Shared Prosperity Fund: Wales

Ben Lake Excerpts

Wednesday 14th November 2018 Westminster Hall

[Ben Lake (Ceredigion) (PC)]

Diolch, Mr Hollobone. It is a pleasure to serve under your chairmanship. I congratulate the hon. Member for Wrexham (Ian C. Lucas) on securing this important and much-needed debate. Those of us representing constituencies in Wales will be all too aware of the importance of regional and structural funding schemes, and consequently that the design of the new shared prosperity fund will largely determine the prospects for our communities for decades to come. It is essential, therefore, that the new fund serves the people and communities that we are elected to represent.

Almost four months have passed since the Secretary of State for Housing, Communities and Local Government confirmed in a written statement the UK Government’s commitment to the UK shared prosperity fund. The days are getting shorter, the autumn Budget has passed and, if nothing else, Christmas will soon be upon us, yet we are still awaiting quite basic details about the new fund. What will the total quantum be? When, and how, will the funds be allocated? What activities will be eligible for support, and which bodies will oversee the decisions?

As has already been mentioned, at present west Wales and the valleys receive a significant amount of funding, as our low GDP per head qualifies us as a less developed region. Over the current cycle, Wales will receive approximately £2.7 billion from European structural funds. A majority of the Welsh population—63% to be precise—lives in this less developed region of west Wales and the valleys, where the funding goes a long way to sustaining the rural and underdeveloped economy.

While it is good that regional and structural funding programmes have been available to us, it is nevertheless a shame that our constituencies have continued to qualify for them. That is not surprising, of course, when we consider that, on the whole, UK economic development has typically focused attention and investment on urban centres, and priorities for rural areas have amounted to little more than improvement of existing connections between the countryside and the cities, so as to accelerate the trickle of prosperity from the economic engines and powerhouses to the rural periphery. The result is that the productivity of rural areas is consistently below the UK average, in stark and rather depressing contrast to that of larger towns and cities.

As the MP for Ceredigion, and as there are few signs of there being a change to UK economic strategy in the near future, I must stress that whatever the methodology used by the new shared prosperity fund, Wales must not be left financially worse off. If rumours are to be believed, and the shared prosperity fund is also to finance other responsibilities such as the old pillar two programmes of the common agricultural policy, for example, its budget will need to be proportionally larger so as not to constitute a real-terms cut.

[Albert Owen (Ynys Môn) (Lab)]

The hon. Gentleman is making an important point. We should put it on the record that the funds should not be put through the Barnett formula, but should be protected at the current European level.

[Ben Lake]

I agree wholeheartedly with the hon. Gentleman. If the Barnett formula were applied to the shared prosperity fund, that would be nothing short of a disaster for our communities. We need to make sure that whatever the methodology, it is focused on the need of communities, rather than on simple population share.

I must labour the point: if the fund is to be used for other responsibilities, it cannot be reduced to a convenient tool for hard-pressed Departments to realise budget efficiencies via consolidation. The funding will be a lifeline for our communities, so it must provide Wales with no less, in real terms, than the total allocated by the EU and UK funding streams it replaces.

Furthermore, I believe the UK shared prosperity fund must operate on multi-annual financial allocations of at least seven years. Inconvenient though that may be for the Treasury’s spending review cycles, it would allow recipient organisations and groups the time for proper planning and implementation of larger scale and transformative projects—the types of project needed seriously to ratchet up jobs, wages and living standards in constituencies such as Ceredigion. We cannot settle for mere tinkering around the edges. What is required is a programme that allows for substantial and prolonged investment, so that our areas are no longer less developed and eligible for such assistance.

As the hon. Member for Caerphilly (Wayne David) mentioned, in terms of the shared prosperity fund’s administration, important aspects of economic development are devolved, so the Welsh portion of the new fund should be devolved to the Welsh Government, potentially, as the hon. Member for Ynys Môn (Albert Owen) just mentioned, as an additional, separate block grant from the Treasury, so that we may bypass the Barnett formula.

Time is against me, so I will conclude with a question to the Minister, who I welcome to his place in the Welsh Office. Will he guarantee that the UK shared prosperity fund will be, in real terms, at least equivalent to the funds that it is replacing, and that its budget will be proportionally increased if other EU—or, for that matter, UK—competencies are to be blended into the fund?

[Mr Philip Hollobone (in the Chair)]

Order. I call Jo Stevens.

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[Nigel Adams]

I completely agree. I see myself as a champion for Wales in Westminster. That is incredibly important and must be my priority. I cannot tell the hon. Gentleman the exact date, but I can say that it will be this year, which indicates that it will be incredibly soon. I hope he takes me at my word when I say that the consultation is about to start.

Given the significance of the shared prosperity fund, it is right that questions about the size, structure and priorities for investment develop as we approach next year’s spending review, which will determine the amount of money that will be discussed.

[Ben Lake]

On the spending review, should we be concerned that it seems that responsibility for this fund has been given to the Ministry of Housing, Communities and Local Government, rather than the Treasury? Might that suggest that it is not as big a pot of money as we would hope?

[Nigel Adams]

I certainly do not write the comprehensive spending review—well, not yet. I ask the hon. Gentleman to bear with, to coin a phrase. I do not think he has anything to be concerned about in terms of MHCLG being involved in this process—it is only right that it be involved.

In the time I have left, let me turn to specific points raised by hon. Members. In his eloquent speech, the hon. Member for Wrexham spoke passionately about his constituency and his area of north Wales. He asked whether the same rules would apply across the UK. We will absolutely respect the devolution settlement and work with the devolved Administrations. As I said, we are committed to consulting before the end of the year—in the next few weeks—and people will have that opportunity to set out their views on the fund.

The hon. Gentleman rightly commented that the system has not always worked as well as he had hoped. He said that investments had not always delivered the expected return in gross value added terms, that some EU funding had not worked particularly well for Wrexham, and that there had been a bit of a missed opportunity. That is absolutely right. That is why we should have this debate, and why we should all contribute to the consultation.

The hon. Gentleman and the hon. Member for Aberavon, whom I thank for his work on the all-party parliamentary group on post-Brexit funding for nations, regions and local areas, said decisions should be made locally. They both made very valid points in that respect. In my view and that of the Government, EU exit provides an excellent opportunity to reconsider how funding for growth is delivered across the UK. The consultation will be a great opportunity to start that conversation.

The hon. Member for Ceredigion (Ben Lake) and others asked when we would publish the details of the fund. As I said, we will do that in the next few weeks, before the end of the year. We are absolutely committed to that. That will give everyone across the UK the opportunity to contribute their views, and to help those views to form Government policy on this issue. Decisions on the actual spending will be made in the spending review next year.

I would have liked to respond to one or two other hon. Members, but I want to give the hon. Member for Wrexham the opportunity to respond to the debate. I thank everyone for contributing. We want an economically strong Wales in a prosperous United Kingdom. Working alongside the Welsh Government through the shared prosperity fund, we can ensure that becomes a reality.

Welsh Affairs

Ben Lake Excerpts

Monday 19th March 2018 Commons Chamber

[Alun Cairns]

I appeared before the Assembly’s External Affairs and Additional Legislation Committee just a few months ago. I have been in front of them on a number of occasions.

The hon. Lady will have had a close relationship with the Circuit of Wales and the challenging decision that that involved. The principles behind the Circuit of Wales decision apply equally to the value for money of any major infrastructure project. As we analyse the numbers, I am sure that she and other Members would not want to see investment that was not good value for money for the taxpayer.

[Ben Lake (Ceredigion) (PC)]

Before we move on from Swansea and the topic of cancelled projects, does the Secretary of State agree that there is a strong argument to reinvest any funding that was allocated to the electrification of the south Wales main line, which has been cancelled, in the Welsh network?

[Alun Cairns]

The hon. Gentleman raises an interesting point, but he well knows that, as the hon. Member for Slough (Mr Dhesi) indicated earlier, the rail network is far more integrated than that. I would highlight the investment in the Halton curve. Although it is in England, it will benefit north Wales passengers by linking Wrexham to Liverpool directly. We therefore cannot be prescriptive about what will bring benefits. There are exciting opportunities to improve access to west Wales. For example, there are calls from significant quarters for a Swansea parkway station. That holds the prospect of transforming access for west Wales passengers and is something that I am quite excited about.

I would love to talk about the Severn tolls and the growth deals in much more detail, but unfortunately time has got the better of us. I want to use this opportunity to celebrate the great success that Wales has to offer in the UK and beyond. From abolishing the Severn tolls to supporting exporters and investors, we continue to show our commitment to Wales. Growth in Wales is strong, and Cardiff saw the highest increase in growth of all UK capital cities in 2016. It is clear that investors see Wales as a great place to invest. There is clearly a lot to celebrate and I look forward to the stimulating debate ahead of us.

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[Ben Lake (Ceredigion) (PC)]

Diolch yn fawr iawn i chi, Mr Deputy Speaker, for calling me to speak in the debate, and a belated dydd Gŵyl Dewi hapus to you and all Members.

I am grateful for the opportunity to contribute to this wide-ranging debate on Welsh affairs. I also wish to join others in congratulating the hon. Member for Ynys Môn (Albert Owen) on originally securing the debate. I very much welcome the fact that it is now being held in Government time.

It will come as no surprise to right hon. and hon. Members that I intend to concentrate my remarks on Ceredigion, the constituency that I have the honour of representing. In particular, I believe that a significant rethink, if not a recast, of economic strategy is needed if Ceredigion and other areas of Wales are not to be left behind in the years to come. My underlying contention is that it is not being overly ambitious, let alone idealistic, to believe that the prospects for individuals living in rural areas should be just as promising as those for people living elsewhere. The children of Ceredigion deserve the very same opportunities as those of other constituencies; adults, too, should be afforded career prospects and the ability to enjoy a life similar to that enjoyed by those inhabiting other areas of the United Kingdom.

I am in no way espousing the idea that the UK Government grant Ceredigion preferential treatment—although I could certainly be persuaded of the merits of such an approach—but I am arguing for fair play, or, as we say in Wales, chwarae teg. It may be too much to ask for, but I believe that Wales sorely needs an economic strategy that facilitates growth in both rural and urban areas if we are to avoid building a geographically unbalanced Welsh economy. The development of the rural economy should form a key part of an economic strategy for Wales. We need look no further than the state of today’s UK economy to appreciate the consequences of an unbalanced approach to economic development. Or better still, we can turn to page 218 of the Government’s own industrial strategy White Paper, which illustrates all too clearly how focusing attention and investment in urban areas has meant that the productivity of rural areas, such as Ceredigion, is consistently below that of the UK average, and in stark and depressing contrast to that of larger towns and cities.

It is for that reason that I cautiously welcome the Government’s announcement of a mid-Wales growth deal as at least a tacit acknowledgement that Ceredigion and—I say this as the hon. Members for Brecon and Radnorshire (Chris Davies) and for Montgomeryshire (Glyn Davies) are in their places—Powys have been overlooked for far too long. I know that time constraints meant that the Secretary of State was unable to speak on that issue in greater depth, but perhaps when the Under-Secretary sums up we may learn a little bit more about the potential of the mid-Wales growth deal.

A growth deal for mid-Wales, if adequately resourced and successful in bringing businesses and communities together, could be a real opportunity to address the consequences of the area’s chronic underinvestment and neglect by successive Governments. It is also a chance to diversify the base of the rural economy in that part of Wales to ensure that, just like the economic success stories of the cities, the economy of rural Wales is rooted in a rich mixture of sectors and industries. That would mean that, in the future, the children and young people of Ceredigion have ample opportunity to pursue a prosperous living in the county and are not forced to move elsewhere for work.

Members will have heard me speak about the difficulties that many of my constituents face in accessing fast and reliable broadband. That is not only a significant barrier to Ceredigion’s economic growth but a source of great frustration for households across the county. Broadband, and good digital connectivity in general, is no longer a luxury; in the 21st century it is increasingly becoming an essential amenity. As such, I very much hope that the mid-Wales growth deal will address poor connectivity. The hon. Member for Montgomeryshire rightly pointed to the investment in roads, but I also hope that some investment will be put into digital connectivity, because broadband, or rather the lack of it, is by far the most prevalent issue raised by constituents in Ceredigion, which, unfortunately, is among the 10 worst constituencies for broadband speeds.

Rural Wales should not be written off as an area without potential. Why should it be the case that opportunities afforded to start-ups and small businesses, including shared office spaces, are poorer in rural areas, or that essential utilities such as adequate broadband and mobile infrastructure are sometimes dismissed as luxuries in places such as Ceredigion?

I am conscious of the time, so I will try to draw my remarks to a close. Increasing investment in mid-Wales is of the utmost importance not solely because Ceredigion, and more generally west Wales and the valleys, are among the most deprived areas of western Europe, but because of the impact that greater job opportunities will have on reducing poverty levels. Indeed, west Wales and the valleys, as many Members here this evening will know all too well, have received significant new structural funding. The United Kingdom Government have previously mentioned that a UK prosperity fund will be established to replace the structural funding post Brexit. I think that Members from both sides of the House would agree that the funds allocated from it should at least equal the European funding, and be allocated on the basis of need, not population.

If the case for further investment in Ceredigion needs justification, I turn the House’s attention to the levels of poverty, particularly child poverty, in my constituency. After housing costs, nearly 29% of children in Ceredigion live in poverty. Research by the Joseph Rowntree Foundation has shown that to truly tackle this shameful affliction, we need to improve the quality of existing housing stock, increase the supply of affordable housing and ensure a fairer social security system. I will not have time this evening to go into each of those points, but the foundation also says that half the battle could be won by increasing wages and improving job opportunities.

[Geraint Davies]

I have spent nearly every year of my life going to Aberystwyth on holiday. Does the hon. Gentleman agree that we should invest in the beautiful coastline, amazing rural environment and great history of Ceredigion, particularly Aberystwyth? There are people who have now have more money, are a bit older, do not want to get skin cancer, and are thinking about the Paris accord and the environment, and Ceredigion is a great place for them to go, particularly Aberystwyth, which is where my father was from. Does the hon. Gentleman agree that we should be investing in the area and promoting Aberystwyth as an opportunity for a great holiday?

[Ben Lake]

I certainly agree with the hon. Gentleman. In fact, I would go even further by saying that people should also pay a visit to the coastal towns of Aberaeron, New Quay, Aberporth and Cardigan.

[Geraint Davies]

And Borth.

[Ben Lake]

And Borth in the north. Everyone is welcome to visit us in Ceredigion. I am sure that hon. Members will all agree that it is the best and prettiest constituency in the whole of Wales.

In so far as greater investment will help to tackle poverty levels, I have no doubt that both the Welsh and UK Governments desperately need to reconsider their approach to economic development, and to refocus attention on rural areas such as Ceredigion to ensure that Ceredigion and other rural areas form an integral part of any economic strategy. They must be far more than an afterthought, an also-ran or a non-essential addition to the real effort of developing our cities and urban areas, as is all too often the case. People should have a realistic hope of being able to pursue a career, afford to settle down and lead a prosperous life in any part of Wales. I, for one, am sure that the people of Ceredigion deserve no less.

Autumn Budget as it Relates to Wales (Morning sitting)

Ben Lake Excerpts

Wednesday 7th February 2018 General Committees

[Ben Lake (Ceredigion) (PC)]

Mae’r Ysgrifennydd Gwladol yn gwneud pwynt diddorol iawn. Wrth gwrs, mae yna ryw gynnydd wedi bod yng nghyllideb Llywodraeth Cymru, ond a yw e’n hapus, fodd bynnag, gyda sut mae’r cynnydd yna’n cymharu gyda’r cynnydd yng nghyllideb yr Alban, neu hwnnw yng nghyllideb Gogledd Iwerddon yn sgil y gytundeb rhwng Llywodraeth y Deyrnas Unedig a phlaid yr Unoliaethwyr Democrataidd?

(Translation) The Secretary of State makes an interesting point. Yes, there has been an increase in the Welsh Government budget, but is he happy about how that compares with the increase in Scotland or Northern Ireland, given the deal between the UK Government and the Democratic Unionist party?

[Alun Cairns]

Yr unig ffordd gallaf ymateb yw trwy gyfeirio at beth ddywedodd Llywodraeth Cymru a Gerry Holtham ar y pryd. Dywedodd Gerry Holtham ei fod yn “setliad teg iawn”, ac fe wnaeth Llywodraeth Cymru eu hunain gyhoeddi, yn y Cynulliad, y byddai’r fargen hon yn darparu cyllid tymor hir teg i Gymru. Dyna beth ddywedodd Gweinidogion y Cynulliad ym Mae Caerdydd.

(Translation) I can only go back to what the Welsh Government and Gerry Holtham said at the time. He said it was a very fair settlement, and the Welsh Government said in the Assembly that the deal would provide fair, long-term funding for Wales. That is what the Assembly’s Ministers said in Cardiff Bay.

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[Ben Lake]

Ar fargen twf canolbarth Cymru, un o’r pethau rwyf yn siwr y bydd y tri ohonom sydd yn cynrychioli etholaethau yng nghanolbarth Cymru yn dweud yw cysylltedd—connectivity. Mae dirfawr angen i wella ar hyn yng nghanolbarth Cymru ac rwyf yn fawr obeithio y bydd modd cynnwys hyn yn y fargen yma.

(Translation) On the mid-Wales growth deal, one of the issues for the three of us who represent constituencies in mid-Wales is connectivity. We truly need to make improvements to that in mid-Wales and I hope that it can be included in the growth deal.

[Alun Cairns]

Rwyf eisiau tynnu cymunedau at ei gilydd: yn amlwg cymunedau o Geredigion ac o Bowys, ond hefyd rwyf yn gobeithio bydd cyfleoedd i rai o’r siroedd yn Nghymru ac ar yr ochr arall i gydweithio er mwyn denu buddsoddiant newydd i’r ardaloedd ac er mwyn cefnogi’r economi. Mae hynny’n golygu y byddai pob rhan o Gymru yn cael budd o’r gefnogaeth leol a phenodol y mae bargeinion dinesig a thwf yn ei chynnig. Ac mae hyn, wrth gwrs, ar ben y fformiwla Barnett newydd sydd wedi ei chytuno.

(Translation) I am very much in favour of bringing communities together, whether they be the communities of Ceredigion or of Powys, but I am also eager to give opportunities to some of the counties of Wales—and those on the other side of the border too—to work together to attract new investment into those areas and to support the economy. Our policy means that every part of Wales will benefit from the local, targeted support offered by the city and growth deals. That is above the new Barnett formula that has been agreed.

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[Alun Cairns]

Rwyf yn falch iawn i ymateb yn bositif. Mae’r ymgynghoriad yn mynd yn ei flaen ar hyn o bryd ynglŷn â franchise Great Western Railways a pha fath o fodel y dylem gydweithio i’w sicrhau, ac rwyf yn argymell bod y Foneddiges anrhydeddus yn ymateb i’r ymgynghoriad. Rwyf eisiau gweld y cysylltiadau gorau posib rhwng Caerdydd, Casnewydd, Bryste a llefydd y tu hwnt yn gyflym ac yn effeithiol, er mwyn iddynt addasu at y cyfleoedd newydd a ddaw yn y rhanbarth sydd yn datblygu wrth i ni gael gwared o’r tollau ar bont Hafren. Hoffwn hefyd dalu teyrnged i’r Foneddiges anrhydeddus am ei hymgyrchu i gael gwared o’r tollau.

(Translation): I am very happy to respond positively. The consultation is under way on the Great Western railway franchise and the type of model that we should be collaborating to get. I recommend that the hon. Lady responds to that consultation. Obviously, I want to see the best possible connections between Cardiff, Newport and Bristol, and further afield. They should be quick and efficient for us to grasp the new opportunities that will arrive in a region that is developing, as we get rid of the tolls on the Severn bridge. I pay tribute to the hon. Lady for her campaigning to remove those tolls from the bridges.

[Ben Lake]

rose—

[Alun Cairns]

Hoffwn fwrw ati i orffen yr araith rhywfaint a byddaf yn ildio yn nes ymlaen. Mae fy Ffrind gwir anrhydeddus Canghellor y Trysorlys hefyd wedi amlinellu gwaith ar gyfer y dyfodol i lunio cynigion ar gyfer cynlluniau rheilffyrdd posib eraill ar hyd a lled rhwydwaith Cymru. Roedd ein strategaeth ddiwydiannol yn sail i gyhoeddiadau’r Gyllideb ac rydym yn awyddus i adeiladu ar y bargeinion a gyhoeddwyd ar gyfer y sectorau deallusrwydd artiffisial, lle mae Casnewydd yn rhagori; gwyddorau bywyd, lle mae Cymru eto ar flaen y gad, gyda nifer o ddatblygiadau cyffrous ac arloesol; a’r diwydiant cerbydau yng Nghymru, sy’n gartref i Toyota, Ford ac Aston Martin.

(Translation): Let me make some progress and I will give way later. The Chancellor of the Exchequer has outlined further work to develop proposals for other potential rail schemes across the Wales network. Our industrial strategy was a basis of the Budget announcements. We are keen to build on the sector deals on artificial intelligence that were announced, where Newport excels. In life sciences, Wales is at the forefront of several exciting and pioneering developments. In the automotive industry, Wales is home to Toyota, Ford and Aston Martin.

[Ben Lake]

Ar y nodyn hwnnw, crëwyd cryn dipyn o gynnwrf cwpl o wythnosau yn ôl pan ddatgelwyd y pwerdy gorllewinol. Wrth gwrs, roedd yn siomedig i ni yng Ngheredigion mai gorllewin Lloegr yr oedd yr Ysgrifennydd Gwladol dros Gymru yn cyfeirio ati. O ran deallusrwydd artiffisial, eto dyma gyfle ar gyfer cynllun twf canolbarth Cymru. Mae Prifysgol Aberystwyth yn ganolfan arbenigol, felly byddai’n dda gweld unrhyw fesurau sydd gan y Llywodraeth i geisio ysgogi hyn.

(Translation): On that point, a few weeks ago there was quite some excitement when the western powerhouse was announced. It was unfortunate for Ceredigion that the Secretary of State referred only to south-east Wales and the south-west of England. On AI, there is an opportunity for the mid-Wales growth deal. Aberystwyth has great expertise in that area, so it would be good to see any proposals from the Government to encourage that development.

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[Christina Rees]

That group deserves some credit and I fully respect that the group has been moving things forward.

[Ben Lake]

Rwy’n ofni na wnaf i wneud llawer iawn o ffrindiau gyda’r hyn sydd gennyf i’w ddweud. Mae’r Foneddiges anrhydeddus yn gwneud pwyntiau cywir iawn. Un o’r pethau mae’n cyfleu yw pa mor anwastad yw gwariant Llywodraeth Prydain ar draws Cymru yn ddaearyddol. Mae rhaid, er tegwch, pwyntio at ffigyrau Llywodraeth Cymru yn ddiweddar, sydd yn dangos bod eu cynlluniau nhw ar gyfer gwariant 2017-18 yn cyfrifo at £102 y pen i’r boblogaeth yn y canolbarth a gorllewin Cymru o’i gymharu â £380 y pen i’r rheiny sydd yn byw yn ne-ddwyrain Cymru. Mae yna fai ar y ddwy ochr.

(Translation) I doubt that I will make many friends with what I am saying, but the hon. Lady is making some interesting points. One thing that comes across is how uneven UK Government expenditure is across Wales geographically. In fairness, we must also point to the recent Welsh Government figures, which show that their plans for expenditure in 2017-18 account for £102 per capita of the population in mid and west Wales, compared with £380 for those living in the south-east. There is blame on both sides.

[Christina Rees]

I am sure the Welsh Government are looking at every area of Wales to increase prosperity, and making every effort to do so.

Rural Economy of Wales

Ben Lake Excerpts

Tuesday 28th November 2017 Westminster Hall

[Ben Lake (Ceredigion) (PC)]

I beg to move,

That this House has considered the future of the rural economy in Wales.

It is a pleasure to serve under your chairmanship, Mr Hollobone. I am grateful for the opportunity to have a debate on a topic that is of great importance to the people of Ceredigion, whom I serve, and a subject that is close to my heart.

An economic strategy that facilitates growth in rural and urban Wales and forges stronger links between them is sorely needed if we are to avoid building a geographically unbalanced Welsh economy. I hope that we can debate the ways in which the current approach fails rural Wales and how those failings can be addressed. The rural economy is resilient and there is potential for greater development that should not be left unrealised. At the very least, I hope to persuade hon. Members that securing a prosperous future for the Welsh rural economy is not a cause that should be championed only by those fortunate enough to represent rural constituencies; it should be a priority for us all. As such, it is good to see right hon. and hon. Members from urban as well as rural constituencies here, and I look forward to their contributions.

The development of the rural economy should form a key part of an economic strategy for Wales if we are to avoid a national economy unhelpfully concentrated in a few areas or in one corner of the country. We need look no further than the UK economy to understand the consequences of an unbalanced approach to economic development. Page 218 of the “Industrial Strategy” White Paper illustrates all too clearly how focusing attention and investment on urban centres has meant that the productivity of rural areas is consistently below the UK average, in stark and rather depressing contrast to that of larger towns and cities. I am sure that we will hear a great deal in this debate about the supposed successes of the UK’s current economic approach, but who benefits from the status quo? If that approach gives rise to such grotesque regional inequality, can it truly be considered a success? It is not over-ambitious, let alone idealistic, to believe that the prospects for individuals living in the countryside should be just as promising as those for individuals living in cities.

Although I am not surprised, I am concerned that the development of the rural economy is not high on the UK Chancellor’s list of priorities. Last week’s Budget offered no sign of imminent change in the UK’s approach to rural development, and even less promise for the rural economy in Wales. Indeed, one is left to infer from the few policies on offer that the Government’s intentions for the rural economy, at least in England, amount to little more than improving existing connections between the countryside and the cities to ensure that the prosperity of the economic engines and powerhouses trickles to the rural periphery that little bit faster. Yet again, I fear we have a Budget that serves the south-east of England rather well, at the expense of the rest of the UK.

Buried deep in the Budget, however, there was a cautious and no doubt carefully worded announcement about a growth deal for mid-Wales. It does not overwhelm me with confidence, nor am I over-enamoured of the thought of delineating new economic areas without considering whether there are sufficient cultural, economic and social links to justify those new lines on the map. Nevertheless, I appreciate that the growth deal for mid-Wales—or perhaps the Welsh midlands—could be a real opportunity to deliver for some of those rural communities that have suffered chronic under-investment and neglect by successive Governments. It is also a chance to diversify the base of the rural economy to ensure that, just like the economic success stories of the cities, the economy of rural Wales is rooted in a rich mixture of sectors and industries.

Agriculture, the food and drink industry and tourism are at the heart of the present rural economy, as I am sure other right hon. and hon. Members will explain in more detail. A growth deal for rural Wales would need to safeguard those foundations, but it could also enable us to build a more mixed economy on them, and in so doing secure a more prosperous future for rural areas. It is therefore important to stress that if a growth deal is produced for mid Wales, it cannot mindlessly replicate the model used for city deals. The Government must do more than merely pay lip-service to the idea; they should work with the Welsh Government to engage with stakeholders and forge a bespoke package that focuses on addressing the unique challenges and opportunities facing the rural economy.

One fundamental problem that could be addressed by a worthwhile growth deal is the poor connectivity in many rural areas of Wales. Broadband, or rather the lack of it, is by far the most prevalent issue raised by my constituents in Ceredigion, which is among the 10 worst constituencies for broadband speeds—an affliction that also plagues the Minister’s constituency. Wales has the perceived benefit of being able to receive investment from the Welsh Government and the UK Government, but thus far both have failed to outline how broadband will be delivered to some of the most rural parts of the country.

Recently, the UK Government invested significant sums to improve broadband infrastructure in three of the four UK nations, but unfortunately not Wales. They managed to find £20 million extra for ultrafast broadband in Northern Ireland. For the time being, I am confident that residents in Ceredigion would happily settle for superfast broadband. The UK Government also managed to find £10 million for full-fibre broadband in six trial areas across England and Scotland, but what about rural Wales?

According to Ministers, the decision on where to invest that money was based on how likely they believed the investment was to stimulate economic growth. Rural Wales should not be written off as an area that has no potential, that would not be successful even if it had effective digital infrastructure, or that is simply not worth it. Why should shared office spaces and other opportunities afforded to start-ups and small businesses be poorer in rural areas? Why should essential utilities such as adequate broadband and mobile infrastructure be dismissed as luxuries for those who live in the countryside? If we are to make Ceredigion and other rural areas of Wales more practical places for businesses to locate and expand, and if we are to ensure that communities can fully benefit from the opportunities afforded by better digital connectivity, investing in broadband and mobile infrastructure is crucial.

Why stop there? A potential growth deal for the Welsh midlands—sorry, for mid-Wales—could also include an ambitious package of investment in transport infrastructure. Reopening the railway line between Aberystwyth and Carmarthen would help to reconnect north and south Wales. Installing a network of electric vehicle charging points would allow rural Wales to make the most of advances in electric cars. As well as improving connectivity, such investment by the UK and Welsh Governments would send a clear signal to budding entrepreneurs and start-ups that the countryside is open for business. It would be a strong statement of intent and confidence.

I am not alone in thinking that rural Wales is worth such an investment. Ceredigion has almost 9,000 microbusinesses, which account for up to 94% of all businesses in the constituency. They sustain the local economy and make up our communities, yet they are penalised by poor all-round connectivity. Improving that connectivity is key to supporting and sustaining those entrepreneurial, innovative and hugely important businesses while opening the door to new enterprises.

I am conscious that other hon. Members wish to speak, but it would be remiss of me not to speak briefly about the need to secure the current foundations of the rural economy, or about how a potential growth deal could help to steady nerves in what is proving to be a most uncertain time. Food and drink manufacturing contributes £1.5 billion to the Welsh economy, supports more than 22,000 jobs and generates more than £330 million in exports. It sits at the heart of the food and drink supply chain that generates a total of £4.5 billion for the economy and supports more than 240,000 jobs across Wales. Agriculture in Ceredigion directly employs more than 6,000 people. Some £40.8 million is spent on goods and services purchased by farmers, which in turn sustains additional spending of £96.9 million.

Although they are seldom associated with the rural economy, the teaching and research conducted in our universities also make a vital contribution: on Ceredigion’s economy alone, they have an annual economic impact worth approximately £250 million. The uncertainty surrounding Brexit is throwing our higher education sector into uncertainty. Clarifying future funding and visa arrangements would go a long way towards addressing that.

[David Hanson (Delyn) (Lab)]

The hon. Gentleman will know that sheep and beef farming are critical parts of the economy, not just in his constituency but in north Wales. Does he agree that the Minister should give an assurance that those products will eventually be tariff-free post-Brexit? If they are not, we will face potential loss of business and therefore loss of income to the rural economy.

[Ben Lake]

I agree that an assurance that beef and lamb exports will not be subject to tariffs or non-tariff barriers post-Brexit would go a long way towards securing the future of agricultural industry and would settle a lot of nerves across the country.

It is imperative that any growth deal for mid-Wales takes account of the significant burden that leaving the EU places on such sectors. The UK Government’s steadfast pursuit of severing all ties with the single market risks undermining the rural economy. We should strive to build a more mixed rural economy, but we must also secure its foundations. I was therefore glad to learn that my Plaid Cymru colleagues in the Welsh Assembly have helped to safeguard the future of Welsh agriculture by securing £6 million of funding for a grant scheme to help young entrants to establish themselves in agriculture. With Brexit negotiations stumbling at every possible hurdle, such funding cannot come quickly enough. The right hon. Member for Delyn (David Hanson) alludes to the effect of Brexit on tariffs; it looks increasingly likely that any meaningful beneficial relationship with the single market and customs union will be abandoned.

I am deeply concerned that Welsh agriculture will be sacrificed in EU negotiations. We will have to compete with markets with far lower food hygiene and animal welfare standards, while losing unrestricted access to our main export market. Welsh farmers will be hardest hit by the double whammy of cheap imports and new regulatory barriers. A staggering 90% of Welsh food and drink produce, produced mainly in rural areas such as mine, is exported easily, directly and freely to the European Union. Do the Government expect farmers simply to replace 90% of their customers overnight? We desperately need certainty and clarity.

The damaging impact of Brexit uncertainty on the whole rural economy should not be underestimated. The National Farmers Union’s farm confidence survey in April showed that 20% of farmers are likely to reduce investment as a result. Without clarity on trading relationships or the support payments that make up to 80% of farm incomes in Wales, it is hardly surprising that many are postponing further investment in their businesses. That should alarm us all, because for every £1 invested in the farming industry, more than £7.40 is put back into the local economy. Our communities simply cannot afford to lose such investment. Without it, the future of the rural economy looks very bleak indeed.

Tourism is a £2.8 billion Welsh industry that employs 4,000 people in Ceredigion and contributes £70 million to gross value added. It often goes hand in hand with agriculture and is an important contributor to the rural economy. Plaid Cymru has proposed a 15% reduction in VAT for the tourism and hospitality sector, which would generate an estimated 5,500 additional jobs and an economic boost of £166 million. Our proposal is not innovative or pioneering thinking, but simply common sense. It would stimulate investment, create jobs, increase consumer spending and help to ensure that Wales’s visitor economy continues to thrive. Even the UK Government think it is a good idea: the Chancellor announced a review of tourism VAT in his Budget, although of course it applied only to Northern Ireland. If it is good enough for Northern Ireland, why is it not good enough for us? Could it not be included as part of a growth deal package for the Welsh midlands—sorry, mid-Wales? At the very least, it should offer resources to support organisations such as Mynyddoedd Cambria that work to forge closer links between the old market towns of the Elenydd—the Cambrian mountains—and ensure that coastal and inland areas benefit from tourism.

It is deeply frustrating that the potential of the Welsh rural economy was not adequately pursued in last week’s Budget, but a growth deal could be the first step towards correcting that mistake. Offering the support and investment required to sustain today’s rural economy will be crucial, but just as important is the opportunity to change how the rural economy is understood, recast how rural development is pursued, and rejuvenate our aspirations for such development. Such new thinking is already being explored by colleagues of mine, including a former Member of this House. The economic region of Arfor aims to develop west Wales into a more cohesive and connected entity. There is no reason why a growth deal for the Welsh midlands—or mid-Wales—could not support and work in conjunction with such an economic area.

I have already mentioned the importance of the agriculture, food and tourism sectors to today’s rural economy. Let us make the most of the opportunity presented by the growth deal to redefine the rural economy of tomorrow. If done properly, such a deal could begin to address the issues plaguing today’s industries and could implement the conditions necessary to facilitate a more versatile future for the rural economy. It could concentrate on improving connectivity and offering greater support to higher education institutions so that they can build on their expertise and cement themselves as centres for the technologies of the future.

After all, why should rural Wales not be at the forefront of biotechnology and research? It could be the centre of cutting-edge knowledge, tackling global issues such as food security. Aberystwyth University’s institute of biological, environmental and rural sciences is already an internationally renowned research and teaching centre for biotechnology and environment studies. It is leading the work to address some of the most pressing issues facing the agricultural sector, and it has already received support from the Biotechnology and Biological Sciences Research Council for its Aberystwyth innovation and enterprise campus. Just imagine the potential benefits of further investment in our other universities in rural Wales! Such investment could serve as the foundation of a bigger Welsh biotechnology industry, shaping the future of food and farming for generations and increasing the breadth of highly skilled and highly paid careers available in rural Wales. That is just one example that is open to the rural economy if we wish to explore it.

I am in no doubt that the Welsh and UK Governments desperately need to reconsider their approach to economic development and to refocus attention on the rural economy, to ensure that it forms an integral part of any economic strategy for Wales and that it is more than a simple afterthought, an also-ran, a non-essential addition to the real work of developing our cities and urban areas.

People should have a realistic hope of being able to pursue a career, and of being able to afford to settle down and lead a prosperous life in any part of Wales. I hope the Minister accepts the points I have raised in the spirit in which they are offered. The possibilities for a mixed and advanced rural economy in Wales are endless, provided that the potential is unlocked with the right investment and the right growth deal for the Welsh midlands—or mid-Wales.

[Several hon. Members rose—]

--- Later in debate ---

[Ben Lake]

Thank you for chairing this debate, Mr Hollobone. It has been a pleasure to serve under your chairmanship. I thank all Members of Parliament—particularly the 10 Welsh Members of Parliament—who attended. That reflects the importance of the rural economy for Members of Parliament from Wales.

I outlined some of the problems facing the future of the rural economy, and we have had a broad discussion about them. We have covered issues relating to what our relationship with the European Union means for our trading arrangements and the future of rural development payments. We also outlined some of the possibilities and opportunities for the rural economy in Wales.

The hon. Member for Ynys Môn (Albert Owen) set out the problem of centralisation and the need for decentralisation. It would send a very strong signal if the UK and Welsh Governments were able to decentralise a lot more of their institutions to rural areas. I am fortunate in Ceredigion to have a Welsh Government building in Aberystwyth, but perhaps there is more we could do to implement that.

[Albert Owen]

I am glad the hon. Gentleman has highlighted that point. Is he as disappointed as me that the Minister did not refer to that? The Government have responsibility for it, and by keeping agencies open they would help local economies.

[Ben Lake]

I agree. The Government, and the public sector more broadly, can play a very important role in investing and locating agencies in more rural areas. That would send a signal—a vote of confidence in rural areas—to the private sector that the countryside is open for business, as I said earlier.

I am conscious that time is getting the better of me. We have an opportunity with the growth deal in particular to work on a cross-party basis. This debate has been constructive, which can only be a good thing. We have an opportunity not only to safeguard the current rural economy, but to lay the foundations of the rural economy of tomorrow. Making better use of our higher education institutions and improving connectivity would be a great way to start. Just like decentralising some of the Government agencies, getting the growth deal right would send a clear signal to the outside world—to businesses and entrepreneurs—that the countryside is open for business, and that they should locate our businesses with us. Diolch.

Question put and agreed to.

Resolved,

That this House has considered the future of the rural economy in Wales.

Oral Answers to Questions

Ben Lake Excerpts

Wednesday 1st November 2017 Commons Chamber

[Guto Bebb]

The hon. Gentleman raises an important point about the port of Holyhead and the concern is shared by my right hon. Friend the Secretary of State for Wales, who visited the port with him. These concerns have been heard in the Wales Office; we have met stakeholders and Irish businesses. I can assure him that our intention is to ensure a frictionless border in Holyhead, in the same way as in Ireland.

[Ben Lake (Ceredigion) (PC)]

EU students contribute upwards of £130 million to the Welsh economy, and thousands of academic staff from across Europe have been vital to the success of Welsh institutions. Given that we already know of an 8% decline in applications from EU students to Welsh universities, what discussions has the Minister had with Cabinet colleagues to ensure that visa arrangements do not further harm our higher education sector?

[Guto Bebb]

The hon. Gentleman makes an important point about the universities sector in Wales. I recently visited Bangor University and Aberystwyth University and discussed these matters. I can assure him that the Wales Office is in constant discussions with other Departments on the issues raised by the sector, including EU visas.

Energy in Wales

Ben Lake Excerpts

Thursday 14th September 2017 Westminster Hall

[Albert Owen]

I will come to price mechanisms in a moment, but my hon. Friend is absolutely right that we need certainty. Investors need to know what the price will be and what return they will get in the long term. I think that everyone accepts that economies of scale enable lower-cost energy production, and that should be reflected in subsidies. The governance framework needs to be a little tighter. The contract for difference, which I will come to, is a good principle. Many people do not appreciate that with a strike price, if prices fluctuate, big developers do not get the money; it comes back and stays with the Government, so we get certainty about how much the Government spend. That is good.

Major energy policies are reserved. I appreciate that the Wales Act 2017 devolved control over projects up to 350 MW, which reflects the larger scale of projects, but we require a partnership between local communities, local businesses, devolved Administrations and the UK Government, within—remember that we are still in the European Union—the European framework.

I acknowledge that whoever won the 2010 general election would have had to reform the electricity market. I sat on the Committee that discussed the relevant legislation before it went through. I did not agree with everything in it, but I did agree with the principle of reforming the electricity market to ensure certainty for investors and value for money for the consumer. Energy Ministers have changed frequently—that has been a problem with both Labour and Conservative Governments —so we have perhaps not given energy the attention it deserves. I support the contract for difference principle and the need for a capacity market mechanism, but during the period of populism I referred to, the oil price and energy prices went up, and that became a big political issue. We were significantly reliant on oil and gas prices, because we were not developing the renewable, new nuclear and low-carbon technologies we should have been.

Wales is still heavily reliant on oil and gas as part of our mix, so we need to move forward. It is ironic that Wales and Scotland are huge producers of energy, yet household and business bills are higher in those areas than in the rest of the United Kingdom. It is totally unfair that a consumer in Wales pays extra for their energy. They might be close to a power station that generates energy for the grid but, because of the transmission and distribution mechanisms, they end up paying more for it. I would not say that the energy market is completely broken, but it is fractured and those issues need to be addressed. Wales is still reliant on gas and coal, and it needs to wean itself off them. I am disappointed that combined storage schemes for coal and for oil have not progressed in the past five to six years. We could have retrofitted many of our power stations so that we had clean coal and oil production as we transitioned to renewables, but we did not do so.

Let me turn to some of the technologies. I will start with marine technology, which is important. We have a history in Wales of small hydro schemes. The Dinorwig pumping station in many ways revolutionised storage. We need to consider storage, and here is a scheme that was developed in Wales many years ago that pumps electricity up at night, when energy prices are low, and stores it.

[Ben Lake (Ceredigion) (PC)]

I echo the hon. Gentleman’s comments about the potential in Wales for hydro schemes. Dinorwig is a fantastic example of a larger hydro scheme. Does he agree that smaller hydro schemes—the potential of which we perhaps have not fully realised—are just as important for our energy mix in Wales? He also talks about the UK and Welsh Governments working in partnership. We desperately need to look at the revaluation of business rates, which is affecting many hydro energy schemes, particularly community energy schemes. Does he agree that we have an opportunity to fully realise the potential of hydro in Wales by addressing that revaluation?

[Ian Paisley (in the Chair)]

Order. I remind Members to keep their interventions as short as possible.

--- Later in debate ---

[Chris Ruane]

He says I cannot, but I am going to ask it anyway. Will he declare his love for the lagoon? There is a local campaign called “Love the Lagoon”—it involves Conservative councillors, Conservative politicians and Conservative Members who are keen to expand that because they can see the benefit for their community. Does he love the lagoon—if that is not a personal question?

Let us look at some of the arguments that the Government have put or may put forward for weakening their support for tidal lagoons. Will they be saying that prices for wind power have dropped so much that it will make lagoons unviable? The success of wind energy is down to early political and financial support, and we want the financial support that we offered then to be replicated now by the Conservative Government to make sure that these proposals go ahead.

The Swansea lagoon, like North Hoyle, was a test bed—a pilot project to test the effectiveness of lagoons and to learn from that experience. The cost of funding the Swansea lagoon—the pathfinder—is equivalent to the cost of a pint of milk a day for every household in the UK. That is a sound investment, as far as I am concerned. If it works, we can expand it to Cardiff bay, Liverpool bay, Colwyn Bay and England, to make sure that we stay at the forefront of this great, new, green technology.

The Welsh Government have given their full support to tidal lagoons. Senior Cabinet Ministers from many Departments have met Charles Hendry and fully engaged with him. The Welsh Government have invested in the skills demand and supply report for the proposed Swansea bay lagoon development, and have provided a £1.25 million commercial loan to the tidal lagoon company.

[Ben Lake]

I acknowledge the support that the Welsh Government have provided for the tidal lagoon. The National Assembly also declared by resolution its support for it, cross-party.

[Chris Ruane]

Absolutely, there was cross-party support. I think that there are even Conservatives who support it down there. In the meantime, we have prevarication and procrastination by the UK Government on the matter of lagoons. Welsh Government Ministers wrote to their UK counterparts in April and June of this year, and I believe that the June letters have still not been responded to. Will the Minister look into that?

Tidal lagoons also have an added benefit in that they will protect the coastlines where they are located from flooding. Both Denbighshire and Conwy have suffered terrible floods. The Minister will remember the floods in the early ’90s in Sir Anthony Meyer’s old seat, Clwyd North West, in Conwy county. Five thousand homes flooded. We had floods as recently as two years ago in my constituency. There has been coastal flooding from waves and the sea. That would be prevented if we were able to establish these tidal lagoons off the coast of Wales.

Oral Answers to Questions

Ben Lake Excerpts

Wednesday 6th September 2017 Commons Chamber

[Guto Bebb]

The leader of the Assembly group in Wales has the right of his own position, but the situation is very clear: this Government’s commitment to Wales is unprecedented. We delivered a fiscal framework when the Labour party did nothing. We have delivered city deals for Cardiff and Swansea, and we will deliver a growth deal for north Wales. This Government’s track record is one of additional investment to Wales, which needs to be matched by the Welsh Government.

[Ben Lake (Ceredigion) (PC)]

As part of their arrangement with the DUP, the UK Government will contribute £150 million over two years to the improvement of broadband in Northern Ireland. As I am sure the Minister will be aware, of the bottom 10 UK constituencies for average download speeds, more than half are in Wales. What discussions has he had with Cabinet colleagues to ensure similar funding to improve broadband infrastructure in Wales?

[Guto Bebb]

I welcome the hon. Gentleman’s question and I welcome him to his place. The situation is very clear: constituencies such as Ceredigion and my own of Aberconwy have lagged behind in broadband connectivity in a Welsh context. He will be aware that broadband roll-out in Wales is the responsibility of the Welsh Government. It is interesting to note that Labour constituencies in Wales were prioritised over constituencies such as Ceredigion and my own of Aberconwy.