Rural Economy of Wales

Guto Bebb Excerpts

Tuesday 28th November 2017 Westminster Hall

[Chris Ruane (Vale of Clwyd) (Lab)]

Let me first congratulate the hon. Member for Ceredigion (Ben Lake). To have a debate this late in the day and to have 10 Welsh MPs here shows the importance of the subject; to have five of them from north Wales and five of them Labour shows the importance of the debate to north Wales.

It is vital that we carefully consider how rural Wales can respond to increasing digitisation, the global economy and the challenges of leaving the European Union in a time of austerity. The Welsh Labour Government are committed to the success of their rural communities and have rolled out several initiatives to that end, but law makers in Cardiff have had their hands tied. The most recent Welsh Government budget, published in October, has been developed against a backdrop of unprecedented cuts and ongoing austerity.

In the referendum, the people of Wales did not give carte blanche to this Government to leave the single market or the customs union, or to make Wales and people in rural Wales poorer. Access to the single market and customs union membership, whether permanently or in a transitional period before long-term arrangements can be made, is necessary to provide the economic activity and jobs on which a sustainable future for rural Wales can be built. That is true of the UK generally, but especially in Wales where our economy has depended on EU funds for so many years. That investment is really appreciated in Wales, particularly by farmers and the farming community.

As has already been quoted, 67% of Welsh exports went to the EU. The corresponding figure for all food and live animal exports was 83%; for meat exports, it was 93%. Agricultural goods generally carry higher import tariffs than other commodities, and if this Government fail to secure tariff-free trade post-Brexit, the effects will devastate the Welsh agricultural sector overnight.

Brexit also raises challenges for Wales in the way of European subsidies and structural funds. The Minister will be aware—I have mentioned this time and again—that I helped to secure European structural funds for his county of Conwy and for my county of Denbighshire.

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

Did you?

[Chris Ruane]

The Minister should know that history. It is a huge amount of money for the whole of Wales—€320 million per year in direct subsidies from the common agricultural policy, with a further €355 million to support rural development.

I ask the Minister, as I have asked him before, to make sure that we have extra funding beyond 2020. Our urban and rural communities have been supported by extra funds from Europe over the past 17 years. We want to be treated as well by Westminster as we have been by Brussels. We have had a big dollop of jam—a big dollop of funding—for Wales. We do not want it taken away and for the jam to be spread thinly across the whole of the UK. We need that funding and the Minister must do his job and make sure that we get it.

On productivity and broadband, thanks to the efforts of the Welsh Labour Government, unemployment in rural Wales in 2016 decreased roughly in line with the Welsh average of 4% and productivity continues to increase. However, productivity in rural communities still lags behind the Welsh average. The Welsh Government recognise that and are helping boost productivity with the “Superfast Cymru” project, rolling out superfast broadband across the country. In an increasingly digital economy, the effects of high-speed internet are really needed in our rural communities. Sadly, Wales’s biggest export has been our young people. There has been a brain drain out of Wales for decades. Superfast broadband offers a chance to stop and reverse that. People want to live in rural communities, especially when they are bringing up families. To do that, they need access to superfast broadband to make sure that they can conduct their digital businesses from areas such as rural Wales.

I just want to touch on the north Wales and the mid-Wales growth funds. I ask the Minister to ensure that the funding allocated to those projects is as great as the funding allocated to city deals in England and Wales.

--- Later in debate ---

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

It is a pleasure to serve under your chairmanship, Mr Hollobone. I also join in the congratulations for the hon. Member for Ceredigion (Ben Lake) on what was a very constructive speech and the tributes to his predecessor, who was also always constructive in this Chamber.

We have had a wide-ranging and constructive debate. It is a pleasure to be able to highlight some of the success stories and some of the work that needs to be done. The hon. Gentleman highlighted the need for a mid-Wales growth deal, although he was not particularly generous in his support for the comments made by the Chancellor in the Budget. I think it is a major step forward.

Since 2015, we have had a city deal for Cardiff and the 10 local authorities surrounding Cardiff and we have had a regional deal for Swansea—not just for Swansea, but for Swansea and the region surrounding Swansea, including Carmarthenshire, Neath, Port Talbot and Pembrokeshire. We are working on a growth deal for north Wales; I had the privilege yesterday to be at the acceptance of the bid from north Wales. I was joined at the session by the hon. Member for Wrexham (Ian C. Lucas). It was a constructive session and there was engagement across the political spectrum. We had leaders of local authorities in north Wales of all political colours. We had a Plaid leader in the session, a Plaid member who was also a leader but not currently a Plaid leader. I am not quite sure what is going on in my own county of Conwy, but we do have a good leader, who was there, and we also had leaders from other north Wales counties, who were of a Labour party persuasion.

[Albert Owen]

I want to say on the record what I have said to the Minister privately—that he should involve Welsh MPs from north Wales in the growth deal. Yes, let us have bottom up and get the bid, but we have a mandate from the communities as well.

[Guto Bebb]

I am absolutely delighted to welcome that comment. It was great to see the hon. Member for Wrexham there. In addition, I am engaging with north Wales MPs and there will be a roundtable session in Gwydyr House with the bid authors and north Wales MPs in due course.

The hon. Member for Ynys Môn (Albert Owen) made a very important point in highlighting the fact that growth deals are bottom up. The key thing is that the proposals from north Wales were coming in from local authorities representing the whole of north Wales. Our responsibility down here in Westminster—the responsibility of the UK Government—and the responsibly of the Welsh Government is to work constructively with the partners in north Wales.

This is the template for an approach for mid-Wales. One of the key things I am aware of as a UK Government Minister representing Wales is the importance of ensuring that we do not forget mid-Wales. One of the key things that we highlighted in the Budget is that, although of course we need to deliver a growth deal for north Wales—after all, in the context of this debate, a significant part of north Wales can undoubtedly be described as rural—we also need to deliver for mid-Wales. I want to be able to stand up and say categorically that we will have delivered growth deals for every single local authority in Wales. We have already delivered for 14 local authorities in south Wales. We are working with the six in north Wales, and we are opening the door to a deal in mid-Wales.

We passionately believe that such deals should come from the bottom up. That is why, in the discussions with the leader of Gwynedd County Council and the chief executive of Carmarthenshire County Council, and in the discussions that Lord Bourne, my fellow Minister in the Wales Office, had yesterday with the chief executive of Ceredigion Council and the vice-chancellor of Aberystwyth University, we were very clear that we do not think that the mid-Wales deal has to be confined to Powys and Ceredigion.

I am sure the hon. Member for Glasgow East (David Linden) is aware of examples in Scotland of counties involved in more than one growth deal. We are keen to ensure that if the proposers from mid-Wales say that they want involvement from south Gwynedd—Meirionnydd, for example—Dyffryn Teifi in Carmarthenshire or even north Pembrokeshire, that is something we can look at, because we want to work to deliver the growth deals that are needed in every part of Wales. If people are telling us that the way to do that is to expand or to work as two counties in mid-Wales, we will listen. I am pleased to say in the spirit of co-operation that, over the past few years, the relationship with the Welsh Government Minister for the economy has been extremely constructive.

One thing that has been highlighted in this debate is that we have an east-west issue in relation to economic development. I would argue—perhaps some Opposition Members would agree—that there was perhaps too much emphasis in the early years of devolution on strengthening ties within Wales, which was perfectly understandable. When a new institution is being created for Wales, there needs to be a coherence to Wales. But we also need to recognise the economic realities, including the links between Newport and Bristol, and the cross-border links in north-east Wales. We need to ensure we have a strong Welsh economy that is able to work with our partners in other parts of the United Kingdom.

The hon. Member for Ynys Môn said that Wales is not a peripheral region. I could not agree more. The north Wales growth deal can link to the northern powerhouse and the success stories that are Manchester and Leeds, and a sector deal for the nuclear industry could make a huge difference not just for north-west Wales, but for the entirety of the north Wales economy and the north-west of England economy. That shows clearly that we are not a peripheral region and that we have a huge contribution to make.

I want to touch quickly on the involvement of universities. The hon. Member for Ceredigion was absolutely right to highlight the importance of universities for economic development. He is fortunate to represent not one but two universities in his constituency. The contribution of Glyndwr University and Bangor University to the north Wales growth deal is an example of what can be done. I was pleased that Lord Bourne met the vice-chancellor of Aberystwyth yesterday, because universities will have a crucial role in any mid-Wales growth deal. I encourage the hon. Gentleman to highlight the importance of the university and further education sector in developing growth deals.

I am aware that time is short, so I will highlight some other issues that were raised in debate. Concerns were raised about broadband connectivity. Listening to the hon. Gentleman, I could be forgiven for thinking that I was listening to his predecessor. Broadband connectivity in Ceredigion is indeed a very serious issue, as it is in many parts of rural Wales, although there are some areas where that is not the case. For example, the connectivity in Aberdaron on the Llŷn peninsular, which is much better than the connectivity in the majority of my constituency, is an example of what can be done. Rural Wales can be served if there is a desire to serve rural Wales, but we need some honesty in this Chamber. For broadband connectivity to be supplied across Wales, there has to be a partnership between the private sector, the Welsh Government and the UK Government.

Back in September, I announced the £56 million of addition spending to be made available through the claw-back on the contract with BT, but it is disappointing that that figure was lower than the 11% secured for Wales in 2011 because take-up in Wales had been lower. There has been a lack of transparency in Wales about why and how the priorities for rolling out broadband were set. It is unacceptable that Ceredigion—an area with two universities, which can make such a contribution to our rural economy—has been so ill-served by the way the Welsh Government have rolled out the contract. We can rectify the situation, and we need to do so, but that can be done only if we work together.

I expected that the agricultural sector would be more of a key part of this debate. We understand the importance of the agricultural sector for Ceredigion and most of rural Wales, including Powys. The Government have gone a long way in trying to reassure the sector. First, we guaranteed that the funding will be in place until 2020. We also said that there will be comparable funding until 2022. I hear what the hon. Member for Vale of Clwyd (Chris Ruane) is saying about getting guarantees post-2022, but a funding guarantee until after 2022 would be a longer period of certainty than we would have had if we had decided to remain within the European Union. The farming community appreciates that guarantee.

The hon. Member for Ynys Môn made an important point, which I am happy to accept, about the importance of ensuring that our share of future agricultural funding is based on the historical trend, rather than a Barnett-based system. The Wales Office and Ministers representing Wales in the Wales Office will be making that case, but we have to do so with sensitivity because we cannot say to the Welsh Government, “This is a chunk of money for you, but you must spend it on this specific area.” If we did that, we would be accused of a power grab.

[Liz Saville Roberts]

Will the Minister give way?

[Guto Bebb]

I am afraid I cannot take an intervention from the hon. Lady because I am coming to the end of my speech.

This has been a constructive debate and the Wales Office is more than delighted to continue it with hon. Members. Our door is always open. The way we are working in north Wales and the way we have worked with the city deals in south Wales show what can be done when we work together on a cross-party, cross-governmental basis. I want to be part of a success story in mid-Wales to follow on from the success story in north Wales.