European Union (Withdrawal) Bill

Lord Wigley Excerpts

Committee: 11th sitting (Hansard): House of Lords
Wednesday 28th March 2018 Lords Chamber

Moved by

[Lord Wigley]

355A: Clause 19, page 15, line 18, at end insert “, subject to subsection (2A)”

[Lord Wigley (PC)]

My Lords, in moving Amendment 355A, standing in my name, I shall speak to Amendment 357A. Both of these are paving amendments for the substantive Amendment 358A, also in my name, to which I shall address most of my remarks.

The amendment goes to the core of the Brexit referendum in 2016 and relates to a campaigning issue which undoubtedly swung many voters to support the leave campaign. This is to do with the amount of extra funding which would, supposedly, be available as a result of the UK decision to leave the EU. The amendment also addresses the guarantees that were given to Wales—and to Scotland and other parts of the United Kingdom—that all the funding coming from the EU would be replaced by UK Treasury funding so that, in this context, Wales would not miss out.

Amendment 358A proposes that this Act does not come into force until the UK Government have laid a report before Parliament, and the National Assembly for Wales, outlining how the money currently provided to Wales through the EU will be provided after Brexit. Such a statement in the Bill is needed in order to demonstrate to the electors of Wales that they were not led up the garden path in the referendum and that the Government do indeed intend to keep the promise, made by the leave campaign, that this level of funding will be maintained. I would be obliged if noble Lords will bear with me as I address those promises in greater detail.

I start with the outrageous £350 million a week that was promised to be channelled into the NHS as money returning from Brussels. That was a central part of the Brexit deal, equivalent to a manifesto commitment in a general election. It is a pledge which the Government, in signing up to deliver the other parts of the Brexit manifesto, are duty-bound to honour. If they feel obliged to deliver Brexit on the basis of the referendum vote, they must do so on the basis on which that vote was secured. That commitment was as applicable to Wales as it was elsewhere and it no doubt had an impact in Wales where the public services devolved to the Assembly are funded by the notorious Barnett formula. The NHS in Wales, as elsewhere, desperately needs additional funding. Indeed, Conservative Ministers—including the present Prime Minister—have derided the Welsh Government for not providing as much money to the NHS as was being provided in England. For a time that was true, but this was partly because the overall cake was inadequate. If an increase in health funding in Wales was the same as that in England, other services such as education would have been even harder hit. It was partly because of a decision by the Welsh Government to redirect some of the funding increase to social services, for the justifiable purpose of enabling hospital patients to return home earlier, thereby reducing the pressure on hospital beds. Whichever way, there was and there is a pressing need for additional funding for healthcare in Wales.

The vote to quit the EU was undoubtedly augmented, in part, by people swallowing the outrageous propaganda that £350 million a week would be coming to the health service. Even on the basis of the restrictive Barnett distribution, the NHS in Wales could therefore have expected something like £18 million a week more funding—£1 billion a year. That is a promise which was made and which the people of Wales expect to be fulfilled. My helpful amendment enables the Government to explain to the people of Wales how they intend to fulfil their pledge.

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[Lord Cavendish of Furness (Con)]

I am grateful to the noble Lord for giving way. Does he accept that those of us who live in Cumbria have watched with huge envy the largesse that has been directed at Wales?

[Lord Wigley]

I have no doubt that Cumbria has its problems, and I have no doubt that people from Cumbria will speak up on its behalf. I support entirely that Cumbrian needs should be answered on a needs basis; we are arguing for exactly that for Wales. The current Barnett formula, as this House has recognised, does not provide that needs-based system for funding. So I accept entirely what the noble Lord says.

The point that I was making was that, back in 2000, the Treasury claimed that it already funded ambitious regional economic projects and that the European cash would be gratefully received as a contribution towards such spending. I sought clarification from officials at 10 Downing Street, but no clarification or assurance was forthcoming. In March 2000, I went to Brussels and met the EU regional commissioner, no less than a certain Monsieur Michel Barnier. He just could not believe what I was saying, since the EU funding was provided on the basis of additionality. He asked his officials—yes, those much-derided Brussels Eurocrats—whether what I said could possibly be true. They confirmed my account, and Mr Barnier asked me to give him a couple of months without making political capital on the issue, in which time he would do his best to sort it out.

The eventual outcome to this incredible episode was, as I may have previously mentioned, that as part of his spending review in July 2000 the then Chancellor Gordon Brown announced that the UK Government would be making a payment of £442 million to the Assembly to settle the account. Thereafter, Wales received the money from Brussels, which it had a right to expect.

So please do not tell me the nonsense about Wales being able to trust the Treasury in London more than it can trust Brussels. Such a claim flies in the face of our bitter experience. Unless we have safeguards built into law, there is no reason for us to believe that we can trust the UK Treasury or its Ministers with our future financial well-being. That is why I have proposed amendments to the Bill. If Wales, in the wake of Brexit, is to be thrown back at the mercy of Whitehall, God help us. I beg to move.

[Baroness Humphreys (LD)]

My Lords, I am grateful for the opportunity to speak in support of Amendment 358A in the name of the noble Lord, Lord Wigley, and I thank him for tabling it.

Since 2000, the area of west Wales and the valleys has been in receipt of funding from the European Union. Everywhere one looks in west Wales and the valleys, one finds examples of the benefits arising from this—from the newly transformed Ponty lido to the upgraded railway stations in Aberystwyth, Carmarthen, Llandudno and Port Talbot, where we see the effects of a £21 million cash injection of EU funds. From the National Waterfront Museum on Swansea marina to the regeneration of south Wales valley towns, we see the benefit of millions of pounds from Europe.

We see schemes creating employment, breathing life into communities and improving the quality of people’s lives. In my own area, I have seen EU funding being used to build a new rural development centre, to convert an old mill to a teaching centre and an old school into a community centre and, perhaps, the project that is closest to my heart, for the upgrading of Nant Gwrtheyrn, the Welsh language and heritage centre on the Llyn peninsula. We have also seen major road improvements. The stretch of the A465 from Brynmawr to Tredegar, for example, saw £82 million of EU funding being poured in to help with its construction, helping to improve both safety and connectivity.

These are just a very few examples of the impact of EU funding on west Wales and the valleys. All this has been achieved with the aid of the main funding streams. It may be useful to remind ourselves of the aim of three of the streams and inquire of the Government how they intend to replicate them. The European structural funds have been used to support people into work and training; have supported youth employment, research and innovation projects and business competitiveness in the SME sector; and have overseen renewable energy and energy efficiency schemes. These funds are worth £2 billion from 2014 to 2020. What will replace them in two years’ time?

The common agricultural policy, as the noble Lord has already referred to, is, as those of us who live in Wales know, an essential £200 million-a-year scheme, providing payments to more than 16,000 farms in Wales to help to protect and enhance the countryside. What assurances can the Minister give about how these funds will be allocated in future, and on what basis?

The third scheme that I want to talk about is the Welsh Government Rural Communities—Rural Development Programme 2014-2020. It is a £957 million programme supporting businesses, farmers, the countryside and communities in rural areas and has been essential to areas such as the Conwy Valley, where I live. Could the Minister outline how the Government intend to support rural communities in Wales after 2020?

All this is in stark contrast to the dire lack of funding that came to Wales from the UK Government prior to 2000, which led to west Wales and the valleys being designated as one of the poorest areas in the EU and therefore eligible for objective 1 funding. I am sure that noble Lords will understand my scepticism about future funding commitments if, or when, we leave the EU.

The UK Government’s record on funding to Wales hardly fills one with confidence. It has been proved beyond doubt that the Barnett formula, by which Wales has received its funding for the NHS, education and so on, has been disadvantageous to Wales, yet no Government of any colour have been prepared to address the issues and reform the formula itself to ensure fair funding on a permanent basis. My noble friend Lord Thomas of Gresford and the noble Lord, Lord Wigley, have already spoken about this. In earlier debates on the Bill my noble friend Lord Thomas drew the House’s attention to the disparity in funding under the Barnett formula and voiced his fears that future funding to Wales will perpetuate the situation. As he has so clearly pointed out, the weakness of the Barnett formula in relation to Wales is that it is based on a crude population count, whereas EU funding has always been based on need.

It is certainly time for Ministers to be crystal clear about the amount of funding that will come to Wales—remembering, of course, that we were promised “not a penny less” during the referendum campaign. We need to know the basis on which the funding will be determined and the methods which will be used to distribute it.

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[Lord Bourne of Aberystwyth]

And a very able one. I take that qualification and thank the noble Lord for it.

It is also worth saying that there were attempts to extend regional government to England. I am sure we all remember the referendum in the north-east, which was pretty decisive. I accept that there are issues to address there. This Government have done more for city mayors than has been done for a long time in terms of devolved power and not just in the big cities of the UK. We have looked at other areas—Cambridgeshire, for example. However, there is incomplete work—including in Yorkshire, it is fair to say.

I agree with the noble Lord, Lord Foulkes, that the Falkirk Wheel is well worth visiting. I also agreed with him on other issues that he mentioned in relation to the unaddressed issues about government in our country—some points well made.

I thank the noble Lord, Lord Thomas of Gresford, for his contribution and agree that we fought for money for Wales. It was not a matter of pride, it was a matter of getting money that was needed. I agree that in many ways the money is still needed because of the relative poverty in Wales—sometimes a poverty that is not obvious. The grinding poverty that exists in the Valleys is obvious, but the poverty in the rural communities of north-west and south-west Wales is not necessarily as obvious.

I thank the noble Lord, Lord Griffiths of Burry Port, for his contribution and for re-focusing us on some of the issues that matter. He referred to the history of some of the devolution process in Wales—the 1997 referendum, the 2011 referendum and much work that was done in-between. He is right that there is a money issue. I do not think it is just a money issue; it is also an attitude issue that has existed prior to this Government and probably the previous Government. In short, I think it is ameliorated. There is an attitude of: “Let’s not forget Wales, let’s not forget Scotland”. It has become lot better; it is plugged in. That is not to say that we are there yet. It is not just a money issue, though money is important too.

The noble Lord mentioned the Barnett formula. A lot of good work has been done in the past by Gerry Holtham and the Holtham commission, but there are issues which remain to be addressed—that is no doubt true. He went on to talk about the consenting process, and I take it that he means the process referred to in Clause 11. I agree that this is a partnership and, in fairness, the Prime Minister is very much aware of that. She met the First Ministers of Wales and Scotland very recently, and I think progress was made. More work needs to be done and is being done. We are not there yet. I think that anyone who is fair minded would acknowledge that we have made considerable progress on this but, as I say, we are not there yet.

I appreciate that the noble Lord, Lord Wigley, may regard this as half a loaf—it is not everything he wants—but I am happy to talk to him between now and Report and to find answers to some of the questions put by the noble Lord, Lord Liddle, about the timing of this process. I hope that helps the noble Lord: I thank him for bringing this important issue to the House. I thank other noble Lords for their part in this. While the present team and I remain at the Wales Office, we are determined to ensure that Wales gets a fair deal. I am sure that applies to the Scottish and Northern Ireland teams in relation to Scotland and Northern Ireland. We have to ensure that all parts of the United Kingdom are taken care of in this. We do not want this to be x versus y: everybody has to be fairly dealt with. On the basis that I am happy to try to find more information for the noble Lord, Lord Wigley, and others, I hope that the noble Lord will withdraw his amendment.

[Lord Wigley]

I am very grateful to all noble Lords who have taken part in this debate, which was rather longer than I expected. Perhaps I set the wrong precedent in my own speech. I thank the noble Lords, Lord Liddle, Lord Roberts of Llandudno, Lord Adonis, the noble Baroness, Lady Humphreys, of course, as well as the noble Lords, Lord Foulkes, Lord Thomas of Gresford and Lord Griffiths of Burry Port, and the Minister, for their comments. I am grateful for the acknowledgment of the importance of the issue. In response to the noble Lord, Lord Cavendish, whose interventions I followed with interest, I recognise, as we all do, that other parts of the UK have specific needs which should be addressed as well. We need a mechanism to do that. In the context of the current round of European funding, on top of the CAP, there is a particular impact on Wales, which was what I wanted to highlight.

I suggest to the noble Lord, Lord Bourne, that, in the fullness of time and having thought a bit more about this and discussed it with his colleagues, the Government might be minded to bring forward a White Paper, or a publication of some sort, laying out how funding coming from Europe will be replaced. This would not be just for Wales but for other areas as well, and not just for the period from now until 2019 or 2021—whichever is the end of the transition period—but their ongoing intention after that. As the noble Lord, Lord Foulkes, said, the timing is important. I identify with the comments made about the late Lord Richard and the late Lord Crickhowell who, in their different ways, both made considerable contributions to Wales. I am sure that, if they were here today, they would be taking an active interest in these issues.

The noble Lord, Lord Bourne, knows enough about the feelings in the National Assembly about European funding to realise that this is a real issue that can make a difference, not just a political football. We can certainly argue about how the money is used and how it is used in Merseyside, south Yorkshire or Cornwall, where it is used in different ways, sometimes with better results. We need the resources because we are not going to get them elsewhere. They have to be replicated somehow. The question of trust has arisen in a number of contributions. Before the noble Lord, Lord Bourne, entered the Chamber there was another issue regarding money from the Treasury—the aggregated capital funding that Wales was accumulating in the National Assembly to avoid the wastage of year-end expenditure and put it into capital projects. That money was taken back by the Treasury on the basis that we had no right to aggregate money from other headings to fund capital projects. That is the sort of breakdown of trust that we are talking about, and we have to make sure that those attitudes are not exemplified in the ongoing period.

I hope that over the coming two or three weeks it will be possible to see whether a different formulation of this amendment can be tabled on Report, bringing in other parts of the United Kingdom and perhaps other parties. I invite the Front Benches of the various parties and individuals on the Cross Benches to consider whether that may be possible, and to do so with the positive intention of achieving a meaningful step forward as a result of the debates here that will help Wales and all other parts of the United Kingdom to find a way through the consequences of leaving the European Union. On that basis, I beg leave to withdraw the amendment.

Amendment 355A withdrawn.