Welsh Affairs

Stephen Crabb Excerpts

Thursday 2nd March 2017 Commons Chamber

[David T. C. Davies (Monmouth) (Con)]

Members will be aware of the plan by the Heads of the Valleys Development Company, led by Mr Michael Carrick, to build a racetrack at Ebbw Vale. Mr Carrick persuaded the Welsh Government to put £9 million into his company, Heads of the Valleys, in order to develop this, but has so far been unable to get the private sector to back the scheme without an assurance from the Welsh Government that they will provide over £200 million as a loan guarantee.

Mr Carrick claims to be an expert in building infrastructure. He has been involved in attempts to set up infrastructure projects in the Shetland islands and the Port of Ardersier in Scotland, as well two biomass projects in Africa and another in Ireland, and a river barrage scheme at Fleetwood. None of these projects has been successful. I have spoken to many involved who say that they feel let down and misled, and in more than one case that they are owed money. I could give some examples, but do not have the time. One that has been in the press, however, involved Mr Bob Long from Fleetwood, who tried to set up a river barrage. Mr Carrick told him that he had the funds available to develop the project, but the money never arrived, and Mr Long claims the project has been almost ruined as a result.

Aventa’s website, which Members can look at if they wish to, implies that it is responsible for managing a fund worth £350 million to build UK infrastructure, but Companies House records suggest that it has just £500 in the bank. However, with his £9 million of public money, Mr Carrick decided to buy a specialist motorcycle company based in Buckinghamshire. It was shown in the records as a dormant company until August 2012, after which it sprang into life. By August 2013, it was showing liabilities of £350,000. The losses grew, but when I met Mr Carrick in July last year, he told me that he would soon turn it around, that it would be an anchor business for his site and that it would lead to a Welsh rider winning a Welsh grand prix. A few months later, it was in administration, owing more than £500,000. If Mr Carrick cannot make a success of a small company turning over a few hundred thousand pounds, should the taxpayer be backing him in a venture worth several hundred million?

Mr Carrick’s publicly funded company has also bought the rights to hold the MotoGP championships at Silverstone, but so far he has made a loss on that of around £1 million. Many companies, including some local ones, have done work for the project but have not been paid—they have all done it at risk—but luckily, one supplier has been paid in full, again out of public funds. Mr Carrick decided to appoint a financial consultant to give advice to the scheme, and the company he appointed was Aventa, a company that he 100% owns and controls. In effect, he paid himself nearly £l million of public money to give himself advice. Civil servants in the Welsh Assembly raised concerns about this but were overruled. I have some written material to back all this up, by the way; I have the invoices. Among other things, Aventa spent £35,000 on landscape gardening. Those invoices were made out to the Heads of the Valleys Development Company, but Mr Carrick says that they were paid by Aventa. He also spent thousands of pounds on political events for the Labour party and, he tells me, for the Conservative party, although I do not have those invoices.

When I raised my concerns with Mr Carrick, he told me that he was entitled to spend Aventa money as he pleased and that it had sources of income other than the public money from the Heads of the Valleys Development Company. I asked for examples and he cited GE. I asked him whether he meant General Electric, and he said yes. I then contacted General Electric, which told me that he had asked for money but had not had any from the company. At the same meeting, one of Mr Carrick’s associates told me that BMW was planning to build a BMW world theme park at the site. I checked with BMW, which told me that that was absolutely ludicrous and that it had no plans to do so. Again, I have all this in writing.

Mr Carrick’s lawyers, who are in touch with me frequently, claimed that I had made all this up, but, fortunately for all concerned, I have a high-quality recording of the meeting, and they have now had to accept that all those comments were indeed made. I can share the transcript of the meeting with anyone who is interested, although I cannot share the recording without Mr Carrick’s permission, which he does not seem very willing to give. I asked him about the business plan, and I was told that he would be able to rent out the race track for between £18,000 and £35,000 a day. Industry experts tell me that that is absolutely ludicrous. But even if he did manage to do that, he would be pulling in revenue of only about £13 million a year on a project that is going to cost £430 million to build. I am intrigued as to why the project keeps increasing in cost, from £200 million in 2011 to £250 million in 2012 and to £380 million when I met Mr Carrick in July. Seven months later, it has risen again to £430 million.

I have two other documents of interest. The first is a quote from a construction company, FC, for £180 million for building the track—a project we are told is worth £430 million. Even with a few hotels chucked in, that would take a bit of explaining. The second is a business plan showing a developer’s profit of £13 million.

[Stephen Crabb (Preseli Pembrokeshire) (Con)]

I commend my hon. Friend for his investigation into this episode. What broader lessons does he think should be drawn from this about Welsh Government Ministers’ attitudes towards the use of public money in the name of economic development?

[David T. C. Davies]

The first lesson is that nobody should be able to make £13 million on a project before it has even been built. Secondly, this whole thing is an outrage. People are being sold a pipe dream. Politicians who support it are being taken out for lunch, and those who ask difficult questions are being threatened with legal action by a group of expensive City lawyers. Some £9 million of taxpayers’ money has been wasted. The only infrastructure we have seen so far has been the £35,000-worth of work done to Mr Carrick’s mansion in Grantchester, and the only sports car in evidence is the Aston Martin that he drives around in. It is time to pull this project.

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[Nick Thomas-Symonds (Torfaen) (Lab)]

It is always a pleasure to follow my neighbour the hon. Member for Monmouth (David T. C. Davies). I hope that he and I will agree on the principle of the importance of investing and creating jobs in the heads of the valleys.

Economic development will be the focus of my remarks, and we have seen good news in recent days. Yesterday, on St David’s day, the Cardiff capital region city deal was signed, which is clearly good news for south-east Wales. However, there are also concerns about Ford workers in Bridgend, which underlines—if there is any need to—the need for a coherent strategy from the UK Government for the years ahead. Whether people voted leave or remain in last year’s referendum, nobody voted to become poorer. We must ensure that structural funding continues beyond 2020. Foreign direct investment, which was at a 30-year high last year, must continue, and the Welsh Government deserve great credit for continuing to attract such investment to Wales. Steel, which is a foundation industry, must also be central to Wales’s economic future.

The priorities are both immediate and long term. Immediately, we must secure tariff-free access to the single market. Indeed, the Welsh Government’s “Securing Wales’ Future” document, which was produced together with Plaid Cymru, sets out the importance of participation in the single market, and a balanced migration policy, given that over two thirds of Welsh exports go there.

In the longer term, we need a vision of what a post-Brexit Wales should look like. The European Union currently has more than 50 free trade arrangements, which will clearly need replacing. The Brexit White Paper produced by the UK Government contains a chapter on “Securing new trade agreements with other countries”. It has 19 paragraphs, but there is no mention whatsoever of Wales’s position or the Welsh perspective on such trade agreements. However, that same document sets out that some of the fastest growing export markets between 2005 and 2014 were places such as China, South Korea, Brazil, and Mexico. The UK Government must work with the Welsh Government, which already have 14 overseas offices ready to assist with the creation of new trade agreements.

[Stephen Crabb]

My ears pricked up when the hon. Gentleman mentioned that the Welsh Government currently fund 14 overseas offices to assist with international trade. Given the extensive global network of embassies and high commissions that the UK Government fund from Westminster precisely to assist with international development, why should taxpayers fund these duplicate offices?

[Nick Thomas-Symonds]

In a sense, the right hon. Gentleman makes my point for me: we need a Welsh perspective in the construction of post-Brexit trade deals.

In the teeth of opposition from Conservative Assembly Members, it was very important that the Welsh Government nationalised Cardiff airport, which is crucial to Wales’ economic future.

The constitutional arrangements of Wales in 2017 are different from those that existed in 1972 when Wales entered the then European Economic Community. When the rules currently set in Brussels on matters such as agriculture, the environment or certain parts of transport are repatriated to the United Kingdom, we must ensure that they are not exclusively returned to this Parliament when it would be more appropriate to base them with the Welsh Government in Cardiff. It is vital to bear that in mind in the debates to come.

There is a broader point, and my hon. Friend the Member for Ynys Môn (Albert Owen), whom I congratulate on leading the campaign to secure this debate, put it well when he talked about working now for the 100%. What is in the best interest of the people? Of course it is vital that we retain workers’ rights, environmental protections and consumer protections as we move into a post-Brexit Wales, but let us have the ambition not only to retain those rights and protections but to build on them—to make our consumers better protected, to strengthen environmental protections and to build on the workers’ rights that our membership of the European Union established and deepened over the years.

Our focus on Wales’ economic wellbeing is vital. It is about ensuring that the voice of Wales is heard loud and clear in the negotiations ahead so that we are able to produce the prosperous post-Brexit Wales that we all want.

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[Chris Davies]

I strongly agree with my hon. Friend. When one stands on the beautiful Pen y Fan in the mountains of the Brecon Beacons, we look down on south Wales to the Gower, and what a pleasure it is to see it from a distance—or, in fact, from near or far.

The Welsh tourism industry provides excellent employment prospects in my constituency and is a great boost to the local economy, but it is under some threat at the moment. Business rate hikes, should they go ahead as planned, will harm the tourism industry’s small profit margins, and a number of owners have expressed concerns to me that they might have to close altogether as a result. I therefore very much look forward to hearing any measures that the Chancellor can put in place next week for England that can be replicated in Wales.

It is not just the tourist in St David who is well suited to my speech. As many hon. Members will know, St David set up a number of monasteries around Wales. They were very frugal in their operations; once set up, they farmed the land. Thankfully, farming practices have remained, and produce from Wales is now widely recognised as among the finest products available in the world. Welsh lamb is becoming a benchmark for quality, and our beef is second to none. I am therefore pleased that the Government are supporting Welsh farmers by protecting farm payments until 2020. Furthermore, with Brexit, we have the opportunity to free our Welsh farmers from the shackles of the EU so that we can better compete with produce from around the world.

St David was not just a tourist and a farmer; he was also an inspiration to the warriors of Wales—he was recognised as our patron saint at the height of the Welsh rebellion against the Normans. Support for our military is still very visible in Wales. For many years, we have had a vast number of training grounds and barracks for our military right across our nation, and our communities take great pride in welcoming servicemen and women to their towns. I know that from the infantry training camps in Sennybridge and the Brecon Beacons, and from the barracks in Brecon, in my constituency, which once housed soldiers who fought in the battle of Rorke’s Drift, which was made famous by the film “Zulu”. That history of community is very important to local people, so I am disappointed that the Government seek to close the Brecon barracks. I hope that they will reconsider that proposal, see how important the barracks is to the military and the wider community, and keep it open for generations to come.

Following my research, I felt that I could not speak in this debate without mentioning St David’s great miracle. As he was preaching to the crowd at the synod of Brefi, he raised the ground beneath him into a hill that his sermon could be heard from. There are times when I wish for just such a power, because of my height—so does the Secretary of State, I am sure. None the less, I was reminded of the beautiful, rolling countryside of Brecon and Radnorshire.

[Stephen Crabb]

I am enjoying my hon. Friend’s speech enormously, but I fear that he has made a slight omission. He has not yet referred to the fact that St David was, of course, from Pembrokeshire, the most beautiful part of our fabulous nation of Wales.

[Chris Davies]

Just as when my right hon. Friend was Secretary of State for Wales, we are delighted to see Pembrokeshire people ruling over us, but we are also delighted to see them go back to Pembrokeshire on occasions, too—[Interruption] Even though he remains a great right hon. Friend.

My right hon. Friend stopped me as I was just about to mention that great institution that we call the Labour-run Welsh Assembly, which is proposing to litter not just Brecon and Radnorshire, but the whole of mid-Wales, with wind and solar farms by imposing measures on Powys County Council’s local development plan. Such a proposal would harm not only the excellent tourism industry that I mentioned earlier, but the attractiveness of mid-Wales for locals and those thinking of relocating there. It looks as if we will need one of those great St David’s miracles to prevent these plans from going through, but I can assure Members that I shall be fighting them all the way.

May I say again what a pleasure it is to see this House focusing on Wales issues?