Welsh Affairs

David T C Davies Excerpts

Thursday 2nd March 2017 Commons Chamber

[David T. C. Davies (Monmouth) (Con)]

Members will be aware of the plan by the Heads of the Valleys Development Company, led by Mr Michael Carrick, to build a racetrack at Ebbw Vale. Mr Carrick persuaded the Welsh Government to put £9 million into his company, Heads of the Valleys, in order to develop this, but has so far been unable to get the private sector to back the scheme without an assurance from the Welsh Government that they will provide over £200 million as a loan guarantee.

Mr Carrick claims to be an expert in building infrastructure. He has been involved in attempts to set up infrastructure projects in the Shetland islands and the Port of Ardersier in Scotland, as well two biomass projects in Africa and another in Ireland, and a river barrage scheme at Fleetwood. None of these projects has been successful. I have spoken to many involved who say that they feel let down and misled, and in more than one case that they are owed money. I could give some examples, but do not have the time. One that has been in the press, however, involved Mr Bob Long from Fleetwood, who tried to set up a river barrage. Mr Carrick told him that he had the funds available to develop the project, but the money never arrived, and Mr Long claims the project has been almost ruined as a result.

Aventa’s website, which Members can look at if they wish to, implies that it is responsible for managing a fund worth £350 million to build UK infrastructure, but Companies House records suggest that it has just £500 in the bank. However, with his £9 million of public money, Mr Carrick decided to buy a specialist motorcycle company based in Buckinghamshire. It was shown in the records as a dormant company until August 2012, after which it sprang into life. By August 2013, it was showing liabilities of £350,000. The losses grew, but when I met Mr Carrick in July last year, he told me that he would soon turn it around, that it would be an anchor business for his site and that it would lead to a Welsh rider winning a Welsh grand prix. A few months later, it was in administration, owing more than £500,000. If Mr Carrick cannot make a success of a small company turning over a few hundred thousand pounds, should the taxpayer be backing him in a venture worth several hundred million?

Mr Carrick’s publicly funded company has also bought the rights to hold the MotoGP championships at Silverstone, but so far he has made a loss on that of around £1 million. Many companies, including some local ones, have done work for the project but have not been paid—they have all done it at risk—but luckily, one supplier has been paid in full, again out of public funds. Mr Carrick decided to appoint a financial consultant to give advice to the scheme, and the company he appointed was Aventa, a company that he 100% owns and controls. In effect, he paid himself nearly £l million of public money to give himself advice. Civil servants in the Welsh Assembly raised concerns about this but were overruled. I have some written material to back all this up, by the way; I have the invoices. Among other things, Aventa spent £35,000 on landscape gardening. Those invoices were made out to the Heads of the Valleys Development Company, but Mr Carrick says that they were paid by Aventa. He also spent thousands of pounds on political events for the Labour party and, he tells me, for the Conservative party, although I do not have those invoices.

When I raised my concerns with Mr Carrick, he told me that he was entitled to spend Aventa money as he pleased and that it had sources of income other than the public money from the Heads of the Valleys Development Company. I asked for examples and he cited GE. I asked him whether he meant General Electric, and he said yes. I then contacted General Electric, which told me that he had asked for money but had not had any from the company. At the same meeting, one of Mr Carrick’s associates told me that BMW was planning to build a BMW world theme park at the site. I checked with BMW, which told me that that was absolutely ludicrous and that it had no plans to do so. Again, I have all this in writing.

Mr Carrick’s lawyers, who are in touch with me frequently, claimed that I had made all this up, but, fortunately for all concerned, I have a high-quality recording of the meeting, and they have now had to accept that all those comments were indeed made. I can share the transcript of the meeting with anyone who is interested, although I cannot share the recording without Mr Carrick’s permission, which he does not seem very willing to give. I asked him about the business plan, and I was told that he would be able to rent out the race track for between £18,000 and £35,000 a day. Industry experts tell me that that is absolutely ludicrous. But even if he did manage to do that, he would be pulling in revenue of only about £13 million a year on a project that is going to cost £430 million to build. I am intrigued as to why the project keeps increasing in cost, from £200 million in 2011 to £250 million in 2012 and to £380 million when I met Mr Carrick in July. Seven months later, it has risen again to £430 million.

I have two other documents of interest. The first is a quote from a construction company, FC, for £180 million for building the track—a project we are told is worth £430 million. Even with a few hotels chucked in, that would take a bit of explaining. The second is a business plan showing a developer’s profit of £13 million.

[Stephen Crabb (Preseli Pembrokeshire) (Con)]

I commend my hon. Friend for his investigation into this episode. What broader lessons does he think should be drawn from this about Welsh Government Ministers’ attitudes towards the use of public money in the name of economic development?

[David T. C. Davies]

The first lesson is that nobody should be able to make £13 million on a project before it has even been built. Secondly, this whole thing is an outrage. People are being sold a pipe dream. Politicians who support it are being taken out for lunch, and those who ask difficult questions are being threatened with legal action by a group of expensive City lawyers. Some £9 million of taxpayers’ money has been wasted. The only infrastructure we have seen so far has been the £35,000-worth of work done to Mr Carrick’s mansion in Grantchester, and the only sports car in evidence is the Aston Martin that he drives around in. It is time to pull this project.

[Paul Flynn (Newport West) (Lab)]

Is the hon. Gentleman aware that the Wales Audit Office is looking into the affairs of that company? Has he contributed his valuable information to the WAO?

[David T. C. Davies]

I am grateful to the hon. Gentleman. Yes, I have contributed quite a bit to the Wales Audit Office, and I am looking forward with great anticipation to the result. It is time to pull the plug on this scheme. If the Welsh Government want to put £200 million of our money at risk, there are better ways of doing it and better people to be doing it with.

--- Later in debate ---

[Paul Flynn (Newport West) (Lab)]

In the spirit of brotherly and sisterly love that characterises this debate, I will advance my main career task of adding to the glittering career of the Secretary of State for Wales. He had the good sense to marry into a family who live in my constituency, which shows that he is a man of ambition.

I urge the Secretary of State to challenge his Cabinet, who seem to use Wales as a kind of Aunt Sally for making comparisons. He could advance his career by promoting some of the great achievements of Wales, and particularly of the Welsh Government. He could start with the Welsh Government’s Bill that introduced presumed consent for organ donation, which has already saved lives and proven to be advantageous. There is a Bill to that effect before this House, and I urge him to persuade the Cabinet of the advantages of introducing the same system in England.

I want to ask the Secretary of State about one of the other great successes of the Welsh Assembly, which was buying Cardiff airport for the bargain price of £52 million. That was derided by some of his friends in Wales, but since the airport was bought it has paid more than £52 million in air passenger duty back to the Government. The hon. Member for Winchester (Steve Brine), who is next to the Secretary of State, took a great deal of time in our debate on the Wales Bill and seemed to give more support to Bristol airport than to Cardiff airport. I say to him that Cardiff airport is another shining success.

In a Select Committee, I reminded the Secretary of State that he was born four years after Wales started paying double tax on the national road system and the Severn bridge tolls, and asked whether his ambition was to ensure that those tolls continued until he retired. That is the way that it is going. By next year, however, the bridge will be all paid for.

I asked the Secretary of State how the toll of £3.70 that he proposed at the time was 50% of £6.70. He and his officials went back to the Wales Office and recalculated, and the next figure I saw was £3. Recently, a question was asked here about how the £3 was calculated. The strange answer was that that was something equivalent to the Humber bridge. We are happy for it to be treated in the same way as the Humber bridge, where £150 million of debt was wiped off. That would give us 10 years at least. Now, the only justification for the tolls is that they are a cash cow, and the Government and the Treasury refuse to give them up.

When the Severn bridge was first opened, Harri Webb wrote a poem:

“Two lands at last connected

Across the waters wide,

And all the tolls collected

On the English side.”

If the ghost of Harri Webb is still about, he might write something along these lines:

“Now all the tolls are collected

The debt is paid in full

But Tory snake oil salesmen

Still rob us with their bull.”

The hon. Member for Monmouth (David T. C. Davies) made several interesting observations, and I would like to know how they will be followed up.

[David T. C. Davies]

Fifty per cent. is better than nothing, and does the hon. Gentleman agree that Mr Webb might have written:

“The Secretary of State

We think no less of him

Because 50%

Is better than dim”—

as they say in Welsh?

[Paul Flynn]

There is a delightful picture, which I have produced with pride on my website, of the hon. Gentleman, the Secretary of State for Transport and the Secretary of State for Wales—a trio of snake oil salesmen—lined up against the background of the bridge, saying “Well, it used to be £6.70. Now, we’re going to make it £3.70.”; “No, we’re not—it’s £3”; and “We’ll charge you each way, so it’s £1.50”. These are the techniques of the fairground.

The charge should be nothing because we have already paid the bill. How many Members were in the House for the Severn Bridges Bill in 1992, when we were told by Wyn Roberts, “This is the end of it”? We have already paid £1 billion of public money. We pay our taxes for every road within the British Isles—we have to pay our share of that—and, in addition, we pay this extra tax to get into Wales. It is a barrier to Welsh life and it should go. I am looking forward to hearing how Ministers came up with the idea of charging £3. There is no justification for it. The largest element of it will actually go on collecting the tolls themselves. This is a totally unfair tax on Wales.

I am sure that the Secretary of State will announce, in under an hour’s time, that this is over and that he will now crusade on the issue and build himself up as the new symbolic or legendary figure of Welsh life, so that when he lays down his political role and joins the choir invisible he can discuss with Harri Webb his verses on the Severn bridge and contemplate the opportunities he has had in life, such as the ones I am sure he will take up after today.