Exiting the EU: Businesses in Wales

Kirsten Oswald Excerpts

Wednesday 14th December 2016 Westminster Hall

[Kirsten Oswald (East Renfrewshire) (SNP)]

It is interesting to hear how South Caernarfon Creameries, which is of great significance to the rural economy in the hon. Lady’s constituency, has relied on money generated by the EU for expansion. Will she join me in expressing concern about the way in which the common agricultural policy is repatriated and implemented in the eventuality of the UK leaving the EU?

[Liz Saville Roberts]

I share the hon. Lady’s concern, not least because the National Farmers Union has presented evidence to the Welsh Assembly that indicates that if the money that reaches Wales from the common agricultural policy were to be Barnettised—to go through the Barnett formula—that would result in a 40% decrease in the money reaching Wales.

To return to the creamery issue, we have yet to see any real clarity on how that will be addressed, and that is of considerable importance to anyone involved in agriculture and the rural economy. As we know, Wales is a net beneficiary from the EU to the tune of £79 per individual a year. Businesses must not be left second-guessing where their future lies and how they can plan ahead.

I will refer specifically to business rates. Businesses in Gwynedd have experienced an average increase of 8.9%, which I believe is the second highest after the county of the Under-Secretary of State for Wales, the hon. Member for Aberconwy (Guto Bebb), who will address us anon. I join my Assembly colleagues in pressing Labour’s Welsh Government to investigate all available powers to ensure that business rates do not penalise businesses. For example, they could use index business rate multipliers to the consumer prices index rather than the retail prices index; variable multipliers, so that small businesses are not disproportionately taxed; three-yearly revaluations, because Gwynedd waited eight years for its most recent revaluation, which had a considerable impact on the increase; and an equitable valuations appeals process. In addition, I strongly urge the Welsh Labour Government to consider adopting Plaid Cymru’s business rates support scheme, which would be likely to benefit tens of thousands of businesses across Wales.

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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.

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[Guto Bebb]

The hon. Gentleman asks an important question. I have to respond in the same way as some of the hon. Members who mentioned businesses in their constituency but indicated an unwillingness to name them. I was recently in discussion with a university in Wales that saw huge potential to increase its attractiveness to students from outside the European Union; however, it is not a case of either/or. It wants to attract an increasing number of students from outside the European Union, but it also wants to ensure that it keeps the markets that it has in the European Union. These discussions are wide-ranging, and it is fair to say that the responses that we are getting, even from the further and higher education sector, are not as negative as the hon. Gentleman implies.

[Kirsten Oswald]

It is interesting that the Minister has come to the subject of universities, which I mentioned. Does he care to elaborate on his suggestion that universities do not particularly see this as a negative, because that is contrary to the discussions that I have had with them? Also, will he talk about overseas students and the impact of his Government’s plans for overseas students on universities in Wales, Scotland and elsewhere?

[Guto Bebb]

The whole point of having consultations with universities is to understand their perspective. Their perspective is that, yes, they have concerns about elements of the decision to leave the European Union, but they are not entirely negative. I am not speaking about a single university; between myself and the Secretary of State, we have spoken to most of the higher education system in Wales since the decision to leave the European Union. We have listened to those concerns, but we are also hearing that they see opportunities. More than any sector, the higher education sector is aware that its success and ability to play a full part in the development of cutting-edge technologies, for example, is dependent not only on our membership of the European Union, but on our partnerships with all parts of the world. I argue that the doom and gloom of some people here, when it comes to us no longer being part and parcel of European projects supporting higher education, can be challenged through agreements with states such as Israel. Again, we need to be slightly more constructive when talking about the response.