Leaving the EU: Infrastructure in Wales

Christina Rees Excerpts

Tuesday 17th January 2017 Westminster Hall

[Christina Rees (Neath) (Lab/Co-op)]

It is a pleasure to serve under your chairmanship for the first time, Mr Flello. I commend my hon. Friend the Member for Cardiff South and Penarth (Stephen Doughty) for securing this important debate and setting out the issues in his usual elegant style. I associate myself with many of the comments made by my hon. Friend the Member for Bridgend (Mrs Moon). I was a Bridgend councillor before I became an MP, and she was my MP. It is always a pleasure to follow my hon. Friend the Member for Torfaen (Nick Thomas-Symonds).

Infrastructure is important in all parts of the UK, but in Wales, the region most affected by deindustrialisation, which is still reeling from neglect of public spending in the 1980s—a place which has mountains and valleys in abundance—the need for investment in all forms of infrastructure has never been greater. The uncertainties of leaving the European Union remain fraught with danger. Beyond the loss of environmental protections, trade agreements and workers’ rights, the impact on the economy is still unknown. However, in Wales the threat to structural funds remains a primary concern, and one that will define the Brexit negotiations and the Government’s ability to respond.

A reduction in the amount of funding available for infrastructure projects in Wales, should the UK Government not commit to fully replacing it, will be catastrophic. It is widely accepted that Wales has been a net beneficiary of the European Union, benefiting from billions of pounds of investment. The referendum results across Wales suggest that that message did not permeate communities, but that is astonishing, given the facts that surround the argument. The annual average allocation of EU funding in Wales is €65 per person, compared with €13 across the UK. Wales receives over six times more European structural and investment funding than England. That is not only astounding and depressing, given the qualifying criteria, but concerning given our potential reliance on the funding, and on the UK Government’s commitment to underwriting it after we leave the EU. To put things into context, the European regional development fund, the only European structural and investment funding directly concerned with infrastructure, committed €106 million to Wales during the 2014 to 2020 programme, under the theme of network infrastructures in transport and energy.

Allow me to highlight some real-life examples of the difference that those vast figures make to infrastructure projects in Wales. The superfast broadband business exploitation project, which seeks to increase the take-up of fibre and ICT infrastructure by small and medium-sized enterprises, has secured €6.3 million in the regional development fund. The tourism attractor destinations project, which aims to increase employment through investments in prioritised local or regional infrastructure, has received £27.7 million in ERDF investment.

Closer to home, I can speak of three projects that would not have happened without ERDF funding. The Neath Port Talbot integrated transport hub will use upwards of £5 million in European investment to create a transport modal interchange facility to promote public transport across the area. SPECIFIC, an academic and industrial consortium led by Swansea University to address the challenge of low-carbon electricity and heat by enabling buildings to generate, store and release their own energy, has secured nearly £15 million in ERDF funding and almost certainly would not exist without it. Lastly, the world-class Swansea University bay campus, which I have mentioned, is a multi-partner investment of £450 million, including almost £40 million in European regional development fund money. Those examples do not highlight the value and impact of directly funded European Commission programmes such as the Connecting Europe Facility and Horizon 2020, which are far more difficult to quantify but just as important as those funded via the UK or Welsh Governments; Horizon 2020 alone has awarded grants worth €40 million to organisations in Wales.

Post-Brexit guarantees are worryingly sparse on detail. Although the Chancellor has given a number of promises relating to any lost EU funding, those promises extend only to structural and investment fund projects signed before last year’s autumn statement. For projects signed after that, the commitment is far vaguer. In his conference speech last year, the Chancellor suggested that he would offer guarantees to projects that

“meet UK priorities and value for money criteria”,

but he has repeatedly failed to set out what those priorities and criteria will be. Surely the Chancellor of the Exchequer of Her Majesty’s Government has a responsibility to instil confidence in Welsh businesses and investments, not undermine it.

Another effect on infrastructure in Wales of the UK leaving the EU will be that the Welsh Government and local authorities have fewer sources from which to seek funding or sustainable loans. The European Investment Bank’s lending to the UK in 2015 amounted to €7.7 billion, of which two thirds, or €5.5 billion, went to infrastructure. Those figures are staggering. The thought of losing that funding leaves me cold. The Swansea University bay campus secured not only substantial ERDF funding but an EIB loan to the value of £60 million. That funding is sustainable, vital and irreplaceable.

Finally, I am concerned about a post-Brexit Wales where UK goals and priorities may be different from the EU priorities on which Wales and its Government have established plans and strategies. What will happen to the electrification of the Great Western line, the South Wales metro and the city deals?

[Nick Smith (Blaenau Gwent) (Lab)]

Does my hon. Friend agree that the Government need to confirm that our transport infrastructure investment needs will be secured for the future? Our valley lines have been a great success, but much improvement is still needed, and electrification in particular must be delivered. For that to happen, funding must be guaranteed for phase 2 of the metro system. The project will help jobs in our south-eastern valleys. The Minister must confirm that that will happen.

[Christina Rees]

I agree completely with my hon. Friend’s valuable point. I hope that is confirmed in the near future.

What will happen to the electrification of the great western line, the South Wales metro, the city deals and Swansea Bay tidal lagoon should they not be priorities for the UK Government once we have exited the European Union? The Government’s support to date for some of those projects has been questionable, as my hon. Friend the Member for Swansea East (Carolyn Harris) said, without the pressure of committing to replace any funding lost post-Brexit. They must rise to the challenge and put in place the necessary guarantees to instil confidence in our businesses, universities and investors. They must commit to replacing any funding lost by projects currently in development but not yet signed, and demonstrate to the people of Wales that we have a Government who work for everyone.

Exiting the EU: Businesses in Wales

Christina Rees Excerpts

Wednesday 14th December 2016 Westminster Hall

[Christina Rees (Neath) (Lab/Co-op)]

It is a pleasure to serve under your chairmanship, Mr McCabe. I congratulate my hon. Friend the Member for Ogmore (Chris Elmore) on securing this important debate.

The uncertainties of leaving the European Union are hazardous and wide ranging. Structural funding, environmental protections and workers’ rights, trade with the EU and the impact on the economy and growth are all areas of concern for the businesses and people of Wales. The lack of clarity is both frustrating and worrying, as the absence of a plan creates an inertia that stalls economic growth and investment. Businesses in Wales have already suffered from the impact of austerity and poor economic UK growth since 2010.

The Office for Budget Responsibility has estimated that cumulative potential output growth will be 2.4 per- centage points lower than it would otherwise have been in 2021 had the referendum not happened. Growth forecasts from the consultancy company Oxford Economics have been downgraded in all regions, with growth in Wales expected to be about 0.25 percentage points lower than the pre-referendum forecast.

Structural funding has played an important role in the regeneration of a post-industrial Wales. The statistics may suggest that it has struggled to achieve its aim of increasing GDP and wealth, but that is not the whole story. When I visit communities across my constituency and the wider region, I find vibrancy, tenacity and life, despite hardship and economic decline. In the last round of funding, projects financed through our membership of the European Union across Neath Port Talbot have helped to launch 485 businesses, support 7,300 people into work, create 1,355 jobs, provide 14,870 qualifications and enable close to 5,000 people to complete an EU-funded apprenticeship—all in that county borough alone.

Projects such as the £22 million valleys regional park have built the tourism infrastructure of my constituency, and more and more visitors are coming to enjoy the beautiful scenery of Gnoll country park and the industrial heritage of Aberdulais Falls. The regional essential skills scheme has helped thousands of people to acquire the competencies necessary to return to work. Neath Port Talbot has also been a lead partner on the pioneering transitional employment initiative, Workways.

I must pay tribute at this point to the leader of Neath Port Talbot Council, Ali Thomas, who last night announced that he will be standing down after many years of service. In fact, he took over from the previous leader, Derek Vaughan, who went on to become our Labour MEP. They are two great men of Neath.

[Stephen Doughty]

Does my hon. Friend agree that, even with the prospect of the European Parliament seats for Wales being abolished, Derek Vaughan continues to fight for Wales and for all of us to secure the best deals on European funding for our constituencies?

[Christina Rees]

I absolutely agree that Degsy, as he is known in Neath, is continuing to fight Wales’s corner. He is vice-chair of the European Parliament’s budgetary control committee, so he has great influence in Europe.

Neath Port Talbot has been the lead partner on the pioneering transitional employment initiative, Workways, which has helped to tackle barriers that prevent individuals from finding or returning to employment by supporting the job search, CV writing and interview skills, and access to training. The Workways project would never have happened without EU structural funds. It received a contribution of £16.7 million towards its overall costs. The scheme is held in such high regard that a second phase has been funded—Workways Plus—which began in April this year and will support at least a further 1,000 people into employment.

Swansea University’s science and innovation campus, the Bay campus, which has had a substantial impact on Neath and the region, simply would not have happened without the £95 million of funding received from the European Union. Derek Vaughan’s legacy before he left as leader of Neath Port Talbot County Borough Council was to make sure that the campus was just inside the council area.

[Stephen Kinnock]

And the Aberavon constituency.

[Christina Rees]

And inside the Aberavon constituency, as my hon. Friend points out. Neath Port Talbot is also home to a company called SPECIFIC, which uses coated steel to make world-leading, innovative technologies that produce, store and release energy. SPECIFIC is hugely concerned about leaving Europe, not least because of the essential funding it has received, without which it probably would not exist.

[Stephen Kinnock]

My hon. Friend is making a powerful speech. On the issue of steel, which is at the heart of the SPECIFIC project, the Welsh Government have taken action to deliver £8 million that will be spent on reducing energy costs at the Port Talbot plant, and £4 million for skills and training. That is precisely the sort of industrial strategy that we need. By contrast, the UK Government continue to be completely asleep at the wheel.

[Christina Rees]

My hon. Friend makes a very powerful point, with which I agree wholeheartedly. Not only will SPECIFIC lose its funding, but it will lose its potential market: it could sell its innovative products to Europe. Also, 16,000 farmers gain direct subsidies from the common agricultural policy. More than 90% would go bust without continuing subsidies from the UK Government via Europe.

Those examples illustrate direct investment across the public and voluntary sectors, but we must note the derived benefits to the private sector and all forms of business. Projects such as Swansea University’s Bay campus have supported hundreds of local businesses—contractors, subcontractors, cafés, shops, fuel stations and bus companies; the list goes on. Those who have been on an EU-funded training scheme have taken up employment with local businesses, which in turn have benefited from a revitalised, skilled workforce. The businesses that make up our tourism industry have been safeguarded and developed through additional investment in projects that have encouraged visitors to the area, who have been renting accommodation, eating out in restaurants and pubs, and enjoying the activities and facilities run by local businesses.

The triggering of article 50 is a leap into the unknown. Any process or deal on exiting the EU needs full scrutiny. The Government need to be held to account for their decision, whether it is for a hard Brexit or a red, white and blue Brexit. Whichever Brexit we end up with, we need fully to consider the implications of a Britain outside the single market or the customs union. The British Retail Consortium has already suggested that if we rely on World Trade Organisation rules and tariffs, the price of meat will rise by 27%, and of clothing and footwear by 16%. Those are costs that my constituents can ill afford during the good times, without the loss of funding and the threat of unemployment on top of that. What will the Government do to protect the 100,000 jobs in Wales that depend on our trade with Europe?

Beyond the fear of losing structural funding and trade with the EU, my constituents have concerns about the protection of workers’ rights. We have already seen this Tory Government going at it hammer and tongs over assent to the nasty and pernicious Trade Union Bill. How can we trust them on workers’ rights? I am simply not convinced that the Prime Minister and her Government will be committed to protecting workers’ rights after Brexit and the repeal of EU employment laws. As to whether EU regulations on businesses bring costs or benefits, I appreciate that there are arguments on both sides, and only time will reveal which of those opinions is true.

All in all, this is a troubling time for the people of Wales, and our businesses are no different. Some 95% of businesses in Wales employ fewer than 10 people, and it is those micro and part-time businesses that will suffer the most from poor UK growth, the absence of structural funds, the lack of a single market and the disappearance of EU regulations.

My hon. and learned Friend the Member for Holborn and St Pancras (Keir Starmer), our shadow Secretary of State for Exiting the EU, has said that we need to see the Government’s plan before article 50 is triggered. We need sufficient detail of the plan, so that the Exiting the European Union Committee and other parliamentary Committees can scrutinise it. We need enough detail so that the Office for Budget Responsibility can cost the plan. We need the devolved nations, such as Wales, to have input, and we need consensus, so that the plan will work for 100% of people, not just 52% or 48%. I look forward to the Minister’s comments on the plan.

--- Later in debate ---

[Stephen Doughty]

I do. I have yet to be convinced about the certainty on levels of funding, let alone the sectors. That will be greatly worrying to many in my constituency. It is worth reflecting on what the Office for Budget Responsibility said in the economic and fiscal outlook published in November: that as a result of the referendum decision, the potential output growth will be 2.4 percentage points lower than it would have otherwise been in 2021 without the referendum. As to the impact on Wales, the House of Commons Library briefing mentions that there could be

“lower business investment…the impact of a less open economy on productivity…a reduction in investment in research and development”

and

“costs associated with adjustments to new regulations or new markets”.

There will obviously be costs and changes: how are they to be minimised?

On regional funding, €5 billion for Wales is planned for 2014 to 2020, and potentially £2.7 billion post-2020. I still do not feel that we have had the guarantees from the Treasury. Why does that matter? It matters for specific projects such as the south Wales metro, which is vital for people’s ability to get around, do business, get to work and take advantage of opportunities in my constituency and the whole south Wales area.

We might be able to achieve those things in part outside the south Wales metro project. I have supported, for example, the proposals for a St Mellons parkway station, which could be funded by other means. There is a good degree of cross-party agreement about the importance of Network Rail and Department for Transport funding for it. However, fundamentally, the south Wales metro has the potential to be a transformative scheme for the south Wales economy. I am pleased that the First Minister was in Brussels arguing for the £110 million-worth of funding. The European Commission was very clear in saying that it could not comment about what would happen after the UK leaves. Such uncertainty is causing concern, so perhaps the Minister will provide some assurances—particularly about that project, which is so crucial to the economy of south Wales.

I have mentioned concerns about access to the single market, which will affect all businesses. I should be particularly worried if we were to consider putting tariffs on goods produced in Wales. The First Minister has made it clear that that is a red line for him. It would affect industries such as the steel industry in my constituency.

I have spoken many times in this Chamber about companies such as Celsa, based on my patch. It does significant amounts of exporting. It is a European company from Catalonia in Spain and works across the European Union. Forty per cent. of direct sales of British and Welsh steel go to the EU. That is similar to the overall total—41% of total goods exports from Wales go to the EU. What assurances can the Minister give to companies such as Celsa that export so much to the EU, let alone other places? What tariffs might they face in the future? What additional trade restrictions might they face?

We have heard a lot of talk about Airbus, which also has a major facility, Airbus Defence and Space, in a neighbouring constituency to mine, Newport West, where a number of my constituents work. Concerns are being expressed about European collaboration on space projects. High tech is an important growth industry in which the UK has been investing more. I should hate such jobs to be lost from our communities—let alone the wider aerospace industry in south Wales.

I want finally to discuss universities. The total value of future research income to Cardiff University, from the seventh framework programme and Horizon 2020 up to July 2016, was £23.5 million, with further applications in the pipeline of up to £15.7 million; work from the European structural fund was worth £23.6 million, plus a potential £35.2 million of projects in development. Those are significant sums.

To give an idea of the sorts of projects involved, I should say that they include the Cardiff University brain research imaging centre, which is doing pioneering work on dementia, multiple sclerosis and other neurological conditions. We should be proud that that work is going on in our capital city. Many researchers from my constituency work in and around the university. What if such things are to be put at risk? I am hearing a lot of concern from the university sector in my area, from individual workers and universities. What assurances can the Minister give?

[Christina Rees]

There is uncertainty about whether the excellent Erasmus programme in which students from Wales can study in Europe will continue. It has benefited many students from my constituency, and, I am sure, from across Wales.

[Stephen Doughty]

My hon. Friend makes an excellent point: 18% of Cardiff University’s home undergraduates are defined as internationally mobile—so they have taken part in Erasmus or one of the other types of exchange schemes, often with other European countries. That adds to their value—their opportunities to contribute to the global economy in the future and bring value to the economy in Wales. That is even before we get on to considering the contribution of international students, researchers and experts to our university sector in Wales. What assurances can the Minister give that those opportunities will not be lost in future for the Welsh university sector?

I have outlined three key areas about which concerns have been raised with me. I hope that the Minister will provide some reassurances and guidance for those who have expressed them. It is clear that this is an uncertain time for all involved. I am not happy for the Government to be given a blank cheque over the negotiations. I want to secure the best deal for businesses, individuals and the academic sector in my constituency and Wales.

--- Later in debate ---

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

It is a pleasure to serve under your chairmanship, Mr McCabe. I congratulate my hon. Friend the Member for Ogmore (Chris Elmore) on securing his first Westminster Hall debate on this important subject and on the powerful case he made. He was right to underline the huge uncertainty for businesses in Wales at the moment and the role that the Welsh Government have played in utilising EU funds to support jobs in Wales through initiatives such as Jobs Growth Wales, which, as he outlined, will lead to 8,955 new job opportunities. He also highlighted the work to support initiatives such as the south Wales metro, Horizon 2020 and the support the Welsh Government have given to universities.

We have heard from a number of hon. Members from across Wales, who have made clear the risks of our departure from the EU for businesses in their constituencies. It is really positive to see the number of constituencies represented by Opposition Members—my hon. Friends the Members for Ogmore, for Wrexham (Ian C. Lucas), for Swansea West (Geraint Davies), for Caerphilly (Wayne David), for Neath (Christina Rees), for Aberavon (Stephen Kinnock), for Alyn and Deeside (Mark Tami) and for Cardiff South and Penarth (Stephen Doughty), as well as my right hon. Friend the Member for Delyn (Mr Hanson) and the hon. Member for Dwyfor Meirionnydd (Liz Saville Roberts). That is in complete contrast with the lack of Members on the Government Benches, which I hope is not an indication of their view on businesses in Wales.

It is important that we highlight the risk of the Government’s lack of certainty and clarity about their post-exit plans and the huge uncertainty that is causing businesses. As my hon. Friend the Member for Wrexham underlined, businesses and investors hate uncertainty, yet at the moment that is all we have from this Government. That reflects the views expressed in discussions that I have had with businesses in my constituency of Merthyr Tydfil and Rhymney.

My hon. Friend the Member for Caerphilly highlighted the view of Norgine in Hengoed in his constituency and its hope for a soft Brexit. That message is repeated by businesses across Wales.

My hon. Friend the Member for Alyn and Deeside highlighted the work that Airbus does, the various plants that it has across Europe and the need for flexibility to travel. When I met Airbus representatives some weeks ago, they talked about workers who may go to European plants for two hours, two days or even two weeks—it is very uncertain, so there is a need for flexibility.

My hon. Friends the Members for Swansea West and for Aberavon highlighted the role that universities play and particularly research and development, the risk to future funding and the uncertainty that that is causing at the moment. My hon. Friend the Member for Neath highlighted the absence of a plan for exiting the EU and the uncertainty that that is causing for business.

[Christina Rees]

Does my hon. Friend agree that once article 50 is triggered, all the MEPs will be involved in the negotiations because they will have to have a vote at the end of the negotiations to ratify the proposal before it goes to the European Council to be ratified, so it would be fair for all Members of this House to be involved in the negotiations as well?

[Gerald Jones]

My hon. Friend makes a very important point. It underlines the position that we are in: we have no direction from the Government. They say that Brexit means Brexit and they are not willing to give a running commentary on what is happening. We understand that up to a point, but we are not asking for a running commentary. As hon. Members know, we are asking for the UK Government’s direction of travel, but unfortunately that has not been forthcoming.

I pay tribute to the comments of my hon. Friend the Member for Cardiff South and Penarth on the work of the Wales MEP Derek Vaughan, who continues to stand up and speak out for Wales. I also agree with my hon. Friend’s comments on the Welsh Government continuing to promote Wales and secure funding for infrastructure projects. We heard just today the announcement about a range of large-scale infrastructure projects taking place across Wales.

The last time that I spoke in a Westminster Hall debate from the Front Bench, I said:

“The Government have a clear and pressing duty to reduce…uncertainty. We have all heard of investment decisions that have been delayed and of businesses that are genuinely worried for their futures. People voted to leave, but they did not vote to damage our economy, so the Government need to step up and set out their plans more clearly to deliver the clarity and business confidence we so badly need.”—[Official Report, 25 October 2016; Vol. 616, c. 40WH.]

I still stand by every word of that today. Despite the time that has passed, neither the Minister nor the Government have done anything to give businesses any clarity or certainty, leaving people, as my hon. Friend the Member for Ogmore so clearly pointed out, in the dark about their futures, their careers and their businesses.

At the recent Welsh questions, my hon. Friend the Member for Clwyd South (Susan Elan Jones) quite reasonably asked the Minister:

“Can he tell us whether his officials have made any estimate of how many jobs in Wales will be lost if the UK leaves the single market and what he and his Government are planning to do about it?”

We are elected to Parliament to represent our constituencies and their interests. As the Opposition, it is our democratic duty to scrutinise and challenge the Government. That was not an unfair, partisan or trick question from my hon. Friend. It was asking what assessment the Minister’s Department has made of the biggest issue facing our country since the second world war and what plans the Government have to help mitigate the negative effects. However, the Minister replied:

“I am somewhat disturbed by the hon. Lady’s comments. Time and again, I hear Opposition parties talking down the Welsh economy.”—[Official Report, 30 November 2016; Vol. 617, c. 1509-1510.]

That was not an appropriate response. In fact, it was quite shameful, and it does a disservice to the office that the Minister holds not to engage with that as a genuine question.

If the Government are planning to offer support to protect jobs, businesses in Wales need to know what that package will look like and when it will come. So far, this has been a Government of smoke and mirrors, confusion and obstinacy. Whether through ignorance or incompetence, they will not give a straight answer to the simplest of questions.

Furthermore, in a written question, the shadow Secretary of State, my hon. Friend the Member for Cardiff Central (Jo Stevens), asked what estimate the Secretary of State has made of the economic value to Wales of the UK’s membership of the single market. However, again, rather than answering the question, which might help to highlight what the impact of a hard Brexit could be on Wales, he said:

“I recognise many businesses in Wales trade with the single market”.

Given the significant impact that the EU exit could have on Wales and, more importantly, the impact that the wrong deal could have on our country, that excuse for an answer is completely unacceptable. Is it asking so much for the Minister to share with us the assessment that he has made of the biggest challenge facing our country? Will he today put on the record the Government’s assessment of the economic value to Wales of the UK’s membership of the single market?

My hon. Friend the Member for Cardiff Central also asked at the last Welsh questions whether Ministers would commit to supporting jobs at the Ford plant in Bridgend post 2020 by offering Ford the same post-Brexit guarantee as the Government recently gave its competitor, Nissan. It is vital for the future of that site and the jobs that are linked to it through the supply chain, as we have heard this afternoon, that post Brexit, it is able to operate on the same terms as competitors such as Nissan. In refusing to give guarantees to Ford, the Secretary of State is offering businesses in Wales a worse deal than those in Scotland or Northern Ireland. We know that because his Cabinet colleagues, the Secretaries of State for Scotland and for Northern Ireland, committed at the Dispatch Box to offering the same protections for businesses in their respective countries as those offered to businesses in England. Is Wales getting a worse deal than Northern Ireland and Scotland? If so, can the Minister tell us why? If not, why will he not guarantee Ford the same deal as its competitors? It looks like a game of playing favourites. My right hon. Friend the Member for Delyn highlighted the support needed for industries such as the automotive industry.

Labour Members believe that a modern industrial strategy for Wales should be more than just picking winners from Whitehall. Companies in Wales should get at least the same deal from the Westminster Government as companies in England. If the Minister will not give that commitment to Ford, perhaps he will consider another major company in Wales, one of the biggest employers and investors—Airbus. It, too, needs to know what the future looks like. We need a straight answer from the Minister. Will Airbus get the same deal from the Government as Nissan? Airbus spends £4 billion with suppliers, supporting approximately 110,000 jobs. Millions of pounds and hundreds of thousands of jobs are on the line, so we need answers from the Minister. Will he offer a deal and protect the future of 100,000 jobs in Wales?

I have said this previously, but for the avoidance of doubt I will repeat it. Labour respects the result of the referendum, but we must get the best deal for people and businesses in Wales from the coming negotiations, and we will get that only if the Government provide some clarity on what their strategy is and what businesses can expect. It is essential that the UK Government work closely with the Welsh Government and the other devolved Administrations in preparing for the EU exit. They owe that to the businesses and people of Wales. I look forward to some clarity from the Minister on what he and the Government are doing to provide any reassurance to the people and businesses of Wales.

Oral Answers to Questions

Christina Rees Excerpts

Wednesday 30th November 2016 Commons Chamber

[Guto Bebb]

I agree with my hon. Friend; investment in Wales is most welcome. We need to diversify the Welsh economy. Manufacturing jobs in Wales have increased and the engineering sector is second to none in the United Kingdom. That is based on attracting inward investment. On a recent visit to Deeside, I saw again how Airbus is acting as a catalyst for small business development in north-east Wales. We need a combination of inward investment and home-grown companies that are able to build on the expertise provided by companies such as Airbus.

[Christina Rees (Neath) (Lab/Co-op)]

Some businesses may not invest inwardly in Wales because they would have to pay two apprenticeship levies: the UK Government levy and the Construction Industry Training Board levy. Under the Barnett formula, that will not result in extra funding for Welsh apprenticeships. Will the Minister reassure potential investors that they will be able to claim all levies for training and will be able to use the money for workforce development with local further education providers?

[Guto Bebb]

I am surprised to hear that question from the hon. Lady; the apprenticeship levy is important, but the settlement between Her Majesty’s Treasury and the Welsh Government has been welcomed by the latter as both fair and comprehensive. It is therefore essential that she and other Members call on the Welsh Government to make sure that the money allocated through the apprenticeship levy is spent where it is needed.

Leaving the EU: Wales

Christina Rees Excerpts

Tuesday 25th October 2016 Westminster Hall

[Stephen Kinnock]

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

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

[Christina Rees (Neath) (Lab/Co-op)]

Does my hon. Friend agree that 16,000 farmers across Wales gain direct subsidies from the CAP? Without that funding, more than 90% of them would go bust. Will he join me in calling on the UK Government to commit to ensuing that the subsidies continue for all farmers?

[Stephen Kinnock]

I agree absolutely that the role the CAP has played in the agricultural industry in Wales and the UK, and indeed across the entire European Union, has been critical and has supported thousands of farmers and their livelihoods. I will talk a little later about how we need to see a clear commitment to long-term funding to replace every aspect of the European funding on a like-for-like basis, including the CAP.

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[Gerald Jones]

As I mentioned earlier, it is important that we respect the result, but it is also important that we ensure we get the best deal for Wales and for the UK in the coming negotiations. Despite the many challenges ahead, we must ensure that Wales has a positive voice throughout the negotiations to secure the best possible outcome. It is essential that the UK Government work closely with the Welsh Government and other devolved Administrations to ensure that their negotiating strategy works for the whole of the UK, not just for England.

The Joint Ministerial Committee met yesterday, although clarity was lacking on the current position and on what future discussions will look like. As we begin the process of exiting the EU, Wales has several priorities. We must prioritise the protection of jobs and ensure business confidence in the aftermath of the referendum. Full and unfettered access to the EU single market is crucial for Wales. Welsh businesses currently benefit from our trading relationship with the EU. If we were to leave the single market, and if tariffs were to be imposed on Welsh goods, that could have a crushing impact on our manufacturing and agricultural sectors. We need certainty about funding for current and future EU programmes.

The First Minister of Wales sought an urgent guarantee, immediately following the referendum, that Wales would not lose a single penny of EU funding up to the end of the EU financial perspective, running until 2020. This month the Treasury pledged to extend the guaranteed funding for all projects agreed before the UK leaves the EU. However, it has not given any commitment to replace the funding, further into the future, that we would reasonably have expected to receive if the UK were to remain in the EU. That is vital to our universities and agricultural businesses. Wales currently receives £650 million in EU funding, in particular through the common agricultural policy and structural funding. Campaigners for leave said that Wales would not lose a single penny in European funding, and we will hold them to that promise.

As my hon. Friend the Member for Aberavon outlined, the case for revision of the Barnett formula arrangements for Wales is now even stronger, to ensure fair funding for Wales during and after the current EU programmes. The Wales Bill provides an important opportunity to consider future funding arrangements for Wales. I urge the Government to reconsider their opposition to delivering a much needed fiscal framework to Wales as part of the Bill, and perhaps the Minister will comment on that.

It is my view, and the view of my party, that EU citizens working and living in Wales now should be able to remain here after the UK’s exit from the EU. EU citizens should not be used as bargaining chips in the negotiations, and we must stamp out the unacceptable abuse that has, sadly, risen since the referendum result.

[Christina Rees]

Since the referendum the UK Government have said little more than “Brexit means Brexit,” but Ministers have alluded to a hard Brexit. Will my hon. Friend agree with the Welsh Labour MEP Derek Vaughan who has said that as a result of that stance the EU has withdrawn behind its lines, and we will end up with a hard Brexit?

[Gerald Jones]

I do indeed agree. As I said in my speech, the people of Wales and the UK voted to leave but not to reduce public services. They certainly did not vote for a hard Brexit. It is important to have the clarity that we need as we go forward. It is essential that we remain outward looking, internationalist and pro-business. We require that we remain committed to fairness and opportunity for all, and I look forward to some reassurances, perhaps, from the Minister this morning.

Oral Answers to Questions

Christina Rees Excerpts

Wednesday 19th October 2016 Commons Chamber

[Guto Bebb]

First, I should correct the hon. Gentleman: the city of Swansea voted to leave, so if there was a body blow to Swansea, it was delivered by people in Swansea. On the city deal, he has to be slightly fairer about what this Government are doing. We have delivered a city deal for Cardiff, with over £1 billion of investment, including £500 million from this Government, and a guarantee that the European elements would be supported. If the Swansea city deal is as good as early indications appear to suggest, it can be supported by this Government in due course.

[Christina Rees (Neath) (Lab/Co-op)]

The Swansea bay city deal aims to turn the region, which includes Neath, into a digital super-hub to boost the local economy, transform energy delivery, and improve health and social care. Will the Minister assure the House that this deal will not face the delays experienced by the Swansea bay tidal lagoon and rail electrification projects?

[Guto Bebb]

It is important to point out that this was announced in the last Budget and is being taken forward. However, there is a bottom-up approach. This Government do not take the view that Westminster knows best. We believe very strongly that the proposal should come from the region, and it is fantastic to see the way in which the four local authorities are working together. I am confident that the deal brings something quite special to south-west Wales, but let us see the detail. If the detail is persuasive, the support will be forthcoming.

Wales Bill

Christina Rees Excerpts

Monday 12th September 2016 Commons Chamber

[Alun Cairns]

I have had representations from the Welsh Government, and we are happy to continue a dialogue in order to refine the reservations. However, amendments 63 to 65 would extend extremely broad powers in this regard. We do not intend to accept them, because we do not believe that devolving the wider competence to which they refer would be the right course. They were not raised by the Silk commission or in the St David’s Day agreement. Nevertheless, in our usual pragmatic style, we are naturally happy to continue to discuss a range of issues. Indeed, the Bill has continually refined itself through its progress, from the Silk commission and the St David’s Day agreement to the draft Bill, and thence to the stage that we have reached today.

New clause 3, tabled by the hon. Members for Newport West, for Arfon, for Dwyfor Meirionnydd and for Carmarthen East and Dinefwr, and new clause 10 and amendment 67, tabled only by the Plaid Cymru Members, seek to probe the progress that the Government have made in implementing our commitment to devolve executive rail franchising functions. New clause 3 also seeks to press the Government to make a decision on whether to enable Welsh Ministers to invite public sector operators to bid for rail franchises for which they are the responsible franchising authority.

[Christina Rees (Neath) (Lab/Co-op)]

Does the Secretary of State agree that changes in railway powers are needed to put Wales where it should be, on a par with Scotland?

[Alun Cairns]

Negotiations are ongoing on the devolution of the franchise and how it can be achieved. If we accepted the new clauses and the amendment, that would set the whole franchise process back considerably. It has already been advertised, and we are anxious to press ahead as possible with the aim of reaching an agreement with the Welsh Government to fulfil the franchise obligations.

--- Later in debate ---

[Christina Rees]

Does my hon. Friend agree that there is also a problem because we will be losing our four MEPs soon?

[Paul Flynn]

My hon. Friend is absolutely right to say that there will be a gap there, and that was a change we did not know about. The Welsh Assembly, and partly this House, decided to have a progressive form of governing in Wales, where we recognise elements of proportional representation, although we do not welcome some of its results. It is right, however, that parties that gain 13% of the vote get 13% of the membership. We have an advanced democracy, as was voted for when the Labour Government set up the Welsh Assembly—the disgrace is in the Lords.

We know what would happen as a result of devolving to the Welsh Assembly the power to increase the number of Members. It would be a brave Assembly that did that in isolation, because adding more politicians is not the most popular thing. The only way this can be presented to the public is as part of a package deal; if the number of MPs is to go down, there would be a case for increasing the number of Assembly Members. Similarly, if the number of MEPs has decreased, a case that would be financially acceptable could be made. What is not acceptable is what the Government are doing now with a piecemeal reform of the only part of the democratic system that could be reformed to their advantage. We need an overall reform, cancelling the planned boundary changes and with the Government getting together with all parties to have a constitutional convention to clear up the nonsense of what is happening in the Lords and the disgrace of buying peerages. Even papers such as the Daily Mail condemned the decision of the last Prime Minister in his resignation honours—

Oral Answers to Questions

Christina Rees Excerpts

Wednesday 13th July 2016 Commons Chamber

[Mr David Jones (Clwyd West) (Con)]

2. What assessment he has made of the potential consequences for Wales of the outcome of the EU referendum.

[Christina Rees (Neath) (Lab)]

4. What assessment he has made of the economic effect on Wales of UK membership of the EU.

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

The British people have voted to leave the European Union, and my right hon. Friend the Prime Minister has made it clear that their will must be respected and delivered. We are now preparing for a negotiated exit from the EU, which will involve close engagement with all the devolved Administrations to ensure that the interests of all parts of the United Kingdom are protected and advanced.

[Alun Cairns]

The Government have a strong record in guaranteeing funds for Wales, most notably the Barnett floor, which was ignored for 13 years by Labour. That demonstrates that we will work hard in prioritising the areas of the UK that rightly need and deserve support.

[Christina Rees]

Has the Minister had talks with major employers in Wales such as Ford, Airbus, GE, Toyota and Tata to find out what their investment intentions are following the vote to leave the EU?

[Alun Cairns]

The hon. Lady raises an important question. Within a week of the Brexit referendum I met a number of business leaders in Cardiff and last week I met a number of business leaders in north Wales. I was struck by their pragmatism and approach—the positivity they were showing. One of the most positive quotes was that entrepreneurs “thrive on change.” They recognise that we are not turning our backs on Europe, but opening up new markets across the globe.

Wales Bill

Christina Rees Excerpts

Tuesday 14th June 2016 Commons Chamber

[Christina Rees (Neath) (Lab)]

It is a pleasure to follow my constituency neighbour, the hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards), although I am not brave enough to call him a naughty boy.

When the Welsh Assembly was constituted in 1999, there were 20 conferred subject areas in which matters were to be determined by the Welsh people through their democratically elected representatives. One famous Welsh politician once said that

“devolution is a process, not an event”.

In the 17 years since the Assembly came into existence, there have been three constitutional settlements, which reflects the need to expand the powers of the Welsh Assembly because of the evolution of the legislative procedure in Wales. However, Members who served on the Welsh Affairs Committee during its inquiry into the draft Wales Bill sometimes wished that it was an event, not a process.

The fourth constitutional settlement—the draft Wales Bill introduced by the then Secretary of State for Wales, the right hon. Member for Preseli Pembrokeshire (Stephen Crabb), in October 2015—promised

“a stronger, clearer and fairer devolution settlement for Wales that will stand the test of time.”

It lasted for four months. On 29 February 2016, he announced that significant and substantial changes would be made to his baby. It may just have been serendipity, but on the day that the Queen officially opened the fifth National Assembly for Wales, the current Secretary of State introduced the revised draft Wales Bill as the fifth constitutional settlement—or, rather, the second fourth attempt—to this House. He said:

“Welsh men and women want sensible legislation that reflects their priorities and allows them to live under laws of their own choosing. I have heard that instruction loud and clear, and I will deliver on it.”

Those were brave words, indeed.

I will not speak about the modification of the necessity test, ministerial consents or even the list of reserved matters, which has been reduced by some 15%. I will concentrate on the devolution of justice, which has been a major area of disagreement between the UK Government and the Welsh Government. There was no mention of devolution of jurisdiction in the draft Wales Bill. First Minister Carwyn Jones has made it known that he is in favour of the devolution of justice, and in 2015, in response to the draft Wales Bill, the Welsh Government argued for

“a Welsh legal jurisdiction that is distinct, but not separate from that of England.”

The new Bill does not propose the devolution of the justice system or of policing, but explicitly recognises that there is a “body of Welsh law”. It allows the Assembly to continue to modify the civil and criminal law to give effect to its legislation, but does not extend to legislating on substantial areas of criminal law, such as offences against the person. The new Bill creates a working group of officials from the Wales Office, the Ministry of Justice, the Welsh Government and the Lord Chief Justice’s office to monitor the situation. I welcome that because in Wales many areas of justice need clarification.

What matters to the people of Wales is whether they can get access to justice. I must admit that in the many campaigns during which I have knocked on doors, I have not found that devolution of the justice system has been a burning issue for constituents. Many of my constituents contact me because they cannot get access to legal advice, or have problems that they do not necessarily identify as legal issues. I am sure that many other Members find that their advice surgeries are inundated by constituents who are being denied access to justice.

It is fundamentally important that the justice system of England and Wales and the ever growing body of law in Wales are clear and accountable, and work for the benefit of my constituents in Neath and those of other Welsh constituencies. It is not straightforward to understand the administrative justice landscape, which is made complex by the intertwining of devolved and non-devolved systems. Administrative justice is not only about citizens’ rights and redress but about learning from what has gone wrong and producing a vision of good public administration. It covers issues including disputes between the citizen and the state, and it is the cornerstone of social justice in Wales—a means by which citizens can have a voice other than through the ballot box, and by which public services can be held to account. It will lead to better results for citizens, less work for the appeals system, lower costs and, most importantly, social justice.

In areas such as housing, education, health and planning, Wales has its own administrative law, and the Welsh Government have responsibility for relevant justice policy and daily administration. Clause 10 introduces justice impact assessments, meaning that the person in charge of an Assembly Bill must make a written statement about its potential impact on the justice system of England and Wales. Every regulatory Bill and statutory instrument introduced to this House and the other place that affects private, civil society or public services has—or should have—an impact assessment, which Opposition Members rightly often use to attack the proposed legislation and suggest amendments.

Most tribunals still operate on an England and Wales basis, but some are devolved—for example, the Agricultural Land Tribunal for Wales, the Adjudication Panel for Wales, the Mental Health Tribunal for Wales and the Residential Property Tribunal Wales. These devolved tribunals are supported by a single Welsh tribunal unit, and there are issues to consider concerning the status of the judiciary in devolved tribunals. They are not a fully integral part of the judiciary for England and Wales, and there is a lack of clarity concerning arrangements for their appointment, training, conduct and discipline. Statutory responsibility is not clear in all cases, and formal agreements are needed so that there is no room for doubt about roles and responsibilities.

The working group may wish to consider the following suggestions: that all devolved Welsh judicial appointments have a standard procedure agreed by the Welsh Government and the Judicial Appointments Commission, and that training, appraisal and disciplinary arrangements be of a standard as demanding as that elsewhere in the UK; that the Welsh Government work with the Ministry of Justice, Her Majesty’s Courts and Tribunals Service, the Department for Work and Pensions, Her Majesty’s Revenue and Customs and other UK Government Departments to ensure that data concerning redress systems can be separately identified and made available to elected representatives; and that the Lord Chief Justice appoint an existing Welsh judge to lead on devolved Welsh tribunals.

As the Bill passes through Parliament, efforts must be made to articulate how the body of Welsh law that it recognises forms part of the law of the legal jurisdiction of England and Wales, with the primary purpose of making it accessible to practitioners and citizens alike.

The working group should also consider youth justice. When Charlie Taylor began his review of youth justice, the first place he visited was Hillside secure unit in my constituency. It is the only institution in the UK that offers placements for children who have suffered through multiple social service placements and/or who have got into trouble with the law. Children from all over the UK are placed at Hillside, but placements last only three months, which is not long enough to make a positive difference to a child’s life. The judiciary and social services departments often see Hillside as a place of last resort, but if children came there earlier in their troubled lives, they would not suffer the trauma of multiple placements and/or many visits to youth courts.

The work at Hillside is aimed at helping children turn their lives around and involves health assessments, psychological assessments, behaviour modification, academic and vocational education, the improvement of communication skills and children becoming self-sufficient before leaving to resume living in the community. It is an excellent example of partnership working, with Neath Port Talbot Council, the police, police and crime commissioners, the Youth Justice Board, the Welsh Government and the UK Government working together for the benefit of troubled children.

Hillside wants to build a step-down unit on its site, so that children can make a smooth transition from living in a secure unit to living in independent accommodation such as flats and dormitories before they have to fend for themselves in the community. Hillside needs funding to build that unit, but it is not clear who is responsible for paying for it. Is it Neath Port Talbot Council, which is responsible for social services and whose funding has been cut by £50 million because of the austerity policies of the UK Tory Government? Is it the Welsh Government, who are responsible for education, health and housing, and whose funding has been cut by the UK Tory Government? Or is it the UK Government, who are responsible for police and youth justice? We need clarity.

Youth justice and access to comprehensive and coherent legal advice are two areas where the involvement of the Welsh Assembly and devolution to the Welsh Government have significantly contributed to rationalising the offer to citizens. The UK Government should look to those models of delivery for examples of how they can support the Welsh Government to create Welsh law within the parameters of current jurisdiction. I look forward to the passage of the Bill.

Welsh Affairs

Christina Rees Excerpts

Thursday 3rd March 2016 Commons Chamber

[Christina Rees (Neath) (Lab)]

St David’s day, 1 March, is a national day of celebration in Wales. It is a day on which to celebrate Wales and being Welsh. We are a proud nation of culture, literature, song, art and sport. I congratulate the Wales women’s rugby team on recently beating Scotland and France at the Knoll ground in my constituency and on qualifying for the world cup. That is a great achievement. It would be remiss of me not to mention squash—the game, not the drink—because in a former life I was the national coach for Squash Wales. As a small nation, we have always punched above our weight and medalled on many occasions, including the European Championships, in many countries. That leads me to what I want to talk about today, which is the importance of staying in Europe.

In my constituency of Neath and across Wales, we enjoy great opportunities and great benefits as a result of EU membership. I pay tribute to Derek Vaughan, our Member of the European Parliament for Wales, who is vice-chair of the budgetary control committee in the European Parliament. He has fought for the benefits that Wales receives. He is a former leader of Neath Port Talbot County Borough Council, and he has used his great experience and knowledge as a former leader of the Welsh Local Government Association to fight for Wales in Europe.

Wales is a net benefactor from the EU to the tune of £838 million a year. Moreover, the lower prices, higher job numbers and increased trade and investment that come from our membership of the EU are worth more than £3,000 a year to the average Welsh household. That is 10 times more than the £274 that each household pays in.

The EU is without doubt the biggest, richest market in the world, upon which, according to the Centre for Economics and Business Research, 191,332 jobs in Wales depend. The economic benefits are clear: for the 2014 to 2020 period, Wales will receive £4.9 billion from the common agricultural policy and structural funds. It is estimated that, over time, the UK could lose as much as 6.1% to 9.5% of our GDP following an exit from the EU. In my constituency, the EU has created 1,120 jobs, helped 6,680 people into work, granted access to further education for 3,490 people and helped 13,630 to gain qualifications. The help in my local authority area—that of Neath Port Talbot County Borough Council—that the EU has provided to enterprises has meant that 670 have been assisted and 420 have been created.

One of the best examples of EU funding benefiting my constituency is the newly relaunched Workways Plus scheme, which is led by the local council and has received £7.5 million in EU funding. It offers training and paid work experience opportunities to 4,000 long-term unemployed people to help get them back into work. The support targets disadvantaged people, helping them to take their first steps to re-engage with or enter the labour market; the scheme offers one-to-one mentoring, and support with job-seeking and interview skills. The programme targets individuals affected by work-limiting health conditions and disabilities, as well as those with care responsibilities and low or no skills. It is the perfect scheme to get people back into work, and it continues a similar EU-funded scheme that ran across south-west Wales between 2009 and 2014, which was an enormous success and showed the true benefits that EU funding can bring to our communities.

Not only are there jobs that have benefited from EU funding, but the effects of our membership have benefited the infrastructure in Neath. EU regeneration funds have been used expertly by Neath Port Talbot County Borough Council to regenerate many town centres across the constituency, and this, in turn, has revived the use of these town centres and has helped the local economy get back to strength after tough economic times. Crucially, EU investment and involvement would also help aid the UK steel industry, as my hon. Friend the Member for Aberavon (Stephen Kinnock) said. The UK Government should follow the example of the Welsh Government, who have taken full advantage of our membership of the EU to help fund many of their projects and schemes, such as Jobs Growth Wales, which have helped get the Welsh economy, and the jobs and skills market, back on track.

Business leaders have already warned that leaving the EU would amount to a step into an

“Abyss of uncertainty and risk.”

The path for a potential exit is unclear; it has been likened to getting off a bus and into a car, which sounds a dangerous prospect to me. My constituents cannot afford this uncertainty as the negotiations conclude and then a potential exit is negotiated. The economic reality for Wales and for my constituents in Neath is such that Brexit would be disastrous for our jobs and prosperity, not to mention for the benefits we all enjoy, such as workers’ rights, environmental protections, consumer safeguards and free movement.

The Conservative party has treated the issue of our membership of the EU as a political football for many, many years, and the Prime Minister has put so many jobs, businesses and projects in my constituency on the line just to appease his own Back Benchers. Rather than address the necessary reforms of the EU in a constructive manner from inside, we face the prospect of an exit, which will be a disaster for neath and for Wales as a whole.

I cannot speak about matters important to Wales without mentioning another critical issue—the ongoing farce that is the Wales Bill, which, as originally drafted, met with criticism from all sides, including the Welsh Affairs Committee of this House. To make matters worse, we learn, not in this House but from the media, that the Bill is now on pause, pending a major overhaul. As the First Minister said, we are back to where we started. How can the Conservative party justify putting Wales’s economic development and prosperity at risk with its mishandling of this Bill and of our relationship with the EU?

Oral Answers to Questions

Christina Rees Excerpts

Wednesday 24th February 2016 Commons Chamber

[Alun Cairns]

My hon. Friend is absolutely right. The unemployment rate in Wales has fallen by more than that in any part of the UK over the last quarter. Welfare reform is key to that. We are determined to deliver a low welfare, low tax, high wage economy.

[Christina Rees (Neath) (Lab)]

The Institute for Fiscal Studies warned this month that universal credit will tend to weaken the incentive for single parents to be in work. What assessment have the Government made of the effect that rolling out universal credit will have on the number of workless households in Wales?