under your chairmanship, Mr Bailey. The debate is technically about budget decisions but, as we all know, making such decisions is not simply about working out how one reallocates figures. At its fundamental essence, the debate is about the people and the constituencies we represent, and their future, and that is where I would like to begin.

At the core of my constituency is the town of Port Talbot, which is home to more than 37,000 people. Since 1902, the beating heart of Port Talbot has been its steelworks—the largest and, I confidently say, the best in the UK, producing a third of the UK’s steel. Many people do not give a second thought to steel, but when they are driving their cars, having a can of baked beans or putting in a load of washing there is a decent chance they are using a piece of steel produced in Port Talbot. Everyone here today knows that the future existence of the works, as we call them, currently hangs in the balance.

The story of Port Talbot over the past 50 years is the reason for the debate. It is a story shared by many towns and cities across the country, from Stoke-on-Trent and its potteries to Dagenham and its Ford factory or Merthyr and its coal mines. Like them, Port Talbot was truly built, and grew, on the foundation of one industry and one company. Half a century ago, the works employed nearly 20,000 people out of a population of 50,000. Every other shop and business in the town depended on the custom of those workers and did a thriving trade, especially on Thursdays, which was payday. Times were good; the town centre was bustling and huge crowds would enjoy their summer weekends on the sandy beaches of Aberavon. As the plant churned out steel faster and better than anywhere else, we also produced extraordinary talent, such as Richard Burton and Sir Anthony Hopkins and, more recently, Rob Brydon and Michael Sheen.

The decline of the steel industry in the UK over the past 50 years can be seen in the standard of living in Port Talbot. The enormous lay-off of 6,000 people in 1980 led to huge numbers signing on to benefits. Today, the works employs just 4,000 people. They are in highly coveted jobs that still provide a decent wage, but nothing has replaced the jobs that were lost or the energy and pride that the industry gave Port Talbot. Icons of our community, such as the Plaza cinema, are boarded up, and smaller shops that depended heavily on steelworkers struggle on. Unemployment is 10% higher than in the rest of the UK, with one in four people relying on benefits to make ends meet. The level of education in our community is proportionally much lower than in the rest of the country. The people of Port Talbot are as warm, tough, hard-working and talented as anyone we could ever wish to meet, but many are losing hope that their lives will give them the kind of security that we all want. They simply do not see that there are opportunities for them. They know that we cannot recreate the jobs and economy of half a century ago, but they are frustrated that there are not the jobs and the economy for the next half century in which they can play a role.

I have told the story of Port Talbot today because it is a town that, despite recent improvements, is in long-term crisis. The future of my constituents hangs in the balance, and unless we take concerted action their prospects will continue rapidly to decline. That is why the debate is so important. As much as iron needs oxygen to be transformed into steel, our area, and the whole of Wales, needs investment to transform its future into one where people have security and opportunity.

And we now come to the crux of the matter. For years, the EU, in various guises, has contributed an enormous amount of investment in Wales, working closely with the Labour Welsh Government. Due to the consequences of the history I have described, south Wales qualified for the highest level of European structural and regeneration funding. All in all, EU structural funds and the common agricultural policy deliver well over half a billion pounds a year, in addition to money from other key funding areas such as higher education, culture and urban development. Working with Government, charities and businesses, the investment has made an enormous difference.

[Albert Owen (Ynys Môn) (Lab)]

European funding also provides leverage for getting matching funds from the UK and Welsh Governments, which makes it very valuable to our communities.

[Stephen Kinnock]

My hon. Friend makes a valid point. There is a clear multiplier effect with EU funding, because it provides the confidence that opens the door to all sorts of other sources and channels of investment. Although we are giving the raw data here, the multiplier effect is absolutely enormous.

Infrastructure built with EU funding is creating jobs and easier access for people and business, including through the Harbour Way road network, the new Port Talbot Parkway station and our town centre. That investment has helped to develop skills, funding 4,885 apprenticeships and 1,360 traineeships for young people, as well as programmes that have led to local people gaining 14,860 qualifications, which has prepared them for work. It has also been a catalyst for business, funding the Baglan energy park, upgrading our commercial centres and being a major investor in the SPECIFIC innovation centre. It has backed world-class industrial excellence in south Wales by being a principal backer of Swansea University’s bay campus, and has contributed to programmes—from historic gardens and activity centres to toddler play areas and community sports facilities— that have improved our family and community life, ensuring that one day Wales will once again dominate the Six Nations.

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[Albert Owen (Ynys Môn) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Bailey. Like the hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards) and my hon. Friend the Member for Torfaen (Nick Thomas-Symonds), I am a democrat and accept the result of the referendum. Indeed, my constituency and Wales mirror the United Kingdom in that roughly 52% voted to leave and 48% voted to remain. We are talking about the future, and although the Prime Minister has said that she has a mandate from the 52%, we must talk for 100% of the residents of Wales and 100% of our constituents. It is important to put that on the record.

I was shocked, as many people were, that the previous Prime Minister, David Cameron, did not have a contingency plan. There was a simple question—leave or remain—and I could not believe that the Government did not cover both those bases, and particularly a leave outcome. We are in a difficult position. The captain—the then Prime Minister—has abandoned ship and left us rudderless and clueless about how to move forward.

I am a strong advocate of the European Union. Indeed, I am a strong advocate of unions—the EU and the Union of Wales, Scotland, England and Northern Ireland. I do not like the word “Brexit”, because it excludes Northern Ireland. We must have a better, more positive word about the United Kingdom’s future outside the European Union.

I worked with the Minister on structural fund projects before he came to this place. He knows how important structural funds have been to the development of Ynys Môn and north-west Wales. It is wrong of Conservative Members to say that that was a waste of money. The social cohesion that those funds have brought to my area after decades of under-investment is a testament to the European vision and the vision of the Welsh Government, which worked with the UK Government and the European Union to develop those areas.

My constituency is the gateway to Wales. It contains the major port of Holyhead, which links Wales to the Irish Republic. The Dublin to Holyhead route has been called the new Dover to Calais route, yet because of our exit from the European Union, that link is now uncertain. We need to look at that, because it will impact hundreds of jobs in my constituency. I remember working with our then MEP—it just happens to be Glenys Kinnock, the mother of my hon. Friend the Member for Aberavon (Stephen Kinnock), who moved the motion—the Welsh Government Minister and the UK Government to get extra resources for that port. They understood the importance of linking Wales and the UK with the rest of Europe.

It is important that we have a vision for the future. Guaranteeing structural funds until 2020, as has already been committed to, is not good enough. We want a clear vision and a clear plan for the future. I want devolved Administrations, the farming unions and rural Wales to be part of that—I want them not on the fringes, but at the centre making decisions. Many of the issues that we are talking about are already devolved. I do not want them to be centralised here in the UK Parliament. I want devolved Administrations to have a direct voice in the future of Wales and the future of the United Kingdom.

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[Gerald Jones (Merthyr Tydfil and Rhymney) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Bailey. I congratulate my hon. Friend the Member for Aberavon (Stephen Kinnock) on securing this important debate and on the powerful case he made. We have heard from an array of hon. Members from across Wales who have a variety of views on what leaving the EU will mean for their constituencies, for Wales and for the people of Wales. The one theme that has come through is that the next few years will be an uncertain period for all, and for our communities and businesses in particular, as highlighted by my hon. Friend the Member for Swansea East (Carolyn Harris).

The Government have a clear and pressing duty to reduce that uncertainty. We have all heard of investment decisions that have been delayed and of businesses that are genuinely worried for their futures. People voted to leave, but they did not vote to damage our economy, so the Government need to step up and set out their plans more clearly to deliver the clarity and business confidence we so badly need.

As my hon. Friend the Member for Islwyn (Chris Evans) highlighted, Wales currently receives a significant net gain from the European budget because west Wales and the valleys qualify for the highest level of EU regional development funding. The Welsh European Funding Office estimates that projects in the 2007-13 round of funding created 11,925 enterprises, supported nearly 40,000 jobs and helped more than 72,000 people into work and 56,000 people into further learning. As my hon. Friend the Member for Neath (Christina Rees) said, 16,000 farmers in Wales get direct subsidies from the common agricultural policy, without which 90% would be in financial difficulty. My hon. Friend the Member for Ogmore (Chris Elmore) highlighted the positive impact that that funding has on farmers and the risk posed by leaving the EU.

Wales is set to receive £2.7 billion in structural funds up to 2020. We have heard examples of local regeneration already delivered across Wales. Many communities have been transformed with the support of EU funding, including many in my constituency. We heard my hon. Friend the Member for Aberavon outline the iconic Swansea University campus and the Workways+ and BEACON schemes, which have been supported through the EU.

My hon. Friend the Member for Ynys Môn (Albert Owen) highlighted the important point of matched funding and what that means in supporting EU funding to go even further in regenerating Wales. My hon. Friend the Member for Swansea West (Geraint Davies) highlighted the regeneration projects in his area and the lack of reassurance coming from the Government.

Despite that, Wales voted in line with England to leave the European Union, and we respect that decision. However, Wales did not vote to become poorer or to damage its public services. That is why, as we begin the process of leaving the EU, we need to work together to ensure that Wales, its economy and its communities get the best deal.

[Albert Owen]

Does my hon. Friend understand that many people who voted to leave were under the impression that some £350 million saved from Europe was going to be spent on the health service in the UK? Five percent under Barnett would give Wales about £17 million. Does he think that should be honoured by the Government, or at least debated?

[Gerald Jones]

My hon. Friend makes a correct point. During the referendum campaign lots of lies were told and comments made, and the people of Wales and the rest of the UK voted for a specific set of circumstances. They did not vote to make our services poorer. Indeed, the investment promised by the Brexiteers—as highlighted by my hon. Friend the Member for Torfaen (Nick Thomas-Symonds)—in the pledge signed on 14 June should be honoured.

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[Guto Bebb]

I am unsure which letter of 14 June the hon. Gentleman is referring to. I am referring to the Treasury commitment of October this year. I think that a commitment made this October trumps a letter of 14 June. The hon. Gentleman has also raised a number of issues about promises made in the referendum campaign that imply a lack of understanding of how a referendum campaign works. It is not about electing a Government. In the referendum campaign there were members of the Labour party on either side of the argument, and the same was true of the Government. To claim that promises made by the referendum campaign are binding on the Government is nonsense, and I think that the hon. Gentleman knows it.

[Albert Owen]

A few years ago the Minister would have been agreeing with us. It is the first time I have ever been accused of scaremongering for quoting the Chancellor of the Exchequer and Finance Ministers. As to the referendum campaign, we are not talking just about individuals making commitments. We are talking about the Foreign Secretary, the Secretary of State for International Trade and the Secretary of State for Exiting the EU. Those are three leading individuals. Will the Minister hold them to account, on behalf of the people of north Wales?

[Guto Bebb]

Again, I highlight the fact that comments made about the letter of 14 June do not reflect the Treasury’s position as it has developed. [Interruption.] Also, it is important to understand that those individuals from the leave campaign who joined the Government have done so with the intention—[Interruption.]

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[Guto Bebb]

Electrification improvements on the south Wales main line will continue, and we look forward to delivering the promises that were made. We are looking at ensuring that the fast trains we need in south Wales will be delivered.

[Albert Owen]

I assure the Minister that none of us in objective 1 structural fund areas wear it as a badge of pride. He and I were on the same side in the 1980s and 1990s fighting for such funds; the then Conservative Government refused even to apply for them, which is why we are now in a dire situation. Will he commit, post-Brexit, to fight for the assisted areas scheme in Wales, to help the areas that need the greatest help?

[Guto Bebb]

The hon. Gentleman makes a constructive point, which I welcome. We are discussing EU funding in Wales post-2020, which will not happen because the people of Wales, along with the people of the rest of the UK, made a decision to leave the European Union.

It is imperative that we highlight the need to continually support Wales, which is clear from the Government’s commitments to Wales that have been highlighted: we are increasing revenue funding to the Welsh Government to £370 million; we have provided a funding floor to the Welsh Government, which has never been provided previously by the Labour party; over £900 million in new capital funding has been made available to Wales; there is a commitment of £500 million for the south Wales metro; we are waiting for proposals on the Swansea city deal; and we are in the process of encouraging a growth deal for north Wales. It is clear that the Government are delivering on our commitment to a regional policy that works for the whole of the UK.

I think the hon. Member for Ynys Môn (Albert Owen), who is making signs from a sedentary position that are unworthy of him, if I may say so, should be aware that the failure of EU funds in Wales to help our GDP position was not the fault of the EU funding. There is no denying that the way in which that funding has been utilised on three successive opportunities is a reflection on the Labour Government in Cardiff.

I am glad to say that the relationship between the Wales Office and the Welsh Government is extremely good, and I am glad to say that we have an understanding of the historical failures of EU funding streams. We are getting a constructive approach from the Welsh Government—unlike their colleagues in Westminster—who want to see a way forward in giving stability in the short term so that people who are committed to European projects know that those funds will be in place until 2020, which is precisely what we are offering.

Beyond 2020, it is important that we develop a strategy for the whole of the UK, which is exactly what we will do, working hand in hand with colleagues in the Welsh Government. Opposition Members should not take to their high horses and claim that they have no responsibility for the situation we face in Wales; they do, and they should acknowledge that. The people who vote for them highlighted their concerns in the referendum, which was a reflection, in my view, on the mismanagement of Wales by the Welsh Government for a very long time.