EU Exit: Devolved Governments

Nia Griffith Excerpts

Thursday 21st July 2016 Westminster Hall

[Nia Griffith (Llanelli) (Lab)]

I welcome the Minister to his place, in particular because of his knowledge of devolution in Wales and because he was a remain campaigner. I very much hope that he will be successful in the Brexit negotiations, because a successful outcome matters to all of us.

The Prime Minister and her predecessor have made it clear that devolved Administrations should be fully involved in negotiations as part of the UK team. That is happening at an official level, but the commitment must remain when things move into the next phase, beyond the initial consultation. There needs to be a real recognition that in certain areas—in particular, agriculture and fisheries for example—there is no UK position. Those matters are devolved entirely, which heightens the need for the Welsh Government to be at the top table.

Access to the single market is absolutely vital for Welsh business. Welsh exports are worth some £5 billion a year, and we have a trade surplus with the EU, unlike the UK as a whole. It is vital that everything is done to keep that marketplace open for us, because some 200,000 jobs in Wales are in effect dependent on that export market for Welsh business, industry and agriculture. Anyone looking to set up a business in Wales must have reassurances about what sort of access they will have to the single market.

We are not talking only about local people setting up businesses in Wales; people from other EU regions do so too. We already have some 500 companies based in Wales that are from other areas of the EU, creating jobs and opportunities for Welsh businesses. They need some immediate reassurance about their situation and what it is likely to look like in the future. We have had statements from the big companies, such as Tata and Airbus, about the challenge that Brexit will pose for them. They will need as much reassurance as possible to stop them pulling out. We want to ensure ease of trade and competitive conditions for them to operate in the UK.

Let me turn to agriculture, on which we have our own devolved policy in Wales, as I have mentioned. Overall, the EU accounts for 40% of exports from Wales, but the figure for agriculture is far higher. The EU accounts for 93% of the lamb that we export, 35% of sheep, 92% of beef and 98% of dairy products—all going to the EU. Those Welsh beef exports are worth £52 million and the Welsh lamb exports £122 million. As I understand it, the EU imposes an average tariff of some 14% on agricultural imports from non-EU countries, with higher rates for individual items. I have even heard of rates of between 58% and 70% on beef products. It is essential that Wales is at the top table and we get the best deal we can for the continued export of our agricultural produce. We all accept that the common agricultural policy needs reform, but we must ensure that we support farmers—particularly those in the so-called areas of natural constraint, which are more challenging to farm.

Before the referendum, Brexit campaigners promised that Wales would not lose out. The Minister for Farming, the hon. Member for Camborne and Redruth (George Eustice), said:

“If we vote to leave on 23 June, the UK government will continue to give Welsh farmers and the environment at least as much support as they get now.”

But the new Environment Secretary said during the referendum debate:

“It would make so much more sense if those with the big fields do the sheep, and those with the hill farms do the butterflies. That would make a lot more sense for the UK and it’s perfectly possible but only if we leave the EU and sort it out for ourselves.”

Although we take conservation seriously and have an excellent record on that, I really do not want Wales to be reduced to one great big butterfly park, because active, vibrant farms are the lifeblood of our rural communities. It is essential that the Environment Secretary clarifies her position on these issues and the Welsh Government are right there at the negotiating table, finding out exactly what that statement means. I really hope that the Minister will ensure that support for Welsh farmers will continue.

To turn to other areas of EU funding, Wales benefits enormously from the European regional development fund and its vital expenditure on upskilling and infrastructure projects, particularly in the valleys and west Wales. Again, we want to ensure that Wales does not lose out in any way. I am particularly concerned, because in response to my question during Welsh questions last week, the Secretary of State for Wales implied that there would be a complete rethink of that funding. He said that

“simply replacing what are currently EU funds with another source from Westminster misses the point: the EU referendum sent out a number of messages, and those areas that receive most EU funds were the areas, sadly, that voted most strongly to leave the EU. We need to look at models of regional aid in a different way.”—[Official Report, 13 July 2016; Vol. 613, c. 278.]

I am really quite puzzled about what he meant by that. Did he mean that he is thinking of cutting the money that goes to the poorest areas of our country?

That £600 million comes to Wales through a needs-based formula. Remember that the Holtham commission said that the Barnett floor was only a temporary measure and funding for Wales needed to move to a much more needs-based formula. Will we lose even the part of our funding that is already needs-based? As I say, the Secretary of State is not giving any reassurances on that. We need to know exactly where we stand, and it is extremely important for the Welsh Government to be at the table.

I know that other Members want to speak, but I want briefly to mention our universities. Because of the differences in funding for universities in Wales, significant decisions are being made. We want to have collaboration, as we can do 10 times more when we work together, and I hope that many cross-border projects will be able to continue.

I would like to say a quick word about EU nationals. Health policy is devolved to Wales, and we are extremely dependent on EU nationals and extra-EU nationals coming to work in Wales—particularly in rural areas, because many of our specialist staff like to stay near the big centres, where they perhaps feel that they have better promotion prospects. Those EU nationals need certainty. We have had two messages: the message that people from the EU would be able to stay was quickly followed up with the message that, “We are not quite sure whether they can.” We do not want them to hop off and apply for jobs back in their home countries because they do not have the security of knowing that they can stay and settle in Wales. We need that certainty urgently, and we also need guidance on what will happen in future. There have been delays in the past—visas have not been available for doctors from outside the EU—and we need to know what will happen with EU nationals. Will there be a fast-track system, and how will that work? Another related but different area is the slaughterhouses and meat-packing factories, which are largely staffed by EU nationals. We need to know what their position is and how that can be taken forward.

No contribution of mine on Wales would be complete without a word on steel. We must make it really desirable for any investor in steel to be in the UK, and that will be so much harder now. There can be no excuses now about the EU causing delays. The Government have to act on energy prices, keeping out Chinese imports and ensuring that the conditions are absolutely right for our steel industry to stay here. For all those reasons, I want the Welsh Government to be fully involved in all the Brexit negotiations.

--- Later in debate ---

[Patrick Grady (Glasgow North) (SNP)]

It is a pleasure to serve under your chairmanship, Mr Bailey. Like others, I congratulate the hon. Member for Edinburgh South (Ian Murray) on securing his debate and using his new found liberty—perhaps I should say independence—on the Back Benches so creatively in this last gasp before the recess. I also warmly welcome the Minister to his post. Westminster Hall has not been short of Brexit debates in the weeks since the referendum and that is likely to continue, so we will set up a tent, bathing facilities and so on for him, because I think he is going to be spending a lot of time in here. However, it would also be worth having a debate on the Floor of the House, now that there is a fully accountable Secretary of State. The House of Lords has spent an awful lot of time debating the Brexit result; we have yet to debate it on the Floor of the House. The attention in this and previous debates in Westminster Hall clearly demonstrates a desire on the part of Members to have a debate on the Floor of the House.

[Nia Griffith]

Does the hon. Gentleman agree that that should be in Government time and not simply a Backbench Committee debate?