Queen’s Speech: Implications for Wales

Albert Owen Excerpts

Wednesday 19th July 2017 Westminster Hall

[Jo Stevens]

The hon. Gentleman raises an interesting point. I know that there has been commentary from the Welsh First Minister about whether it needs to be reviewed. Perhaps the Minister will deal with that in his response.

The paucity of the Government’s programme for this two-year parliamentary Session was laid bare in the Queen’s Speech. Much of the Conservative party manifesto was abandoned: dementia tax; means testing the winter fuel allowance; grammar schools in England—of course, we do not have them in Wales—a vote on repealing the fox hunting ban, although I suspect that Plaid Cymru Members would have been glad at that policy; fixed-term Parliaments; the energy price cap; and the removal of free school lunches. The U-turns and concessions have continued apace since then.

What exactly was on offer for Wales in that Speech and since from the Government? After the dog’s dinner of the Wales Act 2017 in the last Parliament, there has been no progress on tidying up and providing much-needed clarity on the devolution settlement, nothing to offer on rail electrification or anything concrete on scrapping the Severn bridge tolls and no Swansea bay tidal lagoon announcement, despite the Government sitting on the favourable Hendry report since January.

[Albert Owen (Ynys Môn) (Lab)]

My hon. Friend mentioned rail electrification in north Wales. Although I welcome the announcement of an HS2 hub in Crewe, does she agree that that was an ideal opportunity to announce at least a plan for the future of connectivity from Crewe to north Wales? Electrification could be a part of that.

[Jo Stevens]

My hon. Friend raises an important point, which I think demonstrates the Government’s lack of vision for Wales; they are always concentrating on what they can do for England, rather than Wales.

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[Mrs Madeleine Moon (Bridgend) (Lab)]

Thank you, Mr Howarth; I will speak fast. I commend my hon. Friend the Member for Cardiff Central (Jo Stevens) for an amazing speech and for arranging for the debate to take place. The focus on the rights of women in relation to Brexit was spot on and something that no one else has raised so far. I am so pleased that she has done so.

One highlight of the Queen’s Speech was the customs Bill. I want to focus on that and the impact in Bridgend and in particular on Ford’s automotive engine plant. Like many other automotive companies in the UK, Ford relies heavily on tariff and customs-free trade. Automotive experts, including the Society of Motor Manufacturers and Traders, have made it crystal clear that customs barriers and tariffs will cripple the industry. It is no secret that the single market and customs union have been critical to the sector’s competitiveness. That is critical; we cannot allow that to change. The most recent figures show how significant the industry is to the UK economy. Its turnover was £71 billion and it supports 800,000 jobs. The EU is the largest market for the UK’s automotive sector, with 56% of exported cars going into it.

The Government should heed calls from the sector and ensure that the benefits of the single market and tariff and customs-free trade with the EU is retained. That is essential. Keeping free trade and the supply chain unaffected is imperative, otherwise costs will increase. It is estimated that the effect on the automotive industry of losing free access to the customs union will be catastrophic. This is a highly integrated global industry, with vehicles and parts crossing borders multiple times in the assembly process. It relies on the just-in-time manufacturing process, so we need to maintain a seamless customs arrangement. Without that just-in-time process, we will have companies’ cash tied up in making sure that parts are available and stockpiled rather than arriving just in time. That will have a devastating impact on the viability of the automotive trade in the UK.

Leaving the EU without a deal would mean reverting to World Trade Organisation tariffs and customs checks at UK borders, which would increase delays, significantly increase costs and impact competiveness. The Society of Motor Manufacturers and Traders found that a 10% tariff on finished vehicles because of World Trade Organisation rules would cost the industry a staggering £4.5 billion, which would inevitably increase costs for consumers—the average cost of a car in the UK is expected to rise by £1,500 as a result. Research from the PA Consulting Group has found that the cost of moving to a World Trade Organisation regime would impose a 4.5% tariff on vehicle components alone, including the parts needed for the engines being built in Bridgend. That would impact the competiveness of companies such as Ford in Bridgend, and then there is the knock-on effect of 14,000 jobs associated with that factory in Bridgend—14,000 jobs that I am determined to protect.

I cannot stress enough how important tariff and customs free trade is. Investment in the UK car industry has already sharply declined in the first half of this year to just £322 million, compared with the total of £1.66 billion that was invested in the UK’s automotive sector last year. Companies are delaying spending because it is difficult to plan amid uncertainty over our future trading arrangements and concerns relating to the World Trade Organisation tariffs. The Government should carry out an impact assessment on how changes to customs procedures will affect the automotive industry, and absolutely avoid the possibility of resorting to World Trade Organisation rules.

The industry needs concrete reassurances and further details on how the customs Bill will ensure frictionless trade. Nothing is being told to the companies, everyone is living with uncertainty and employees are deeply concerned about their future, their ability to invest in mortgages and the uncertainty of their job prospects. Are they actually going to be in work in two years’ time? Nobody knows. Without doubt, the imposition of tariffs by losing access to the single market and customs union puts our businesses across Wales, such as Ford, at a significant disadvantage.

[Albert Owen]

My hon. Friend is making a very important point about the Government’s industrial strategy. It talks about the whole of the UK, but in the automotive sector they have done a sweetheart deal with Nissan, putting greater uncertainties on the other car plants in the United Kingdom. If we are going to have an industrial strategy for all, there must be a level playing field.

[Mrs Moon]

This Government do not like level playing fields. They do bungs to the DUP, and goodness knows what bung has gone into the north-east—I don’t know, nobody knows. We have to have transparency, and we do not have transparency.

A completed car being exported into the EU would face a tariff of 10%, with 4.8% on assembled engines and 2% on components. Currently, banking passporting of capital across the EU is allowed. Is the Wales Office monitoring the number of Welsh businesses applying for banking licences in the EU? SMEs will need time to cope with dealing with the customs transition. Are SMEs going to have support, training and opportunities to ensure awareness of the impact of exiting the customs union on their businesses? There is a great deal of concern that that is not there. Finally, will the Minister comment on REACH rules, on the registration, evaluation, authorisation and restriction of chemicals, which are used widely in the automotive industry, and say what he is doing to look at the impact on the automotive industry in Wales?

[Hywel Williams (Arfon) (PC)]

I congratulate the hon. Member for Cardiff Central (Jo Stevens) on securing this debate and on her very fine speech.

This is a pivotal period in our history. It is a point that will determine the future of our economy, our governance and our relations with the rest of the world—that is, the world beyond just England—but I regret to say that the Prime Minister’s legislative programme is a deficient plan for defining times. The UK Government have no majority of their own, a compromised mandate and, as far as I can see, no real plan for Wales. They do have a split Cabinet, a lame duck premier and a legislative programme dominated by what one senior EU diplomat described to me recently as a vanity project for a few politicians who have now largely jumped ship—all that based on an unassailable sense of entitlement and an optimism that all will be well and the world will beat a path to our door.

My contribution today will be focused on two of the most wretched elements of the Queen’s Speech: the European Union (Withdrawal) Bill and the Government’s wilful neglect of Wales’s infrastructure. It is now quite clear that Westminster intends to claw back powers from the people of Wales. The UK Government intend to encroach on our basic power to govern ourselves, trashing the settlement that, since 1999, has allegedly been based on an agenda of respect. Plaid Cymru MPs will do all that we can to oppose the Bill. We have always said that we will never vote for legislation that takes power away from the people of Wales. Now that the Brexit Secretary has conceded that his withdrawal Bill will need the consent of the devolved Governments, the way that he achieves his purpose will be revelatory, if not miraculous. I look forward to how he will explain himself, but there we are—we live in very strange times.

One way to avoid the provisions of the withdrawal Bill that would most damage Wales would be to make it largely unnecessary by maintaining our economic links with our soon-to-be-former partners. Staying in the single market and the customs union would render much of the Bill nugatory. Yet, as I said, there is no majority, no mandate, no plan, a split Cabinet, a lame duck premier and a legislative programme dominated by a vanity project. As the Prime Minister might say, “Remind you of anyone?” Well, actually, it does; but it is more John Major than Margaret Thatcher.

Turning to infrastructure commitments, where is the concrete commitment—literally concrete—to deliver for Wales? There is a further commitment to HS2, and Welsh taxpayers will be contributing to building the most expensive railway in the world without an inch of it being in Wales. Whatever benefits might come to north and north-east Wales, and perhaps even my constituency, objective commentators have said that it will actually damage the economy of much of the south of our country. I do not think that has been given the attention that it should have been.

The most glaring omission is the electrification of the south Wales main line. I understand that we are to have a further Government U-turn—possibly today, or perhaps it has already been announced—just before we leave for our constituencies. The Prime Minister said the other night that she hoped we would leave Westminster to settle down. Well, we are here not to settle down but to settle up. The Labour Government promised us full electrification in 2009—I took their word for it then, and I am sure their intentions were sincere—and full electrification was promised again in 2010. It is enough of a scandal that eight years later we are still waiting for it, but for the British Government to scuttle electrification of the line to Swansea while expecting the people of Wales to stump up for England’s HS2 is breathtakingly arrogant and totally indefensible. I should be glad to hear the Minister’s attempt to defend it.

The UK Government are backtracking on the electrification of the south Wales main line. As for the equivalent electrification of the north Wales main line, I suppose we can join the long line of honest people queuing up to whistle for their money from this dodgy Government.

[Albert Owen]

Will the hon. Gentleman give way on that point?

[Hywel Williams]

I think not, because time is rather short.

The Queen’s Speech claws away at our ability to strengthen our country, and it indulges the country’s constitutional obsessives and imperial Walter Mittys at the same time. Plaid Cymru will oppose this destructive and offensive stupidity.

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[Albert Owen (Ynys Môn) (Lab)]

Thank you, Mr Howarth, for calling me to speak. I will certainly do my best to allow my hon. Friend the Member for Ogmore (Chris Elmore) to make a contribution on equal parity.

The Queen’s Speech was an opportunity lost. It was a two-year programme that did not have a Welsh dimension, which is an absolute disgrace, particularly when we heard warm words from the Prime Minister, and indeed in the Queen’s Speech, that there would be a programme for the whole of the United Kingdom.

I will concentrate on three main points; other Members have touched on them, but I want to elaborate on them and get some answers from the Minister. The first is the north Wales growth deal. We have seen Cardiff and Swansea city deals, which I welcome. In no way do I want to take away from them, but north Wales needs a focus of attention. This growth deal has been announced in numerous autumn statements. It is supposed to be bottom-up from the councils in north Wales, but the reality is that they have been squeezed; they do not have the finances or other resources that are needed. If we are to have an industrial strategy for the whole United Kingdom, we need the United Kingdom Government to take the lead and not pass the buck.

Many of us here in Westminster Hall today received increased mandates from the people of Wales, including the people of north Wales. We want to have a voice when it comes to growth deals, and we want to be able to say that we can help deliver the best for our constituents, so I ask the Minister: what is happening with the north Wales growth deal and why are we as MPs being excluded from its consideration?

I know that the Minister has sympathy with me on the second issue I will raise, which is Welsh ports. That is because Welsh ports will be impacted by Brexit more than any other ports in Europe, because they are the corridor to the Republic of Ireland. If we are to have a “seamless” or “frictionless” border, we want to know what that means; businesses need to know exactly what that means. If we have tariffs in Welsh ports, including Holyhead, then we will have delays and additional costs, which will impact on jobs in north Wales, in Wales as a whole and in the whole United Kingdom. We need clarity on that. I understand the issues with the border in Northern Ireland—I understand the Good Friday agreement and the fragility of that policy. However, the issue of Welsh ports is very important, and thus far it has not been given the attention it deserves.

Finally—I want to allow my hon. Friend the Member for Ogmore to make as long a contribution as possible—I will refer to the Hendry review and the Swansea bay tidal lagoon. The policy has just been kicked into the long grass, with excuse after excuse. I support the policy, and when I was on the Energy and Climate Change Committee we conducted an inquiry into it. We concluded, across parties, that it was a good thing for British energy and British industry. The Hendry review was an independent inquiry, based on a model that this Government had put in—contract for difference strike prices. It is their model, it is their review and it is time they delivered.

I will finish with one last point. The DUP has had £1 billion—in many ways, good on it—but that has taken money and attention away from Wales, which is a disgrace. It is the job of the Wales Office to stand up and be the voice of Wales in Westminster, but it is failing us.

[Chris Elmore (Ogmore) (Lab)]

Thank you for calling me to speak, Mr Howarth; I am grateful for the brief time I have.

I want to make three points. I congratulate my hon. Friend the Member for Cardiff Central (Jo Stevens) on securing the debate. I agree entirely with her, and indeed with the hon. Member for Arfon (Hywel Williams), about the power grab that the repeal Bill is now conducting against the Welsh Government. I believe that we could be bordering on a real constitutional issue in how devolution moves forward if—at the moment it appears that this will be the case—not all the relevant powers that currently reside with the EU are devolved to the Welsh Government by the UK Government.

There were two things missing from the Queen’s Speech that I feel quite passionate about, because they have an impact on Wales and should have been referred to. The first relates to rail electrification. We have had the Transport Secretary on the train to Paddington and we have had the Welsh Secretary driving the train from Paddington to Cardiff, and then saying that we will have additional funding for electrification to Swansea. That would have a significant impact on my constituency and many others across the south Wales belt, and it would have further implications for the electrification of the valleys lines, including the lines through Pencoed up to Maesteg and possibly even to the constituency of my hon. Friend the Member for Bridgend (Mrs Moon)—that would create a transport hub in Bridgend.

That electrification is vital, and the UK Government—the Conservative Government—are failing the people of Wales by not securing it. That is simply unacceptable, especially given the hundreds of promises that Ministers have made time and again to provide electrification. Maybe the Transport Secretary and the Secretary of State for Wales just like driving trains—that might explain why they are so keen to make false promises.

The key area I wish to focus on is the impact of pension changes on women born in the 1950s, which was not considered in the Gracious Speech. I thank my hon. Friend the Member for Cardiff Central for plugging the work of our hon. Friend the Member for Swansea East (Carolyn Harris) and myself on this issue. The issue is specific to Wales—

[Albert Owen]

And to the rest of the UK.

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[Albert Owen]

On the Minister’s point about debating the Queen’s Speech in Westminster Hall, is it his intention to have a fuller debate in the Welsh Grand Committee, which was set up for Welsh issues only? It would also provide an opportunity for Conservative Welsh Members to attend and to speak up for Wales.

[Mr George Howarth (in the Chair)]

Order. Welsh politics has always held a great fascination for me, although I do not think this debate is the occasion to run either the last general election, or, as the Minister seems to be doing, the one before that. If we can stick to the issue at hand, I am sure the people of Wales will be very grateful to us.

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[Guto Bebb]

The hon. Lady is a member of the Labour party, so I understand her suspicion of the intentions of a Conservative-led Government, but the aim of the Henry VIII powers are to correct deficiencies within the law as it stands. There will be thousands of deficiencies where legislation refers to European regulations and European laws. There will be a need to correct them. The same need to correct deficiencies will be granted to the Governments in Cardiff, Edinburgh and, I hope, Belfast. The intention is to correct deficiencies. The last thing the hon. Lady would want to see on the day after we depart the European Union is for our legal system to be inoperable. That would be a dereliction of duty on behalf of this Government.

I hope that gives some degree of comfort to the hon. Lady. Ultimately, there is an obligation on the Opposition to scrutinise as we go through the process of putting that the legislation in place.

[Albert Owen]

Would the Minister give way on that very point?

[Guto Bebb]

Not for the time being; I have to make some progress.

Converting EU law into UK law is not enough to ensure a functioning statute book on exit day. As I have mentioned, retained EU law will contain a broad range of deficiencies that need to be corrected; the intention is that that those deficiencies can be corrected both at a devolved level and in Westminster.

In addition to the withdrawal Bill, there will be other EU exit Bills, which are absolutely essential for the way in which we can operate as we leave the European Union. The customs Bill will provide for a stand-alone UK customs regime on exit, and the trade Bill will put in place the essential and necessary framework to allow the UK to operate our own independent trade policy. I suspect Opposition Members, who respect the result of the referendum, would not argue against the need for a customs Bill or a trade Bill.

On the comments of the hon. Member for Ynys Môn about ports, the Wales Office is aware of the issues in relation to Holyhead port. I think I am right in saying that the Secretary of State has visited. I have recently had meetings with Irish Ferries, for example, to discuss the issue in detail. Although we all recognise the sensitive nature of the border in Northern Ireland, it is imperative that we ensure that the ports in Wales are also protected. The Wales Office is certainly very aware of that issue, and I am more than happy to deal with the hon. Gentleman on that in due course.

The trade Bill is also crucial because, as has been pointed out by many hon. Members, Wales is more dependent on exports than any other part of the United Kingdom. We saw a significant increase in our exports in the year to March 2017. When I hear the doom and gloom of Opposition Members about the Welsh economy, I would remind them that our exports are increasing, not decreasing, and we are exporting more to the European Union than we did in the year prior to the decision to leave the European Union. That is some source of comfort.

It is also imperative that we have an immigration Bill that deals with some of the issues raised about the concerns of EU citizens and the wider implications. On the point made by the hon. Member for Cardiff Central about her constituent and the lack of response from the Home Office, I would personally be more than happy to take that up on her behalf with the Home Office, if she would care to write to me about it. Such a delay in responding is simply not acceptable; I will happily look into it on her behalf.

We will also bring forward a fisheries Bill and an agriculture Bill, which will undoubtedly have an impact on Wales. Some 60,000 people are employed in the agriculture sector in Wales—we all know the importance of agriculture to our rural communities. We need to ensure that we have a functioning sector as we leave the European Union.

There are other pieces of legislation in the Queen’s Speech that are important to Wales. We will bring forward a number of proposals, for example modernising the courts system and dealing with domestic violence through the creation of a domestic violence and abuse commissioner. Those issues are not England-only; they apply in Wales.

I will try to respond to some of the points raised by hon. Members. I have touched on the fact that a number of pieces of legislation in the Queen’s Speech have a direct impact on Wales. Anybody who denied that would be wrong.

On the financial settlement for Wales, hon. Members have very short memories. Just before Christmas, we announced a fiscal framework for Wales that ensured a Barnett floor—something that has been called for by many interested parties in Wales for a very long time and was never delivered by the Labour party when they were in power in Westminster and in Cardiff Bay. It has been delivered by this Conservative Government. The fiscal floor currently ensures that for every £100 spent in England, £119 is spent in Wales. It guarantees that there will be a floor. In other words, because of that funding commitment, the Barnett squeeze will not happen again.

Over and above the Barnett consequentials, the Government have also delivered support for growth deals for Cardiff and Swansea. I assure the hon. Member for Ynys Môn that we are working very hard on achieving a growth deal for north Wales. The hon. Member for Wrexham (Ian C. Lucas) is in discussions with us on a regular basis on the growth deal for north Wales.