Ford in Bridgend

Stephen Kinnock Excerpts

Monday 10th June 2019 Commons Chamber

[Alun Cairns]

I am grateful to my right hon. Friend for underlining the points in relation to Brexit, because Ford has stated clearly that Brexit has nothing to do with this decision. Furthermore, there would be more credibility in the Opposition’s points about Brexit if the engine plant was being shifted from the UK to anywhere else in the European Union, but we know that production is being shifted to Mexico. Therefore, I do not think the Brexit argument stacks up, and my right hon. Friend makes an important point that it is disappointing that many people will still refer to Brexit, which will undermine the potential for further investment in the site.

[Stephen Kinnock (Aberavon) (Lab)]

This is a devastating blow for the workforce, many of whom are from my Aberavon constituency. The Secretary of State keeps saying that the situation in other EU countries is also difficult, but none of them has seen investment in the automotive sector drop by 80% in the past three years. The fact is that this Government are like a driverless vehicle and have been for the past three years. Their botched Brexit and general incompetence have seen confidence drain away from the automotive sector. When will we see a proper industrial strategy that helps the sector move from diesel and petrol to electric?

[Alun Cairns]

The hon. Gentleman makes an important point about the need to attract investment in this sector, but he is somewhat selective with the data that he presents. All automotive manufacturers have had challenges to meet in relation to changing consumer demand. For example, the UK is leading the way in attracting investment in the sector, and not only in terms of the scale of the money that I have already highlighted. Some 20% of all electric vehicles sold in Europe are manufactured here in the UK, which demonstrates that we are playing a prominent role.

St David’s Day

Stephen Kinnock Excerpts

Thursday 28th February 2019 Commons Chamber

[Stephen Kinnock (Aberavon) (Lab)]

It is always a pleasure to follow my hon. Friend the Member for Cardiff North (Anna McMorrin), and I congratulate my hon. Friend the Member for Gower (Tonia Antoniazzi) on securing today’s debate. As she is an avid Welsh rugby fan and former Wales international, I know that she will have enjoyed the match on Saturday. It was a stunning win and a great way to kick-start the St David’s Day celebrations. Eddie Jones led his England side down the M4 and got stuck in traffic along the way before coming completely unstuck against a Welsh side determined to stop his chariot. We were given little chance of winning that match but, as the Welsh always do, we rose to the challenge and triumphed in the face of adversity.

[Matt Western (Warwick and Leamington) (Lab)]

I congratulate Wales on their victory at the weekend. It was mightily impressive and a real demonstration of power. Does my hon. Friend agree that the renewables sector provides a huge opportunity for Wales to refound itself through offshore wind and onshore through hydroelectric?

[Stephen Kinnock]

I agree with my hon. Friend. Wales was of course the cradle of the industrial revolution and it should be the cradle of a green revolution. Unfortunately, we are dealing with the most incompetent and short-sighted Government in living memory, who refuse to go forward with the Swansea Bay tidal lagoon. I think that sends a clear signal about what really makes them tick.

Today’s St David’s Day debate is marked with sadness following the loss of our good friend and colleague Paul Flynn, the former Member for Newport West. He had a razor-sharp intellect and a rapier-like wit. He was an outstanding parliamentarian who was passionately committed to social justice and opportunity for all—a lovely man, who always had a helpful word of advice for us new kids on the block. He will be sorely missed.

Just as I had complete confidence in the 23 men in red on Saturday, I have confidence in my fellow countrymen and women to rise to the challenge of Brexit, but the challenge is truly daunting. We are two and a half years on from the referendum and fast approaching 29 March. We are also two years on from a general election when the Conservative manifesto promised to set up a new UK shared prosperity fund to replace EU funds after 2020. But with just 29 days to go until we leave the EU, we know little more about the UK shared prosperity fund than we did in June 2017.

Like much of Wales, my Aberavon constituency has benefited hugely from European money—from the Bay Campus at Jersey Marine to the sunken gardens and toddler play area on Aberavon beach; from the Croeserw community enterprise centre to the Cognation mountain bike trails in the Afan valley; and from the transport hub to the Port Talbot magistrates court. These projects would not have been possible without European funding.

Between 2014 and 2020, west Wales and the valleys were set to receive from European structural funds investment worth more than £1.6 billion, yet nearly everything about the shared prosperity fund is still to be worked out. We still do not know how much funding will be available, how it will be divided across the country, what activities will be eligible for support or who will take the decisions on how the money is spent. There is a huge fear that this will be not just a financial grab, but a power grab, and that the Westminster Government will use this opportunity to reduce funding for areas that need it most and to claw back powers that sit naturally with the devolved Administrations.

These deep-seated concerns led to the creation of the all-party parliamentary group for post-Brexit funding for nations, regions and local areas, which I am truly proud to chair. The wide-ranging review that we carried out heard from 80 organisations across the UK, including the Welsh Government, councils in Wales and the Welsh TUC. I wrote to the Secretary of State for Wales back in November, seeking a meeting about the findings of our APPG, but have yet to receive a response. Those representations were unanimous in saying that the UK shared prosperity fund must comprise not a single penny less in real terms than the EU and UK funding streams it replaces. Westminster must not use Brexit as an opportunity to short-change the poorest parts of the UK. Equally, the UK Government must not deny devolved Administrations the appropriate control over funds. Local decisions must not be made by a bureaucrat or by a Tory Government sitting at the other end of the M4. The Government’s inaction cannot continue; they must provide guarantees on the shared prosperity fund.

Of course, one group of people who know very well about this Government’s inaction are the steelworkers in Port Talbot, Llanwern, Trostre and right across Wales. They have gone above and beyond to save our steel industry, but their actions have not been matched by the Westminster Government. When unscrupulous pension advisers took the opportunity during the pension transfer to swoop in like vultures and rip off steelworkers, the Government did nothing. Now there is a very serious risk that thousands have been conned into transferring out of the scheme, almost always against their best interests. It is imperative that steelworkers are notified of this, so that it can be remedied before the opportunity is missed, but the Government’s inability to support steelworkers does not stop there. At the height of the steel crisis, the UK Government consistently showered steelworkers with warm words, but since then they have failed to create a sector deal for steel, and last year less than half of the steel bought by the Government came from the UK, despite British steel being the best in the world; that is simply not good enough.

Disabled people in my constituency have also been badly let down. The personal independence payment is there to support individuals with the extra costs of living associated with a disability, but the system in place now is working against disabled people, instead of for them. Three quarters of people in Wales who challenged the decision of the Department for Work and Pensions to stop or reduce their PIP were successful in having that decision overturned, which just shows how fundamentally broken the system is. In Wales, one in 10 people waited more than a year to win back money that they were initially denied—a dreadful failure.

I am a proud Welshman. I was born in Tredegar in 1970. My grandfather on my father’s side was a coalminer in the Welsh valleys, while my grandmother was a district nurse—the backbone of the NHS. My grandfather on my mother’s side was a railway signalman in Anglesey, supported by a grandmother who was truly the rock of the family. Their never-say-die attitude and commitment to working hard for their communities has been passed down the generations and it is with that spirit that I will continue fighting hard for my Aberavon constituents in Westminster.

We are a proud, unique community in Aberavon. Even Banksy picked us out last year as a worthy home for one of his wonderful creations. But, like every area, we need a UK Government and a Welsh Secretary who will stand up for Wales; and that means, more than anything, that we desperately need a UK Labour Government. Happy St David’s Day to all.

Oral Answers to Questions

Stephen Kinnock Excerpts

Wednesday 23rd January 2019 Commons Chamber

[Stephen Kinnock (Aberavon) (Lab)]

Q9. In May 2018, Michel Barnier said that the only frictionless model for the future relationship with the UK would be Norway-plus—Norway being part of the single market, plus a customs union. This means that a Norway-plus Brexit would eliminate the need for the backstop and would also be agreed rapidly, thereby eliminating the need to extend article 50. If the Prime Minister really wants to do away with the backstop and really wants to leave the EU on 29 March without the need for an extension, why does she not pivot to the Norway-plus option today?

[The Prime Minister]

First, it is not the case that that is the only way to provide frictionless trade between the United Kingdom and the European Union. Other options have been put on the table. The question of the extent of that frictionless trade will be a matter for the second stage of the negotiations.

Shared Prosperity Fund: Wales

Stephen Kinnock Excerpts

Wednesday 14th November 2018 Westminster Hall

[Ian C. Lucas]

The hon. Gentleman has read my speech, too—I was planning to go on to the north Wales growth deal. I am passionate about regional policy and devolving powers to the nations and regions, but the Government should be giving a lead. It is their responsibility to compensate for market failures with engineering investment to improve a part of our economy that the market on its own would leave behind.

There is agreement across the political spectrum that the present system has not worked as it should for the benefit of all the nations and regions of the UK. We need to reflect on the result of the referendum and ask why investment from the structural funds, for example, has not achieved as much as we would all have liked.

[Stephen Kinnock (Aberavon) (Lab)]

My hon. Friend is making an excellent speech. Surely the best way to ensure the best possible outcomes for our programmes and projects is to decentralise and devolve, empowering local authorities, local stakeholders and the practitioners who will ultimately deliver the projects to design measures and outputs. The people on the ground know best what works and what does not.

[Ian C. Lucas]

That is my next paragraph, which I shall read. As someone who believes in devolved decision making, I believe that decisions relating to investment in Wrexham and north Wales should be made by people who are close to our local economy and community. Historically, the EU’s structural funds system did not work well for my constituency of Wrexham.

Let me give one example. Wrexham Glyndwr University was established in 2008—the first time in our history that we had a university. That was a strategic moment for Wrexham and hugely important. As I said when I was a Minister within the Department for Business, Innovation and Skills, universities are at the centre of developing economies in the modern world. The establishment of Wrexham Glyndwr University was a really important period, but between 2008 and 2014 it received no structural funds at all. The Wales European Funding Office tells us that, in the same period, Swansea University received £89 million, the University of Glamorgan £41 million, Cardiff University £29 million and Bangor University £47 million. There was a lack of investment from the source that was supposed to be supporting the development of the economy in the area that I represent. That was a missed opportunity and will have had a negative impact on the university that we are developing as part of the local economy.

That lack of investment is mirrored in funding for north-east Wales generally. Neath Port Talbot Council received over £89 million between 2007 and 2014, while Flintshire received £3 million. Incredibly, Wrexham received only £446,000. After Brexit, we will need a new system of funding and a fair allocation across Wales. As the hon. Member for Aberconwy (Guto Bebb) said, we have shown the way in north Wales: from the bottom up, local government, MPs, Assembly Members and universities have worked together to produce a growth bid for north Wales to remedy the failings that we believe exist within our local economy. We put forward that growth bid on behalf of the community that we represent; it is very much devised and put together by the local players.

I still get frustrated at having to go with a begging bowl either to the Treasury across the road or to Cardiff Bay to beg for investment. I want those decisions about investment and the power to raise money to be devolved to places such as north Wales, because I have lot of confidence in the north-east Wales economy. Despite the fact that we have not benefited from a lot of the funding that other parts of Wales have had, the economy in north-east Wales has developed during the period that I have been privileged to represent Wrexham. We need to address the defects in our local economy in transport and digital infrastructure. In the future, we will have an insight into our local economy to see where the defects are and to begin to address them.

--- Later in debate ---

[Stephen Kinnock (Aberavon) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Hollobone. I congratulate my hon. Friend the Member for Wrexham (Ian C. Lucas) on securing this important debate.

The 2017 Conservative manifesto promised to set up a new UK shared prosperity fund to replace EU funds, with the intention that the new fund will

“reduce inequalities between communities across our four nations”

and will be

“cheap to administer, low in bureaucracy and targeted where it is needed most”,

so we know how to measure the promises that the Conservative Government are now making. Two and a half years later—not from the manifesto but from the referendum—we still do not know how much funding will be available, how it will be divided across the country, what activities will be eligible for support or who will take the decisions on how the money is spent. There is a huge fear that that will be not just a financial grab, but also a power grab, and that the Conservative Government will use this opportunity to reduce funding for areas that need it most and to claw back powers that sit naturally with the devolved Administrations.

That concern drove us to create the all-party parliamentary group on post-Brexit funding for nations, regions and local areas. In that spirit, we worked with the Industrial Communities Alliance and launched a national inquiry to help us understand the wide-ranging views on the key questions that I have highlighted. That involved inviting a large number of organisations to submit evidence to the inquiry about what they wanted from the shared prosperity fund. Respondents included local authorities, local enterprise partnerships, the TUC—including the Welsh TUC—mayoral combined authorities and devolved Administrations. Such was the huge interest and concern that we received submissions from over 80 different bodies across England, Scotland, Wales and Northern Ireland. Many hon. Members present here are members of the APPG. The report will be published on Friday, but I will give a brief summary of the key recommendations.

There is an overwhelming consensus that the shared prosperity fund must not comprise a penny less than what the EU would have invested in Britain from 2020 to 2024. The Government must, above all, prioritise narrowing the differences in prosperity across the UK. In England, the funding should be allocated to local areas on the basis of a robust formula and up-to-date statistics. In Scotland, Wales and Northern Ireland the UK Government should respect the devolution settlement and any guidelines should therefore be kept at a strategic and broad level, and agreed with the devolved Administrations, who should keep responsibility for detailed design and delivery. Those findings all reflect my own concerns. The report has been signed off by all vice-chairs of the APPG, so it is a cross-party report; we shall send it to the relevant Secretaries of State and seek follow-up meetings.

Westminster must not use Brexit and the end of the EU’s regional funding as an opportunity to short-change the poorest parts of the UK. The UK Government must not preside over a Westminster power grab, whereby devolved Administrations are denied the appropriate control over funds. The Government have promised their own consultation—I am sure the Minister will tell us more about that—which I understand will be launched before Christmas. It is very important that they take the recommendations in our report into account, particularly as they reflect the views of more than 80 organisations at the coalface of those issues. The design must not be dreamed up in Westminster or Whitehall bubbles, but driven by the practitioners—the people who really know what works, and what does not, in their communities.

Welsh Affairs

Stephen Kinnock Excerpts

Monday 19th March 2018 Commons Chamber

[Stephen Kinnock (Aberavon) (Lab)]

I thank my hon. Friend the Member for Ynys Môn (Albert Owen), who is not in his place, for securing today’s debate. It is always a pleasure to follow my hon. Friend the Member for Cardiff North (Anna McMorrin).

I rise today to speak about a gross injustice visited upon the people of Wales not far from this House. On 10 February 2018, the Welsh people were quite simply robbed blind. With this being the delayed St David’s day debate, I would expect many rugby fans to be here, but for those who do not know what I am talking about, I am referring to the recent outcry in the Wales v. England six nations rugby match, when the referee fatally denied a legitimate Welsh try, which proved decisive. We saw Wales denied what we were due, and we were ignored by those in power. I am afraid that that is a running theme in political and public life. The rugby pitch is not the only place where England and Wales are not on a level playing field; not the only place where better judgment and match reviews are needed. In spite of all that, we persist.

Just as I have faith in the talent and promise of Welsh rugby, so I have faith in the talent, promise and future of Wales. Our best days are still ahead of us. Whitehall may not play fair, Westminster may ignore us and Downing Street may break its promises, but Wales will persist, and we shall we succeed.

The Conservative record in Wales is one of false and broken promises; it is the record of a Government who do not listen and do not care. What happened to rail electrification? What happened to the tidal lagoon? What happened to supporting our steel industry and to investing in our young people?

[Geraint Davies]

To add to the comments about what happened to the £700 million for rail electrification, as my hon. Friend knows, Network Rail also took out an extra £1 billion. We want extra investment in electrification, straightening lines, the Swansea metro, yet, proportionally, there is far less investment in Wales—something like 1% versus 5% of the population and 6% of the network. Does my hon. Friend agree that we are massively underfunded and desperately in need?

[Stephen Kinnock]

I agree absolutely that if the Government are serious about rebalancing the British economy, which is grossly skewed towards London and the south-east, that has to start with infrastructure investment. The difference between the per capita sums that are spent in London and the south-east and those that are spent in the rest of the country is a chasm that has to be filled.

When the Prime Minister famously declared in Wrexham that “nothing had changed”, she did so in front of a sign claiming that she had a plan for a “strong and prosperous future”. But building that future requires investment, not platitudes; action, not warm words. More than a year ago, the Hendry review—a Government- commissioned review, carried out by a former Conservative Minister, no less, reported back, calling for the Swansea bay tidal lagoon to get the go-ahead. It is a groundbreaking project that would power 150,000 Welsh homes for 120 years, creating thousands of jobs and using Port Talbot steel. Yet nothing has happened. Fourteen months on, and the Government have not even bothered to respond to the review. It is just like the sector deal for steel. For six months, a comprehensive plan for how we can turn our steel industry from one that is surviving into a sector that is thriving; a plan that would allow our communities to fulfil their potential, has sat on a shelf, gathering dust. The plan would mean an additional £1.5 billion of investment over the next five years, increasing production by 40%, creating 2,000 more jobs, training 200 more apprentices a year and increasing investment in R&D. It has the support of all the steel companies and unions, but to unlock that investment, the Government need to act to cut energy prices, which are, on average, 50% higher than those of our competitors.

The steelworkers of Port Talbot, Llanwern, Trostre and right across Wales have shown the lengths they will go to to save our steel industry, but when they agreed to changes in their pensions to save the industry the Government did nothing. They ignored our calls for changes to deemed consent that would have helped many to maximise their savings, and they did nothing when dodgy pension advisers—vultures—swept in to rip off our steelworkers.

Since the 2015 election, Labour MPs have called on Ministers over 700 times to stand up and support our steel industry. While the Business Secretary was on a jolly in Australia, I was in Mumbai with Community union fighting for the future of our steelworks and our industry. How much longer is this meant to continue? On the tidal lagoon and steel, we seem to have a Government incapable of making any decision, a Government frozen by their own ineptitude and shortcomings. While the Westminster Tories have stood by and done nothing, Welsh Labour has gone to the very limits of what it can do, announcing tens of millions of pounds of support for the Welsh steel industry and a plan for millions to support the lagoon. While the Tories stand by, Welsh Labour stands up.

Without more powers, however, there is only so much we can do. That is why powers must be given to Cardiff Bay, not hoarded by Westminster after Brexit. We have seen that we cannot trust the Tories with those powers. They promised electrification through to Swansea. It was in their manifesto. The then Welsh Secretary not only assured me, but promised when I challenged him at Question Time back in 2015 that we would have electrification. However, the day before learning of millions in new investment in London with Crossrail 2, we were told the electrification would be cancelled and that instead we would get hybrid diesel trains. As the Secretary of State experienced—it is a pity he is not in his place so I could remind him—those trains are not so reliable. After his finely balanced photo op with the Transport Secretary, the train broke down and started leaking on its inaugural journey.

The people of Wales deserve better than that. And we deserve better than a Government forcing a prison on Port Talbot, against the wishes of the community, in a totally inappropriate site. I agree that we should be investing in better and newer prisons, but they must be in appropriate sites, not right next to schools and retirement homes on marsh land with poor communications. It must be done with the consent of the local community. We need a Government who listen and a Government who will not try to build our future on the cheap. Since 2008, some £78 million has been cut from Neath Port Talbot’s annual budget and it is expected to find an additional £60 million over the next five years. If it manages to achieve that, it will be the equivalent of it scrapping the entire social services budget. It is a textbook example of the Tory strategy of the devolution of blame: Westminster cuts budgets and forces local councils to cut services or to break the law.

As the central Government budget cuts have grown deeper, it has been impossible to sustain many services, but in Aberavon we are a community and we stand together. Residents, service users and the council workforce have all played their part in meeting those savings. Council staff took a voluntary pay cut and the community banded together to take on responsibilities, volunteering their time and experience to keep facilities open, such as the libraries in Taibach, Briton Ferry and Cymmer. Volunteers have worked hard to keep open the Noddfa community centre in Glyncorrwg, the Gwynfi miners hall and the Afan Valley swimming pool and to take control of bowling greens and sports pitches. When the Government have stood by, our community has stood up, but they should not have to. Community action should be in addition to the state, not in place of it.

There are times when I worry for the future of our country. We have a Government short-changing the present: a Government who claim to know the cost of everything, but know the value of nothing, and a Government who seem incapable of taming the Brextremists, whose reckless, hard Brexit would devastate steel communities like those in my constituency. But then I remember the steelworkers willing to make personal sacrifices to save their industry, community and way of life, to save our steel. I remember people standing by the tidal lagoon, despite Government delay and incompetence. I remember the residents standing up for their services.

Above all, I think of the young people in my constituency, in particular the incredible young women of LEAD— the leadership, enterprise, activism and development programme—delivered by RECLAIM. Through LEAD, those 12 and 13-year-old girls from Aberavon are engaging with the issues that face our community and are gaining the confidence and skills, so that they too can be change makers, leading change and making a difference in Aberavon. The girls of PT Perfect have put together their manifesto of the issues that are important to them, such as homelessness, supporting local businesses and giving girls the opportunity to be seen and to be heard. They have campaigned tirelessly on those issues and have engaged actively with a range of community figures about them. Last month, they were in Parliament to mark the centenary of women receiving the vote. This month, they have been selected to appear on stage at the WOW—the Women of the World—festival at the South Bank.

It is for these girls and for the cohort of boys that will start the LEAD programme in a few weeks’ time and for the thousands of youngsters across Aberavon that we need the Westminster Government to change their attitude towards Wales. Labour understands the potential that we have in Wales and is willing to do what is required to allow us to fulfil that potential. The people of Wales deserve better. The people of Port Talbot deserve better and all in our country deserve better, because we have much to give and much to achieve, but to do that we need support from a Government that believe in Wales and will invest in our people.

[Mr Deputy Speaker (Sir Lindsay Hoyle)]

I call Geraint Davies—you have two minutes.

Queen’s Speech: Implications for Wales

Stephen Kinnock Excerpts

Wednesday 19th July 2017 Westminster Hall

[Tonia Antoniazzi (Gower) (Lab)]

I congratulate my hon. Friend the Member for Cardiff Central (Jo Stevens) on securing the debate. We had to wait longer than we expected for the Queen’s Speech, apparently because the ink took longer than expected to dry on the vellum. When it came, it made no mention whatever of the tidal lagoon. It did include five interesting objectives: working with the devolved Administrations to ensure prosperity outside the EU; an industrial strategy that spreads opportunity throughout the UK; backing infrastructure to support economic growth; backing new industries; and acting to reduce energy bills. However, it seems to me that, unless I can be convinced otherwise, the Government have no interest in Wales.

Five years ago, in 2012, the first formal planning document for the Swansea bay tidal lagoon was submitted to the Planning Inspectorate. The construction of the tidal lagoon featured in the Conservative party manifesto in 2015, but not in 2017. In January this year, former Energy Minister Charles Hendry published his independent review of tidal lagoons, which concluded that the Swansea bay tidal lagoon would be cost-effective and

“a significant economic opportunity for Wales and the UK more generally.”

Crucially, Hendry stated that moving ahead with a lagoon off the Swansea coast should be seen as “a no-regrets policy” and that it should be built

“as soon as is reasonably practicable.”

The Swansea bay tidal lagoon is set to be the blueprint for tidal energy in the UK. It is a game changer for Wales, but despite the support of the Welsh Government, a number of MPs, AMs, councillors, Wales Office Ministers and Charles Hendry, the UK Government have still not committed to backing the project. We have had enough.

As Cardiff bay, which attracts more than 1 million visitors per annum, has shown, developments that increase the attractiveness and usefulness of Wales’s shoreline can provide a catalyst for further investment and leisure use. There is a strong expectation that the new tidal lagoon would support national events and raise Swansea’s profile. It could build on Swansea’s very strong existing maritime heritage, which includes the National Waterfront Museum and the water sports centre of excellence. As hon. Members will have read in the review, the range of employment opportunities will be far-reaching, not just in design, build and manufacturing, but in related services such as tourism, recreation and recruitment. That will be of huge benefit not just to Gower, Swansea and Wales but to the rest of the United Kingdom. I feel I need to highlight that point, because we are being very short-sighted.

As an educationalist, I feel it pertinent to note how the University of Wales Trinity Saint David is responding by focusing on the skills, needs and opportunities that the tidal lagoon will bring, including the digital skills that are needed to deliver it.

[Stephen Kinnock (Aberavon) (Lab)]

My hon. Friend is making an excellent speech on the tidal lagoon. It is also worth mentioning that 100,000 tonnes of British steel will go into the project. The Prime Minister said that she was disappointed with Donald Trump for withdrawing from the Paris climate accords, yet she refuses to give the go-ahead to this vital, clean, green energy project. How are those two positions compatible?

[Mr George Howarth (in the Chair)]

Order. The hon. Gentleman may be leading the hon. Lady down a rose-strewn path—unless she can find some way of relating his point to Wales and the Queen’s Speech.

--- Later in debate ---

[Guto Bebb]

Not for the time being; I have to make some progress.

Converting EU law into UK law is not enough to ensure a functioning statute book on exit day. As I have mentioned, retained EU law will contain a broad range of deficiencies that need to be corrected; the intention is that that those deficiencies can be corrected both at a devolved level and in Westminster.

In addition to the withdrawal Bill, there will be other EU exit Bills, which are absolutely essential for the way in which we can operate as we leave the European Union. The customs Bill will provide for a stand-alone UK customs regime on exit, and the trade Bill will put in place the essential and necessary framework to allow the UK to operate our own independent trade policy. I suspect Opposition Members, who respect the result of the referendum, would not argue against the need for a customs Bill or a trade Bill.

On the comments of the hon. Member for Ynys Môn about ports, the Wales Office is aware of the issues in relation to Holyhead port. I think I am right in saying that the Secretary of State has visited. I have recently had meetings with Irish Ferries, for example, to discuss the issue in detail. Although we all recognise the sensitive nature of the border in Northern Ireland, it is imperative that we ensure that the ports in Wales are also protected. The Wales Office is certainly very aware of that issue, and I am more than happy to deal with the hon. Gentleman on that in due course.

The trade Bill is also crucial because, as has been pointed out by many hon. Members, Wales is more dependent on exports than any other part of the United Kingdom. We saw a significant increase in our exports in the year to March 2017. When I hear the doom and gloom of Opposition Members about the Welsh economy, I would remind them that our exports are increasing, not decreasing, and we are exporting more to the European Union than we did in the year prior to the decision to leave the European Union. That is some source of comfort.

It is also imperative that we have an immigration Bill that deals with some of the issues raised about the concerns of EU citizens and the wider implications. On the point made by the hon. Member for Cardiff Central about her constituent and the lack of response from the Home Office, I would personally be more than happy to take that up on her behalf with the Home Office, if she would care to write to me about it. Such a delay in responding is simply not acceptable; I will happily look into it on her behalf.

We will also bring forward a fisheries Bill and an agriculture Bill, which will undoubtedly have an impact on Wales. Some 60,000 people are employed in the agriculture sector in Wales—we all know the importance of agriculture to our rural communities. We need to ensure that we have a functioning sector as we leave the European Union.

There are other pieces of legislation in the Queen’s Speech that are important to Wales. We will bring forward a number of proposals, for example modernising the courts system and dealing with domestic violence through the creation of a domestic violence and abuse commissioner. Those issues are not England-only; they apply in Wales.

I will try to respond to some of the points raised by hon. Members. I have touched on the fact that a number of pieces of legislation in the Queen’s Speech have a direct impact on Wales. Anybody who denied that would be wrong.

On the financial settlement for Wales, hon. Members have very short memories. Just before Christmas, we announced a fiscal framework for Wales that ensured a Barnett floor—something that has been called for by many interested parties in Wales for a very long time and was never delivered by the Labour party when they were in power in Westminster and in Cardiff Bay. It has been delivered by this Conservative Government. The fiscal floor currently ensures that for every £100 spent in England, £119 is spent in Wales. It guarantees that there will be a floor. In other words, because of that funding commitment, the Barnett squeeze will not happen again.

Over and above the Barnett consequentials, the Government have also delivered support for growth deals for Cardiff and Swansea. I assure the hon. Member for Ynys Môn that we are working very hard on achieving a growth deal for north Wales. The hon. Member for Wrexham (Ian C. Lucas) is in discussions with us on a regular basis on the growth deal for north Wales.

[Stephen Kinnock]

Will the Minister give way?

[Guto Bebb]

I do not have time.

I have recently met every council leader and chief executive in north Wales, and I will be meeting the final ones this afternoon. If the hon. Member for Ynys Môn wants to meet me about the growth deal, I would be more than happy to have such a meeting.

I would point out to the hon. Member for Arfon that he is incorrect in stating that there are no consequentials from the High Speed 2 project. There are: HS2 is included in the Department for Transport budget and therefore there have been consequentials.

Welsh Affairs

Stephen Kinnock Excerpts

Thursday 2nd March 2017 Commons Chamber

[Stephen Kinnock (Aberavon) (Lab)]

I thank my hon. Friend the Member for Ynys Môn (Albert Owen) for securing this debate.

On 23 June 2016, the UK, Wales and indeed my constituency of Aberavon voted to leave the EU. I accept and respect that result, but not unconditionally. Brexit must be made to work for Wales. That means fighting tooth and nail against a crippling Brexit on WTO terms. The tariff barriers alone would cost £6 billion a year, destroying the automotive sector and crippling our steel industry.

Indeed, just yesterday, as my hon. Friend the Member for Bridgend (Mrs Moon) said, we heard about the job threats at Ford in my neighbouring constituency of Bridgend. This means that the UK Government must protect funding for Wales, so I call on the Government to commit to securing funds through to 2030, on a pound-for-pound match basis, based on current EU structural funding. The current guarantee up to 2020—the year after we are due to have left the EU—is simply not good enough.

The challenges facing my Aberavon constituency serve to demonstrate why the stakes could not be higher, and how desperately the United Kingdom needs a project of national renewal. Such a project must be rooted in the steel industry, because each steel job supports three others in the local community and the country; because each steel job supports a family and the community; and because each steel job supports a way of life and a way of being.

That is why, two weeks ago, the men and women of Tata Steel swallowed a bitter pill to secure the future of their industry, guaranteeing steel production at Port Talbot and across Tata’s operations for the foreseeable future. The vote to close the British Steel pension scheme, transferring it to a defined contribution scheme alternative, was a hard decision, but it was one for the workforce themselves alone. That is why Plaid Cymru’s crude attempt to score cheap political points, manufacturing conflict between the workforce and the unions with a view to securing votes in May’s local elections, was such a shameful spectacle. There can be no excuse for such political opportunism, and I deeply regret Plaid Cymru’s attempts to play politics with steelworkers’ livelihoods. Thankfully, our steelworkers are far too smart to fall for Plaid Cymru’s crass grandstanding and mind games, and they chose to ignore that ill-founded advice.

The workforce have shown their willingness to make real sacrifices to save their industry; Tata has made commitments to secure the industry; and the Welsh Assembly Government have offered £60 million in support and created an enterprise zone to help with business rates, but the Westminster Government have done nothing. They have done nothing on Chinese dumping, energy prices, procurement or skills retention or training, and nothing to help to secure the deal between Tata and the unions. I therefore ask the Government to commit unequivocally today to heed the cross-party “Steel 2020” report—amazingly, I have a copy here—and to a sector deal for steel.

[Nick Thomas-Symonds]

My hon. Friend is talking about the Westminster Government’s inaction, but is the position not slightly worse than he suggests, in that when there were calls to reform the lesser duty rule, far from doing nothing, the Government were at the head of a blocking minority, which prevented that reform?

[Stephen Kinnock]

My hon. Friend is right. The British Government are notorious for being the ringleader of a group of member states that consistently blocked the European Commission’s attempts to give the anti-dumping regime more teeth. That is a matter of great regret, which reflects the “China first” policy, rather than a “Wales first” policy, that the Government have pursued.

A thriving steel industry must also be a catalyst for the regeneration and development that will happen if the Government get on and approve a city deal for the Swansea Bay area. That will help to regenerate and manage the impact of de-industrialisation. It also makes sense for the Government to give the green light to the Swansea Bay tidal lagoon, an idea whose time has clearly come. The lagoon would create and sustain thousands of jobs and meet 11% of Welsh energy needs with a clean, green, reliable source of sustainable energy.

The Government’s parliamentary boundary review has rather less support in Wales than elsewhere. It disrespects local communities. It proposes to slice Port Talbot town centre in two, leaving the high street and adjacent shopping centre in different constituencies. It is absurd. The review disregards the 2 million people who registered to vote in the referendum campaign and seeks to stifle the voice of Wales by removing more than a quarter of Welsh seats. All that is taking place while the UK Government seem intent on using Brexit to turn the UK into a European version of the Cayman Islands.

[Paul Flynn]

With all our constitutional problems—a grossly bloated House of Lords, not enough Members in the Welsh Assembly and the constitutional chaos that will flow from Brexit—is it not astonishing that the Government are interested in only one reform, which will give them more Members here?

[Stephen Kinnock]

My hon. Friend is right—it is a barefaced gerrymander, which we regret.

I urge the Government to take action on steel and economic regeneration, and to rethink the boundary reviews. I wish all hon. Members a happy St David’s day.

Exiting the EU: Businesses in Wales

Stephen Kinnock Excerpts

Wednesday 14th December 2016 Westminster Hall

[Stephen Kinnock (Aberavon) (Lab)]

Does that not mean that certainty for businesses in Wales and across the United Kingdom will be conditional on a commitment to a transitional arrangement? We must not have a situation where the article 50 negotiations come to an end in 2019 and we fall off a cliff edge, because that would cause so much uncertainty, not just about tariffs but about the regulatory environment to which my hon. Friend refers.

[Ian C. Lucas]

Indeed. It seems increasingly likely that there will be some kind of transitional phase. I have talked about one set of standards—the environmental standards in the automotive sector—but different regulatory regimes will apply to all sorts of businesses right across the piece. Constructing the mechanisms that will apply to businesses and our relationship with the European Union after we leave will involve a huge amount of work. Regimes will have to be defined for areas such as financial services, broadcasting and pharmaceuticals, and those will have to apply very soon. If those systems are going to be in place within the next two years, we need to provide clarity to businesses that are making investment decisions now. Businesses in Wrexham that I represent, such as Wockhardt and Ipsen Biopharm, which are both exporting pharmaceutical companies, need to know what our relationships will be. If they do not, they may begin to reflect on whether the business environment in this country will be as effective, successful and supportive for them in the future.

My objective for post-Brexit Britain and Wales is for the UK to be as close as possible to membership of the single market, while retaining the right to devise and implement immigration policy. If I were negotiating, that is what I would want. I would love the Government to provide that sort of clarity about its negotiating position. It is really important that we have access to the single market. Membership of the EU and the single market has benefited the Wrexham economy hugely—it has become very much an exporting economy—but the lesson of the referendum is that we have failed to manage migration to the UK. I am clear that we must apply a managed migration policy for EU citizens.

--- Later in debate ---

[Geraint Davies (Swansea West) (Lab/Co-op)]

It is a pleasure as always to serve under your chairmanship, Mr McCabe. As has already been said, there is great uncertainty about Brexit among the business fraternity across Wales. If article 50 is, in fact, triggered on 31 March 2017, the remaining EU27 countries will determine the deal that we have to live with, no matter what has been said in this Chamber and elsewhere. There is a natural concern that that deal will be in the interests of those 27 countries and others that are not leaving the EU.

There is the spectre of tariffs. Some people have said there will not be tariffs because we import more than we export. However, only Germany and the Netherlands have a net trade surplus with us, so other countries may have an incentive to impose tariffs. Indeed, German car makers may want to block, for example, Japanese car makers that use Britain as a platform to launch into Europe. Of course, that is why there has been an under-the-table deal with Nissan, which has been referred to, while several other large conglomerates have naturally come forward to ask for money to offset prospective tariffs.

As I said when I intervened, it is particularly important that Welsh businesses and all people relying on exports to the EU have a level playing field and subsidies and support, so that they can continue their terms of trade after Brexit—assuming that Brexit goes ahead. My constituency of Swansea West is part of the wider Swansea Bay city region, where 25,000 people’s jobs involve exporting to Europe. Alongside that, there is obviously a farming community that is helped by the common agricultural policy, which may be under threat, and we also benefit from billions of pounds of convergence funding. I am looking to the Minister to provide assurances on all those things—namely, the level playing field, the matched convergence funding and, indeed, what the farmers may need in CAP.

A big employer in my area is Swansea University, which is an engine and an asset for economic growth. It has now doubled in size with the new bay campus in the constituency of my hon. Friend the Member for Aberavon (Stephen Kinnock). It is a jewel in the crown of engineering research and development capability across Europe, and the problem is that we may not be able to maximise our opportunities of utilising that; it is not only an asset for young people to grow and learn, but for producing innovative products for export.

[Stephen Kinnock]

The European Investment Bank played a critical role in funding the bay campus, which is indeed one of the jewels in the crown of Welsh higher education. Does my hon. Friend agree that some assurance on how to deal with our exiting from the European Investment Bank is desperately needed from the Government?

--- Later in debate ---

[Christina Rees]

I absolutely agree that Degsy, as he is known in Neath, is continuing to fight Wales’s corner. He is vice-chair of the European Parliament’s budgetary control committee, so he has great influence in Europe.

Neath Port Talbot has been the lead partner on the pioneering transitional employment initiative, Workways, which has helped to tackle barriers that prevent individuals from finding or returning to employment by supporting the job search, CV writing and interview skills, and access to training. The Workways project would never have happened without EU structural funds. It received a contribution of £16.7 million towards its overall costs. The scheme is held in such high regard that a second phase has been funded—Workways Plus—which began in April this year and will support at least a further 1,000 people into employment.

Swansea University’s science and innovation campus, the Bay campus, which has had a substantial impact on Neath and the region, simply would not have happened without the £95 million of funding received from the European Union. Derek Vaughan’s legacy before he left as leader of Neath Port Talbot County Borough Council was to make sure that the campus was just inside the council area.

[Stephen Kinnock]

And the Aberavon constituency.

[Christina Rees]

And inside the Aberavon constituency, as my hon. Friend points out. Neath Port Talbot is also home to a company called SPECIFIC, which uses coated steel to make world-leading, innovative technologies that produce, store and release energy. SPECIFIC is hugely concerned about leaving Europe, not least because of the essential funding it has received, without which it probably would not exist.

[Stephen Kinnock]

My hon. Friend is making a powerful speech. On the issue of steel, which is at the heart of the SPECIFIC project, the Welsh Government have taken action to deliver £8 million that will be spent on reducing energy costs at the Port Talbot plant, and £4 million for skills and training. That is precisely the sort of industrial strategy that we need. By contrast, the UK Government continue to be completely asleep at the wheel.

[Christina Rees]

My hon. Friend makes a very powerful point, with which I agree wholeheartedly. Not only will SPECIFIC lose its funding, but it will lose its potential market: it could sell its innovative products to Europe. Also, 16,000 farmers gain direct subsidies from the common agricultural policy. More than 90% would go bust without continuing subsidies from the UK Government via Europe.

Those examples illustrate direct investment across the public and voluntary sectors, but we must note the derived benefits to the private sector and all forms of business. Projects such as Swansea University’s Bay campus have supported hundreds of local businesses—contractors, subcontractors, cafés, shops, fuel stations and bus companies; the list goes on. Those who have been on an EU-funded training scheme have taken up employment with local businesses, which in turn have benefited from a revitalised, skilled workforce. The businesses that make up our tourism industry have been safeguarded and developed through additional investment in projects that have encouraged visitors to the area, who have been renting accommodation, eating out in restaurants and pubs, and enjoying the activities and facilities run by local businesses.

The triggering of article 50 is a leap into the unknown. Any process or deal on exiting the EU needs full scrutiny. The Government need to be held to account for their decision, whether it is for a hard Brexit or a red, white and blue Brexit. Whichever Brexit we end up with, we need fully to consider the implications of a Britain outside the single market or the customs union. The British Retail Consortium has already suggested that if we rely on World Trade Organisation rules and tariffs, the price of meat will rise by 27%, and of clothing and footwear by 16%. Those are costs that my constituents can ill afford during the good times, without the loss of funding and the threat of unemployment on top of that. What will the Government do to protect the 100,000 jobs in Wales that depend on our trade with Europe?

Beyond the fear of losing structural funding and trade with the EU, my constituents have concerns about the protection of workers’ rights. We have already seen this Tory Government going at it hammer and tongs over assent to the nasty and pernicious Trade Union Bill. How can we trust them on workers’ rights? I am simply not convinced that the Prime Minister and her Government will be committed to protecting workers’ rights after Brexit and the repeal of EU employment laws. As to whether EU regulations on businesses bring costs or benefits, I appreciate that there are arguments on both sides, and only time will reveal which of those opinions is true.

All in all, this is a troubling time for the people of Wales, and our businesses are no different. Some 95% of businesses in Wales employ fewer than 10 people, and it is those micro and part-time businesses that will suffer the most from poor UK growth, the absence of structural funds, the lack of a single market and the disappearance of EU regulations.

My hon. and learned Friend the Member for Holborn and St Pancras (Keir Starmer), our shadow Secretary of State for Exiting the EU, has said that we need to see the Government’s plan before article 50 is triggered. We need sufficient detail of the plan, so that the Exiting the European Union Committee and other parliamentary Committees can scrutinise it. We need enough detail so that the Office for Budget Responsibility can cost the plan. We need the devolved nations, such as Wales, to have input, and we need consensus, so that the plan will work for 100% of people, not just 52% or 48%. I look forward to the Minister’s comments on the plan.

Leaving the EU: Wales

Stephen Kinnock Excerpts

Tuesday 25th October 2016 Westminster Hall

[Stephen Kinnock (Aberavon) (Lab)]

I beg to move,

That this House has considered the effect on funding for Wales of the UK leaving the EU.

It is a pleasure to serve under your chairmanship, Mr Bailey. The debate is technically about budget decisions but, as we all know, making such decisions is not simply about working out how one reallocates figures. At its fundamental essence, the debate is about the people and the constituencies we represent, and their future, and that is where I would like to begin.

At the core of my constituency is the town of Port Talbot, which is home to more than 37,000 people. Since 1902, the beating heart of Port Talbot has been its steelworks—the largest and, I confidently say, the best in the UK, producing a third of the UK’s steel. Many people do not give a second thought to steel, but when they are driving their cars, having a can of baked beans or putting in a load of washing there is a decent chance they are using a piece of steel produced in Port Talbot. Everyone here today knows that the future existence of the works, as we call them, currently hangs in the balance.

The story of Port Talbot over the past 50 years is the reason for the debate. It is a story shared by many towns and cities across the country, from Stoke-on-Trent and its potteries to Dagenham and its Ford factory or Merthyr and its coal mines. Like them, Port Talbot was truly built, and grew, on the foundation of one industry and one company. Half a century ago, the works employed nearly 20,000 people out of a population of 50,000. Every other shop and business in the town depended on the custom of those workers and did a thriving trade, especially on Thursdays, which was payday. Times were good; the town centre was bustling and huge crowds would enjoy their summer weekends on the sandy beaches of Aberavon. As the plant churned out steel faster and better than anywhere else, we also produced extraordinary talent, such as Richard Burton and Sir Anthony Hopkins and, more recently, Rob Brydon and Michael Sheen.

The decline of the steel industry in the UK over the past 50 years can be seen in the standard of living in Port Talbot. The enormous lay-off of 6,000 people in 1980 led to huge numbers signing on to benefits. Today, the works employs just 4,000 people. They are in highly coveted jobs that still provide a decent wage, but nothing has replaced the jobs that were lost or the energy and pride that the industry gave Port Talbot. Icons of our community, such as the Plaza cinema, are boarded up, and smaller shops that depended heavily on steelworkers struggle on. Unemployment is 10% higher than in the rest of the UK, with one in four people relying on benefits to make ends meet. The level of education in our community is proportionally much lower than in the rest of the country. The people of Port Talbot are as warm, tough, hard-working and talented as anyone we could ever wish to meet, but many are losing hope that their lives will give them the kind of security that we all want. They simply do not see that there are opportunities for them. They know that we cannot recreate the jobs and economy of half a century ago, but they are frustrated that there are not the jobs and the economy for the next half century in which they can play a role.

I have told the story of Port Talbot today because it is a town that, despite recent improvements, is in long-term crisis. The future of my constituents hangs in the balance, and unless we take concerted action their prospects will continue rapidly to decline. That is why the debate is so important. As much as iron needs oxygen to be transformed into steel, our area, and the whole of Wales, needs investment to transform its future into one where people have security and opportunity.

And we now come to the crux of the matter. For years, the EU, in various guises, has contributed an enormous amount of investment in Wales, working closely with the Labour Welsh Government. Due to the consequences of the history I have described, south Wales qualified for the highest level of European structural and regeneration funding. All in all, EU structural funds and the common agricultural policy deliver well over half a billion pounds a year, in addition to money from other key funding areas such as higher education, culture and urban development. Working with Government, charities and businesses, the investment has made an enormous difference.

[Albert Owen (Ynys Môn) (Lab)]

European funding also provides leverage for getting matching funds from the UK and Welsh Governments, which makes it very valuable to our communities.

[Stephen Kinnock]

My hon. Friend makes a valid point. There is a clear multiplier effect with EU funding, because it provides the confidence that opens the door to all sorts of other sources and channels of investment. Although we are giving the raw data here, the multiplier effect is absolutely enormous.

Infrastructure built with EU funding is creating jobs and easier access for people and business, including through the Harbour Way road network, the new Port Talbot Parkway station and our town centre. That investment has helped to develop skills, funding 4,885 apprenticeships and 1,360 traineeships for young people, as well as programmes that have led to local people gaining 14,860 qualifications, which has prepared them for work. It has also been a catalyst for business, funding the Baglan energy park, upgrading our commercial centres and being a major investor in the SPECIFIC innovation centre. It has backed world-class industrial excellence in south Wales by being a principal backer of Swansea University’s bay campus, and has contributed to programmes—from historic gardens and activity centres to toddler play areas and community sports facilities— that have improved our family and community life, ensuring that one day Wales will once again dominate the Six Nations.

[Christina Rees (Neath) (Lab/Co-op)]

Does my hon. Friend agree that 16,000 farmers across Wales gain direct subsidies from the CAP? Without that funding, more than 90% of them would go bust. Will he join me in calling on the UK Government to commit to ensuing that the subsidies continue for all farmers?

[Stephen Kinnock]

I agree absolutely that the role the CAP has played in the agricultural industry in Wales and the UK, and indeed across the entire European Union, has been critical and has supported thousands of farmers and their livelihoods. I will talk a little later about how we need to see a clear commitment to long-term funding to replace every aspect of the European funding on a like-for-like basis, including the CAP.

[Jim Shannon (Strangford) (DUP)]

I congratulate the hon. Gentleman on bringing this important debate to Westminster Hall. Does he agree that European funding has been used to great advantage, including in Northern Ireland, but that Brexit signals not an end to the funding of worthy schemes but rather a new way of distribution and the opportunity to ensure that the schemes that are funded are necessary and helpful to local communities? With that in mind, the Government have committed to helping to ensure that the farming grants and community schemes are retained within this Parliament, until 2020. Does the hon. Gentleman not accept that with Brexit, we have a new way of doing things?

[Stephen Kinnock]

There is an old phrase, “Never let a crisis go to waste”. Brexit has caused a crisis, and that opens up massive questions about where we go now as a country. A major part of that, of course, is what will happen in Northern Ireland. The Government have made commitments up to 2020, but 2020 is within the blink of an eye. We need a far more long-term plan and a strategy that goes way beyond that.

[David Simpson (Upper Bann) (DUP)]

I congratulate the hon. Gentleman on obtaining the debate. Is it not the case that Welsh steel and other industries will benefit from Brexit with respect to the procurement rules? Indigenous businesses in the construction industry and so on may prosper.

[Stephen Kinnock]

The way in which the Government have interpreted EU procurement rules has been completely wrong-headed for many years. There are ways to build in local content clauses in procurement, to ensure that the use of British steel in British projects is maximised. Unfortunately, the Government, because of their laissez-faire attitude, have hidden behind EU state aid rules. As a result, they have failed to use those rules in a way that could have benefited the steel industry, which is one of the industry’s five major asks. We have seen some improvements, but we need a proper industrial strategy in this country that clearly sets out how procurement can be used to promote British industry.

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

rose—

[Geraint Davies (Swansea West) (Lab/Co-op)]

rose—

[Stephen Kinnock]

I will give way once more, to my hon. Friend the Member for Torfaen (Nick Thomas-Symonds), but then I must make some progress.

[Nick Thomas-Symonds]

Does my hon. Friend agree that the real worry for steel outside the European Union is that the Government will simply put no trade defence mechanism in place?

[Stephen Kinnock]

That is a major concern. The British Government have been the ringleader of a set of countries trying to roll out the red carpet for China, to allow it to dump untold amounts of its unfairly subsidised steel on the EU and British markets. As we know, the Secretary of State for International Trade has said that he has no plans to support the steel industry with trade defence instruments. When combined with all the other uncertainty that Brexit has caused, that is a major concern for our industry.

Workways+ is a project that helps long-term unemployed people and people with complex needs to develop the skills and qualifications that will help them into paid positions. The Cynnydd Project works to help young people avoid the unemployment trap. BEACON is helping Swansea University to work with industry to pioneer renewable chemicals, fuels and other materials, bringing another key future industry to the area. Those are just three EU-funded projects already under way, and many others are in the pipeline. Each one makes the lives of our constituents better.

In reality, the situation in Port Talbot, Aberavon and across Wales calls for far more investment to accelerate our recovery from decades of under-investment in the face of the impact of globalisation and deindustrialisation. Yet all that funding and all that progress is at risk after the referendum vote to leave the European Union. While the leave campaign made promises that all EU funding would continue to flow to Wales at the same levels, I think we know that those promises are about as valid as what could be printed on the side of a bus.

[Wayne David (Caerphilly) (Lab)]

My hon. Friend will be aware that the Chancellor of the Exchequer has made that promise, but he has also said that he wants to guarantee funding for projects that meet UK priorities. Does that not imply that the Government intend to use this opportunity to insist that money is spent on their priorities, rather than those agreed with partners and the European Union?

[Stephen Kinnock]

I thank my hon. Friend. One of the huge risks to Wales of Brexit is that we will see a power grab by the Westminster Government. We will start to see the Westminster Government using the opportunity to claw back funding. We know that the £350 million was a lie. The figure was far more like £190 million, but where will that money go? Will it just disappear into the black hole of the Treasury in Westminster, never to be seen again in Wales? That is a huge risk for Wales in light of Brexit.

Now that all the bluff and bluster of the referendum campaign is behind us, it is all about what the Prime Minister’s Government actually do. So far on that score, the signs have not been positive. Despite repeated requests from the First Minister for a commitment to full continued funding, so far the Government have pledged only to continue funding agreed EU-funded projects until 2020.

That is not as powerful a pledge as it may first seem, for a number of reasons. First, it is for only one additional year after we are scheduled to leave the European Union in March 2019. The Government have made zero assurances that funding will be retained after 2020. Secondly, the Chancellor made clear in his statement on 13 August that the pledge applied only to projects signed before this year’s autumn statement. Apparently, any projects signed after that will be assessed by a method that is yet to be revealed to us—a mystery method. Funding is therefore not guaranteed for multi-year projects signed after next month, even if they are in the current EU 2014 to 2020 funding round.

[Carolyn Harris (Swansea East) (Lab)]

I congratulate my hon. Friend on securing this debate. He is making an excellent case. Does he agree that uncertainty is the enemy of business? The Government have made no commitment on funding post-2020, and that could have devastating consequences for attracting investment to Wales.

[Stephen Kinnock]

I absolutely agree. We have seen in all the feedback since the Brexit vote that businesses are in a holding pattern. Many companies, both outside and within the UK and the EU, are waiting to see how things develop in the wake of Brexit. We have no idea what the Government’s top-level negotiating position will be in terms of hard or soft Brexit, and we have no idea what the plan is on the budgetary side in terms of replacing EU funding. That double whammy causes massive uncertainty for business. It relates back to the point on the multiplier effect. EU funding opens the door for other businesses coming in, and that uncertainty is the enemy of business, as my hon. Friend says.

[Craig Williams (Cardiff North) (Con)]

rose—

--- Later in debate ---

[Mr Adrian Bailey (in the Chair)]

I call Stephen Kinnock. He is definitely Stephen Kinnock.

[Stephen Kinnock]

I am, Mr Bailey.

I thank the hon. Gentleman for his intervention. My sense is that we are moving firmly off topic with that intervention, but delivering value for taxpayers’ money is a top priority for all Governments, including the Welsh Assembly Government. In light of the unemployment figures coming out of Wales at the moment, which are certainly going in the right direction, along with a range of other economic indicators, I would argue that the Welsh Assembly Government are definitely providing value for money for Welsh taxpayers.

[Geraint Davies]

Does my hon. Friend agree that Wales faces a triple whammy? First, we start from a position of generating only 70% of average UK GDP per head. That is why, secondly, we get multimillion-pound investment that we are about to lose. Thirdly, given the advent of tariffs that we are so dependent on and the inward investment that has just been attracted, we will end up in a situation where we lose trade and grants and start from a weak position that will be catastrophic for the people of Wales.

[Stephen Kinnock]

I agree absolutely with my hon. Friend. In many ways, this debate is about resilience. The resilience of the Welsh economy in relative terms is weaker compared with that of many other parts of the United Kingdom. With the impact of Brexit, the loss of funding and inflation—the weakening of the pound will send inflation up, and we know that the poorest are always hardest hit by inflation—his reference to the triple whammy is an apt and correct way of describing what is happening.

The third reason why the pledge is not as powerful as it appears is that the Government have not yet agreed with other EU Governments that UK-based applications for EU funding will be in any way affected. The EU funding programmes for 2014 to 2020 are well under way—they have either already been launched or are in the advanced stage of planning. I fear that the Government’s antagonistic behaviour towards the EU and their lack of clarity over future funding will harm the prospects of Welsh applications.

Fourthly, the Government appear to have no plan for how the underwriting of funding will work at a small business or charity level, which is so important. Fifthly, even if Westminster does replace EU funding, there are serious considerations as to how that will be done and calculated. The Government will likely be tempted simply to increase the funds available on the basis of the Barnett formula. However, as the Welsh Labour Government have made abundantly clear, the Barnett formula has disadvantaged Wales for years, and we simply cannot afford or accept such chronic under-investment any longer.

At a minimum, the chosen approach to replacing EU funds must be ring-fenced—it must be in addition to the block grant. Beyond that, a revision of the Barnett formula is long overdue. In short, there is no clarity and no confidence for the people of Wales. The Government must urgently make it clear that they will underwrite all project funds agreed in the 2014 to 2020 mechanism. They must make it clear that they will maintain EU levels of annual funding to Wales for at least a decade post-Brexit, and they must set out how the replacement of funds will work in practice for the Welsh Government and local organisations in the spectrum of Brexit scenarios.

Also, the Government must commit to including Welsh voices in the negotiations, especially with regard to other themed EU funding programmes such as the Erasmus student exchange programme or the Horizon 2020 higher education innovation partnership. Of particular concern to south Wales is the future of the UK relationship with the European Investment Bank, whose loans have helped to build the Swansea bay campus; improved the Welsh Water and Severn Trent network in 2015; and upgraded the Great Western mainline. The last loan was worth £430 million. Such institutions matter greatly to us. The head of the bank, Werner Hoyer, has already publicly made it clear that current levels of lending to the UK cannot be maintained after Brexit. Welsh voices must be heard in the negotiations as our future so critically depends on those relationships with the continent. The Government must make clear whether they will seek associate status to the programmes and institutions. They must bring clarity quickly as the futures of people, communities and organisations across Wales hang in the balance.

Although it looks likely that the entirety of the UK will suffer economically in the coming years as a result of Brexit, it is in many parts of Wales where it will hit hardest, as our economic resilience is relatively low. That does not take into consideration the impact of Brexit on the steel industry, which would be hugely endangered if EU tariffs are imposed on it. If investment in Wales is not maintained, vital projects will go under, followed by businesses. People will lose jobs, and unemployment and welfare bills will shoot up. Communities will fracture. Port Talbot and its people have been through enough. That does not have to be our future.

In Port Talbot, Aberavon and across south Wales we are seeing the enormous potential to accelerate what we are doing. There is innovation. One company, SPECIFIC, has developed a steel-based paint that acts as a solar cell to generate power. It could turn every building in the country into a power station—except perhaps for Boris’s Foreign Office. The Swansea bay tidal lagoon is a world-leading project to capture wave energy. The Swansea bay city region proposal, Internet Coast, could transform south Wales into one of the best digitally connected places in the world. All that is being done without any sign of a proper industrial strategy. Imagine if we actually had one.

Alongside the Government’s Brexit negotiations, they must also present a modern industrial strategy, backing skill development, innovation, modern manufacturing, sustainability and the digital revolution. The strategy must focus on regions such as south Wales, where we have so much underdeveloped talent. When the Welsh Secretary declares that we should not simply replace EU money with Westminster money because we have to address underlying issues, we have to laugh. First, of course we need to address the underlying issues. Unlike him, I am unwilling to settle for basic skills. I am ambitious to ensure my constituents have the high skills needed for new industry to flourish in south Wales. Secondly, it seems blindingly obvious that financial support is a precondition for building such industries and developing skills. Finally, it was very nice of the Welsh Secretary to say that publicly, but it is his Government’s responsibility to come up with the solution, so he may wish to get on with it.

The Government must recognise with humility and sobriety rather than the gung-ho hubris they have shown so far that, if Wales does not continue to receive funding for crucial programmes, communities will be devastated for generations, with everything that that means for people’s lives. It will result in a lack of security, a lack of dignity and a lack of hope. I therefore hope that the Government will reassure the people of Wales quickly that they will ensure the floor is not ripped out from underneath them.

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

Parallel to the UK’s membership of the EU has been the rise of one of the most successful businesses in the world: Airbus. One of the real threats to business is the arrangement concerning communication between the multinational aspects of that business. It is essential that the Government work closely with business to preserve a premier economic powerhouse such as Airbus.

[Stephen Kinnock]

I agree absolutely with my hon. Friend. There is no better example than Airbus, which is an exemplar of a cross-country, cross-industry collaboration. Airbus has worked as a consortium that has developed through its supply chains a world market-leading capability. When people say the European Union is a sclerotic project that does not work anymore, there is one answer to that question: Airbus. It is a fantastic example, as my hon. Friend has described. We must now see a commitment from the Government to continue to support such projects moving forward. It will be more difficult in the wake of Brexit, but it is still possible. It is up to the Government to show leadership to ensure that that happens.

We need a comprehensive funding and industrial strategy that does not say our best days were in the coal and steel boom years of the 1960s. We need a strategy that says our best days are still ahead of us.

[Several hon. Members rose—]

--- Later in debate ---

[Stephen Kinnock]

I thank all of my hon. Friends and other hon. Members for making powerful and passionate speeches. We have seen how high passions are running on these vital issues, which is because the future of our communities is at stake. We will defend the fact that we need funding and resourcing until our dying day. The Government are teetering on the brink of a gross betrayal of our communities. The Minister made the point that, although we have had all those years of funding from the EU, the west Wales and valleys, for example, still qualifies for it as it is below 75% of EU GDP. That is not something we would ever wish to celebrate, but can we really argue that EU funding has been the cause of that difficulty? Surely to address that issue we need to continue the funding and support?

There are three questions. First, what happens after 2020? Secondly, what about the projects signed after the autumn statement and what is that secret method? Thirdly, what about Welsh applications that are suffering because of the antagonistic behaviour of the UK Government towards the rest of the EU? Those are the three questions that I asked in my opening remarks and that my hon. Friends have continued to ask. Unfortunately, we have not received answers today, but I assure the Minister and his colleagues that we will continue to press for those answers.

Question put and agreed to.

Resolved,

That this House has considered the effect on funding for Wales of the UK leaving the EU.

Oral Answers to Questions

Stephen Kinnock Excerpts

Wednesday 25th May 2016 Commons Chamber

[Guto Bebb]

It is imperative that we look carefully at the best value for money from investment in our transport infrastructure. I accept that there is a need to work together, but I also highlight the fact that the CBI and the Federation of Small Businesses this morning called for more action from the Welsh Government. We hear that £200 million has been allocated for the A55, for example, but we have yet to see any action. We do need to work together; finger-pointing does not help.

[Stephen Kinnock (Aberavon) (Lab)]

2. What steps the Government are taking to support the steel industry in Wales.

[The Secretary of State for Wales (Alun Cairns)]

With your permission, Mr Speaker, may I pay tribute to my predecessor, my right hon. Friend the Member for Preseli Pembrokeshire (Stephen Crabb), who is now the Secretary of State for Work and Pensions, for the work he did when he was Secretary of State for Wales in all matters supporting Wales, but particularly in relation to the steel industry?

We are doing everything we can to support the sale of Tata Steel UK, including offering support to potential buyers worth hundreds of millions of pounds. Our discussions with buyers, the Welsh Government and the unions continue, and we stand ready to negotiate with the preferred bidder to ensure the future of steelmaking in Wales and across the UK.

[Stephen Kinnock]

As we know, a critical meeting is taking place in Mumbai later today, and the future of the industry is hanging in the balance. What measures have the Secretary of State and his colleagues in the Cabinet taken to ensure that a viable and sustainable pension scheme is developed as a result of the sale of the business? Can he assure the House that it will be sustainable for the 130,000 members of the scheme?

[Alun Cairns]

I have spoken to the Secretary of State for Business since his meetings with Tata in Mumbai. Pensions are rightly one of the issues under consideration, and the hon. Gentleman will be aware that my right hon. Friend highlighted them at the outset, when he said that pensions, plant and power were three of the issues that needed to be addressed. Pensions are an extremely complex issue and cross a number of Departments, but we are determined to find a way through in the interests of the members, the trustees and the company.