Welsh Affairs

Stephen Kinnock Excerpts

Thursday 3rd March 2016 Commons Chamber

[Stephen Kinnock (Aberavon) (Lab)]

I beg to move,

That this House has considered Welsh affairs.

I can confirm that, this morning, I enjoyed a meeting with the Secretary of State, at which we discussed the crisis in the Welsh steel industry, so he was certainly available for discussions then.

It is a great honour to open this debate today, and I am grateful to the Backbench Business Committee for allowing a St David’s day debate. The debate offers us the opportunity to speak about the challenges and opportunities affecting Wales. I am sure that Members will wish to touch on a wide range of different matters. I want to open today’s debate by concentrating on what I believe are some of the most salient, political, cultural and economic matters facing our country and our people today.

This will be a momentous year for Wales. First, we are on course for a championship-deciding clash with England in the Six Nations. I remind the House that it is traditional for Wales to win the Six Nations after a World cup. Perhaps the most momentous sporting occasion will be when the rugby team’s round-ball counterparts make their debut in the European championships in France this summer. It has been 58 years since we have been at an international finals. That is far too long for a country that has produced footballing greats—such as Allchurch, Rush, Hughes and Giggs—to be absent from major footballing tournaments. “Together Stronger” was the mantra of the team and the supporters through qualification, and it is a philosophy that can be applied across many of the issues that I wish to speak about today.

When Bale, Ashley Williams and Ramsey are flying the flag for Wales in that contest, campaigners from this House and across Wales will be making the case for Wales and the whole of the UK to remain in the European Union. We will do it with special zeal. Wales is a net beneficiary of EU funding. Our membership of the European Union is vital to our economy, security and our place in the world. A Brexit would be a massive gamble for Wales, putting jobs, investment, trade and therefore the safety of our communities at risk. The very last thing that we need now is the instability that the possibility of secession from the EU inflicts on a country that already endures economic fragility and social disadvantage.

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

I am very grateful to the hon. Gentleman for giving way on that point. Does he accept the Library figure that the UK makes a net payment of around £8 billion to £8.5 billion each year to the European Union, and that if that money were taken and Barnettised and 5% of it were handed over to Wales, Wales would become a net beneficiary from exiting the European Union?

[Stephen Kinnock]

I thank the hon. Gentleman for his intervention, but I am afraid that he is confusing the budget of the European Union with the British economy. The British economy benefits to the tune of £227 billion a year in the exports that it makes to the European Union, thanks to its membership of the single market. If we are looking for value for money, £9 billion to £227 billion looks like a pretty good deal to me.

More immediately, many share my concerns about the months between now and 23 June and ask whether it is realistic to expect rational decisions to be made around a Cabinet table that is beset by mutual loathing.

Hundreds of thousands of Welsh jobs are linked to EU membership, and that membership is our largest source of investment, bringing growth, quality employment and higher wages. Much of our global investment from outside the EU is made possible by the fact that, inside the EU, we provide a gateway to the single market. That is a major reason for international firms such as Tata Steel in my constituency to locate in Wales.

As Members will be aware, the Welsh steel industry finds itself in a precarious position and nowhere in Wales is that felt more acutely than in my constituency. The works in Port Talbot are the productive core of our local economy and community, so the announcement at the start of the year of 750 job losses was a bitter blow, which will be compounded when the impact starts to be felt through the supply chain and the wider local economy.

Although the steel crisis may be partly the result of global trends and events, what cannot be ignored is that the Government have been asleep at the wheel for the past five years. Far more could and should have been done to give the British steel industry a fighting chance. From the blatantly unfair and distortive dumping of Chinese steel to the incompetent and complacent management of public procurement, this Government have failed to give justified support or stimulus to steel.

[David T. C. Davies]

The hon. Gentleman is being very generous in giving way. May I draw his mind back to the evidence that we took from management and the unions about those terrible job losses? Both said that the European Union had delayed bringing in tariffs on Chinese rebar and had taken a very long time to agree the compensation package—for which the Government had to ask permission from the EU— in order to give back to companies such as Tata some of the money that had already been taken as a result of energy taxes.

[Stephen Kinnock]

I thank the hon. Gentleman for his intervention. Membership of the European Union is defined by how a country engages and how it works with partners in Brussels—both with the European Commission and the other member states. What we have is a Government who, in 2011, recognised that there should be an energy-intensive industries compensation package, but then failed to knock on the door in Brussels and make it happen. How can it be that it took five years to deliver that deal?

When it comes to the dumping of steel, the British Government are the ringleader of a set of member states that do not want to reform the anti-dumping rules—so we still have the lesser duty rule—and are cheerleaders for China, lobbying for it to have market economy status. I am afraid that we need to draw a line under this constant scapegoating of Brussels. The blame should be laid squarely at the doors of Nos. 10 and 11 Downing Street and the rest of the Cabinet. Unlike other member states, they have failed to engage in Brussels in a way that wins for British business.

The Government operate in a fog of laissez-faire ideology. They pray to the gods of the free market, and then they hope for the best. In reality, the market economy can function effectively only if it is regulated. Just as football requires the off-side rule to ensure fair competition, so our steel industry requires the right regulatory framework, so that it can trade in equitable conditions—on a level playing field. Instead, the Government’s blithe faith in the free market is driving them to lobby for China to be given market economy status, and to refuse to support the scrapping of the lesser duty rule.

I wish to state now, with utmost gravity, that if speedy action is not taken to prevent the dumping of Chinese steel, we will witness the beginning of the end of UK steel making. The Government know full well that this foundation industry is hanging by a thread. Neither free market dogma nor cosying up to Beijing should be allowed to impede their patriotic duty to emulate other EU countries and stand up for the men and women who are the backbone of the British economy.

The Minister for Enterprise and the Secretary of State for Business, Innovation and Skills recently visited my constituency, and I hope they will return so that they can go to the homes of some of my constituents who have lost their jobs. I hope they will look those men, women and families in the eye and explain themselves—explain how they can claim publicly that they are supporting the steel industry, while fighting tooth and nail behind closed doors against the lifting of the lesser duty rule and for market economy status for China.

I hope those Ministers will explain how they can claim publicly that they are changing public procurement to maximise the use of British steel, while allowing the Ministry of Defence to build the latest flotilla of Royal Navy frigates with Swedish steel. I hope they will come to Aberavon and explain the breath-taking contrast between their words and their deeds, for the people of my constituency deserve an explanation.

I am certain that the British steel industry has a promising future if it is given the right support by Government. The men and women at the Port Talbot works make the finest steel that money can buy and they are breaking all production and efficiency records, but the industry requires a long-term industrial strategy based on a sustained, comprehensive approach to skills, investment, regulation, energy and industrial relations. That is why I am proud to co-chair a working group of the all-party parliamentary group on steel, which will produce a report, “Steel 2020”, on formulating a long-term industrial strategy for British and Welsh steel.

Our strategy for the future of the Welsh economy must not be limited to steel. We need a new industrial revolution grounded in the new economy of renewables and connected technology, a fourth industrial revolution such as the one that was spoken of at the recent meeting of the World Economic Forum in Davos. I see Wales at the forefront of that revolution. The Swansea Bay tidal lagoon could transform the energy industry, but frustratingly, its future is under threat owing to the Government’s perpetual flip-flopping. A positive decision on the lagoon would not only put a much needed tick in the Government’s ever-diminishing green credentials, but deliver a massive boost to the local economy. By committing to sourcing as much steel as possible from the UK, it would significantly help the UK steel industry. That project needs and deserves rapid advance. The Government need to get off the fence, and fast.

The Government’s short-sightedness is undermining other forms of renewable energy, such as wind and solar. These are burgeoning industries in my constituency, with hundreds of jobs at stake, but they are under threat because of the Government’s moves to cut price stabilisation mechanisms, such as the feed-in tariffs. The Government have been on a policy descent from “Hug a huskie” to, in the words of the Prime Minister, “Let’s cut the green crap”.

[Craig Williams (Cardiff North) (Con)]

May I point out the hypocrisy in what the hon. Gentleman is saying? There is a contradiction between supporting steel—Celsa Steel, for example—which uses so much electricity, and putting a price on that electricity for renewables?

[Stephen Kinnock]

I thank the hon. Gentleman for his intervention. As we have discussed, it is clear that energy-intensive industries require support from Government. That was recognised by the Chancellor in 2011. The support that has come, finally, is welcome. The big question for me is how it could possibly have taken five years to make that happen—to get the state aid clearance that was required from the European Union. Fundamentally, the strategy for energy must be about spreading the burden of the cost more effectively so that our energy-intensive industries are not being hung out to dry by an energy policy that does not make sense. It is also about making a firm commitment so that those investing have a sense of the stability and sustainability of the market in future. We currently do not have any of those things in place, which is why we are in such a mess.

[Ian C. Lucas (Wrexham) (Lab)]

My hon. Friend makes an important point about stability. Does he agree that the real problem in industries such as solar and anaerobic digestion—on which a reception was held in the House earlier this week—is the instability of the legislative and regulatory framework, which is a deterrent to long-term investment and is costing a large number of jobs in communities right across Wales?

[Stephen Kinnock]

I agree absolutely. The Energy and Climate Change Committee has just produced a compelling report that clearly demonstrates that we are losing investment and jobs precisely because of the mixed messages and signals that this Government send to investors. Business abhors a vacuum. Business needs stability. It needs to know whether there will be a return on its investments, and at present it sees no evidence whatever of that in the United Kingdom.

Wales, and south-west Wales in particular, can also be at the forefront of an internet revolution. Swansea Bay city region has based its city deal proposal on the concept of an “internet coast” to drive the digital future of energy, health and economic acceleration. All eyes are on the Chancellor. If he really wants a “march of the makers”, he must give his full backing to that exciting vision. The Swansea University bay campus, which, I emphasise, is based in my Aberavon constituency, has a huge role to play in the development of the internet coast. I look at my hon. Friend the Member for Swansea East (Carolyn Harris) for verification of that.

[Carolyn Harris (Swansea East) (Lab)]

indicated assent.

[Stephen Kinnock]

This outstanding project, made possible by EU and European Investment Bank funding, is one of the largest and most important knowledge economy projects in Europe, producing cutting-edge research focusing on science and innovation.

The “internet coast” is a plan for the future. It is a pity the same cannot be said of the Government’s draft Wales Bill, which does not provide anything like the lasting settlement that it was intended to create. Instead, it has thrown up more uncertainties around the legislative process, and succeeds only in generating reams of constitutional red tape. Just this week the Welsh Affairs Committee, under the chairmanship of the hon. Member for Montgomeryshire (Glyn Davies), called on the Government to pause the proposed timetable for the Bill so that there is opportunity to reflect fully. That is the least that is needed. My specific concern is about ministerial consent and the risk that the process is seen as tantamount to an English veto, but my more general concern is that the Bill has been drafted in a bubble, isolated from the broader debate about the constitutional reform that our country so desperately needs.

The UK is more centralised than any other leading industrialised economy, and the Scottish referendum demonstrated that the constitutional foundations of the UK are cracking beneath our feet. The British people need and deserve better. The piecemeal, make-do and muddle-through approach that is epitomised by this Wales Bill is simply not going to get the job done. We must, therefore, have a full constitutional convention that would formulate a bold, radical, rational, root-and-branch reform of our constitution. The convention would develop a written constitution that is anchored in a confederal UK, an elected senate, a more proportional electoral system, and properly defined devolution of powers to the nations and regions of the United Kingdom.

We have also seen the results of government by muddle in Wales with the Trade Union Bill. Having taken a sledgehammer to crack a nut, the Government have found that the nut is not entirely theirs to crack in the first place. I am delighted that my Labour colleagues have stood eyeball to eyeball with the Government, and it was the Government who blinked first. The Trade Union Bill, coupled with the changes in voter registration and the alterations in constituency boundaries, are blatant and disgraceful attempts to turn the UK into a one-party state, the thinly veiled agenda being to eradicate parliamentary opposition altogether. Vladimir Putin would be proud of such fixing. Wales is disproportionately hit by the boundary changes, losing around a quarter of our MPs, reducing Wales’s voice in the House and marginalising the Welsh people.

There is great potential in Wales, but we will realise that potential only with bold leadership. There is vision and willingness in Cardiff Bay, but we find those qualities abysmally lacking on the Government Benches. As we go into elections in May, we should remember all that we have to be proud of in Wales: a Labour Government delivering for working people, creating 50,000 apprenticeships and getting 15,000 young people back to work with Jobs Growth Wales; ground-breaking legislation on violence against women; a Labour Government who have improved the cancer survival rate faster than anywhere in the UK, and who are training more nurses than ever before; a Labour Government who stood up to Westminster to protect farm workers’ wages; a Labour Government who stood by Remploy, while the Tories were shutting it down across the rest of the UK.

Let us remember that it is the work of the Welsh Labour Government under the leadership of First Minister Carwyn Jones that has enabled the creation of 750 jobs at Aston Martin in St Athan. Under Carwyn, Labour will make use of the Welsh Government’s new powers by cutting business rates for small businesses and supporting entrepreneurship, growth and jobs. That is the kind of leadership we need in Wales.

[Mrs Madeleine Moon (Bridgend) (Lab)]

I thank my hon. Friend for his wonderful speech and for his important leadership in the whole steel debate—he has been critical in moving in it forward. Will he talk a little about the importance of clarifying what will happen with rail franchising in Wales? Will he talk about whether it is true, as suggested by the Department for Transport, that no trains that start or end in England will be franchised in Wales? We have to know what is happening. Is it not important that we take that issue forward?

[Stephen Kinnock]

I agree entirely. That comes back to an issue I was talking about earlier: the need for a long-term industrial strategy that connects supply with demand and that gives our steel producers some certainty so that they know what infrastructure projects are coming down the track. They can then configure their production processes to ensure that they make the right kind of steel at the right time. That is about a partnership between Government and business; without such a partnership, industries such as the steel industry will continue to struggle. I hope that we will hear a little more today about the Government’s commitment to such a partnership.

That is the kind of leadership we need in Wales: the kind that creates jobs, opportunity, industry and enterprise and that stands up for all in our nation—the kind we can be proud of. That is why it is vital that we see a Labour victory in Wales on 5 May.

Wales has the talent and creativity to emulate our Celtic cousins Scotland and Ireland in gaining strong recognition in the world. Our people achieve far beyond the nation’s size in rugby, football, athletics and so on. With effort and fair chances, we can do the same politically, technologically, environmentally, culturally and economically. I am proud to be Welsh, to be British and to be European. I am certain that we can make those advances because, in all dimensions, together we are stronger.

[Several hon. Members rose—]

--- Later in debate ---

[Alun Cairns]

The hon. Gentleman has made some important points. It is, of course, up to the Labour party to explain its position. All I know is that Labour called for this for decades, we responded within a year, and since then there has been complete silence on the Opposition Benches.

My hon. Friend the Member for Aberconwy was extremely upbeat about Wales’s economic prospects. It is true that, since 2010, the number of people in work has risen by 89,000, unemployment has fallen by 35%, the youth claimant count has fallen by 61%, and Wales has experienced faster growth per head than any other nation or region of the United Kingdom outside London. The hon. Member for Neath (Christina Rees) spoke of the importance of getting people into work. This is action, and this is where it is happening.

We have been getting behind Welsh businesses, and there are 22,000 more small and medium-sized enterprises in Wales than there were in 2010. The hon. Member for Aberavon mentioned the steel sector. I know that he spoke to the Secretary of State and the Minister for Small Business, Industry and Enterprise earlier today about the issues facing the steel industry and, in particular, the communities around Port Talbot, but I hope he will recognise that the Government have gone a long way towards meeting the five asks from the steel industry.

One of those asks was a cut in business rates, which were mentioned by some Opposition Members. That is a devolved matter, and something that the Welsh Government could do. The energy-intensive industry compensation package has been delivered, as has the provision of more time in which to comply with the EU’s industrial emissions directive. As for EU-level action on anti-dumping, the UK Government are leading the pressure that is being exerted in Brussels. I hope that the hon. Gentleman will recognise that, along with a range of other measures that we have taken.

[Stephen Kinnock]

The Minister was going OK until he got to the bit about dumping. I am sorry, but we cannot let that one go. There are two key facts. The British Government are the ringleader of a group of member states that is blocking the scrapping of the lesser duty rule, which would make a huge difference to the ability to impose tariffs on unfairly dumped Chinese steel. They are also the chief cheerleader for Beijing in Brussels when it comes to giving market economy status to China, which would also dramatically reduce the scope. It must be recognised that, in respect of those two points, it is a case of abject failure.

[Alun Cairns]

I am sorry to hear that response, which raised two issues. The first is the confusion over market economy status. Russia has market economy status, but that does not prevent the European Union from introducing tariffs or prevent it from taking action. The other measures that the hon. Gentleman mentioned would take three years to introduce. We want to take action before then. We want to continue to be proactive. We want to work with the hon. Gentleman, the Welsh Government and the communities in and around Port Talbot and Newport, because of the importance of the steel industry to them.

In 2014-15 there were 102 inward investment projects in Wales, 98% of which were supported by UK Trade & Investment. That demonstrates the role that the UK is determined to play in supporting the Welsh economy, and in working with the Welsh Government.

The hon. Member for Merthyr Tydfil and Rhymney (Gerald Jones) mentioned welfare reforms. Welfare reforms are very important to getting people back to work, but we cannot pick one element individually. We need to look at the wider package, such as the national living wage, which would increase the incomes of 150,000 people in Wales by 2020. That will make someone working full time on the national living wage £4,400 better off, on top of the tax cuts that they will receive as a result of the increase in the personal allowance.

The Cardiff city deal was mentioned by many hon. Members, most notably my hon. Friend the Member for Cardiff North (Craig Williams), who has spearheaded and championed that cause and been persistent at every turn. He has been relentless, first as a candidate and now as a Member of Parliament, in pressing Ministers on this issue. Let me make it clear that we want this deal to be signed as quickly as possible and we are determined to press those involved in order to develop a world-class deal. We want Wales to look outwards and we want it to involve the private sector. We want the city deal to be a world beater in what it delivers. Hon. Members should recognise the fact that the spending review has already announced our “in principle” commitment to support a new investment fund, and earlier this year the Chancellor committed £50 million to establish a UK compound semiconductor centre as a down-payment on the city deal.

My right hon. Friend the Member for Clwyd West (Mr Jones) talked about ensuring that north Wales was recognised and about the importance of the northern powerhouse, a subject that was also raised by the hon. Member for City of Chester (Christian Matheson). There was a focus on the importance of rail links, and I hope that bringing the HS2 investment forward by six years will provide great opportunities for mid-Wales, north Wales and Cheshire through the links to the northern powerhouse. The hon. Member for City of Chester talked about local government reorganisation and the need to look towards Wales. I would also say that local government in Wales needs to look across the border. I think that it does so, but the Welsh Government need to recognise the fact that it is an administrative border and that the way in which people lead their lives means that they cross that border in a much more open way.

I could also go on at length about the investments that the prison in north Wales and Hitachi’s involvement at Wylfa will bring. Much has been said about the tidal lagoon project in Swansea. The Tidal Lagoon Swansea Bay company has recognised the strength of the review and welcomed it. I wish that hon. Members would reflect on what they are saying in this context and support the company rather than seeking to undermine the project, which could involve a significant investment.

In the time remaining, I want to talk briefly about the Wales Bill. We said at the outset that it was a draft Bill and that we wanted to be pragmatic and to use pre-legislative scrutiny positively. Given some of the negative points that have been made, however, I want to say that we will take absolutely no lessons from the party that gave us the Government of Wales Act 2006 and the convoluted and complex legislative competence order system, which has led to a great deal of legislative confusion. We are determined to get this right, and this pause needs to be taken in the positive spirit in which it was intended.

There have been calls to adjust the necessity test, but we plan to go further and to remove it. We will look at the list of reservations, but it also gives clarity. I encourage members to look at the Scotland Bill, which also has quite a long list of reservations, but there have been no complaints because of the clarity that it provides. Many people are calling for a distinct legal jurisdiction, but that would effectively mean a separate legal jurisdiction. That would be dangerous for Wales, in relation not only to the legislative process but to investment. We are also determined to work constructively to clear up the mess that we inherited with the pre-commencement orders. We want to get this Bill right, and we are being pragmatic. If we ploughed ahead, we would be criticised. We are being criticised just for pausing. It seems that, according to Labour Members, whatever the Wales Office does, it cannot win.

[Stephen Kinnock]

I should like to thank the entire House for an excellent debate today. We have covered a wide range of issues including the economy, the EU, the Wales Bill, the Severn bridge toll, road and rail, city deals and public services. The red threads that run through all these subjects are the ideas of partnership, investment and solidarity. We know that we need to work together with the European Union and across the UK, and we hope that we will see that spirit of partnership from the Government, alongside investments to enable us to take our economy forward to a brighter future. I thank the House for this debate.

Question put and agreed to.

Resolved,

That this House has considered Welsh affairs.