Exiting the EU: Businesses in Wales

Geraint Davies Excerpts

Wednesday 14th December 2016 Westminster Hall

[Chris Elmore]

I entirely agree with my hon. Friend, and I echo his concern. I hear that constantly from small businesses, not only in my constituency but across the piece, living as I do in south Wales.

[Geraint Davies (Swansea West) (Lab/Co-op)]

Do my hon. Friend and the Minister agree that there should be a level playing field? If certain motor companies are selected for special subsidies through under-the-table deals, that discriminates against other companies, whether they are big, like Airbus, or smaller suppliers. We need support for all exporters and subsidiary suppliers that will be confronted by tariffs, so that they can continue to compete effectively.

[Chris Elmore]

I thank my hon. Friend for that intervention, which the Minister heard. My hon. Friend is right to make the point that we need a fair playing field for all businesses across Wales and, indeed, the UK.

The opportunities that the EU offers will be sorely missed if the Government do not create better circumstances for businesses in a post-EU Wales. Businesses in Wales are clear that they are willing to adapt to a post-Brexit Britain, but they need certainty and assurances from the Government about what that will look like. As Members of Parliament, it is our duty to go back to our constituencies and tell businesses what they can anticipate from Parliament and the Government in the near future, but I cannot give them any assurances because this House has not been given any by the Government. I am not asking for a running commentary—I leave that privilege to the Foreign Secretary—and I am not hoping for a line-by-line strategy; I am asking only for a few select assurances, so that business in Wales can begin to plan.

I ask again: will the Government guarantee to replace the cumulative £2.7 billion post-2020 EU funding that has not been underwritten by the Treasury? What steps will be taken to ensure that there is not a training shortage in Wales? How will the Government involve businesses in Wales in their EU negotiations and representations made by the Secretary of State for International Trade? I suspect that the Government are unable to provide any answers, and I can only assume that is because they do not have any.

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[Geraint Davies (Swansea West) (Lab/Co-op)]

It is a pleasure as always to serve under your chairmanship, Mr McCabe. As has already been said, there is great uncertainty about Brexit among the business fraternity across Wales. If article 50 is, in fact, triggered on 31 March 2017, the remaining EU27 countries will determine the deal that we have to live with, no matter what has been said in this Chamber and elsewhere. There is a natural concern that that deal will be in the interests of those 27 countries and others that are not leaving the EU.

There is the spectre of tariffs. Some people have said there will not be tariffs because we import more than we export. However, only Germany and the Netherlands have a net trade surplus with us, so other countries may have an incentive to impose tariffs. Indeed, German car makers may want to block, for example, Japanese car makers that use Britain as a platform to launch into Europe. Of course, that is why there has been an under-the-table deal with Nissan, which has been referred to, while several other large conglomerates have naturally come forward to ask for money to offset prospective tariffs.

As I said when I intervened, it is particularly important that Welsh businesses and all people relying on exports to the EU have a level playing field and subsidies and support, so that they can continue their terms of trade after Brexit—assuming that Brexit goes ahead. My constituency of Swansea West is part of the wider Swansea Bay city region, where 25,000 people’s jobs involve exporting to Europe. Alongside that, there is obviously a farming community that is helped by the common agricultural policy, which may be under threat, and we also benefit from billions of pounds of convergence funding. I am looking to the Minister to provide assurances on all those things—namely, the level playing field, the matched convergence funding and, indeed, what the farmers may need in CAP.

A big employer in my area is Swansea University, which is an engine and an asset for economic growth. It has now doubled in size with the new bay campus in the constituency of my hon. Friend the Member for Aberavon (Stephen Kinnock). It is a jewel in the crown of engineering research and development capability across Europe, and the problem is that we may not be able to maximise our opportunities of utilising that; it is not only an asset for young people to grow and learn, but for producing innovative products for export.

[Stephen Kinnock]

The European Investment Bank played a critical role in funding the bay campus, which is indeed one of the jewels in the crown of Welsh higher education. Does my hon. Friend agree that some assurance on how to deal with our exiting from the European Investment Bank is desperately needed from the Government?

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[Geraint Davies]

As my hon. Friend knows, the three primary sources of funding for the bay campus were the European Union, the European Investment Bank and the Welsh Government. We need clarity about those future relationships and future funding. Thank goodness it has actually been built. Clearly, if Brexit had occurred a couple of years ago, we would be in all sorts of problems. We are looking for assurances from the Minister on tie-ups with the network of universities across Europe in the future, on possible funding streams and on support for exports that are driven by innovation from that campus. My hon. Friend knows the campus is linked with Rolls-Royce, Tata and other big manufacturers. The idea was to have an integrated approach to export delivery, and we do not want to put that in jeopardy.

There is great concern among the business community across Wales about the prospective falling consumer demand following Brexit and in the light of the autumn statement, which showed that an extra year of austerity would be inflicted upon us and that Britain’s debt would grow to 90% of GDP. Incidentally, it was half that—45%—when the last Labour Government were in power in 2010. The debt is completely out of control. The Chancellor’s Brexit evaluation is that we will all have to pay an extra £1,000 in future taxes. On top of that, the inflation that has occurred owing to the falling value of the pound is equal to a 5% cut in everybody’s income, which they then cannot spend in local shops and on domestically grown products. There are concerns, and we want reassurance, and the business community wants those assurances without further ado.

Hon. Members may know that my position is that the triggering of article 50 should be delayed until next November, after the French elections in May and the German elections in October, to provide an opportunity for real negotiation up to that point. People should then have the final say on whether it is a good deal or not, with the default position of staying in the EU. As time moves on, not only the business community but everyone will see that the balance of costs and benefits is heavily weighted towards costs, and in my considered view, we are better off staying in. People should have the final say because, frankly, they were given false information when they voted in the first instance.

Assuming for a moment that we trigger article 50, we need those assurances from the Minister now. Businesses desperately want to plan for a prosperous future, rather than an uncertain future of fewer sales.

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[Stephen Doughty]

If the Minister checks the voting list, he will see which way I voted on that matter. I am speaking about my own views on this issue and I certainly have a great deal of concern about the lack of information.

[Geraint Davies]

Does my hon. Friend also accept that even if we did agree to this last minute plan, whatever it is, once article 50 is triggered the 27 EU countries will decide to give us what they want, not what is in the plan?

[Stephen Doughty]

I have a great many concerns about the negotiating process, but I want to turn to three areas of particular concern that businesses have raised with me: regional funding, the single market and the situation for universities.

It is worth reflecting, as some colleagues have, on the importance of the scale on which businesses engage in the single market. There are 191,000 jobs dependent on EU trade, and that affects everything from steel to the high-tech products in my constituency; 500 firms in Wales export more than £5 billion annually to other EU member states and 450 firms from other EU member states, located in Wales, employ more than 50,000 people.

Several hon. Members have spoken about funding and I will come on to that, but, without referencing specific names, the sorts of things I have been told about include workers’ rights to travel to engage in cross-European projects; contracts, which I mentioned in an intervention; and concerns about research collaboration and major long-term projects being put at risk. The message is very clear that businesses do not want a hard Brexit, if there is to be a Brexit. They want it to be as soft as possible and are particularly concerned about tariffs and access to the single market. Those concerns are constantly raised with me.

Businesses were positive with me about the work that the Welsh Labour Government are doing to try to provide some certainty and optimism in the economy in uncertain times. There is particular praise for the work of the First Minister and Economy Secretary, who went to the United States and Japan to stand up for Welsh businesses and the links that we have with those two markets. Whether it is a case of fighting for funding for the south Wales metro or for other projects, the Welsh Assembly Government are trying to ensure that some positive things happen during the uncertainty.

There is also continued investment in infrastructure projects and building, including a lot going on in Cardiff at the moment. There is the city centre redevelopment; we have plans for new stations; we have an enterprise zone, where there is a lot of investment; and—to give credit—there is some degree of cross-party agreement on a city deal. It is vital that such investment in infrastructure and business should continue, particularly now while there is a lot of uncertainty.

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[Kirsten Oswald (East Renfrewshire) (SNP)]

It is a pleasure to serve under your chairmanship, Mr McCabe. I thank the hon. Member for Ogmore (Chris Elmore) for obtaining the debate, which has been incredibly interesting. The speeches were all notable and it is a vital topic.

I was particularly interested in the speech of the hon. Member for Dwyfor Meirionnydd (Liz Saville Roberts). It is an extraordinary fact that there is such a lack of strategy and clarity about the UK Government’s plans. Clearly, Scotland voted unequivocally to remain in the EU, and that is our focus, but for our friends in Wales I reflect on the wise words of the hon. Lady, who talked about a tempestuous period before us. Her focus, and that of other hon. Members who spoke, is rightly on securing the best possible outcomes for businesses in Wales. Instead of the clarity that we would want from the UK Government in this context, we continue to hear such phrases as “Brexit means Brexit”, “have your cake and eat it” and “red, white and blue Brexit”. It is like “The Great British Bake Off” or some kind of punchline. It is just not funny; in fact, it is highly irresponsible.

It is quite extraordinary and very disappointing that before negotiations have even begun, the UK Government appear to have given up on retaining membership of the single market. I understand well the concerns that hon. Members have expressed. Small and medium-sized businesses, which the hon. Member for Ogmore talked about, are watching this kind of debate carefully because they are looking and hoping for clarity and reassurance. Although I have the greatest respect for the Minister, I fear he cannot possibly deliver that because essentially there is no plan.

For all the devolved Governments, it is vital that there is real and proper engagement on the EU, for business reasons, social reasons and other reasons across our society. The hon. Member for Ogmore highlighted a business that had already raised concerns about negative impacts and rightly warned that platitudes are simply no substitute for plans. The hon. Member for Cardiff South and Penarth (Stephen Doughty) spoke of uncertainty among businesses of all sizes about the implications of Brexit. We also heard a sensible question from the hon. Member for Ogmore about whether Welsh businesses will be involved in negotiations. I will wait with bated breath to hear the Minister’s response on that.

There is a significant issue with the involvement of the Scottish Government, demonstrated by our long, unanswered call to the telephone hotline. There is a dearth of real dialogue and opportunity to input. For Wales and Welsh businesses, that attitude—which is in stark contrast with the clear and planned proactive engagement of Scotland’s First Minister—rightly rings alarm bells, as the Brexit vacuum continues. That cannot be more starkly illustrated than by the hon. Member for Cardiff South and Penarth’s helpful comment that it is likely to be February before the UK Government publish any plan.

The hon. Member for Wrexham (Ian C. Lucas) spoke of the need for certainty, which keeps coming up. Businesses are the backbone of the Welsh economy and can be resilient, with the right support. They undeniably require certainty and clarity, which are simply missing. The UK Government must come clean. We want to hear something from the Minister on the Government’s strategy for exiting the EU. The Welsh Government need to put into place a framework of support to ensure they are doing everything possible to help business weather the storm. It seems that the ideological Brexiteers who are sitting right at the heart of power are preventing us from seeing this plan from the UK Government. All we hear are bull-headed assurances that a land of milk and honey awaits—it does not, and businesses can see that.

The hon. Member for Wrexham described what his Brexit negotiating position would be. His particular focus was on migration. The hon. Member for Caerphilly (Wayne David) spoke about skilled migration. I was pleased to hear a mention of universities from the hon. Members for Cardiff South and Penarth and for Croydon Central. Universities have significant concerns. I have had several meetings with representatives of higher education institutions.

[Geraint Davies]

Although I did have an association with Croydon Central, I am the MP for Swansea West.

[Kirsten Oswald]

I thank the hon. Gentleman for that important intervention.

I have met several university representatives, both before and after 23 June. They express particular concerns about the sustainability of courses and the finance of universities. Those issues would be hugely compounded by the reported UK Government plans in respect of overseas students. That is a huge issue economically, socially and in educational terms, and the UK Government need to get a grip on that.

More generally, all of us here need to be clear on what we mean when we talk about migrants and migration. It is vital that, as politicians, we never leave any doubt in people’s minds about the value we place on people from elsewhere who have chosen to make their homes alongside us. The First Minister of Scotland made that very clear when she spoke about the EU nationals who have chosen to make Scotland their home. She said:

“You remain welcome here. Scotland is your home and your contribution is valued.”

It is undoubtedly the case in Wales, as it is elsewhere in these nations, that people who have come here more recently, as well as longer ago, have made a significant contribution to our society and continue to do so. Specifically, they have contributed to business, including universities, social care, healthcare, small and medium-sized enterprises and big business. All those things are vital to the Welsh economy.

The hon. Member for Dwyfor Meirionnydd expressed a concern that the UK Government need to act in the best interests of Wales. She emphasised the importance for Wales of single market membership and customs union membership. She also mentioned that the business confidence figure for Wales has fallen, despite the great ambitions of the business community. Business is concerned. She gave a striking example of the potential significant impact on important companies such as South Caernarfon Creameries.

It has been quite challenging for me to sit here today and hear hon. Members trying desperately to look on the bright side. There really is not much to look forward to, should we leave the EU. It is no wonder that hon. Members such as the hon. Member for Swansea West seek reassurance. It seems clear to me, as someone who represents a constituency where 74% of people voted to remain, that there are vital benefits to remaining in the EU, as the hon. Member for Neath (Christina Rees) said. She spoke of workers’ rights, which are very important, as well as economic benefits and social protections. I echo those sentiments.

I also highlight the importance of cultural and business benefits, which we could lose if we leave the EU. Some 99% of Welsh businesses are SMEs. The hon. Member for Dwyfor Meirionnydd emphasised the need to adopt or adapt systems similar to those favoured in Germany to ensure the potential of those businesses is achieved. She is focused on achieving the best deal for Wales, for her constituents and for Welsh business.

My focus is on protecting Scotland’s interests. Of course, our aim to remain in the EU is strong and unequivocal. The UK vote means that Scotland faces being taken out of the EU against our will. That would be unacceptable and democratically unsustainable. Just as the hon. Member for Dwyfor Meirionnydd focuses on protecting Wales, it is right that my focus and that of my party is on considering and pursuing all possible steps to ensure Scotland’s continuing relationship with the EU.

To conclude, it is essential that we get far more from the UK Government than the limbo, woolly words and clunky slogans we have had so far. For all our businesses, all our communities and all the people living in them, it is essential that the UK Government start to have real, meaningful discussions with the devolved Governments and much more constructive discussions with our friends in Europe.

Leaving the EU: Wales

Geraint Davies Excerpts

Tuesday 25th October 2016 Westminster Hall

[Nick Thomas-Symonds (Torfaen) (Lab)]

rose—

[Geraint Davies (Swansea West) (Lab/Co-op)]

rose—

[Stephen Kinnock]

I will give way once more, to my hon. Friend the Member for Torfaen (Nick Thomas-Symonds), but then I must make some progress.

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[Stephen Kinnock]

I am, Mr Bailey.

I thank the hon. Gentleman for his intervention. My sense is that we are moving firmly off topic with that intervention, but delivering value for taxpayers’ money is a top priority for all Governments, including the Welsh Assembly Government. In light of the unemployment figures coming out of Wales at the moment, which are certainly going in the right direction, along with a range of other economic indicators, I would argue that the Welsh Assembly Government are definitely providing value for money for Welsh taxpayers.

[Geraint Davies]

Does my hon. Friend agree that Wales faces a triple whammy? First, we start from a position of generating only 70% of average UK GDP per head. That is why, secondly, we get multimillion-pound investment that we are about to lose. Thirdly, given the advent of tariffs that we are so dependent on and the inward investment that has just been attracted, we will end up in a situation where we lose trade and grants and start from a weak position that will be catastrophic for the people of Wales.

[Stephen Kinnock]

I agree absolutely with my hon. Friend. In many ways, this debate is about resilience. The resilience of the Welsh economy in relative terms is weaker compared with that of many other parts of the United Kingdom. With the impact of Brexit, the loss of funding and inflation—the weakening of the pound will send inflation up, and we know that the poorest are always hardest hit by inflation—his reference to the triple whammy is an apt and correct way of describing what is happening.

The third reason why the pledge is not as powerful as it appears is that the Government have not yet agreed with other EU Governments that UK-based applications for EU funding will be in any way affected. The EU funding programmes for 2014 to 2020 are well under way—they have either already been launched or are in the advanced stage of planning. I fear that the Government’s antagonistic behaviour towards the EU and their lack of clarity over future funding will harm the prospects of Welsh applications.

Fourthly, the Government appear to have no plan for how the underwriting of funding will work at a small business or charity level, which is so important. Fifthly, even if Westminster does replace EU funding, there are serious considerations as to how that will be done and calculated. The Government will likely be tempted simply to increase the funds available on the basis of the Barnett formula. However, as the Welsh Labour Government have made abundantly clear, the Barnett formula has disadvantaged Wales for years, and we simply cannot afford or accept such chronic under-investment any longer.

At a minimum, the chosen approach to replacing EU funds must be ring-fenced—it must be in addition to the block grant. Beyond that, a revision of the Barnett formula is long overdue. In short, there is no clarity and no confidence for the people of Wales. The Government must urgently make it clear that they will underwrite all project funds agreed in the 2014 to 2020 mechanism. They must make it clear that they will maintain EU levels of annual funding to Wales for at least a decade post-Brexit, and they must set out how the replacement of funds will work in practice for the Welsh Government and local organisations in the spectrum of Brexit scenarios.

Also, the Government must commit to including Welsh voices in the negotiations, especially with regard to other themed EU funding programmes such as the Erasmus student exchange programme or the Horizon 2020 higher education innovation partnership. Of particular concern to south Wales is the future of the UK relationship with the European Investment Bank, whose loans have helped to build the Swansea bay campus; improved the Welsh Water and Severn Trent network in 2015; and upgraded the Great Western mainline. The last loan was worth £430 million. Such institutions matter greatly to us. The head of the bank, Werner Hoyer, has already publicly made it clear that current levels of lending to the UK cannot be maintained after Brexit. Welsh voices must be heard in the negotiations as our future so critically depends on those relationships with the continent. The Government must make clear whether they will seek associate status to the programmes and institutions. They must bring clarity quickly as the futures of people, communities and organisations across Wales hang in the balance.

Although it looks likely that the entirety of the UK will suffer economically in the coming years as a result of Brexit, it is in many parts of Wales where it will hit hardest, as our economic resilience is relatively low. That does not take into consideration the impact of Brexit on the steel industry, which would be hugely endangered if EU tariffs are imposed on it. If investment in Wales is not maintained, vital projects will go under, followed by businesses. People will lose jobs, and unemployment and welfare bills will shoot up. Communities will fracture. Port Talbot and its people have been through enough. That does not have to be our future.

In Port Talbot, Aberavon and across south Wales we are seeing the enormous potential to accelerate what we are doing. There is innovation. One company, SPECIFIC, has developed a steel-based paint that acts as a solar cell to generate power. It could turn every building in the country into a power station—except perhaps for Boris’s Foreign Office. The Swansea bay tidal lagoon is a world-leading project to capture wave energy. The Swansea bay city region proposal, Internet Coast, could transform south Wales into one of the best digitally connected places in the world. All that is being done without any sign of a proper industrial strategy. Imagine if we actually had one.

Alongside the Government’s Brexit negotiations, they must also present a modern industrial strategy, backing skill development, innovation, modern manufacturing, sustainability and the digital revolution. The strategy must focus on regions such as south Wales, where we have so much underdeveloped talent. When the Welsh Secretary declares that we should not simply replace EU money with Westminster money because we have to address underlying issues, we have to laugh. First, of course we need to address the underlying issues. Unlike him, I am unwilling to settle for basic skills. I am ambitious to ensure my constituents have the high skills needed for new industry to flourish in south Wales. Secondly, it seems blindingly obvious that financial support is a precondition for building such industries and developing skills. Finally, it was very nice of the Welsh Secretary to say that publicly, but it is his Government’s responsibility to come up with the solution, so he may wish to get on with it.

The Government must recognise with humility and sobriety rather than the gung-ho hubris they have shown so far that, if Wales does not continue to receive funding for crucial programmes, communities will be devastated for generations, with everything that that means for people’s lives. It will result in a lack of security, a lack of dignity and a lack of hope. I therefore hope that the Government will reassure the people of Wales quickly that they will ensure the floor is not ripped out from underneath them.

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[Geraint Davies (Swansea West) (Lab/Co-op)]

Britain has been terrorised by clowns, and we now know that their ringleader is a peroxide blonde with a German name and a red nose masquerading as the Foreign Secretary. He promised a mixture of lower costs, market access and lower migration, but we are obviously going to get higher costs, which is why the deficit reduction plan has been torn up, no market access—it sounds like it will be a hard Brexit—and increasing migration, as ever. Boris said that we could have our EU cake and eat it, but Donald Tusk has said that all we will get is salt and vinegar.

The referendum took place immediately after the Welsh Assembly elections, so the Welsh people did not have time to contemplate all the ramifications of Brexit on their grants, and 16-year-olds and people living abroad were not allowed to vote. It is now coming home to us that we face the triple whammy that I mentioned earlier. Wales starts from a position of having something like 70% of UK GDP per head. As the hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards) said, 200,000 people who rely on EU trade—25,000 of them are in Swansea bay—face tariffs.

There is enormous uncertainty. We hear today that the promised electrification to Swansea may not proceed, and we do not know what is happening about the lagoon or the Swansea city deal. Tariffs are going up, and companies such as Nissan want compensation. It is like someone going to a shop and buying a mobile phone that they are told has a colour picture, but when they get home they find it is black and white. In other words, if the promises that were made were not a reasonable representation of the future—the falling pound, the loss of investment and the loss of jobs—the British and Welsh people deserve a referendum on the exit package before we trigger article 50. Article 50 should not be triggered until something like next October.

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

Does the hon. Gentleman agree that the fall in the pound has been excellent for exporters?

[Geraint Davies]

I assume that the fall in the pound to a 30-year low was designed to make Polish workers better off when moving abroad. The weak pound is a nightmare that will generate huge inflation in Britain. People will not be able to go on holiday, except on the £14 visa. If the hon. Gentleman thinks that, he should have said before the referendum, “We are fighting for a lower pound and less investment, and we are ripping up our deficit strategy.” In fact, the hon. Member for Cardiff North (Craig Williams), who has now left the Chamber, seems to think that we should have £1 billion less, because we are wasting our money—so much for representing Wales. Last week when I asked the Minister in Question Time about the “body blow” of Brexit, he said simply that Swansea had voted for it, as if to say, “Well, it’s their own fault—like it or lump it.”

In reality, we need support where it is most necessary, and we need promises from the Minister to ensure that funding is sustained and that we still have the city deal, the lagoon and the electrification. We need a helping hand to succeed in difficult days. If possible, we should also have another crack at this with an exit package referendum, so that people can have a say on what they get and whether they want to go ahead. They have said that they want to go ahead in principle, but in practice is a hard Brexit what they wanted? No.

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[Gerald Jones]

My hon. Friend makes a correct point. During the referendum campaign lots of lies were told and comments made, and the people of Wales and the rest of the UK voted for a specific set of circumstances. They did not vote to make our services poorer. Indeed, the investment promised by the Brexiteers—as highlighted by my hon. Friend the Member for Torfaen (Nick Thomas-Symonds)—in the pledge signed on 14 June should be honoured.

[Geraint Davies]

Further to that, will my hon. Friend accept that the people of Wales and Britain voted in good faith in principle to leave and that that was subject to the exit package set out? There is a strong case for another vote not on the principle of whether to leave but on the exit package and whether it represents the reasonable expectations of voters, because already something like 7% of the people who voted to leave now say they do not want to leave. As this is a once-in-a-lifetime choice, surely they should look at the exit package in a referendum.

[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.

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[Guto Bebb]

I thank you, Mr Bailey. I assure you I was not feeling harassed.

It is important to point out that the individuals from the leave campaign who joined the Government will serve in relation to the Government’s agenda, which, to a large extent, is still based on the manifesto commitment of the last election.

I need to move on to reflect on some of the comments of the hon. Member for Aberavon. He began with an important comment about the way a single-industry town is affected by the fact that that single industry has contracted. He highlighted the changes that have happened over a period of years. However, the debate is about European funding in Wales. That funding has been important, but there is no denying that we have qualified for three rounds of such intervention. I do not believe that there is fault with Brussels in the fact that we still qualify for the highest percentage of support from the European Union, but Opposition Members should reflect on the fact that time after time we have ended up still qualifying for the highest level of intervention.

As my hon. Friend the Member for Gower (Byron Davies) stated, when we qualified for the first round of intervention the expectation was that it would be a one-off opportunity, because eastern European countries were joining the European Union whose standard of living was significantly lower than that enjoyed in Wales at that time. However, we have qualified again and again, and it appears that Opposition Members here expect Wales to qualify again in 2020. That is an indication of the failure of the Welsh Government in Cardiff to make the best of the funding available.

I fully accept that some European schemes across Wales have been successful and have made a difference, but no Member can deny that other schemes in Wales have been wasteful and inefficient. The real issue Opposition Members should face is that Welsh GDP per head is continually falling, despite the intervention that has been described by Opposition Members as absolutely crucial to the future of Wales. I believe we need a funding stream in place to support Wales, and I will fight for that as part of the Wales Office, but the crucial point is that to claim the status quo is the way forward is to ignore the realities on the ground in Wales, which were reflected in the referendum. The only two parts of the west Wales and valleys region, which receives the highest level of European intervention, that voted to remain were Gwynedd and Ceredigion. Opposition Members should reflect on that.

[Geraint Davies]

If the Minister expects GDP per head to go up in Wales, does he accept that the Government should stick by the cast-iron promise from the previous Prime Minister to electrify the railway to Swansea? The Government could make Swansea bay part of the wider electrified European network and give us the tools to export, rather than cutting us off at the knees and laughing as they are now.

[Guto Bebb]

The hon. Gentleman has used intemperate language throughout the debate. It is important to point out that he argued that nothing is happening in relation to the Swansea city region, but we are expecting the proposals for the Swansea city region deal.

[Geraint Davies]

Where is the money?

[Guto Bebb]

The hon. Gentleman asks where the money is from a sedentary position. It would be a very irresponsible Government—perhaps like the one down the M4 in Cardiff—who would commit funding to a project without even having the costings. The hon. Gentleman should also be aware that we have a commitment to look carefully at the Swansea tidal lagoon. The Wales Office is working hard to ensure that that project has an opportunity to succeed, but it has to work for both the taxpayers and the people of south Wales.

I will take no lessons from the hon. Gentleman. He claims to be a democrat, but on several occasions in the debate he has called for another referendum. I think what we are seeing is an individual who perhaps did not fight as hard for his beliefs as he should have during the referendum and is now asking for a second chance. On the electrification of the south Wales main line, I will take no lessons from the Labour party, which did nothing to electrify the south Wales mainline, when the Government have just delivered improvements to the Severn tunnel and a new service from Swansea that started yesterday, and we will see fast trains getting to Cardiff and Swansea in due course. I expect the hon. Gentleman to welcome that. [Interruption.] The excitement of Opposition Members indicates to me that they are aware that some truths are being told.

Oral Answers to Questions

Geraint Davies Excerpts

Wednesday 19th October 2016 Commons Chamber

[Alun Cairns]

The hon. Gentleman raises a fairly technical area of policy. Appropriate economies of scale are involved in this. I am happy to discuss the details with him. The Welsh Government have made their views clear. However, it is not only about “Welsh money for Wales”—which, on the face of it, would sound good—but about having the economies of scale such that we can access funding elsewhere as well. Therefore, it is not necessarily the right thing, but I am certainly not closed to the idea.

[Geraint Davies (Swansea West) (Lab/Co-op)]

2. What recent discussions he has had with the Chancellor of the Exchequer on whether funding for the Swansea bay city deal will be included in the autumn statement.

[The Parliamentary Under-Secretary of State for Wales (Guto Bebb)]

I am very supportive of achieving a deal for the Swansea bay city region. However, this is not about Government telling local authorities what to do; it is about empowering them to bring forward bespoke proposals for their region. I welcomed the announcement in the Budget that we were opening negotiations, but it must be the right deal—a well-thought-out deal that delivers for the whole region.

[Geraint Davies]

The Minister will know that Brexit will deal a major body blow to Swansea’s universities and the Swansea region overall. What assurances can he give that in the autumn statement the Chancellor will make a firm commitment to put his money where his mouth is, because we want hard cash, not hot air, to provide the required support for jobs and prosperity in the area?

[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.

Oral Answers to Questions

Geraint Davies Excerpts

Wednesday 13th July 2016 Commons Chamber

[Guto Bebb]

I could not agree more with my hon. Friend, who is well known for his campaigning efforts on behalf of rail commuters. The Government’s investment in the railway infrastructure is at record levels. We are seeing the electrification of the main railway line to Swansea, and we are also seeing great investment in signalling in north Wales. That new capacity will be good for the economy of south Wales and the south-west.

[Geraint Davies (Swansea West) (Lab/Co-op)]

As the Minister will know, there is more economic connectivity between south Wales and the south-west than there is between south Wales and north Wales. Will he undertake to speed up the electrification of the railways, particularly at a time when Brexit is leading to considerable uncertainty about inward investment in Wales?

[Guto Bebb]

The hon. Gentleman has made a good point about the importance of rail connectivity to economic development, but I do not think it is a case of either/or. I think it is important to have great connections between north and south Wales, but we should also recognise the need for south Wales to be linked with the London area and the south-west, and the same applies to north Wales. As for “speeding up”, I will take no lessons from the Labour party, which failed to invest a single penny in the electrification of any railway line in Wales during a 13-year period.

Wales Bill

Geraint Davies Excerpts

Tuesday 5th July 2016 Commons Chamber

[John Penrose]

There has been a difference for many years between local election registers and parliamentary election registers. That is a very long-standing principle. We are not changing that. It would be possible, should the Welsh Assembly so decide, to make further changes and enfranchise other groups of people whom we would not necessarily want to enfranchise for UK parliamentary elections. At the moment, however, there is already a difference between the two electoral registers. There has been for a very long time. Nothing about this will change any of that, but in future it will be up to the Welsh Assembly to decide whether it wants to make further changes that might narrow or widen the existing long-standing differences.

[Geraint Davies (Swansea West) (Lab/Co-op)]

The Minister seems to be saying that the Welsh Government should have the right to displace coincidental elections, but that they do not have to. He seems to be saying that under the rules a general election, an Assembly election and even a European election could occur on the same day. At the same time, he is saying that it would be delayed by only a month. In the last such episode, we saw political parties in Wales campaigning up to the Assembly elections and not really mentioning Europe, but then we had only six weeks to persuade Wales that it was better off in. That was not enough. Is a month long enough?

[John Penrose]

I fear that I was not clear enough. I am saying that there are explicit provisions in the Bill to prevent the elections the hon. Gentleman just mentioned from happening on the same day. It will not be possible to hold an Assembly general election, for example, on the same day as a UK parliamentary general election. That is explicitly prevented in the Bill and if some future accident of diary meant that the two things were to fall on the same day, we are talking about the powers for Welsh Ministers to move their date, should it be necessary, by up to a month, and about their having that power rather than the Secretary of State.

[Geraint Davies]

On the second point, one question would be whether a month is long enough. It would seem to me that it is not. Secondly, it seemed to me that the Minister said that there are powers to move the dates but that Welsh Ministers are not obliged or required to move them. Could not the Welsh Assembly Government choose to have the two elections on the same day under this provision?

[John Penrose]

I am not saying what the hon. Gentleman fears I am saying. I can reassure him on that. The power to move things by a month already exists. It just happens to be vested in the Secretary of State. All we are seeking to do here, as part of the St David’s day agreement and following the principles set out in it, is to devolve that power from the Secretary of State to Welsh Ministers. We are not seeking to change the power in one direction or another; we are just making sure that it is being exercised more locally in Cardiff rather in than Westminster. It continues to be legally the case that the Assembly elections and the UK parliamentary elections cannot happen on the same day, so it would only be a question of moving some of these elections around in that case—although there might be other reasons why one might want to—if at some point, many decades hence, an accident of the diary meant that the two happened to coincide. In order to comply with the constraint, they cannot happen on the same day and one would have to move, whereupon this power would apply.

I was talking about the online voter registration system and the way that that needs to be adjusted, if it is to be adjusted, by mutual consent. As I said, the Assembly is free to decide on the franchise and the registration process for Assembly elections, but as a practical matter, where the Welsh Government want changes to the Great Britain-wide Digital Service, they will need the approval of UK Ministers to do so. That is because the Digital Service is a series of interconnecting digital applications, including online voter registration, for people living in England, Wales and Scotland, as well as British citizens resident overseas. We all need to ensure that any changes to the franchise or registration process for Welsh Assembly and local government elections in Wales do not adversely impact on voters in other parts of the UK or abroad.

With these considerations in mind, the clause allows Welsh Ministers to make regulations concerning the Digital Service in relation to Assembly and local government elections in Wales with the agreement of a Minister of the Crown.

Oral Answers to Questions

Geraint Davies Excerpts

Wednesday 25th May 2016 Commons Chamber

[Guto Bebb]

My hon. Friend is perfectly right to say that the business rates announcement was welcomed by small businesses in England. The Wales Office is calling on the Welsh Government to replicate the steps taken in England, in order to ensure that small businesses in towns and cities across Wales benefit in the same way from the changes that are being implemented in England, which will allow them to grow and to employ more people in Wales.

[Geraint Davies (Swansea West) (Lab/Co-op)]

The Welsh Government have done well in attracting inward investment, but in terms of business confidence and Brexit, what will the UK Government do to shore up certainties about the Swansea bay lagoon, electrification and supporting Swansea with a city deal?

[Guto Bebb]

The hon. Gentleman should be aware that the Wales Office is working very closely with the Treasury to develop a Swansea city deal, which will include the electrification of the main line to Swansea. We are also proposing a review of the Swansea bay tidal lagoon in order to look at its viability and to ensure that it will provide value to the taxpayer if it is developed.

Oral Answers to Questions

Geraint Davies Excerpts

Wednesday 13th April 2016 Commons Chamber

[Alun Cairns]

I am grateful to my hon. Friend for his kind words. It is fair to say that there are no infrastructure projects more important to the south Wales economy than the upgrade of the M4 around Newport. It is hard to believe that our noble Friend Lord Hague was Secretary of State for Wales when a commitment to that was first made, only for it to be cancelled twice by the Labour party when it was in government. Business has called for it; commuters have called for it; visitors have called for it. The Chancellor made money available specifically for this project almost three years ago. We just wish the Welsh Government would get on with it.

[Geraint Davies (Swansea West) (Lab/Co-op)]

The Select Committee on Welsh Affairs found that the operational and maintenance costs of the bridge represented a quarter of the toll, yet, as the bridge goes into public hands, the Government have reduced the toll by half and are therefore creating a 100% margin. When will they reduce the toll to the level of the operational and maintenance costs to give south Wales and the Welsh economy every chance of performing as well as anywhere else, rather than having this stranglehold on it?

Draft Wales Bill (Morning sitting)

Geraint Davies Excerpts

Wednesday 3rd February 2016 General Committees

[Geraint Davies (Swansea West) (Lab/Co-op)]

I hear what the Secretary of State is saying, but does he agree that the Welsh people’s consent was given by the most recent referendum in which they argued that more, not less, devolution should occur? He is now arguing that we should move backwards, behind that battle line, and in fact many laws that have been passed in Wales would not have been passed under the legislation he is now proposing.

[Stephen Crabb]

The hon. Gentleman’s charge is untrue on so many levels. The Conservative-led coalition Government held the referendum and we recognise that that was a game changer in terms of devolution for Wales. A large majority of people who participated in that referendum voted for full law-making powers in the areas that were devolved. They were never asked to agree that the devolution boundaries should be redrawn. It is the role of elected Governments to make decisions about where the devolution boundary lies.

--- Later in debate ---

[Nia Griffith]

An awful lot more cases will go to the Supreme Court if we do not get this Bill correct. That is the problem. The Assembly has passed 14 Bills, parts of which various commentators are suggesting could not have been passed if this legislation had been in place. The fact that they are arguing over that is the reason why we would end up with people—not just the UK Government or the Welsh Government, but any individual—taking things to the Supreme Court, and thousands of pounds would be spent trying to sort that out. That is simply not the way we want to proceed.

[Geraint Davies]

Does my hon. Friend agree that the logic of English votes for English laws was that there would be Welsh votes for Welsh laws and that the direction of travel of this Bill is in fact English votes for Welsh laws? That will generate all sorts of confusion, some of which has just been alluded to.

--- Later in debate ---

[David T. C. Davies]

Thank you, Mr Owen. If I may, I will continue not so much on Select Committees, because that was a side issue, but on the overall issue of scrutiny. A lot of evidence came to us from people who were basically calling for there to be more Welsh Assembly Members, and they included the Speaker of the Assembly. I want to pick up on that, because one thing that I said when I campaigned against the Assembly in the late 1990s was that it would be a case of 60 people doing a job that was previously done by three—then, of course, we had two junior Ministers. In one sense, I got that one wrong, as we all did, because of course in Parliament there are 1,400 people who can scrutinise legislation: Members of the House of Lords and Members of the House of Commons. I think that in the Welsh Assembly there are 13 Ministers and junior Ministers, which leaves 47 people, or thereabouts, who can actually scrutinise legislation. That clearly puts them at a disadvantage, and various people have suggested various solutions to the problem over the years.

One suggested solution was that scrutiny could be conducted by the Welsh Grand Committee or even by the Welsh Affairs Committee. I would not mind putting myself forward for such a role, but in reality it would be completely politically unacceptable for Members of Parliament to scrutinise Welsh Assembly legislation.

Another solution that has been offered is some kind of Ty’r Arglwyddi—a Welsh House of Lords—but again that would be politically very difficult to get through and would involve huge cost, so people have started talking about more Assembly Members. That was the solution put to us in the evidence we took. I believe that Rosemary Butler mentioned a figure of 80 to 100 Assembly Members—I do not want to put words in her mouth. David Melding said something similar. We were definitely being told by one witness after another that we needed between 80 and 120 Assembly Members to do the job, rather than 60, but I think all of them recognised that that would be a very difficult sell to the public, so respectfully I want to put forward an alternative solution, based on the thought that, assuming this Bill goes through in some form, the Assembly will have the extra powers and there will be a need for a much higher level of scrutiny than there is currently.

I think there is an obvious solution. We have 22 local authorities. I believe that those local authorities could easily send four members, based on some sort of party balance, to sit in the chamber of the Welsh Assembly—perhaps on one day a month. They could carry out good scrutiny of the legislation that is being passed. They would have a democratic mandate to do that because they would all be elected. They would have the expertise to do it because local authority members often carry out the functions of legislation passed by the Welsh Assembly, particularly in education and social services, and they will clearly be in a position to know what will work and what will not work. I am not suggesting for one moment that local councillors should be able to block or overturn legislation, but they could have a role in forcing the Assembly to think again and add amendments.

[Geraint Davies]

Does the hon. Gentleman accept that in such a model there would be a tendency for more money to go towards local authorities and for less money to go towards health?

[David T. C. Davies]

There would clearly be pressure from local authority members to reconsider the local government funding formula, and I assume that members from areas such as Brecon and Monmouth would want to do that because, despite the Minister giving extra money to the Welsh Assembly, areas such as Monmouthshire are seeing a huge cut in funding, and there is absolutely no reason for that. Brecon is even worse, because I believe that about 4%—

Oral Answers to Questions

Geraint Davies Excerpts

Wednesday 13th January 2016 Commons Chamber

[Alun Cairns]

It is hard to believe that the former right hon. Member for Richmond, Yorks was Secretary of State for Wales when the upgrade was first committed to, only for it to be cancelled by Labour Members. It was reconsidered later by a Plaid Cymru Welsh Government Minister, only to then be cancelled. My right hon. Friend the Chancellor of the Exchequer has made additional resources available, and we just want the Welsh Government to get on with it.

[Geraint Davies (Swansea West) (Lab/Co-op)]

In the light of the serious flooding caused by climate change, will the Minister ensure that the newly proposed M4 relief road will double as a flood defence for the Severn estuary?

[Alun Cairns]

The route is a matter for the Welsh Government, and we encourage them to consider all options. We want the project to start as soon as possible. Even if it started to the earliest possible timescale outlined by the Welsh Government, it would still not be completed until the end of 2022, which is unacceptable.

Oral Answers to Questions

Geraint Davies Excerpts

Wednesday 18th November 2015 Commons Chamber

[Stephen Crabb]

My hon. Friend makes an important point, not least about the importance of investing in technology. If we are to drive up prosperity in Wales, we need more growth in higher technology. This afternoon, I am proud to be helping to launch a new compound semiconductor centre for IQE and Cardiff University. That is emblematic of the changes in the Welsh economy.

[Geraint Davies (Swansea West) (Lab/Co-op)]

Twenty-five thousand jobs in Swansea bay city region rely on being in the single market. Swansea is, of course, in the convergence funding area. Will the Secretary of State support Swansea bay city region MPs’ bid to get the new tax centre for Wales in Swansea bay city region, given that it is an area of relative deprivation, and not Cardiff?

[Stephen Crabb]

Exciting things are happening in Swansea and the Swansea bay city region. I am delighted that Swansea MPs are working together. If they have a proposal about future changes to the delivery of Government services, with opportunities for Swansea, I ask them please to send them through and we will consider them.