Shared Prosperity Fund: Wales

Debate between Ben Lake and Albert Owen

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?

Rural Economy of Wales

Debate between Ben Lake and Albert Owen

Tuesday 28th November 2017 Westminster Hall

[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.

Energy in Wales

Debate between Ben Lake and Albert Owen

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?