Exiting the EU: Businesses in Wales

Debate between Christina Rees and Stephen Kinnock

Wednesday 14th December 2016 Westminster Hall

[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.

Steel Industry

Debate between Christina Rees and Stephen Kinnock

Thursday 3rd November 2016 Westminster Hall

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

I congratulate my hon. Friend the Member for Middlesbrough South and East Cleveland (Tom Blenkinsop) and my hon. Friend the Member for Redcar (Anna Turley) on obtaining the debate. I welcome the Minister to his place, and want to compliment my hon. Friend the Member for Aberavon (Stephen Kinnock) on his great speech. His constituency is adjacent to mine, and I assure the House that he and I are working together for the people who live in our constituencies and work at Tata Steel.

To say it has been a difficult year for the steelworkers of Neath and Port Talbot would be an understatement. The challenge of competing in a global market, the absence of anti-dumping tariffs, the lifting of the lesser duty rate and Brexit all conspire to create a world of uncertainty and fear. Of the 1,050 jobs lost in the UK steel industry since the year began, 750 of them have been lost from Port Talbot. That was on top of the 400 jobs lost in 2014.

Steel and the steel industry are essential to Wales and its economy, and that is particularly the case for my constituency and the people of Neath. The notion that it does not have a future is simply unthinkable. There are 575 businesses making up the steel industry, employing 31,000 people across the UK. More than 50% of those jobs are based in Yorkshire and Humberside or in Wales. However, between 1997 and 2014, iron production in Wales fell by 3,210 kilotonnes—or by more than 50%. Steel production has fallen by 25% during the past 40 years. Nevertheless, last year was a record-breaking one for Tata Port Talbot, with the plant producing 3.2 million tonnes of steel.

Decline and uncertainty are things that our steelworkers have had to deal with for many years and, being as robust as the steel that they make, they have bounced back every time, working through it all to keep our country supplied with the finest steel in the world. However, the uncertainty has taken on a new form in the shape of Brexit. The European Union accounts for more than 40% of direct British steel sales— and more, when the exports of British manufacturers are considered. Post-Brexit tariffs on British steel or an elongated trade agreement might signal the death knell of an industry already fighting to compete on a level global playing field.

I remind Members that the forerunner of the European Union, the European Coal and Steel Community, was set up not only to cement peace but to help economic growth by pooling resources and preventing unnecessary competition. Its architects would be astonished at the current state of affairs and the UK Government’s inability to work with our European partners to prevent unnecessary competition from across the world. The latest industrial revolution taking place in China may well be the biggest of all. In 2015, the Chinese produced 804 million tonnes of steel, or 50% of the total worldwide output. The UK produced 11 million tonnes during the same year. It is a matter of not whether there will be implications for the UK steel industry as a result of Brexit but what their extent will be. If the Government do not do all they can, exports will be hit hard, output will be slashed, jobs will be lost and communities will be forsaken.

The picture painted may be bleak compared with a golden past, but I firmly believe that steel in Wales and the UK has a strong future. A future for any industry is all about adapting to change and turning threats into opportunities. The future of the steel industry is clearly about innovation, and technological innovation is in its business model. Beyond the heavy end of steel production that we all know so well, we also have organisations that innovate and produce high-tech products that are changing the way we view steel.

Neath Port Talbot is home to a company called Specific, which uses coated steel to make world-leading, innovative technologies that produce, store and release energy. At the heart of its work is Swansea University’s bay campus, which straddles the constituencies of Neath and Aberavon. Specific is hugely concerned about our leaving Europe, not only because of the essential funding it has received from the EU—without which it probably would not exist—but because of the potential loss of a market in which it could promote and sell its products. It is that sort of high-level innovation that needs to be harnessed and nurtured if we want to see a future for our steel industry.

[Stephen Kinnock]

My hon. Friend is making an excellent and comprehensive speech. It is important to underline the fact that the quality of the steel is possible only through primary steelmaking. It must be produced on the basis of a process that starts right up the chain with a blast furnace, not with an electric arc furnace. If we are going to take steel into the 21st century and as high up the value chain as we can, we must retain primary steelmaking in this country.

[Christina Rees]

I thank my hon. Friend for making that important point.

An innovative product is only one part of the story; we must also use the current crisis as an opportunity to change the way we do business so that a structure can be established to protect the steel industry for many years to come. What about a management-workforce buy-out at Tata Port Talbot, and perhaps elsewhere? It could be set up in the shape of a co-operative and take advantage of the benefits of a tripartite model of delivery that would also involve investment from the public and private sectors. There are many such examples from across Wales and the UK, including Tower Colliery, John Lewis, Welsh Water and hundreds of credit unions. Welsh Water’s slogan is “For Wales, not for profit”; we could apply the same principle to our other key industries, which for Wales means steel.

Co-operation, consensus and community are the founding principles of not only co-operatives but the Labour party. It is on those shared values that figures from across the Labour movement have led the development of organisations that have anchored communities during difficult times and helped to create a buffer against global economic shifts. Let us consider the possibility of doing the same in communities such as Neath, Port Talbot and elsewhere. I urge the Government to play their part in this endeavour.

Leaving the EU: Wales

Debate between Christina Rees and Stephen Kinnock

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.