Welsh Affairs

Alun Cairns Excerpts

Thursday 3rd March 2016 Commons Chamber

[Carolyn Harris (Swansea East) (Lab)]

We have become very accustomed to waiting for things in Wales. We waited a very long time for rail electrification, we waited patiently to get the Welsh national football team into the Euros, and we waited a very long time for a Welsh premier league football club, but now Swansea City is there. Today, we waited a very long time for the Secretary of State to make an appearance in this very important debate. Either our performances are not up to scratch or he has had a better offer, because he has chosen to leave the Chamber.

[The Parliamentary Under-Secretary of State for Wales (Alun Cairns)]

I am happy to announce to the hon. Lady that the Secretary of State has an important telephone conversation with the Minister for Economy, Science and Transport in the Welsh Government.

--- Later in debate ---

[The Parliamentary Under-Secretary of State for Wales (Alun Cairns)]

I start by congratulating the hon. Member for Aberavon (Stephen Kinnock) and other Members on contributing to today’s important debate in Westminster’s calendar—one that underlines the role that Wales plays within the United Kingdom. I welcome all the contributions of right hon. and hon. Members, and I will do my best to cover as many points raised within the limited time remaining.

The debate has been extremely wide ranging and has covered issues across the spectrum of the constitution, the European Union, the economy, public services, the tidal lagoon, the railways, the northern powerhouse and many other issues. I shall canter through as many as I can, but I want to spend some time on the Wales Bill in order to respond to the questions from the shadow Secretary of State for Wales and others. I shall address some other points, too.

Let me start my opening remarks by saying that Wales is in a good place. I am optimistic about our future. As a Government, we have been determined to make a difference to all parts of the UK, and while the job is not complete and there is always obviously more work to be done, we have taken positive action that sets the scene for a bright outlook for Wales. We are determined to work constructively with the Welsh Government, and whatever rhetoric we hear from individuals within Cardiff Bay, we are determined to respond in the measured fashion that the people of Wales deserve.

We want to secure our economic recovery, which was our greatest challenge when we came to office in 2010. Members will remember that unemployment was rising and for too many young people there was little prospect of employment, with the UK and Wales in a precarious financial position. Few Members, however, have mentioned the funding floor, so I was grateful to my hon. Friend the Member for Aberconwy (Guto Bebb) for doing so. This has been called for by Members for well over a decade, and it is only a Conservative Administration who have delivered it—and within the first year of their Parliament.

[Glyn Davies]

Previously, throughout my time in this Parliament and, indeed, in the Welsh Assembly, the Barnett deficit dominated every discussion, and was often raised by Opposition Members. Now we are in balance. Fair funding for Wales is one of the Government’s biggest achievements, but it is not being properly recognised by everyone.

[Alun Cairns]

I am grateful to my hon. Friend for emphasising that point. The 115% rate of Barnett consequentials is extremely important—it entirely meets the criteria in the Holtham demands—but one would almost think that Labour and Plaid Cymru Members were disappointed that we had actually delivered on something that they had been calling for. They would far rather be shouting from the sidelines, calling for it in the hope that we would not deliver it. When we respond in a positive way and deliver for the people of Wales, there is complete silence.

[Jonathan Edwards]

Obviously the Barnett formula is a step forward, but does this not underline the danger of using opaque terms such as “fairness” and “non-detriment”? In my view, a fair funding settlement should be based on need rather than serving to prevent further injustice. As the hon. Member for Llanelli (Nia Griffith) pointed out, the key aspect of non-detriment is the fiscal framework. Has the Minister any idea of the preferred index for which the Welsh Labour Government are arguing with the Treasury? It is clear that different mechanisms will have vastly different outcomes.

[Alun Cairns]

The hon. Gentleman has made some important points. It is, of course, up to the Labour party to explain its position. All I know is that Labour called for this for decades, we responded within a year, and since then there has been complete silence on the Opposition Benches.

My hon. Friend the Member for Aberconwy was extremely upbeat about Wales’s economic prospects. It is true that, since 2010, the number of people in work has risen by 89,000, unemployment has fallen by 35%, the youth claimant count has fallen by 61%, and Wales has experienced faster growth per head than any other nation or region of the United Kingdom outside London. The hon. Member for Neath (Christina Rees) spoke of the importance of getting people into work. This is action, and this is where it is happening.

We have been getting behind Welsh businesses, and there are 22,000 more small and medium-sized enterprises in Wales than there were in 2010. The hon. Member for Aberavon mentioned the steel sector. I know that he spoke to the Secretary of State and the Minister for Small Business, Industry and Enterprise earlier today about the issues facing the steel industry and, in particular, the communities around Port Talbot, but I hope he will recognise that the Government have gone a long way towards meeting the five asks from the steel industry.

One of those asks was a cut in business rates, which were mentioned by some Opposition Members. That is a devolved matter, and something that the Welsh Government could do. The energy-intensive industry compensation package has been delivered, as has the provision of more time in which to comply with the EU’s industrial emissions directive. As for EU-level action on anti-dumping, the UK Government are leading the pressure that is being exerted in Brussels. I hope that the hon. Gentleman will recognise that, along with a range of other measures that we have taken.

[Stephen Kinnock]

The Minister was going OK until he got to the bit about dumping. I am sorry, but we cannot let that one go. There are two key facts. The British Government are the ringleader of a group of member states that is blocking the scrapping of the lesser duty rule, which would make a huge difference to the ability to impose tariffs on unfairly dumped Chinese steel. They are also the chief cheerleader for Beijing in Brussels when it comes to giving market economy status to China, which would also dramatically reduce the scope. It must be recognised that, in respect of those two points, it is a case of abject failure.

[Alun Cairns]

I am sorry to hear that response, which raised two issues. The first is the confusion over market economy status. Russia has market economy status, but that does not prevent the European Union from introducing tariffs or prevent it from taking action. The other measures that the hon. Gentleman mentioned would take three years to introduce. We want to take action before then. We want to continue to be proactive. We want to work with the hon. Gentleman, the Welsh Government and the communities in and around Port Talbot and Newport, because of the importance of the steel industry to them.

In 2014-15 there were 102 inward investment projects in Wales, 98% of which were supported by UK Trade & Investment. That demonstrates the role that the UK is determined to play in supporting the Welsh economy, and in working with the Welsh Government.

The hon. Member for Merthyr Tydfil and Rhymney (Gerald Jones) mentioned welfare reforms. Welfare reforms are very important to getting people back to work, but we cannot pick one element individually. We need to look at the wider package, such as the national living wage, which would increase the incomes of 150,000 people in Wales by 2020. That will make someone working full time on the national living wage £4,400 better off, on top of the tax cuts that they will receive as a result of the increase in the personal allowance.

The Cardiff city deal was mentioned by many hon. Members, most notably my hon. Friend the Member for Cardiff North (Craig Williams), who has spearheaded and championed that cause and been persistent at every turn. He has been relentless, first as a candidate and now as a Member of Parliament, in pressing Ministers on this issue. Let me make it clear that we want this deal to be signed as quickly as possible and we are determined to press those involved in order to develop a world-class deal. We want Wales to look outwards and we want it to involve the private sector. We want the city deal to be a world beater in what it delivers. Hon. Members should recognise the fact that the spending review has already announced our “in principle” commitment to support a new investment fund, and earlier this year the Chancellor committed £50 million to establish a UK compound semiconductor centre as a down-payment on the city deal.

My right hon. Friend the Member for Clwyd West (Mr Jones) talked about ensuring that north Wales was recognised and about the importance of the northern powerhouse, a subject that was also raised by the hon. Member for City of Chester (Christian Matheson). There was a focus on the importance of rail links, and I hope that bringing the HS2 investment forward by six years will provide great opportunities for mid-Wales, north Wales and Cheshire through the links to the northern powerhouse. The hon. Member for City of Chester talked about local government reorganisation and the need to look towards Wales. I would also say that local government in Wales needs to look across the border. I think that it does so, but the Welsh Government need to recognise the fact that it is an administrative border and that the way in which people lead their lives means that they cross that border in a much more open way.

I could also go on at length about the investments that the prison in north Wales and Hitachi’s involvement at Wylfa will bring. Much has been said about the tidal lagoon project in Swansea. The Tidal Lagoon Swansea Bay company has recognised the strength of the review and welcomed it. I wish that hon. Members would reflect on what they are saying in this context and support the company rather than seeking to undermine the project, which could involve a significant investment.

In the time remaining, I want to talk briefly about the Wales Bill. We said at the outset that it was a draft Bill and that we wanted to be pragmatic and to use pre-legislative scrutiny positively. Given some of the negative points that have been made, however, I want to say that we will take absolutely no lessons from the party that gave us the Government of Wales Act 2006 and the convoluted and complex legislative competence order system, which has led to a great deal of legislative confusion. We are determined to get this right, and this pause needs to be taken in the positive spirit in which it was intended.

There have been calls to adjust the necessity test, but we plan to go further and to remove it. We will look at the list of reservations, but it also gives clarity. I encourage members to look at the Scotland Bill, which also has quite a long list of reservations, but there have been no complaints because of the clarity that it provides. Many people are calling for a distinct legal jurisdiction, but that would effectively mean a separate legal jurisdiction. That would be dangerous for Wales, in relation not only to the legislative process but to investment. We are also determined to work constructively to clear up the mess that we inherited with the pre-commencement orders. We want to get this Bill right, and we are being pragmatic. If we ploughed ahead, we would be criticised. We are being criticised just for pausing. It seems that, according to Labour Members, whatever the Wales Office does, it cannot win.