Leaving the EU: Wales

Adrian Bailey Excerpts

Tuesday 25th October 2016 Westminster Hall

[Craig Williams (Cardiff North) (Con)]

rose—

[Mr Adrian Bailey (in the Chair)]

I call Byron Davies.

[Craig Williams]

Almost, Mr Bailey. [Laughter.]

I thank the hon. Gentleman for securing this debate. On the multiplier effect—I know why he has not touched on this today—the Wales Audit Office produced the Wales transport projects report in 2010-11 about how the Welsh Government had spent EU funds. He mentioned half a billion pounds, but there was a huge concern that there had been wasted opportunity to the tune of £1 billion.

[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.

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[Mr Adrian Bailey (in the Chair)]

Order. There is great pressure on time. Nine Members indicated in advance that they wished to speak in this debate and I have had another three since. I want to call the Front-Bench speakers at around 10.30 am, so we will start with a time limit of four minutes, which I might reduce as time goes on. I also ask that Members recognise it will be necessary for speakers to take no interventions. If Members persist in intervening, they may lose their priority on the speakers list.

Also, the clock controlling the time limits is working here at the desk, but not up there on the wall, so the Clerk will hit the bell one minute prior to the end of the time limit. The bell is not a fire alarm; you do not need to vacate the building. It is simply an indication to the speaker.

[Byron Davies (Gower) (Con)]

I am delighted, as the real Byron Davies, to have the opportunity to contribute to this debate, Mr Bailey. I congratulate the hon. Member for Aberavon (Stephen Kinnock) on securing this debate. I am pleased that we are all here contributing to what should be a wider and national conversation about what happens to Wales post-Brexit. I am sure that we here today recognise the importance of ensuring Wales gets the best possible deal from Brexit. The UK Treasury has of course guaranteed European structural and investment funds in Wales for projects signed before the UK leaves the EU. The Treasury has also guaranteed funding received directly from the European Commission: for example, the universities participating in Horizon 2020. The guarantee also includes pillar 1 of the common agricultural policy, so the agricultural sector in Wales will receive the same level of funding it was expecting under the 2014-2020 programme. The access of the UK, and consequently Wales, to the EU funding programmes will be subject to negotiations during the withdrawal process. Even once outside the EU, it is possible that the UK will receive funding from it.

Although it is essential that we support the Secretary of State for Wales and the Minister, who are ensuring we have funds for important infrastructure projects, as part of this process we must scrutinise how the money is spent. I must admit that I was shocked that Carwyn Jones did not have a plan for Wales after Brexit and failed to lobby the British Government prior to the referendum. Apparently, it was too political. That means he did not obtain any guarantees about having funding matched. That is staggering, given the importance of the current funding to Wales. The fact that the First Minister, of all people, did not think of that or secure it is beyond me. It could be argued, however, that it is part of a deeper undercurrent of thoughtlessness and evidence of the Welsh Government’s blasé attitude to the spending of public money. Unfortunately, Wales’ lack of scrutiny is part of the problem. It is due to myriad factors, including a lack of a competitive national media, which leaves the public with an information deficit, and the processes in the Assembly, which mean that many parts of Welsh policy and spending decisions have received a woeful lack of scrutiny. It is no longer good enough to say that the Assembly will get there or that things will change. It has been two decades, and in this place and the Assembly we must seriously start to look at and tackle the problems that the Assembly and Wales face post Brexit.

Wales has received three rounds of EU funding worth almost £4 billion in less than two decades. In the heady early days of devolution, the then First Minister, Rhodri Morgan, said that the first round of funding was a once-in-a-lifetime opportunity to shape a new Wales, shake off the shackles and take advantage of the myriad opportunities and the booming years of the early 2000s to create a hi-tech, trading nation that is proud of its industrial past. We were told that it would grow to become a confident, outward-looking nation once again. Two decades on, we are on our third round of funding.

The Welsh Government’s wasted spending includes a £7.5 million Government procurement card for luxury hotels, iTunes, Victoria’s Secret underwear, yacht wear and other vital uses of taxpayers’ funds for Welsh Government officials. Some £1.6 million was spent on a martial arts centre that never opened in north Wales. Tens of millions of pounds in business loans went from the former economy Minister to firms that went bankrupt, despite warnings about their viability. Some £1.8 million was spent on chauffeur-driven cars; £20 million was spent on properties on the M4 relief road, without a spade in the ground; £3.4 million was spent on a heritage centre that closed within three years; and hundreds of millions of pounds have been spent on major road projects that a 2010 Wales Audit Office report said cost 61% more than estimated and hampered wider transport objectives. My point is that, although it is of fundamental importance that we debate and discuss the future of funding for Wales and support the Wales Office in achieving that—

[Mr Adrian Bailey (in the Chair)]

Order. I call Jonathan Edwards.

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[Chris Evans (Islwyn) (Lab/Co-op)]

It is a pleasure to serve under your chairmanship, Mr Bailey. I congratulate my hon. Friend the Member for Aberavon (Stephen Kinnock), who spoke movingly about his constituency and his fears about our impending exit from the European Union.

I take issue with the hon. Member for Gower (Byron Davies), who said that Carwyn Jones did not have a contingency plan. I ask the hon. Gentleman to look at the Treasury’s recent evidence to the Public Accounts Committee, in which it said that it had no contingency plan because the referendum was not a general election and the Government’s official policy was to stay in the European Union. It therefore made no plans. How naive can it be?

Wales receives more EU funding than any other part of the UK. The Wales Governance Centre estimated in 2016 that Wales received a net £245 million from the European budget in 2014. That equates to £79 per person, yet Wales voted out, with 52.5% opting to leave. Like many others, I am at a loss to understand why the nation voted against the public interest. However, as a democrat, I accept the result. Unlike Members of some other parties in the House, I believe that we cannot continually have referendums until we get the answer we want from the people.

There is no future in debating our past; we should debate where we go from here. Let us begin by trusting the people of Wales. President Abraham Lincoln said:

“I am a firm believer in the people. If given the truth, they can be depended upon to meet any national crisis. The great point is to bring them the real facts”.

He went on to say “and beer.” As we know, we like some of that in Wales too. The UK Government here in London and the Welsh Assembly both have a role in ensuring that Wales continues to prosper even after exit from the European Union.

We must demand from the UK Government a new funding settlement for Wales. EU funding is critical to Wales’s development. We have heard from many hon. Members about the projects in their constituencies. Those must be funded beyond 2020. I find it embarrassing, frankly, when companies that are wondering what exit from the European Union will mean for them come to see me and want to be briefed. At the moment, I have no answers. I was extremely disappointed that when the leaders of the nations of this country met the Prime Minister yesterday, they too were told that the Government had no answers. It is no good for the Prime Minister to go on saying, “We’re not giving a running commentary on the exit from the European Union.” She needs to give facts, a rationale and a road map right now. [Interruption.] I have started, so I will finish.

However, Brexit must be seen as an opportunity. Wales cannot rely solely on EU funding or the public sector. Wales is an innovative country. In my constituency, General Dynamics UK in Oakdale and Axiom in Newbridge both stand up to that. The Welsh Assembly must create an entrepreneurial spirit. Wales is a trading nation. Our exports to EU countries in the year to the end of the second quarter of 2016 were worth £4.7 billion but, as a trading nation, Wales must have a dedicated trade ambassador who reaches out across the world and ensures that Wales is the place to do business. I have attempted to do that in Islwyn by encouraging businesses that I meet to come to Wales. It is time for the Welsh Assembly Government and the Government in London to step up to the plate. We need a trade deal. We need a strategy for Wales to prosper. Even though we are disappointed, exiting the EU provides a real opportunity for Wales.

[Mr Adrian Bailey (in the Chair)]

Order. I now intend to call the Opposition spokespersons. It would be helpful if you could keep your remarks within 10 minutes to leave adequate time for the Minister to respond and Stephen Kinnock to summarise at the end.

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[Guto Bebb]

Again, I highlight the fact that comments made about the letter of 14 June do not reflect the Treasury’s position as it has developed. [Interruption.] Also, it is important to understand that those individuals from the leave campaign who joined the Government have done so with the intention—[Interruption.]

[Mr Adrian Bailey (in the Chair)]

Order. Members have had the opportunity to intervene. They must not continue to harass the Minister from a sedentary position when he is trying to respond.

[Guto Bebb]

I thank you, Mr Bailey. I assure you I was not feeling harassed.

It is important to point out that the individuals from the leave campaign who joined the Government will serve in relation to the Government’s agenda, which, to a large extent, is still based on the manifesto commitment of the last election.

I need to move on to reflect on some of the comments of the hon. Member for Aberavon. He began with an important comment about the way a single-industry town is affected by the fact that that single industry has contracted. He highlighted the changes that have happened over a period of years. However, the debate is about European funding in Wales. That funding has been important, but there is no denying that we have qualified for three rounds of such intervention. I do not believe that there is fault with Brussels in the fact that we still qualify for the highest percentage of support from the European Union, but Opposition Members should reflect on the fact that time after time we have ended up still qualifying for the highest level of intervention.

As my hon. Friend the Member for Gower (Byron Davies) stated, when we qualified for the first round of intervention the expectation was that it would be a one-off opportunity, because eastern European countries were joining the European Union whose standard of living was significantly lower than that enjoyed in Wales at that time. However, we have qualified again and again, and it appears that Opposition Members here expect Wales to qualify again in 2020. That is an indication of the failure of the Welsh Government in Cardiff to make the best of the funding available.

I fully accept that some European schemes across Wales have been successful and have made a difference, but no Member can deny that other schemes in Wales have been wasteful and inefficient. The real issue Opposition Members should face is that Welsh GDP per head is continually falling, despite the intervention that has been described by Opposition Members as absolutely crucial to the future of Wales. I believe we need a funding stream in place to support Wales, and I will fight for that as part of the Wales Office, but the crucial point is that to claim the status quo is the way forward is to ignore the realities on the ground in Wales, which were reflected in the referendum. The only two parts of the west Wales and valleys region, which receives the highest level of European intervention, that voted to remain were Gwynedd and Ceredigion. Opposition Members should reflect on that.