Exiting the EU: Businesses in Wales

Wayne David Excerpts

Wednesday 14th December 2016 Westminster Hall

[Chris Elmore (Ogmore) (Lab/Co-op)]

I beg to move,

That this House has considered the effect of exiting the EU on businesses in Wales.

It is a pleasure to serve under your chairmanship, Mr McCabe. The effect that exiting the European Union will have on businesses in Wales is incredibly important, so I thank hon. Members for attending. This debate offers an opportunity to recognise the challenges ahead and gives the Government the chance to clarify their Brexit plan for Wales, on which I sincerely hope for some detail from the Minister.

Businesses in Wales have serious concerns that the Government do not have a plan for how Brexit will work for them. The success of our local small and medium-sized enterprises should be a concern for us all. When local businesses do well, they not only generate jobs and meet the needs of our communities, but fill up our high streets, liven up our towns and inspire the businesses of the future. Businesses throughout Wales are facing dangerous uncertainty and need the Government to publish their plan for Welsh Brexit.

One of the starkest consequences of exiting the EU for businesses in Wales could be a widening funding gap. Each year the EU contributes about £650 million in investment to Welsh social businesses and SMEs. Each pot of funding that has helped our businesses to thrive seems only to have been made possible by EU contributions. The social business growth fund, for example, contributes £4 million, but £2.3 million of that is from the EU. Similarly, the Wales business fund provides £136 million, but £76 million is from the EU. In addition, we have low-interest loans from the European Investment Bank, which have enabled companies and public bodies throughout Wales to thrive; the European regional development fund, which, among other projects, will provide £106 million for phase 2 of the south Wales metro; and Horizon 2020, which has been pivotal for Welsh universities. Without Government planning for Brexit, our Welsh businesses could see a serious dent in their funding.

To the Government’s credit, the Chancellor has announced that the Treasury will guarantee all multi-year EU business funding agreed before Brexit, but we need confirmation of the Government’s plan for EU funding that does not fit that criterion. The Government must also provide clarity about the status of the cumulative £2.7 billion post-2020 EU funding that has not yet been underwritten by the Treasury.

Our departure from the EU might also have an impact on the availability of training in Wales. Jobs Growth Wales, the Welsh Government scheme to get young people into work, will support the creation of 8,955 new job opportunities for 16 to 24-year-olds over the next three years, and has only been made possible by the European social fund. Similarly, the Workways Plus scheme was made possible by £7.5 million from the European social fund. The scheme offers one-to- one mentoring to help long-term unemployed people become ready for work, gives an opportunity for people to gain new qualifications and finds paid positions for some.

Thousands of apprenticeships throughout Wales also rely on the EU and could be affected by our exit. The European Alliance for Apprenticeships, launched in July 2013, works closely with the Welsh Government to strengthen the quality, supply and image of apprenticeships. The alliance has been pivotal in securing and promoting opportunities throughout Wales.

Other consequences could include Britain leaving the single market or ending freedom of movement, which could affect businesses in Wales. Welsh universities, and the businesses reliant on them, would be particularly impacted by the end of freedom of movement. Each year more than 7,000 EU students enrol at universities throughout Wales. Were the Government to clarify their desired future migration arrangements, universities and associated businesses could plan accordingly. As things stand, the Government have given no clear indication of whether restrictions will be applied and the enrolment of EU students will decrease once we have left the European Union.

When this House debates the effect of exiting the EU, we sometimes allow the discussion to slip away from the reality on the ground, but I want to focus on the real impact that exiting the EU will have on one business in my constituency. It is one of the UK’s leading manufacturers in its industry. It has asked to remain anonymous, but kindly told me its concerns about the future, which I will share with the House. Its business is already being impacted by a downturn in construction activity and sizeable currency fluctuations. It tells me that the scale of potential change is vast, and that if widespread change materialises, the implications for resources and productivity are significant. For that industry-leading business, the level of uncertainty is of serious concern and must be addressed urgently.

This business employs people throughout the UK, not only in my constituency. It needs clarity on the form of Brexit, and it needs a plan. Specifically, it needs to know whether the Government plan to stay in the single market and the customs union. It tells me that it needs a commitment to ensuring that Britain can secure the right skills in the workforce. It also needs assurances that other policy voids, such as the one on energy efficiency, will be filled.

The bottom line is that business in Wales is crying out for a Brexit plan for Wales. When the UK leaves the EU in March 2019, in all likelihood the engine of Welsh business will not break down, but if the Government do not plan, it will slowly lose fuel and industries will come to a halt. Wales needs not a red, white and blue Brexit, as the Prime Minister suggested, but a comprehensive strategy to deliver the most secure outcome. Vague platitudes from the Government mean nothing and serve only to distract from the fact that, as things stand, we are being led into the night without a torch.

[Wayne David (Caerphilly) (Lab)]

Does my hon. Friend agree that Norgine, a Dutch pharmaceutical company with a manufacturing facility in Hengoed, speaks for many businesses in Wales when it states that it wants a very soft Brexit?

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[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.

[Wayne David]

Does my hon. Friend accept that there is a need to differentiate between skilled and unskilled labour?

[Ian C. Lucas]

Absolutely. One of my questions for the Minister is: what migration system will apply to EU citizens? We already have a system in place for citizens from outside the EU, and I imagine that if we jump off the cliff that my hon. Friend the Member for Aberavon (Stephen Kinnock) referred to, EU citizens will, by default, be put in the same position as people who come to the UK from outside the EU. However, I have seen reports in the press that the Prime Minister thinks that the points-based immigration system for people from outside the EU that the Labour party introduced when it was in power is not restrictive enough. I would really like clarity on that question from the Government, because we need to have a system in place. In my constituency, we have really important multinational manufacturing businesses such as Kellogg’s and Solvay, whose members of staff travel regularly from mainland Europe to the UK. Those businesses need to know what system will be put in place for them to manage that.

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[Stephen Doughty]

I have a great many concerns about the negotiating process, but I want to turn to three areas of particular concern that businesses have raised with me: regional funding, the single market and the situation for universities.

It is worth reflecting, as some colleagues have, on the importance of the scale on which businesses engage in the single market. There are 191,000 jobs dependent on EU trade, and that affects everything from steel to the high-tech products in my constituency; 500 firms in Wales export more than £5 billion annually to other EU member states and 450 firms from other EU member states, located in Wales, employ more than 50,000 people.

Several hon. Members have spoken about funding and I will come on to that, but, without referencing specific names, the sorts of things I have been told about include workers’ rights to travel to engage in cross-European projects; contracts, which I mentioned in an intervention; and concerns about research collaboration and major long-term projects being put at risk. The message is very clear that businesses do not want a hard Brexit, if there is to be a Brexit. They want it to be as soft as possible and are particularly concerned about tariffs and access to the single market. Those concerns are constantly raised with me.

Businesses were positive with me about the work that the Welsh Labour Government are doing to try to provide some certainty and optimism in the economy in uncertain times. There is particular praise for the work of the First Minister and Economy Secretary, who went to the United States and Japan to stand up for Welsh businesses and the links that we have with those two markets. Whether it is a case of fighting for funding for the south Wales metro or for other projects, the Welsh Assembly Government are trying to ensure that some positive things happen during the uncertainty.

There is also continued investment in infrastructure projects and building, including a lot going on in Cardiff at the moment. There is the city centre redevelopment; we have plans for new stations; we have an enterprise zone, where there is a lot of investment; and—to give credit—there is some degree of cross-party agreement on a city deal. It is vital that such investment in infrastructure and business should continue, particularly now while there is a lot of uncertainty.

[Wayne David]

We understand that the Government have given some assurances about the continuation of what would have been European funding. Does my hon. Friend share my concern about the fact that the Government are also talking about changing expenditure priorities?

[Stephen Doughty]

I do. I have yet to be convinced about the certainty on levels of funding, let alone the sectors. That will be greatly worrying to many in my constituency. It is worth reflecting on what the Office for Budget Responsibility said in the economic and fiscal outlook published in November: that as a result of the referendum decision, the potential output growth will be 2.4 percentage points lower than it would have otherwise been in 2021 without the referendum. As to the impact on Wales, the House of Commons Library briefing mentions that there could be

“lower business investment…the impact of a less open economy on productivity…a reduction in investment in research and development”

and

“costs associated with adjustments to new regulations or new markets”.

There will obviously be costs and changes: how are they to be minimised?

On regional funding, €5 billion for Wales is planned for 2014 to 2020, and potentially £2.7 billion post-2020. I still do not feel that we have had the guarantees from the Treasury. Why does that matter? It matters for specific projects such as the south Wales metro, which is vital for people’s ability to get around, do business, get to work and take advantage of opportunities in my constituency and the whole south Wales area.

We might be able to achieve those things in part outside the south Wales metro project. I have supported, for example, the proposals for a St Mellons parkway station, which could be funded by other means. There is a good degree of cross-party agreement about the importance of Network Rail and Department for Transport funding for it. However, fundamentally, the south Wales metro has the potential to be a transformative scheme for the south Wales economy. I am pleased that the First Minister was in Brussels arguing for the £110 million-worth of funding. The European Commission was very clear in saying that it could not comment about what would happen after the UK leaves. Such uncertainty is causing concern, so perhaps the Minister will provide some assurances—particularly about that project, which is so crucial to the economy of south Wales.

I have mentioned concerns about access to the single market, which will affect all businesses. I should be particularly worried if we were to consider putting tariffs on goods produced in Wales. The First Minister has made it clear that that is a red line for him. It would affect industries such as the steel industry in my constituency.

I have spoken many times in this Chamber about companies such as Celsa, based on my patch. It does significant amounts of exporting. It is a European company from Catalonia in Spain and works across the European Union. Forty per cent. of direct sales of British and Welsh steel go to the EU. That is similar to the overall total—41% of total goods exports from Wales go to the EU. What assurances can the Minister give to companies such as Celsa that export so much to the EU, let alone other places? What tariffs might they face in the future? What additional trade restrictions might they face?

We have heard a lot of talk about Airbus, which also has a major facility, Airbus Defence and Space, in a neighbouring constituency to mine, Newport West, where a number of my constituents work. Concerns are being expressed about European collaboration on space projects. High tech is an important growth industry in which the UK has been investing more. I should hate such jobs to be lost from our communities—let alone the wider aerospace industry in south Wales.

I want finally to discuss universities. The total value of future research income to Cardiff University, from the seventh framework programme and Horizon 2020 up to July 2016, was £23.5 million, with further applications in the pipeline of up to £15.7 million; work from the European structural fund was worth £23.6 million, plus a potential £35.2 million of projects in development. Those are significant sums.

To give an idea of the sorts of projects involved, I should say that they include the Cardiff University brain research imaging centre, which is doing pioneering work on dementia, multiple sclerosis and other neurological conditions. We should be proud that that work is going on in our capital city. Many researchers from my constituency work in and around the university. What if such things are to be put at risk? I am hearing a lot of concern from the university sector in my area, from individual workers and universities. What assurances can the Minister give?

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[The Parliamentary Under-Secretary of State for Wales (Guto Bebb)]

It is a pleasure to serve under your chairmanship, Mr McCabe. I, too, extend congratulations to the hon. Member for Ogmore (Chris Elmore) on securing the debate, and on winning a by-election in Ogmore —a task that was beyond my capacity back in 2002.

This has been a good, detailed debate, but it has been lacking in constructiveness. Its title on the Order Paper is “Effect of exiting the EU on businesses in Wales”, but throughout the debate, an acknowledgement of Wales’s strong position has been sorely lacking. There has been no mention of the fact that, in the past year, Wales has performed extremely well on jobs. On every single measurement of employment, the Welsh performance has been positive, and it has been in the top three of the 12 UK regions and nations. As we debate our exit from the European Union, we are in a strong position, both as regards employment levels and how businesses are performing in Wales. It is a shame that those comments have not been made in this debate.

There has been acknowledgment of the strength of various parts of Welsh industry and of success stories in parts of Wales, but we need to look at the overall performance of the Welsh economy since 2010. Wales’s employment growth has been well above that of the UK as a whole. We have seen unemployment in Wales fall, and I am happy to say that that is because of a constructive relationship between the UK and Welsh Governments. That is something we should hear a bit more about, rather than the scaremongering we hear when people continually ask whether there will be job losses as a result of leaving the European Union.

[Wayne David]

Does the Minister agree that the most disappointing aspect of this debate has been the absence of a single speech from a Conservative party Member of Parliament for Wales?

[Guto Bebb]

I thank the hon. Gentleman for his intervention.

Oral Answers to Questions

Wayne David Excerpts

Wednesday 30th November 2016 Commons Chamber

[Margaret Ferrier (Rutherglen and Hamilton West) (SNP)]

1. What assessment he has made of the potential effect of the UK leaving the EU on the Welsh economy.

[Wayne David (Caerphilly) (Lab)]

8. What recent discussions he has had with his Cabinet colleagues on the potential effect on the Welsh economy of the UK leaving the EU.

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

The Welsh economy approaches EU exit from a very strong position. Since the vote to leave the EU we have seen economic inactivity continue to fall in Wales while employment has risen to a record high. Businesses continue to show confidence in the economy, with new investment across the UK fundamental to prosperity in Wales.

[Alun Cairns]

The hon. Lady raises an important issue, and I would say that Wales has been the fastest growing part of the UK outside London since 2010. She makes an important point in relation to the future of structural funds. She will also appreciate that they are meant to be a short-term boost to the economy, but after 16 years and after £4 billion has been spent, west Wales and the valleys have 64% of UK GVA. I am sure we need to use this opportunity to be positive and do something better with similar structural support.

[Wayne David]

Does the Secretary of State’s answer to that last question imply the Government intend to change the agreed priorities for the spending of the structural funds?

[Alun Cairns]

The hon. Gentleman will appreciate both that his constituency has experienced some significant falls in unemployment since 2010 and that after all that money has been spent those areas voted in the strongest numbers to leave the EU. The point I am making is that the current programme has not worked and has not fitted those communities. Exiting the EU presents an ideal opportunity to revisit this and look to see what we can do better for the hon. Gentleman’s constituency and other communities in Wales in need.

Leaving the EU: Wales

Wayne David Excerpts

Tuesday 25th October 2016 Westminster Hall

[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.

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[Guto Bebb]

The hon. Gentleman must understand that initially, in the immediate aftermath of the referendum, the Government gave a commitment to support EU funding up to the autumn statement; but a further Treasury commitment has been made since then. Those letters have been delivered to the Welsh Government. Indeed, I assure the hon. Gentleman that the First Minister of Wales has given a genuine welcome to the Treasury’s commitment to trying to ensure that there is a commitment to the 2020 programmes in a Welsh context. Opposition Members should be aware that in claiming, in contrast with the Labour spokesman, that there is no commitment up to the exit from the EU, they are doing the people of Wales and their constituents a disservice.

[Wayne David]

The Chancellor of the Exchequer said that there will be a guarantee, but only for those projects that “meet UK priorities”. That is a qualification, surely.

[Guto Bebb]

It is a terrible thing for hon. Members to speak from a position of lack of knowledge. The commitment that has been given is very clear. Where a project is considered to be a Welsh Government priority it will be accepted by the Treasury as a priority for the UK Government as well. I recommend that Opposition Members read the comments by the Treasury. Some of them have raised the issue of a south Wales metro, and I recommend that they read the comments about that made by the Under-Secretary of State for Transport, my hon. Friend the Member for Blackpool North and Cleveleys (Paul Maynard), to the Select Committee on Welsh Affairs yesterday. It will be well worth their while. The Welsh Government need to get on with that project, because if the scheme is in place in good time the money will be forthcoming from the EU. If it is signed off before our exit from the EU, again, the Treasury will give a commitment. Opposition Members peddle scare stories about the commitments we have given. It is important for them to get their facts right.

Oral Answers to Questions

Wayne David Excerpts

Wednesday 19th October 2016 Commons Chamber

[Alun Cairns]

It is in the UK’s strategic interests to maintain a steel-making capacity, and so quite obviously to maintain that at Port Talbot. The Government stand ready and waiting to support any bidder. It is a matter for Tata as to whether it pursues the joint venture. We are maintaining a relationship with Tata and other potential bidders that were in discussions earlier this year. We are keen to maintain a sustainable future.

[Wayne David (Caerphilly) (Lab)]

Welsh steel is obviously of the highest quality, and I hope that when Heathrow airport is expanded Welsh steel will be used. In that sense, will the Secretary of State have a word with the Prime Minister to ensure that she stops faffing around on Heathrow expansion and that we have a positive decision as early as possible?

[Alun Cairns]

The hon. Gentleman tempts me, but he knows that that decision will be coming soon. He makes an important point about the use of steel in infrastructure projects. The UK Government have already changed procurement rules, making it easier for British steel to be used in contracts. For example, Crossrail, Europe’s largest civil engineering scheme, uses almost entirely British steel.

Wales Bill

Wayne David Excerpts

Monday 12th September 2016 Commons Chamber

[Alun Cairns]

The Government new clauses and amendments deal with a number of issues, in three main categories. First, there are a number of technical drafting changes to ensure that the new devolution settlement functions as it should. Secondly, there are amendments addressing several issues that have arisen during the ongoing discussion of the Bill with the Welsh Government, the Presiding Officer and the Assembly Commission. Thirdly, I am pleased to have tabled a number of amendments that address issues that I committed to return to when they were raised in Committee before the summer recess.

New clause 4 deals with a drafting issue and is a consequence of the devolution of responsibility for local government elections. It makes changes to provisions in the Police Reform and Social Responsibility Act 2011 relating to the timing and franchise for police and crime commissioner elections, which are reserved under the Bill and are currently linked in law to timing and franchise for local government elections. Under the Bill, responsibility for that provision will be devolved to the National Assembly for Wales. The new clause is therefore necessary to avoid certain aspects of PCC elections in Wales being subject to any future changes that the Assembly makes for future local government elections in Wales.

Hon. Members will be aware that the St David’s Day agreement provided that all aspects of the election of PCCs in Wales would remain the responsibility of the UK Government and Parliament. The Bill provides that PCCs, including their elections, are reserved matters, so the Government believe that the new clause is appropriate. It provides that the timing of ordinary elections of PCCs in England and Wales will cease to follow the timings of other ordinary elections in England and Wales. Instead, it provides for them to be held on the first Thursday in May in the year of an election.

The new clause also amends section 52 of the 2011 Act so that the franchise for PCC elections in Wales ceases to correspond directly to that for local elections and instead corresponds to the parliamentary franchise, with the exclusion of overseas electors and the inclusion of peers and EU citizens, who are entitled to vote in local government elections.

[Wayne David (Caerphilly) (Lab)]

My understanding is that the Government are currently considering a report from the Law Society on consolidating and simplifying electoral law. Given that PCCs are not a devolved matter, would it not be sensible for the Government to hold their fire and amend legislation on that, rather than introducing an amendment at this point?

[Alun Cairns]

The hon. Gentleman is clearly missing the purpose of what we are trying to do. We are seeking to devolve responsibility for local elections to Wales, but because the franchise for those elections is linked to that for the elections for police and crime commissioners, any change to the franchise for local government elections in Wales will have a consequential effect on that for PCC elections, which are non-devolved. We are therefore seeking to separate the franchises, so that the same people have the right to vote as is currently the case. That will give the Welsh Government the freedom to change the franchise for local government elections as they see fit, should they, for example, wish to change the voting age. It would not be appropriate for such changes to be extended to elections for police and crime commissioners. That is the purpose of the new clause.

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[Wayne David]

I want to say a few words about new clause 11 and whether the devolution of policing is to be kept under review. I begin with a non-partisan point. When I was a Wales Office Minister for some 18 months, it struck me during meetings at the Home Office to consider policing in England and Wales how it became matter of fact simply to talk about England. That changed when I banged the table a few times, but it was interesting, going back several years now, that there was already a mindset that policing had been devolved to Wales—so they thought—and that it need not be considered by the Home Office. One of the unintended consequences of devolution is the assumption, certainly made by senior civil servants at that time—I suggest that it is still made—that policing has been devolved and that it should be considered on an England-only basis. It is not enough for us to keep on reminding people that it is not devolved; we have to realise why that assumption has been made and work out what is the logical direction of travel. A fair point made frequently by our colleagues in the Welsh Assembly is that policing is the only non-devolved emergency service in Wales.

Over the past few years, we have seen a movement towards the practical involvement of the Welsh Assembly in the day-to-day development of policing strategies, particularly on community safety. They fund a large number of police community support officers—I think they call them community support officers—and there are initiatives on counter-terrorism and how to get effective policies to tackle the threat. The Tarian unit is looking at organised drugs crime in Wales and how to combat it. Also, as has been mentioned, Wales has four police and crime commissioners who argue strongly and logically that the time has come for the devolution of policing to be seriously considered. The four police authorities in Wales have created a police liaison team that involves senior officers regularly meeting the Welsh Government. In a sense, a dovetailing is already taking place before our eyes on day-to-day policing.

I am not suggesting that this is an easy matter to be considered and then easily devolved, as it is not; it is complex and difficult. For example, the funding arrangements for policing in Wales are the most complicated of those of all the public services. More than a third of all police funding in Wales comes from the Home Office —that is more than £250 million a year, so we are talking about a heck of a lot of money. Before any devolution occurs, we want to be sure that we have funding arrangements commensurate with the powers that are devolved. That important issue must be central to any discussions and future negotiations.

We will also have to be mindful of the need for effective cross-border co-operation in any devolution of policing. As we all know, crime does not recognise any international boundaries these days, and it certainly does not recognise Offa’s Dyke, so we need strong, automatic mechanisms of co-operation in place as part of any devolution strategy. On co-operation, it is also particularly important that we examine the issue of police training and recognise that no matter what the devolution package is, it is extremely unlikely that Wales would develop its own training strategy for police officers. We would have to buy in, if necessary, from the national College of Policing, which is based in Berkshire and does an excellent job on police training. We also need to continue our involvement with the National Policing Improvement Agency. Policing must not be separated; we need to make sure that a close partnership is developed and put in place, taking into account the current funding arrangements, which are no longer suitable for the situation in which we find ourselves.

This issue will not go away, because of political imperatives and because the practicalities of tackling crime efficiently necessitate more devolution and greater partnership with the institutions of government that exist in Wales and are developing—this Bill helps in their development. We do not need a knee-jerk reaction, simply saying that the devolution of policing can be done easily and quickly, as it cannot. However, this needs to be kept under review, as this sensible and moderate new clause suggests. I heard the Minister’s negative comments, but I hope that he will recognise reality and keep this issue full square on the table, so that we have an active and positive consideration, and that when the time is right and there is a political consensus for it, we devolve policing powers for Wales.

[Stephen Doughty]

I wish to speak briefly about two areas: the amendments on energy generation and new clause 6 on air passenger duty.

On energy, I have already indicated my support for many of the comments that were made by our Front-Bench spokesman and indeed that were coming from those on the Government Benches, too. I believe the Welsh Government should be having more say on this issue because the Welsh Government and the Welsh Assembly have set a very different direction on sustainability and energy production right from the outset. We saw the principle of sustainable development and sustainability embedded in the first Wales Act, and the sustainable futures Act and other legislation passed in the Assembly have also shown a different direction. I trust people there to make a better choice about the energy mix and energy production matrix in Wales than we are seeing coming from the UK Government, particularly when they abolish the Department of Energy and Climate Change and downgrade sustainability and climate change in their overall agenda. We have a different approach in Wales. The megawatt limits that are set at the moment are arbitrary, and we ought to be giving as much encouragement as possible to local decision making on this, for many reasons. In particular, I would like the removal of some of the impediments to local energy generation by community energy schemes, as so much damage has been done to these schemes.

At the Co-operative party conference this weekend—I am a proud Co-operative party MP as well—I heard about the damage that has been done to community and co-operative energy across the UK by the rapid changes, for example, to feed-in tariffs, and the bureaucracy surrounding such schemes. It has been a huge mistake and has caused great damage to the industry. We have a thriving community energy sector in Wales that I want to see grow and expand. Given the framework that the Welsh Government and the Welsh Assembly have set from the beginning and which is very much embedded in their structures, it makes clear sense to devolve and expand the powers in this area.

It may seem odd for me to talk next about air travel and new clause 6. I believe that the expansion of air travel must be in balance with other forms of transport and within the framework of the Climate Change Act 2008, Welsh domestic legislation on sustainability and the Paris agreement. I am not convinced by the case that the Minister outlined today about air passenger duty. I find it particularly curious that the Secretary of State, who has Cardiff airport in his constituency, just 15 minutes away from the boundaries of my own, is willing to oppose this idea. Expanding provision at Cardiff airport will lead to shorter journey times, less congestion, less traffic and less cost for consumers in Wales. It will generate jobs and opportunities for the Secretary of State’s constituents and mine, many of whom work in the airport and in the aerospace industry and supply industry locally.

On the idea that it takes just 60 minutes to get across to Bristol, I have travelled to and from Bristol airport on a number of occasions. I have travelled there by all the different modes of transport—I have driven in my car, I have taken the train to Bristol Temple Meads and caught the connecting bus, and I have taken the coach directly to the airport. Bristol airport is a very nice place and I had a very nice experience there. I have nothing bad to say about Bristol airport itself, but it is complicated to get there. It takes a long time. With Cardiff airport just 15 minutes down the road from my constituency and from our capital city, it seems odd that a Wales Office Minister—indeed, the Secretary of State—rather than getting the best deal for Wales, should stand up for an airport on the other side of the Severn bridge and encourage passengers to go over there.

There is a further issue. Ministers have talked about the opportunities for Welsh passengers to travel from Bristol airport. Those will remain, but we do not benefit as much from passengers coming from the south-west, for one very good reason: the Severn bridge tolls. Why would passengers choose to come across to Cardiff airport, which entails crossing a toll bridge, when they have an airport on their own doorstep? We need to think carefully about what is the right decision.

I was not an absolute believer in the original Welsh Government decision to get involved in running the airport. I admit I was a sceptic, but they did the right thing and their decision has borne fruit, as we heard. Passenger numbers are up 29%, as my hon. Friend the Member for Llanelli (Nia Griffith) said. A service has been launched to London to allow a connection to many of the international business flights from London City airport. Companies such as FlyBe are expanding their opportunities. It was good enough for the Welsh football team to travel in and out of Cardiff airport. I find it odd that the Minister and the Secretary of State appear to be more interested in protecting the position of Bristol, rather than doing what is right for Wales and especially for consumers in south Wales, who want to be able to travel from Cardiff airport and to connect.

That is particularly pertinent in light of the result of the EU referendum. If we want Wales to be able to take advantage of the global trade agreements that the Government are supposedly going to magic up for us in the next couple of years, we must enable businesses, especially larger ones, to connect to flights to the City of London and elsewhere quickly and efficiently, and not have to take two or three modes of transport to get to an airport quite far south of Bristol. We ought to make the most of our own airport on our own doorstep, which is at the hub of a thriving aerospace industry.

Let us not forget that we have the British Airways Maintenance Cardiff centre. The hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards), I think, mentioned the length of the runway and the airport’s ability to handle the world’s largest aircraft. That is crucial. Could we not make more of those synergies with 777s and, we hope, with A380s and 747s, which are already maintained there and perhaps in future could fly from there as well?

I will support new clause 6 because it would benefit Wales, my constituency, Cardiff South and Penarth, and constituents in the Vale of Glamorgan, and it makes sense in terms of the efficiency and sustainability of air travel from Wales in the future.

--- Later in debate ---

[Wayne David]

Like other Members, I recognise that the Bill is a huge improvement on the Bill that the Government introduced a few months ago. During its passage, the significance of clause 1 may not have been emphasised enough. The clause states:

“The Assembly and the Welsh Government are a permanent part of the United Kingdom’s constitutional arrangements.”

I know that some constitutional experts have said that that statement is more apparent than real, because one Parliament cannot bind another, but I consider it to be an important and, indeed, unprecedented declaration of confidence in the Assembly and its Government.

I also recognise that the Bill takes us forward by moving from a conferred-powers to a reserved-powers model. The list of reserved powers is shorter and clearer than the list in the draft Bill. The new definition of “Wales public authority” is, I understand, a good definition. There are also clear provisions for cross-border bodies to have legislation and to be dealt with appropriately.

However, although the Bill constitutes a step forward and, hopefully, there will be fewer legal wrangles than there have been in the past, there is still a possibility of disputes. In Scotland, for example, there have been disputes over its reserved-powers model. There have been disputes about legislation that the Scottish Government have wanted to introduce in relation to adults and juveniles, and there has been controversy about legislation to replace council tax with a local income tax. A few years ago, there was a famous controversy over the Antarctic, which, apparently, was omitted from the list of reserved powers held by central Government. The Foreign Office went on to issue permits, but there was a distinct possibility of a legal challenge, because it seemed that, technically, it was acting illegally. The situation was only rectified when retrospective legislation was introduced in 1998. So we should not just blandly assume that there will be no legal problems. There may be some, although I hope that there will be far fewer than there have been in the recent past.

As has been pointed out by a number of experts in the constitutional unit, future disputes could have been avoided if a clear set of principles had been articulated in the Bill. I recently read an article by Alan Cogbill, who was director of the Wales Office between 2005 and 2009. He wrote:

“Articulated principles could help avert disputes. They would give the courts, if called on to adjudicate on legislative and executive powers…a basis from which to infer parliament’s intentions, instead of being called on to address what are properly political judgments.”

Unfortunately, the Bill does not do that.

I suggest, however, that this is not the end of the debate. Like other Members, I see devolution very much as a process. I hope that that issue, in particular, will be returned to in the not-too-distant future so that we can benefit from even greater clarity. I also hope that in the not-too-distant future we will not just consider devolution for Wales, Scotland and Northern Ireland, but consider it as a principle that is applicable to all parts of the United Kingdom, albeit in different ways, and I believe that the Bill will take us forward towards that goal.

Wales Bill

Wayne David Excerpts

Tuesday 5th July 2016 Commons Chamber

[Jonathan Edwards]

I appreciate that intervention, and the National Assembly has, of course, legislated on that basis through the organ donation Bill, whereby donating has become a civic responsibility for people in Wales as opposed to a voluntary responsibility in which people had a choice. All these things will be part of the mix when these powers are devolved. I believe our politics will be far healthier for that. Luckily, these issues will be determined by people further up the chain of command in my party than myself—by those who sit in our own sovereign Parliament in Cardiff.

I look forward to a consensus developing around the need for a proportional electoral system. If we are talking about compulsory voting, it has to go hand in hand with a change to a more proportional electoral system. We cannot allow one party to gain 50% of the seats on the basis of 30% of the votes, as we saw last May. That is bad for democracy and it is a hugely corrupting influence on our politics. There is a chance here for Labour Members to show that they are genuinely interested in the national interest as opposed to the interests of the Labour party. I shall hold my breath on that one, as Labour colleagues seem to be more interested in compulsory voting than having a proportional electoral system.

[Wayne David (Caerphilly) (Lab)]

Does the hon. Gentleman not accept that, in the interests of democracy and effective representation, a strong case can be made for maintaining the constituency link between a representative and his or her constituents?

[Jonathan Edwards]

I fear that we are getting into a debate about PR, and my party is strongly of the view that we need to go down that road. We will have to address these issues as we go along. The last election was a wake-up call where one party had 50% of the seats but only 30% of the votes.

--- Later in debate ---

[Jonathan Edwards]

In what sense would it make Wales poorer? I am more confused by the Labour position the more Labour Members intervene. The hypocrisy of Labour’s position does nothing to further the good name of politics. Most depressingly, it shows that both the Labour party and the Conservative party rejoice in treating the people of Wales as second-class citizens and Wales as a second-class nation.

[Wayne David]

Will the hon. Gentleman not accept the fundamental and basic point that unfortunately Wales is a far poorer country than Scotland and that the danger in what he is proposing is that he will make Wales poorer?

[Jonathan Edwards]

That is a damning indictment of the current situation. I have faith in my own people and my own country to be able to develop our own economy and create wealth. The big plus of devolving fiscal powers is that it would incentivise the Labour Government in Cardiff to stop spending money on their pet projects and start concentrating on increasing tax revenues to spend on public services. That is why I support the devolution of fiscal powers.

Points of Order

Wayne David Excerpts

Tuesday 8th March 2016 Commons Chamber

[Wayne David (Caerphilly) (Lab)]

On a point of order, Mr Speaker. Last Thursday this House had an excellent debate on Welsh affairs, but unfortunately the Secretary of State for Wales was absent. The Under-Secretary of State for Wales, the hon. Member for Vale of Glamorgan (Alun Cairns), said:

“I can advise the House that the Secretary of State has parliamentary business elsewhere”.—[Official Report, 3 March 2016; Vol. 606, c. 1162.]

However, we learned from Twitter that the Secretary of State was at a lunch with Bexley Conservative Ladies, and I have the photograph to prove it. That is not parliamentary business, so I respectfully suggest that the Under-Secretary comes to the Dispatch Box to apologise for inadvertently misleading the House.

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

Further to that point of order, Mr Speaker, I am happy to clarify the position and, of course, apologise if I have inadvertently misled the House. I can confirm that the Secretary of State was on a mixture of Government and political activity that afternoon. I can also confirm that it was always expected that I, as Under-Secretary of State, would respond to the Backbench Business Committee debate on St David’s day.

Welsh Affairs

Wayne David Excerpts

Thursday 3rd March 2016 Commons Chamber

[Wayne David (Caerphilly) (Lab)]

I would like briefly to refer to three issues: first, what has happened to the draft Wales Bill; secondly, the importance of the European Union to Wales; and, thirdly, the need for the third runway at Heathrow airport from a Welsh perspective.

I have to ask where the Secretary of State for Wales is this afternoon. Surely this is an important debate and his place really ought to have been in this Chamber listening to what Members have to say and responding to their remarks. It is not asking too much that he show some courteousness and political common sense by coming here. I very much hope that he will learn the lesson from his embarrassment this afternoon. The Under-Secretary will clearly take that message back to him.

Quite a significant decision has been taken by the Secretary of State over the past week—to withdraw the draft Wales Bill—but I am concerned that there has been no oral statement or even a written statement. There has been no communication with the House of Commons. We learned about the decision from the press. That is a gross discourtesy and an undermining of the parliamentary system that we are all committed to.

That brings me to my main issue. I ask the House this question: what do the following individuals and organisations have in common? They are the Wales Governance Centre, the leaders of three political parties in Wales, the Learned Society of Wales, Sir Paul Silk, Sir Emyr Jones Parry, the head of the Wales office of the Law Society, and the professor of governance and constitution at University College, London—and the list could go on. The answer is that they all said that the draft Wales Bill was not fit for purpose. There was relative unanimity on that among those in Wales who follow these issues closely—the objective experts and academics, and the people who are at the sharp end of implementing legislation. I am sure the Under-Secretary will say, “Well, yes, that is why we withdrew the Bill—we listened”, but would it not have been better if he had listened at the start?

Concern was expressed about the draft Bill right from the very beginning, when it was first published. I have a copy here, and quite a heavy tome it is. The Secretary of State said in the foreword:

“This draft Bill sets out in detail how the Government plans to deliver the St David’s Day commitments to create a stronger, clearer and fairer devolution settlement for Wales that will stand the test of time.”

It stood the test of time for four months, and then he recognised what everybody else was saying—that it was not fit for purpose and he should go back to the drawing board and start all over again.

[Mr David Jones]

I have listened to the hon. Gentleman’s criticisms, but does he not agree that it is far better to get the legislation right than to bring through hasty legislation that does not stand the test of time? In that regard, did he read the recent report by the Public Administration and Constitutional Affairs Committee that bemoaned the fact that the Blair Government of 1997 hastened through legislation that has now resulted in the West Lothian question not being addressed?

[Wayne David]

I agree up to a point. Pre-legislative scrutiny is good—it makes for better legislation—but it would have been far better if the Wales Office had recognised that meaningful constitutional change can be achieved only on the basis of a high degree of political consensus. It cannot be achieved by a Government—any Government—trying to push through legislation that does not command broad support and is seen by some people as partisan and not properly thought through. That was one of the fundamental problems with the draft Bill. Many people thought it was purely impractical and would therefore lead to bad governance. That lesson ought to be learned.

[Paul Flynn (Newport West) (Lab)]

That part of the splendid report referred to by the right hon. Member for Clwyd West (Mr Jones) is a fine example of inventing precedent to suit a case. In fact, the words inserted into the report were disputed, because they are a great example of the argument made at the beginning of a splendid book about those times called “Dragons Led by Poodles”, which asserted that only the future is certain, but the past is always changing. That is what the Committee tried to do.

[Wayne David]

My hon. Friend is too modest to say this, but it is worth pointing out that he was the author of that book. I disagreed with some things in it, but it did have many words of wisdom.

My central point is that those of us who believe in devolution need to recognise that there needs to be a high degree of consensus, dialogue and debate among all politicians involved in the process, both here and in Cardiff Bay. I really hope that when the Government start from scratch, they will have learned the cardinal lesson that they have to consult—genuinely and openly, and on a cross-party basis—opinion here in Westminster. I think that all our colleagues are prepared to contribute.

It is also important that the Government work with the Welsh Assembly. It is very important that we have that dialogue with Cardiff Bay, because, to be frank, it is unthinkable that a Westminster Government could decide a devolution package that is not acceptable to the body to which power is being devolved. If they had proceeded with the draft Bill, we might have been in that situation, ridiculous though it seems. I ask the Government for dialogue not only here, but with our colleagues and friends back in the Welsh Assembly.

My second point is about the European Union. In my view, there is an overwhelmingly strong case for the United Kingdom to remain a full member of the European Union, but that case is particularly strong for us in Wales. There can be no doubt whatsoever that the European Union is vital for jobs, exports and, therefore, prosperity in Wales.

Last week the Prime Minister visited the General Electric aircraft engine maintenance plant in Nantgarw, just outside my constituency. He made his case for why Britain should remain in the EU and why it benefits south Wales and General Electric. Objectively, he had a strong case to make, because General Electric is one of my constituency’s most important employers; many of the workers travel down Nantgarw hill to work there. It recognises how important it is to have a good relationship with the EU and to be an integral part of the single European market. I have no ideological axe to grind; empirically, we recognise that it is good for our economy to be firmly linked to our partners in the rest of Europe. It is as simple and straightforward as that. It is a bread and butter issue.

On Monday night, I met representatives from DS Smith Recycling Ltd, which is a British company with a strong European presence. It is expanding its operations in an innovative way throughout the European Union, and it is a major and important employer in my constituency of Caerphilly. The company is not committed to the left or to the right; it simply wants to expand its work and be a good employer. It recognises that it would be absolute lunacy for itself and the people it employs if we extricated ourselves from the European Union. The message that went out on Monday evening was, “In the interests of the company, jobs and prosperity, please make sure that the strong case is put for Britain to remain in the European Union.”

The two companies I have mentioned have innovative and well-structured training programmes, which the EU’s structural funds contribute to in large part. Wales has been allocated £2.4 billion from the EU structural funds for the 2014 to 2020 period. Indeed, Wales is a net beneficiary—more money comes in than goes out—to the tune of £838 million a year. There are strong practical reasons for making the case over the next few weeks that Britain and Wales should remain an integral part of the European Union. It makes sense for ordinary people and for the country’s prosperity, to which we are all committed.

My final point is also linked to the prosperity of Wales, namely the question of whether Heathrow should be expanded and have a third runway. As a Welsh MP, I believe that the strongest single argument in favour of the third runway at Heathrow is the positive impact it would have on the Welsh economy. That is not just my view. The First Minister of Wales, Carwyn Jones, was clear the other day that the Welsh Government support the expansion of Heathrow because it would provide the best possible support for investment, tourism and jobs in Wales. His comments are informed by hard facts and clear analysis. It has been estimated that 85% of the new manufacturing jobs that an expanded Heathrow would generate would be created outside London and the south-east. Up to 6,000 of those manufacturing jobs would be in Wales, constituting a significant part of the 8,400 Welsh jobs accompanying a total of £6.2 billion of economic benefit.

Those facts speak for themselves. It is essential that the Government stop shilly-shallying and give the go-ahead for the expansion of Heathrow. It makes sense for the country as a whole and for Wales in particular.

Whether or not Heathrow will bring the best possible benefits to Wales depends on access. That is why it is essential that Heathrow’s expansion is accompanied by the electrification of the Paddington to south Wales railway line and the construction of a rail spur directly to Heathrow. I am aware that a consultation began this week.

[Craig Williams]

On the subject of Governments dilly-dallying, if we are going to have a third runway at Heathrow—which I support wholeheartedly—would it not make sense for the Welsh Labour Government to get on with the M4 relief road and improve the tunnels and the capacity of the M4 so that we can get to the airport?

[Wayne David]

I am in favour of that, but the decision is not up to the Government in Cardiff alone. A lot depends on what the Government in London do and on whether financial facilities are made available to the Welsh Government. That is important.

It is vital that a message goes out from the consultation that Network Rail is commencing that the Governments in Cardiff and in London are in favour of the spur to Heathrow. When the Minister replies, I would like him to say that strong representations will be made to Network Rail to make sure that we get the spur. We hope that that will be part of a longer-term project for the expansion of Heathrow airport.

I have spoken about three important issues. We want a coherent draft Wales Bill to be presented, and I hope that it will be formulated on the basis of consensus. I hope that in the next few months many Members in this Chamber will decide to pull together and argue the case for Britain’s continued membership of the European Union, highlighting its importance for Wales. I also hope that we will be able to unite in support of an expanded Heathrow airport. That, again, would be of tremendous benefit to the Welsh economy.

[Several hon. Members rose—]

Oral Answers to Questions

Wayne David Excerpts

Wednesday 18th November 2015 Commons Chamber

The Secretary of State was asked—

[Wayne David (Caerphilly) (Lab)]

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

[The Secretary of State for Wales (Stephen Crabb)]

I would like to start by putting on record the enormous sense of solidarity felt by all people across Wales with the French nation. We stand with them shoulder to shoulder in these difficult and anxious days.

The steel industry in Europe is facing a perfect storm as a result of a glut of cheap imports, falling prices and high energy costs. With nearly half of the UK’s primary steel industry employed in Wales, we fully recognise the impact of these global challenges on Welsh steelworkers and their families. We are working closely with the industry and with the devolved Administrations to do everything possible to support the industry at this time.

[Wayne David]

We on the Labour Benches associate ourselves with the Secretary of State’s words about the people of Paris.

On 28 October, the Secretary of State for Business, Innovation and Skills attended an extraordinary meeting of the Competitiveness Council on the steel industry. Following that EU meeting, plenty of warm words were issued in a written statement, but can the Secretary of State tell the House what practical measures were agreed to help the steel industry in this extremely difficult time?

[Stephen Crabb]

I thank the hon. Gentleman for the question. Before I answer it substantively, I should make the House aware that there has been an explosion in the past hour at the Celsa Steel plant in the constituency of the hon. Member for Cardiff South and Penarth (Stephen Doughty). Our thoughts are with the workers at this time and with the emergency services who are at the plant as we speak.

On the practical response to the global challenges facing the steel industry, the hon. Member for Caerphilly (Wayne David) will be aware of the specific practical working groups that we established following the national summit. Those engage the Welsh Government as well as the Scottish Administration, and action has been taken by the Business Secretary at a European level to get our European partners to focus much more seriously and more urgently on tackling dumping and bringing forward state aid clearance so that we can fully compensate our steel industry for the higher energy costs that it faces.

Barnett Floor (Wales)

Wayne David Excerpts

Tuesday 10th November 2015 Westminster Hall

[Nick Thomas-Symonds]

I repeat to the hon. Lady a point made powerfully by my hon. Friend the Member for Ogmore (Huw Irranca-Davies): in 1997 to 2010, we had what he called “Barnett-plus”, which was record investment in public services in Wales, to the benefit of both my constituents and hers.

[Wayne David (Caerphilly) (Lab)]

I had the privilege of succeeding my hon. Friend the Member for Ogmore as a Wales Office Minister and I held that post in the run-up to the 2010 general election. One of the things that we were proud of was the firm commitment in our manifesto to address that very issue.—Unfortunately, we lost the election.

[Nick Thomas-Symonds]

My hon. Friend makes a good point. In 2015, we also had a manifesto commitment on the Barnett floor; but unfortunately, we were again not in government after the election.

In 2012, consideration was given to how Wales’s share of future funding would not fall again when public expenditure started to rise—the so-called “Barnett squeeze”. In the autumn of that year, the UK Government formally agreed that there was a squeeze and that such convergence had taken place. They said that they would review the position at each spending review, to assess whether it would recur, and address the issue. Alas, I am afraid that they did not.

On 8 July, the Government’s lack of interest in Wales was perhaps summed up in the Chancellor’s Budget speech. In one short reference, he said:

“In Wales, we are honouring our commitments to a funding floor and to more devolution there, and investing in important new infrastructure such as the M4 and the Great Western line.”—[Official Report, 8 July 2015; Vol. 598, c. 329.]

That promise came five years after the Assembly had voted unanimously on the matter—five years later. Put simply, the people of Wales have waited long enough for the UK Government to deliver.

--- Later in debate ---

[Alun Cairns]

The spending review is a matter for the Chancellor. We, as a Conservative Government, are delivering on our commitment to introduce the Barnett floor, as we have announced, alongside the spending review. That commitment was repeated in our manifesto and the floor will be introduced, as announced.

[Wayne David]

The operation of the Barnett formula and the Barnett floor is complicated, but does the Minister accept—this is fundamental to our whole discussion—that at a time of falling public expenditure, when cuts are being made, the Barnett floor is not really an issue? It is only an issue at a time of increasing public expenditure. It is relatively easy for the Government to introduce the Barnett floor now, and I suggest they should, but its real impact will be in the future, when expenditure increases.

[Alun Cairns]

I find it a bit rich that the hon. Gentleman is complaining that a Barnett floor has yet to be introduced when we are committed to introducing it. We said we would do it last March and in our manifesto, and we will introduce it alongside the next spending review. When he was part of an Administration, although Wales’s relative position was deteriorating, absolutely nothing was done to introduce a Barnett floor.

Hon. Members will be aware that since 2010 significant commitments have been made, beyond the Barnett formula, to back the Welsh economy. Those include a commitment to fund and upgrade the great western main line through to Swansea and a significant contribution to the cost of the upgrade and electrification of the valley lines, reinforcing the UK Government’s support for improving infrastructure in Wales. Two years ago, the Welsh Government were given early access to capital borrowing powers to use for M4 improvements.