European Union (Withdrawal) Bill

Lord Wigley Excerpts

Committee: 3rd sitting (Hansard - continued): House of Lords
Wednesday 28th February 2018 Lords Chamber

[Lord Judd (Lab)]

My Lords, I warmly thank my noble friend for having put this amendment before the Committee. I should explain that I live in Cumbria and I understand very directly some of the things that have been said in this debate. It always gives me great heart when I see the European sign on tangible projects in an otherwise not too prosperous county, as an indication of European solidarity and a determination that people should stand together in making sure that a decent life is available to everyone. I do not think that, historically, we can overestimate the significance, the sadness, of what we are losing in that concept of European solidarity.

The other point I will make is that there have been references to reassurances and so on. Forgive me, I do not mean to be critical of those who have used the word, but I do not think that is enough. Possibilities have been created through our membership of the European Union. I believe that we have to have very firm guarantees from the Government that nothing is going to be lost in the context of what may be about to happen and that they will ensure that any work already in train, and any expectations already generated, will be fulfilled.

There really is a growing sense of injustice and unfairness in many parts of the country. The south-west is one example, and certainly the north is another example, not least Cumbria. There is a deep frustration—and in some instances it is not an exaggeration to say “anger”—about the disparities between what is available in the south and the south-east and what is not. I agree most warmly with the point made earlier in the debate that there is a feeling that our Government is a Government of the south-east and not a Government of the totality of British life. In that context, for Wales, Northern Ireland, Scotland, and indeed for English regions, we need those guarantees from the Government tonight.

[Lord Wigley (PC)]

My Lords, I am delighted to support Amendment 23, moved by my noble friend Lord Foulkes, and I concur without reservation with everything he said. The amendment addresses many crucial matters for Wales, as well as for Scotland and indeed for many parts of England. Article 174 of the Treaty on the Functioning of the European Union aims to reduce disparities in terms of economic and social development between the various regions of Europe. The central plank of this is to reduce inequality. I fear that the same thing cannot be said of the policy of the present UK Government. The objective of their policy is in no way a concerted drive to attack the disparities that exist within these islands. The income per head of an area such as Kensington and Chelsea is 10 times that of the area of west Wales and the valleys, the Anglesey area or the Gwent area. We surely cannot accept a tenfold disparity in a civilised society.

Europe has been a bulwark for us over the past 15 years in Wales—the past 18 years, in fact—since we started getting the Objective 1 money in 2000. That money has come through as additional funding for Wales, after a bit of a fight, which I will talk about on another occasion, but we have not had the success that Liverpool and Merseyside, certainly, have had, and South Yorkshire has had to a lesser extent—and we still have a lot of work to do.

The reality is that, when we look at the matters of industrial infrastructure investment that are in Westminster’s hands, we see that Wales is the only country in western Europe that does not have a single mile of electrified railway line. What happened to the plans that were already drawn up to electrify to Swansea? They have been dropped—and the proposals to electrify from Crewe to Holyhead are somewhere in the clouds. Yet we in Wales are asked to pay our contribution towards HS2. The reality is that we get greater assistance with our economic needs from the European Union than from Westminster. That is one reason why it hurts so much that we are about to leave the European Union, unless something can be done about it. Another example of where the Westminster regime is not sensitive to the crying economic need of Wales is the Swansea Bay lagoon, which has been confirmed as being a viable project, with a former Conservative Member of Parliament driving it forward, yet the Government refuse to come off the fence on it.

Then there is the disparity in another important aspect of economic infrastructure: broadband connectivity. The UK Government have recently directed significant sums to improve broadband in three of the four countries of the UK. They found £20 million for ultrafast broadband in Northern Ireland and £10 million for full-fibre broadband in six trial areas of England and Scotland. We are missing out on important things such as this and we cannot rely on Westminster to look after our needs. The Government’s justification for their broadband investment was that it will trigger the most effective short-term economic growth. Therein lies the central weakness of the Westminster approach: its short-termism and its links to political returns, as we have seen in the context of Northern Ireland.

The EU has been a major source of assistance to Wales, not least in terms of our economic infrastructure. The ERDF and the European Social Fund have been mentioned. Areas of England such as Merseyside, South Yorkshire and Cornwall have certainly benefited greatly from the EU as well. We will miss out all round when we turn our backs on Europe.

In the context of the amendment, we have a right to know how the Government intend to sustain the EU objectives of Article 174 after Brexit—if indeed they do. We are told that there will be a shared prosperity fund, but we have no details of its size or remit, nor how it will work with devolved government. In particular, given our experience in Wales with the Barnett formula, which has been such a travesty—and has been recognised by this House as a travesty—we have enormous reservations about leaving it to the Treasury in Whitehall to be the adjudicator in the distribution of such resources. It is for these reasons that I support the amendment, and I am certain that we shall have to return to these critical issues later in the Bill’s passage.

[The Earl of Listowel (CB)]

My Lords, I declare my interest as a vice-chair of the Local Government Association. I support the amendment moved by the noble Lord, Lord Foulkes, because over the past two years I have been attending two inquiries led by the All-Party Parliamentary Group for Children: the first into children’s social care services and the second into different thresholds for access to those services.

It has become clear from the evidence I have heard that local authority funding has been cut by 30% to 40%. Local authorities are delivering their statutory services and safeguarding children as best they can, but all the peripheral services—the family support services and the charities—are really struggling to meet the need and therefore more and more children are being taken into care. As I said earlier, Lord Justice Munby, President of the Family Court, in his statement last year highlighted that more and more children were being taken into care and the courts were finding it difficult to process the numbers of children being taken into care.

What needs to happen is what has happened to adult social care: additional funding needs to be given to local authorities so that they can meet the needs of their children and family services and we can stop taking children away from families whom, if they had had additional support early on, they could have stayed with. It is relevant to this debate because we have heard in the inquiries that it is often the poorest local authorities, with the most deprived families, which have both the greatest demand on their services and the fewest resources to meet those needs. So in what the noble Lord, Lord Foulkes, proposes I see a way of reducing deprivation and improving the wealth of those communities so that there is more resource available to local authorities to meet local need, and reducing the need of families to turn to those kinds of services. I look forward to a response from the Minister to the principles that the noble Lord, Lord Wallace, has just set out.

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[Lord Adonis]

I am very grateful for that response; I think that might help us in our further discussions.

In response to the amendment of the noble Lord, Lord Wigley, I will make two points. First, in the debate about regional assistance, one of the arguments is that we are simply getting our money back. The crucial point about the European Regional Development Fund and the other cohesion funds of the European Union, however, is that they are long-term development funds. The reason that they are so valued in the regions is not just because of the investment, but because they enable long-term planning to take place in the regions, which does not happen in response to Treasury funds because our own funding for these projects is so short-term. One of the big struggles that we have had in government—and this spans all three parties that have been in government in the last 20 years —is that we have had a huge difficulty in fixing and delivering long-term investment priorities because of the short-term attitude of the Treasury, which is not prepared to make those commitments.

When I became Secretary of State for Transport in 2009, the forward investment strategy for the railways in the United Kingdom was for five years, until 2014; so—surprise, surprise—there were no plans for high- speed rail at all and no electrification programme. It is not just that it did not go to Swansea: it did not go anywhere. Wales is the only country in the entire continent of Europe besides Albania that does not have one mile of electrified railway. This is because of a consistent absence of long-term infrastructure planning over the last generation. Thanks to decisions that we took in 2009, electrification is at long last going to reach Wales, but the plans that were in place for it to go to Swansea have been cut back to Cardiff; it was supposed to go to Bristol but it is now going only to Bristol Parkway, not to Bristol Temple Meads.

I do not wish to bore the Committee with the details, but the fundamental underlying point here is the absence of long-term infrastructure planning. We look to the Government for a commitment not just to have significant funds for regional assistance—because clearly funds are going to be required unless we are going to see the divides between different parts of the country becoming even wider over the coming years—but we need a long-term approach. The current European Regional Development Fund has a six-year planning horizon and we need to see at least that length of planning in respect of new funds and policies that the Government put in place. Otherwise, we will see a short-term scramble for short-term projects that do not begin to be able to deliver huge benefits such as new railway lines—HS2 and HS3 that we need linking the northern cities—and significant investment in Wales. The noble Lord, Lord Wigley, referred to tidal lagoons and the investment that could be made there. That, again, is an investment that would deliver economic and energy benefits over the next 80 years, and it needs to be long-term.

My second point, which is linked to the points made by my noble friend Lord Foulkes, is about the European Investment Bank. One of the most worrying things in relation to the funding of infrastructure projects, particularly in less developed regions of the country, over the period since the Brexit decision has been the collapse in lending to the United Kingdom for projects supported by the European Investment Bank. An article in the Financial Times last month gave quite scary statistics: new contracts in the UK financed by the EIB are down from £5.5 billion in 2016 to just £1.9 billion last year in 2017. Of that £1.9 billion, only £377 million was spent in the nine months after Article 50 was triggered. The president of the European Investment Bank, Werner Hoyer, was very clear that a key factor in this was,

“extra legal work the bank now had to do to ensure its assets in Britain would be protected after the UK left the EU”,

and uncertainty on the part of investors. This is leading to a significant problem in investment in infrastructure projects, in particular. Speaking as a former chairman of the National Infrastructure Commission, I can tell the Government that they will not get a commitment to long-term infrastructure projects unless they can put together the funding packages that are required. They need to span the public and private sectors, and for many of these projects which span a 10, 15 or 20-year horizon, the public sector is looking for guarantees, and if those guarantees have to come exclusively from the Treasury in future, we will see significantly less infrastructure investment than we have in the past.

Although the European Union is not the be all and end all—

[Lord Wigley]

Before the noble Lord leaves the issue of the European Investment Bank, I raised a question in the debate on Monday evening about the ongoing eligibility of higher education institutions, such as Swansea University, which has had £60 million out of the EIB. Will the noble Lord confirm my understanding that the UK will have an ongoing entitlement to help from the EIB? As he says, it is a question of the level of help and the confidence that is there and not that we will not be eligible.

[Lord Adonis]

My Lords, I am afraid we again get into the Alice in Wonderland world here, as we were in the debates on Erasmus and Euratom. My understanding from discussions with the European Investment Bank when I was chair of the National Infrastructure Commission is that if the Government were to wish to stay a member of the European Investment Bank, that might be possible. There are lots of legal issues which would need to be addressed, but it might be possible. However, it is the Government’s policy, as a matter of principle, that we will withdraw from the European Investment Bank because it is seen as a European institution and apparently the instruction from the British people two years ago was that we must withdraw from it for exactly the same reason that we must withdraw from Euratom: it is seen as a European institution and we are supposed be withdrawing from all of them or else Brexit does not mean Brexit.

We are engaging in self-inflicted harm purely for an ideological purpose by choosing not to be part of an institution which has “Europe” in the title. What has concerned the Committee so much in our debates is that sector by sector, area by area, we are committing to policies that are going to make the country worse off bit by bit. The cumulative effect of all this is going to be immensely serious. Where it is possible to not engage in that self-inflicted harm, it seems to me to be just a matter of common sense not to do so. I would be very grateful if the Minister could tell the Committee the Government’s policy in respect of lending currently made by the European Investment Bank and whether it might still be open.

I am constantly encouraging, and we have the more emollient face of the Government responding to the debate in the noble Baroness. I always have very high hopes of her because she sounds so reasonable when she replies. It may just be that she is so practised at doing these things, but I very much hope that she might give us a commitment that the Government will consider remaining a part of the European Investment Bank and not putting this essential investment in the future infrastructure of the country at risk, as appears to be happening at the moment.

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[Baroness Goldie]

I heard what the noble Lord said and I am coming to that; I hope what I am about to say will reassure him. I am explaining what the new proposals and structures are in order to give some context to my response to what is a very important amendment. The amendment also refers to rural areas. The Committee will be aware that my noble friend Lord Gardiner is the Government’s rural ambassador. He is working to ensure that government policy is addressing the challenges faced by rural areas. The House will recall that the noble Lord, Lord Cameron of Dillington, carried out a review in 2015 on the effectiveness of the Government’s rural-proofing policy, to which the Government responded. They have taken action based on his recommendations. That now includes practical guidance published by Defra to ensure that government departments make rural issues a routine policy consideration.

Looking beyond England, the devolved Administrations obviously have responsibility for rural policy, and I know that Scottish and Welsh Ministers will be thinking about how to ensure that their own policies and initiatives reflect the needs of rural communities. The Government’s industrial strategy and other existing policy initiatives therefore already cover the areas covered by the EU cohesion policy, which the noble Lord’s amendment seeks to preserve.

[Lord Wigley]

One of the core principles of the EU cohesion funds is the element of additionality. In previous UK regional policies, before we went into the EU structural funds from 2000 on, there was not that element of additionality, and initially the UK Government refused to recognise the need for additionality for European funding. Can the Minister therefore give an undertaking that the funds that will replace the money now coming from Europe will be additional, over and above existing regional policy?

[Baroness Goldie]

What I can say to the noble Lord is that we are in new territory. We are leaving the EU and having to construct successor policies and funding streams to deal with what we were accustomed to as a member of the EU. I have tried to explain what the principal strategy underpinning that would be, but as the noble Lord is aware, there are other funding sources. There is the United Kingdom shared prosperity fund, which will be a very important source of the funding streams to which I think he alludes. Before I come on to that, I shall deal with matters raised by the noble Lord, Lord Judd, because they are important.

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[Baroness Goldie]

I think that, in the first instance, as we look at how we will fund different parts of the United Kingdom, the primary discussions will be with those parts of the United Kingdom—they would have to be. That is without prejudice to the Executive in Northern Ireland, who I hope will be established. We will want to pay proper respect to that Executive when they are constituted and consider what they want to do. I would be very surprised if there were not a desire to have constructive discussions with the Republic of Ireland in the interests of trying to determine how best to address these needs, if there is a relationship. The Republic of Ireland, at that point, will be an international country separate from the United Kingdom, as it will be in the EU and the United Kingdom will not. We have to respect these new relationships and new boundaries.

[Lord Wigley]

This will be the last time I trouble the noble Baroness. On the Interreg question, one area that has benefited greatly has been the western Wales coast, particularly the seaports with their connections with southern Ireland. Given the pressure that there will be on Holyhead and other ports arising from Irish trade coming through the UK, surely this is an area where a version of Interreg has a very significant role to play. Can the Minister keep that in mind as the thinking on these issues develops?

[Baroness Goldie]

I thank the noble Lord; I think he raised an important point. The Government, as my noble and learned friend Lord Keen said, are very keen to listen. One benefit of debates like this is that points arise which merit careful consideration, so I thank him for raising that point.

The amendment strayed on to a more technical area. It would create provision for a Minister of the Crown to make provisions for programmes to implement cohesion policy domestically. I argue, however, that these powers are unnecessary. For example, under Section 126 of the Housing Grants, Construction and Regeneration Act 1996, the Government already possess power to provide financial assistance for the areas currently supported by EU cohesion policy and European structural funds. It allows the Secretary of State to give financial assistance in activities that contribute to the regeneration or development of an area, which include contributing to or encouraging economic development, providing employment for local people and providing or improving training services for local people. These activities cover much of the support provided under current European structural funds.

I have tried to set out why I think the noble Lord’s amendment is not required. The Government already have an industrial strategy which covers many of the areas of the amendment. There are also existing powers in place that make the amendment unnecessary. I have endeavoured to outline our plans for new funding to replace cohesion policy programmes—I appreciate that it has not perhaps been with the detail that the noble Lord might be seeking, but I hope I can reassure him that there is a plan to provide successor mechanisms to the European funding sources. I hope I have tackled his concerns and I urge him to withdraw his amendment.