European Union (Withdrawal) Bill

Earl of Listowel Excerpts

Committee: 3rd sitting (Hansard - continued): House of Lords
Wednesday 28th February 2018 Lords Chamber

[Lord Wigley (PC)]

My Lords, I am delighted to support Amendment 23, moved by my noble friend Lord Foulkes, and I concur without reservation with everything he said. The amendment addresses many crucial matters for Wales, as well as for Scotland and indeed for many parts of England. Article 174 of the Treaty on the Functioning of the European Union aims to reduce disparities in terms of economic and social development between the various regions of Europe. The central plank of this is to reduce inequality. I fear that the same thing cannot be said of the policy of the present UK Government. The objective of their policy is in no way a concerted drive to attack the disparities that exist within these islands. The income per head of an area such as Kensington and Chelsea is 10 times that of the area of west Wales and the valleys, the Anglesey area or the Gwent area. We surely cannot accept a tenfold disparity in a civilised society.

Europe has been a bulwark for us over the past 15 years in Wales—the past 18 years, in fact—since we started getting the Objective 1 money in 2000. That money has come through as additional funding for Wales, after a bit of a fight, which I will talk about on another occasion, but we have not had the success that Liverpool and Merseyside, certainly, have had, and South Yorkshire has had to a lesser extent—and we still have a lot of work to do.

The reality is that, when we look at the matters of industrial infrastructure investment that are in Westminster’s hands, we see that Wales is the only country in western Europe that does not have a single mile of electrified railway line. What happened to the plans that were already drawn up to electrify to Swansea? They have been dropped—and the proposals to electrify from Crewe to Holyhead are somewhere in the clouds. Yet we in Wales are asked to pay our contribution towards HS2. The reality is that we get greater assistance with our economic needs from the European Union than from Westminster. That is one reason why it hurts so much that we are about to leave the European Union, unless something can be done about it. Another example of where the Westminster regime is not sensitive to the crying economic need of Wales is the Swansea Bay lagoon, which has been confirmed as being a viable project, with a former Conservative Member of Parliament driving it forward, yet the Government refuse to come off the fence on it.

Then there is the disparity in another important aspect of economic infrastructure: broadband connectivity. The UK Government have recently directed significant sums to improve broadband in three of the four countries of the UK. They found £20 million for ultrafast broadband in Northern Ireland and £10 million for full-fibre broadband in six trial areas of England and Scotland. We are missing out on important things such as this and we cannot rely on Westminster to look after our needs. The Government’s justification for their broadband investment was that it will trigger the most effective short-term economic growth. Therein lies the central weakness of the Westminster approach: its short-termism and its links to political returns, as we have seen in the context of Northern Ireland.

The EU has been a major source of assistance to Wales, not least in terms of our economic infrastructure. The ERDF and the European Social Fund have been mentioned. Areas of England such as Merseyside, South Yorkshire and Cornwall have certainly benefited greatly from the EU as well. We will miss out all round when we turn our backs on Europe.

In the context of the amendment, we have a right to know how the Government intend to sustain the EU objectives of Article 174 after Brexit—if indeed they do. We are told that there will be a shared prosperity fund, but we have no details of its size or remit, nor how it will work with devolved government. In particular, given our experience in Wales with the Barnett formula, which has been such a travesty—and has been recognised by this House as a travesty—we have enormous reservations about leaving it to the Treasury in Whitehall to be the adjudicator in the distribution of such resources. It is for these reasons that I support the amendment, and I am certain that we shall have to return to these critical issues later in the Bill’s passage.

[The Earl of Listowel (CB)]

My Lords, I declare my interest as a vice-chair of the Local Government Association. I support the amendment moved by the noble Lord, Lord Foulkes, because over the past two years I have been attending two inquiries led by the All-Party Parliamentary Group for Children: the first into children’s social care services and the second into different thresholds for access to those services.

It has become clear from the evidence I have heard that local authority funding has been cut by 30% to 40%. Local authorities are delivering their statutory services and safeguarding children as best they can, but all the peripheral services—the family support services and the charities—are really struggling to meet the need and therefore more and more children are being taken into care. As I said earlier, Lord Justice Munby, President of the Family Court, in his statement last year highlighted that more and more children were being taken into care and the courts were finding it difficult to process the numbers of children being taken into care.

What needs to happen is what has happened to adult social care: additional funding needs to be given to local authorities so that they can meet the needs of their children and family services and we can stop taking children away from families whom, if they had had additional support early on, they could have stayed with. It is relevant to this debate because we have heard in the inquiries that it is often the poorest local authorities, with the most deprived families, which have both the greatest demand on their services and the fewest resources to meet those needs. So in what the noble Lord, Lord Foulkes, proposes I see a way of reducing deprivation and improving the wealth of those communities so that there is more resource available to local authorities to meet local need, and reducing the need of families to turn to those kinds of services. I look forward to a response from the Minister to the principles that the noble Lord, Lord Wallace, has just set out.

[Baroness Young of Old Scone (Lab)]

My Lords, I add my support to Amendment 23, moved by the noble Lord, Lord Foulkes, from an environmental perspective. These funds have been hugely beneficial in helping bring environmental progress, together with economic and social progress, to these very deprived areas.

The ERDF is big and it is substantial—you can see it from the moon. Four of its 11 thematic objectives are environmental: climate change mitigation, climate change adaptation, wider environmental protection and sustainable transport. The thematic approach has really helped mainstream environmental considerations into development in these areas and encouraged more sustainable development strategies and schemes that provide local employment and economic activity, often in areas that have absolutely nothing but their natural resources to rely on. That has been a hugely valuable process.

I particularly commend the Interreg process as part of the EDRF. This focuses on cross-border environmental protection projects and has provided for projects that have struggled to get funding elsewhere because they span administrative and governmental boundaries. It is quite telling, as the noble Lord, Lord Wallace, said, that Norway participates in Interreg, and I encourage the Government to consider remaining in the Interreg process. It is hugely innovative and facilitates cross-border work which simply will not be done by a “Britain going it alone” process, as is the case with many of the issues that we will face in the future outside the European Union. This is particularly important in environmental areas because, of course, the environment does not recognise governmental or administrative boundaries.

I therefore ask the Minister whether she would consider how a strategy could be brought forward to fill the gap post-Brexit. It needs two elements. First, it needs to recognise that these funds are absolutely crucial and that that level of funding needs to be continued, because so many other sources of funding for these sorts of projects are diminishing. Local authority money is going, lottery money is going, the Government themselves are broke and the charities are not too well-off either.

Secondly, there is the whole issue of stability. If the funds are reshaped along Barnett formula lines—and if they are simply locked into the block grant and not ring-fenced—key areas of high need will lose out. Currently, these funds are allocated on the basis of need and merit proposals, and we would not see a degree of stability going forward if they were simply dealt with on a pre-existing formula. I therefore hope the Government will come forward with a strategy; this is a splendid proposition.

--- Later in debate ---

[Baroness Goldie]

I shall come on to that and endeavour to address the points that the noble Lord has raised. I was merely going to observe to the noble Lord, Lord Wallace of Saltaire, who was concerned about what he saw as a sort of Home Counties-centric Administration, that, looking at this Front Bench, there is not much Home Counties representation here, with the honourable exception of the bicycling baronet. Across this Front Bench there is a genuine understanding of all parts of the UK—including, to be fair, the Home Counties—and that is very important. The Government are very anxious to reflect the pan-UK need and relevance in conceiving and constructing policy to address the issues that are the subject of the amendment.

As I understand it, the noble Lord’s amendment seeks to transfer the provisions of Article 174 of the Lisbon treaty, which provides the legal basis for EU cohesion policy, into UK law. Indeed, that policy is one of the key policies of the EU, as the noble Lords, Lord Foulkes and Lord Wigley, recognised. It recognises the importance of reducing inequalities between communities and reducing disparities across the EU. At the same time, leaving the EU allows the UK to begin to take its own decisions on the future of regional development. Arguably, perhaps, it will be better placed to ensure that those are better tailored to UK priorities rather than the priorities of the EU.

The noble Earl, Lord Listowel, raised important points, to which I listened with care. I think they are more a matter for the Ministry of Housing, Communities and Local Government and the revenue support grant, but I am informed that the local government financial settlement has allowed additional flexibility in meeting costs for adult social care, which I understand has been widely welcomed.

[The Earl of Listowel]

I thank the Minister for saying what she has said. That is true about adult social care, but we need the same arrangement for children’s services. That is my concern; I do not think it has come in. If she could say during the passage of the Bill that that will indeed be made available for children’s services, that would go a long way towards assuaging my concerns in this area.

[Baroness Goldie]

I assure the noble Earl that I am listening to what he says.

The noble Lord, Lord Adonis, specifically raised the issue, which I will deal with here, of UK access to the European Investment Bank. The UK wishes to explore options for maintaining a relationship with the EIB in the second phase of negotiations. To avoid doubt, I say that the UK will leave the EIB when it ceases to be an EU member state, but that is all I am able to tell him at the moment. I think that will be an important feature of the second phase of negotiations. He rightly identified that the bank has been an important source of investment finance.

The noble Lord, Lord Foulkes, rightly wants to know the shape of all this and what the Government are actually doing. If your Lordships will permit me, I shall try to outline the situation. The Government have already set out their long-term strategy in many areas covered by the noble Lord’s amendment. In November, my right honourable friend the Secretary of State for Business, Energy and Industrial Strategy launched the Government’s industrial strategy, which sets out the long-term plan to boost the productivity and earning power of the UK. It sets out how we will help businesses to create better, higher-paying jobs in every part of the UK with investment in the skills, industries and infrastructure of the future.

The strategy will boost productivity and earning power across the country by focusing on five foundations of productivity. It is worth repeating them: ideas, people, infrastructure—in that connection, let me say that I listened with interest to what the noble Lord, Lord Adonis, said about the value of long-term strategic thinking; he made a number of important points, which the Government will want to bear in mind—business environment, and places.

All these foundations have links to cohesion policy, but it is perhaps that final foundation which is most relevant: places. This recognises that every region of the UK has a role to play in boosting the national economy, including North Yorkshire, to which the noble Lord, Lord Wallace of Saltaire, referred. The UK has a rich heritage, with world-leading businesses located around our country. Yet—and this is disappointing —many areas are not fulfilling their potential, and that despite receiving cohesion policy funding. The UK still has greater disparities in regional productivity than other European countries.

The challenges and opportunities facing us are shared across the union. We recognise that the devolved Administrations are acting to identify and deliver their own priorities, and we respect the devolution settlement. But devolution has never meant that the Westminster Government should stop delivering for people, businesses and places in the devolved nations.

As part of the industrial strategy, we will agree local industrial strategies that build on local strengths and deliver economic opportunities. We want to work with all relevant bodies in England and partners in the devolved nations to consider how local strategies can deliver for places in Scotland, Wales, Northern Ireland and, of course, England. I hope that that to some extent reassures the noble Baroness, Lady Hayter, who asked how all this would flow out across the UK. We are also introducing a new £115 million strength in places fund to build excellence in research, development and innovation across the UK.

We are already seeing the opportunities and benefits of a focus on places. In the year that we launched the northern powerhouse project, we saw productivity in the north rise at a faster rate than London and the UK average. We have also seen further exciting developments outside England. Our city deal programme demonstrates how the UK Government can work hand in hand with our partners in the devolved Administration Governments and local authorities to deliver co-ordinated, locally led interventions that have a real impact on local economies. As confirmed by the Chancellor in the Budget, we are currently working with regional representatives from Stirling and Clackmannanshire, the Tay cities, Belfast, north Wales and the border lands between Scotland and England to negotiate new city deals.

Meanwhile, under the people foundation, we also want to tackle regional disparities in education and skill levels so that we build on local strengths and deliver opportunities for people wherever they live. The industrial strategy will do this through a major programme of reform to ensure that our technical education system can stand alongside our world-class higher education system and rival the best in the world. There will also be investment of an additional £406 million in maths, digital and technical education, helping to address the shortage of STEM skills.

The industrial strategy recognises the importance of ensuring that all areas in all parts of the United Kingdom can meet their full potential. The strategy recognises that every region of the UK has a role to play in boosting the national economy, but the noble Lord’s amendment refers to a number of specific types of region in particular, including regions which suffer from what he described as demographic handicaps, and rural areas. These are very important matters. In responding to the challenges of demographic handicaps, the industrial strategy recognises these. The ageing society grant challenge aims to bring an innovation, productivity and growth lens to the challenges and opportunities of our ageing population.