Leaving the EU: Wales

Guto Bebb Excerpts

Tuesday 25th October 2016 Westminster Hall

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

It is a pleasure to serve under your chairmanship this morning, Mr Bailey. I congratulate the hon. Member for Aberavon (Stephen Kinnock) on securing the debate, and the hon. Member for Merthyr Tydfil and Rhymney (Gerald Jones), who I think is appearing in Westminster Hall in his new capacity for the first time. I also congratulate him on being the only Member from the Opposition ranks who has understood the commitment given by the Treasury on EU funding in Wales. A number of Opposition Members have raised questions in relation to its running out at the autumn statement; but that is not the case. A further letter has been delivered to the Welsh Government, highlighting the fact that the Treasury would be willing to underwrite EU programmes in Wales up to the point of exit. That is a crucial and important Government commitment.

[Nick Thomas-Symonds]

I respect what the Minister says about what the Treasury has said; but what about the letter of 14 June that I read? Is it now Government policy simply to ignore that?

[Guto Bebb]

The hon. Gentleman must understand that initially, in the immediate aftermath of the referendum, the Government gave a commitment to support EU funding up to the autumn statement; but a further Treasury commitment has been made since then. Those letters have been delivered to the Welsh Government. Indeed, I assure the hon. Gentleman that the First Minister of Wales has given a genuine welcome to the Treasury’s commitment to trying to ensure that there is a commitment to the 2020 programmes in a Welsh context. Opposition Members should be aware that in claiming, in contrast with the Labour spokesman, that there is no commitment up to the exit from the EU, they are doing the people of Wales and their constituents a disservice.

[Wayne David]

The Chancellor of the Exchequer said that there will be a guarantee, but only for those projects that “meet UK priorities”. That is a qualification, surely.

[Guto Bebb]

It is a terrible thing for hon. Members to speak from a position of lack of knowledge. The commitment that has been given is very clear. Where a project is considered to be a Welsh Government priority it will be accepted by the Treasury as a priority for the UK Government as well. I recommend that Opposition Members read the comments by the Treasury. Some of them have raised the issue of a south Wales metro, and I recommend that they read the comments about that made by the Under-Secretary of State for Transport, my hon. Friend the Member for Blackpool North and Cleveleys (Paul Maynard), to the Select Committee on Welsh Affairs yesterday. It will be well worth their while. The Welsh Government need to get on with that project, because if the scheme is in place in good time the money will be forthcoming from the EU. If it is signed off before our exit from the EU, again, the Treasury will give a commitment. Opposition Members peddle scare stories about the commitments we have given. It is important for them to get their facts right.

[Nick Thomas-Symonds]

It is not a scare story. I quoted precisely from the letter of 14 June, not just about guaranteeing EU funding but about additional funding for the NHS and a pledge on VAT, both by 2020. Is that the Government policy now or not?

[Guto Bebb]

I am unsure which letter of 14 June the hon. Gentleman is referring to. I am referring to the Treasury commitment of October this year. I think that a commitment made this October trumps a letter of 14 June. The hon. Gentleman has also raised a number of issues about promises made in the referendum campaign that imply a lack of understanding of how a referendum campaign works. It is not about electing a Government. In the referendum campaign there were members of the Labour party on either side of the argument, and the same was true of the Government. To claim that promises made by the referendum campaign are binding on the Government is nonsense, and I think that the hon. Gentleman knows it.

[Albert Owen]

A few years ago the Minister would have been agreeing with us. It is the first time I have ever been accused of scaremongering for quoting the Chancellor of the Exchequer and Finance Ministers. As to the referendum campaign, we are not talking just about individuals making commitments. We are talking about the Foreign Secretary, the Secretary of State for International Trade and the Secretary of State for Exiting the EU. Those are three leading individuals. Will the Minister hold them to account, on behalf of the people of north Wales?

[Guto Bebb]

Again, I highlight the fact that comments made about the letter of 14 June do not reflect the Treasury’s position as it has developed. [Interruption.] Also, it is important to understand that those individuals from the leave campaign who joined the Government have done so with the intention—[Interruption.]

[Mr Adrian Bailey (in the Chair)]

Order. Members have had the opportunity to intervene. They must not continue to harass the Minister from a sedentary position when he is trying to respond.

[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.

[Chris Elmore]

I am not getting anywhere near as animated as the Minister suggests. Specifically on electrification, the chair of Network Rail yesterday said there is no money beyond 2019 to fund electrification to Swansea, which affects my constituency and affects the electrification of the valley lines. Will the Minister confirm whether the Swansea electrification will be completed by 2024, as previously committed to by the Welsh Secretary, the Transport Secretary and, I believe, the previous Prime Minister?

[Guto Bebb]

Electrification improvements on the south Wales main line will continue, and we look forward to delivering the promises that were made. We are looking at ensuring that the fast trains we need in south Wales will be delivered.

[Albert Owen]

I assure the Minister that none of us in objective 1 structural fund areas wear it as a badge of pride. He and I were on the same side in the 1980s and 1990s fighting for such funds; the then Conservative Government refused even to apply for them, which is why we are now in a dire situation. Will he commit, post-Brexit, to fight for the assisted areas scheme in Wales, to help the areas that need the greatest help?

[Guto Bebb]

The hon. Gentleman makes a constructive point, which I welcome. We are discussing EU funding in Wales post-2020, which will not happen because the people of Wales, along with the people of the rest of the UK, made a decision to leave the European Union.

It is imperative that we highlight the need to continually support Wales, which is clear from the Government’s commitments to Wales that have been highlighted: we are increasing revenue funding to the Welsh Government to £370 million; we have provided a funding floor to the Welsh Government, which has never been provided previously by the Labour party; over £900 million in new capital funding has been made available to Wales; there is a commitment of £500 million for the south Wales metro; we are waiting for proposals on the Swansea city deal; and we are in the process of encouraging a growth deal for north Wales. It is clear that the Government are delivering on our commitment to a regional policy that works for the whole of the UK.

I think the hon. Member for Ynys Môn (Albert Owen), who is making signs from a sedentary position that are unworthy of him, if I may say so, should be aware that the failure of EU funds in Wales to help our GDP position was not the fault of the EU funding. There is no denying that the way in which that funding has been utilised on three successive opportunities is a reflection on the Labour Government in Cardiff.

I am glad to say that the relationship between the Wales Office and the Welsh Government is extremely good, and I am glad to say that we have an understanding of the historical failures of EU funding streams. We are getting a constructive approach from the Welsh Government—unlike their colleagues in Westminster—who want to see a way forward in giving stability in the short term so that people who are committed to European projects know that those funds will be in place until 2020, which is precisely what we are offering.

Beyond 2020, it is important that we develop a strategy for the whole of the UK, which is exactly what we will do, working hand in hand with colleagues in the Welsh Government. Opposition Members should not take to their high horses and claim that they have no responsibility for the situation we face in Wales; they do, and they should acknowledge that. The people who vote for them highlighted their concerns in the referendum, which was a reflection, in my view, on the mismanagement of Wales by the Welsh Government for a very long time.

[Kirsty Blackman]

I have not been in Westminster Hall for quite a while, but I did not expect that Opposition Members would ask important, constructive questions and that the Minister would stand up and throw out political points. Will he commit to actually replying to the wide range of issues raised by Members on this side of the House and to providing a comprehensive response?

[Guto Bebb]

To be frank, I am astounded to be accused of making political points by a Member from the Scottish National party; there are always firsts in life. In relation to the crucial question that was asked, which has been misunderstood by Opposition Members and which is the point I want to make sure that people in Wales hear, there is a commitment to EU funding in Wales up until the point that we exit the European Union. That was the misunderstanding that was highlighted in the speech of the hon. Member for Aberavon who secured the debate, and is the point that was misunderstood by many Opposition Members, although it was properly understood by the hon. Member for Merthyr Tydfil and Rhymney. It is important to highlight that.

I will finish on agriculture. Concerns have been expressed about the future of the agricultural sector. As with general EU funding for Wales, there is a commitment to agricultural funding up to the point of exit from the European Union. The hon. Member for Ceredigion (Mr Williams), who represents a rural constituency, will be as aware as any other hon. Member that there are complexities involved in ensuring that we develop a support structure for the agricultural sector moving forward. That work is in hand and information will be provided in due course. The hon. Gentleman will understand that the complexity in the change we are facing is something that will take time to resolve, but I assure him that the Government are committed to ensure that that issue is also reflected in our work.