Wales: Economic Investment Projects

Lord O'Neill of Gatley Excerpts

Tuesday 12th July 2016 Lords Chamber

[Lord Wigley]

To ask Her Majesty’s Government what discussions they have had with the Government of Wales in relation to the financing of economic investment projects in Wales from 2020 onwards.

[The Commercial Secretary to the Treasury (Lord O'Neill of Gatley) (Con)]

My Lords, Ministers regularly meet to discuss issues relating to the economy of Wales. The role and ambition of the Welsh Government in economic investment in Wales is clearly important. They are responsible for a significant proportion of capital spending in Wales, with £8.7 billion of capital block grant funding up to 2020-21. Through the Wales Act 2014, they are gaining new tax and borrowing powers that can be used to further increase investment.

[Lord Wigley (PC)]

My Lords, with your indulgence, may I thank people in every party and of no party and in all parts of these islands for the warm support given to Wales in the recent Euro 2016 tournament? This is already bringing an economic spin-off for Wales by way of a surge in tourist inquiries.

As the Government are committed to delivering Brexit, will the Minister confirm that they will also honour the commitments on which the Brexit vote was secured, including the vow that the European structural funds from which Wales is currently benefiting will be fully replaced by UK Treasury funding?

[Lord O'Neill of Gatley]

My Lords, as a keen football supporter, let me also add my congratulations on the performance of Wales. I look forward to Manchester United signing some of those players. On the specific question from the noble Lord, that is a matter for the next Prime Minister. What has been committed to in the specific deals between this Government and the various places, particularly Cardiff city, will of course be stood behind.

[Lord Thomas of Gresford (LD)]

My Lords, if I could put a figure on it, £0.5 billion a year of EU investment funds are coming to Wales. Surely the Government will take note of the fact that those who were in favour of Brexit said it was “our” money, and not EU money. Perhaps we can have some of “our” money in the future. Will the Minister guarantee that?

[Lord O'Neill of Gatley]

My Lords, I suspect that this will be a rather repetitious session. It will be a decision for the new Prime Minister. Wales is not the only place in the United Kingdom that is in this position, and there are many others that we have to consider.

[Lord Lansley (Con)]

My Lords, my noble friend will recall that in the last Parliament we legislated for access to infrastructure investment so that projects could have access to the Government’s capacity to borrow at relatively very low rates. Can he tell us to what extent Wales has been able to access that facility for projects in Wales?

[Lord O'Neill of Gatley]

My Lords, as I mentioned in my opening statement, the legislation that is currently being discussed in the other place makes provision for the Welsh Government to use income taxes to give themselves a lot more leeway to spend and invest in the way that they see fit.

[Lord Anderson of Swansea (Lab)]

My Lords, one of the major investment projects in Wales is the Swansea lagoon, which is pending and has been delayed on a number of occasions. Can the Minister indicate whether there will be further delays to this valuable project?

[Lord O'Neill of Gatley]

My Lords, I have two quick answers. First, there are many investment projects that have, in principle, been committed to all over the United Kingdom, not just in Wales. Secondly, I am unaware of any specific delay on anything that has been agreed with respect to the Swansea tidal lagoon plant.

[Lord Elystan-Morgan (CB)]

My Lords, does the Minister recollect that, when the devolution legislation was going through Parliament about 20 years ago, solemn undertakings were given by the Government of the day, with regard to concordances between the Government and the Welsh Assembly, which were to operate in those fields which had not been transferred? Can he tell the House whether those bodies are alive and active, and if so, will they play their full part in preserving the rights and the interests of the land and nation of Wales in this context?

[Lord O'Neill of Gatley]

My Lords, my simple answer is no, I cannot tell the noble Lord because I am not entirely sure what he is specifically referring to. I also point out—I look forward to discussions with the new Welsh Economy Minister—that the scope for devolution inside Wales greatly depends on decisions for them rather than us here in Whitehall.

[Lord Kinnock (Lab)]

My Lords, I ask the Minister a question to which he can provide an answer because he is not under today’s usual restrictions. In recent years, Wales has benefited significantly from loans at very low cost from the European Investment Bank. Participation in the work of that bank is not necessarily confined to members of the European Union. Can the Minister assure me that he and his colleagues in the Government will strive to ensure that the best possible conditions are achieved so that there is continuity of flow of investment—crucially needed in Wales, as demonstrated in Swansea University—in future years, regardless of our status in relation to the European Union?

[Lord O'Neill of Gatley]

My Lords, I thank the noble Lord for pointing out the specific legal status of the EIB for those unfamiliar with it. It is the case that any change to the EIB’s shareholder structure or lending activity is a decision for member states. It is important that we pursue discussions because, as I am sure the noble Lord is aware, lending in the UK right now is at record levels, covering more than 30 different projects.

[Lord Davies of Oldham (Lab)]

My Lords, leading Brexiteers such as Michael Gove and Chris Grayling made it quite clear that Wales, as others, would benefit from the decision to leave the European Community. Can the Minister assure us that, given that Wales benefited from a surplus of £245 million a year from Europe, the Welsh will not be sold short by future decisions of the Government?

[Lord O'Neill of Gatley]

My Lords, the third repetition of the day. That specific issue will be a choice for the new Prime Minister. Many other parts of the United Kingdom are facing a similar challenge.