Wales: Regional Development Funding

Stephen Kinnock Excerpts

Tuesday 7th May 2019 Westminster Hall

[Stephen Kinnock (Aberavon) (Lab)]

I beg to move,

That this House has considered the future of regional development funding in Wales.

It is a pleasure to serve under your chairmanship, Sir Graham. I take this opportunity to welcome the Minister to his place. I have lost count of how many have preceded him. I have not counted how many days he needs to get through to exceed his predecessor, but I am sure that one of my colleagues will work that out as we speak. We wish him well and we wish him good luck—he is going to need it.

Regional development funding has been absolutely critical in boosting less prosperous areas across the United Kingdom, including in Wales. It is crucial in an era in which the divides in terms of wealth and prosperity in British society are so evident for all to see. We are witnessing a growing trend whereby our cities attract investment, create wealth and offer high-quality jobs, whereas our smaller towns are left behind or, worse still, buffeted by the winds of globalisation without any real support from the UK Government.

That has been the story of the last 40 years. UK Governments have stood by and watched the forces of globalisation and new technology destroy our industrial base and decimate our high streets, and they have been intensely relaxed about the impact of those changes on the pride, identity and prosperity of constituencies such as mine and others across Wales and the United Kingdom. First, Margaret Thatcher sold out the miners across south Wales, the English midlands and northern England, offering no state support to those who needed it to retrain in other fields. Then, although new Labour injected much-needed investment into our public services, it did not manage to deliver fundamental structural reform through a bold, radical industrial strategy. Then came Osborne-omics, which inflicted utterly self-defeating austerity on the areas that could handle it least.

As a result of this triple whammy, manufacturing has collapsed, from 30% of UK GDP to just 10%, since the 1970s. In comparison, Germany’s manufacturing base has remained stable, at 23% or above. The vast differences between the UK and German experiences of the last 40 years demonstrate conclusively that globalisation is not an unstoppable force of nature; it is a man-made phenomenon. The repeated failure to harness globalisation and make it work for our communities was caused not by force majeure but by repeated failures of political leadership.

The collapse of our manufacturing base has of course led inexorably to our skills and productivity crises. No recent Prime Minister has come up with any kind of half-decent strategy to support the so-called forgotten 50% who do not go to university or get good jobs and training. For those graduates living in the big cities, the last 40 years have delivered wealth, opportunity, diversity and the excitement of technological change, but non-graduates who live in our towns and villages have simply been ignored and left behind. Younger, diverse cities full of graduates continue to thrive; older, smaller towns with close-knit communities of non-graduates continue to suffer. Wales is a case in point. Despite the efforts of the Welsh Government—I will come to the vital support the Welsh Government have delivered for constituencies such as mine—many parts of our great country have experienced hardship due to inept government at the UK level.

The gap in GDP between Wales and London makes the UK the most unbalanced EU member state in terms of regional economic disparities—a truly shocking statistic that shows the size of the challenge we face if we are to reduce inequality and spread opportunity. In Aberavon, we have had absolutely no regional development support from Westminster. The Swansea bay tidal lagoon would have put south Wales at the forefront of a 21st-century industry, marrying our desperate need to produce more green energy with the creation of genuinely high-quality jobs across the region.

Wales was the cradle of the first industrial revolution, and we could have been the cradle of a new, green revolution, but the Tory Government ran scared, spending £1 billion to buy the votes of each Democratic Unionist party Member but not a single penny for a long-term strategic infrastructure project that could have boosted wealth and opportunity for my constituents and so many across south Wales. I cannot help wondering whether that £1 billion would pass a value for money audit, given the voting behaviour of the DUP over recent months, but I digress.

The tidal lagoon decision followed hot on the heels of another broken promise: to electrify our railway lines. That promise made it only as far as Cardiff, with the line down to Port Talbot and Swansea still firmly embedded in the 20th century. With everything the Transport Secretary has achieved in his quite remarkable tenure, it feels that too little attention has been paid to this kick in the teeth for Welsh commuters and travellers and for the Welsh economy. Maybe handing a £50 million ferry contract to a company with no ferries was in fact a cunning plan to distract us from the fact that the Government he represents were holding Wales in contempt.

Thankfully, where the UK Government have failed, other tiers of governance have stepped in to give the Welsh economy a much-needed boost. The Welsh Government and local councils have combined to deliver so many crucial projects, but many have relied on the funding that we receive from the European Union—the EU structural fund.

[Carolyn Harris (Swansea East) (Lab)]

Although the Swansea bay campus is in my hon. Friend’s constituency, the £60 million EU investment in it has benefited my constituency incredibly. Does he agree that, given that we have missed out on the tidal lagoon and electrification, we now deserve assurances from the Government that structural funding will come to our region and to our communities?

[Stephen Kinnock]

I agree with every word. As I will come on to, the key point is that we must not receive a penny less; there must not be any sleight of hand in the shift from EU structural funding to the shared prosperity fund.

EU structural funds are distributed to regions throughout the European Union based on their relative GDP. Areas where GDP per capita falls below 75% of EU GDP are placed in the first tier, and therefore receive the maximum funding. The poorer the region, the higher its priority and the more funding it receives. West Wales and the valleys is ranked as a region of the highest priority, and therefore received £2 billion for the 2014-20 cohort. No other area of the UK received more than £750 million, showing the scale of the challenge for the economy in that area of Wales. We are talking about a serious amount of funding here.

Like much of Wales, my Aberavon constituency has benefited hugely from European money, and from the strong vision and partnership working formed between the Welsh Government and our local Neath Port Talbot Council. Take, for instance, the new integrated transport hub—a Neath Port Talbot Council project in partnership with the Welsh Government, using EU money—or the sunken gardens and toddlers’ play area on Aberavon beach, which is a Neath Port Talbot Council project using EU funding granted by the Welsh Government.

There are more, from the bay campus, as my hon. Friend mentioned, to the Croeserw community enterprise centre, to the Cognation mountain bike trails in the Afan valley, to the Port Talbot magistrates court regeneration project. Those projects would not have been possible without European funding and strong political leadership of a type we see consistently from the Welsh Government and our local councils, but too rarely from Westminster. That is why Brexit raises a number of concerns regarding the future of regional development funding.

[Chris Bryant (Rhondda) (Lab)]

My hon. Friend is absolutely right that the Government have previously guaranteed that every penny from Europe that Wales lost would be matched by Westminster funding. That still has not happened. Has he noticed that, in the meantime, the Government have guaranteed that the British overseas territories will now receive from Westminster every single penny that they received from the European Union? Is it not a bit of an irony that the British Government are prepared to guarantee money to our overseas territories but not to our territories at home?

[Stephen Kinnock]

Indeed. That is a quite shocking example of the failure to prioritise what is happening right on our doorstep. It is absolutely vital that we see the funding in Wales that we need if we are to deliver. We all know how much support is required to deal with the huge changes in our economy over recent decades. We currently have a system that, while not perfect, works relatively well: EU funding is targeted at less prosperous areas and delivered by devolved Administrations who know the needs of their areas better than anyone else.

Now, we can debate Brexit until the cows come home—I am sure that we would love to—but I am sure that we can all agree that it is crucial that Wales does not lose a single penny of the funding that we would have received had the British public voted to remain instead of to leave the EU on 23 June 2016. The UK Government have agreed to replace those European funds, 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. We need £1.7 billion per year UK-wide to keep up with what the EU is set to contribute from 2020 to 2026.

[Wayne David (Caerphilly) (Lab)]

There is an active debate ongoing about how the shared prosperity fund ought to be allocated. Some strongly argue that there should be a huge competitive element. Does my hon. Friend agree that it is far better to have a needs-based formula, so that resources are allocated where they are desired, not according to which area can put forward the best bids?

[Stephen Kinnock]

I agree entirely. There are two key points. First, the big advantage of the current system is that it is depoliticised. The European Union works on the basis of data and facts and of a scientific analysis of what is required. There is a huge risk that the shared prosperity fund will be turned into pork barrel politics, where the fund gets used as a slush fund for, dare I say it, a Conservative Government in Westminster. Secondly, competitive bidding does not work. The shared prosperity fund needs to be embedded in an industrial strategy and a regional development strategy that works from a strategic point of view rather than being based on bidding.

The second key question is how this money will be divided across the country. The third question is what activities will be eligible for support. The fourth question is who will take the decisions on how the money is spent. We are still none the wiser on all those key questions.

It really is not just about the money. There is a real fear that this will be not just a financial grab, but a power grab: the Westminster Government will use this opportunity to reduce funding for areas that need it most and claw back powers that sit naturally with the devolved Administrations.

[Jessica Morden (Newport East) (Lab)]

This week is the 20th anniversary of the first elections to the Welsh Assembly. It is therefore important that, when we have this debate, we respect the role of the Welsh Government and devolution.

[Stephen Kinnock]

One of the key recommendations we in the all-party parliamentary group for post-Brexit funding for nations, regions and local areas have made in our report on the future of the shared prosperity fund—apologies for the plug, Sir Graham—is that the devolution settlement must be respected. Of course, the Westminster Government, the Assembly in Cardiff Bay and local authorities need to work as a team on this, but, fundamentally, the people on the ground know best how to spend this money and deliver maximum impact. Therefore, it is essential that the devolution settlement is respected in spirit and letter.

As I was saying, there is a fundamental worry that the shared prosperity fund will become a politicised slush fund, with a Conservative Government using it to buy votes in marginal seats. Those deep-seated concerns led to the creation of the all-party group, which I am proud to chair. The wide-ranging review we carried out heard from 80 organisations across the UK, including the Welsh Government, a wide range of local authorities in Wales and the Welsh TUC. Those representations were unanimous: 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 and of our great country of Wales. Equally, the UK Government must not deny devolved Administrations the appropriate control over funds. Local decisions must not be made by an official or Minister sitting at the other end of the M4.

While it is deeply disappointing that the Minister with overall responsibility for the shared prosperity fund, the Under-Secretary of State for Housing, Communities and Local Government, the hon. Member for Rossendale and Darwen (Jake Berry), has refused to meet with our APPG, I am pleased to report that its officers met with the Secretary of State for Wales last month to make these points to him, and then last week with the Chief Secretary to the Treasury. Both meetings were conducted in a positive and constructive spirit, but it is shocking that there is still no sign of the public consultation on the SPF being launched any time soon. In fact, in one meeting there was a suggestion that the consultation may even be delayed until the comprehensive spending review in the autumn. Given that the CSR will include information on the funding of the SPF, I am not sure how relevant bodies, such as the Welsh Government and our local authorities, will be able to contribute in a meaningful way to a debate over funding when the horse will have already bolted. However, I can assure the Minister that our APPG will be watching carefully to ensure that there is no sleight of hand from the Government on this point.

Our APPG report contains 19 specific and deliverable recommendations. I hope the Minister has had an opportunity to read it, and we look forward to his response. However, in the limited time available, we would be particularly grateful if he responds to the following requests. Will he guarantee that Wales does not receive a penny less and that the devolution settlement will be fully respected, and will he provide clarity on when the SPF consultation will be published?

Let us be clear, the Welsh are a proud, resilient people. They are not looking for special treatment or anybody’s charity. However, we are looking for a level playing field—an opportunity to compete without having one hand tied behind our backs. This is the essence of the Welsh spirit: an unrelenting commitment to community, fairness and the wellbeing of our future generations. With that spirit, every single Welsh MP on the Labour Benches will keep fighting to ensure that Wales gets the regional investment that it needs to thrive in this city-centric era of globalisation and fast-paced technological change.

[Several hon. Members rose—]

--- Later in debate ---

[Stephen Kinnock]

The Minister’s speech showed that the Government are truly paralysed by Brexit. We could have a debate about that, but the fact is that that paralysis is having real-world consequences. What is the future of that key infrastructure project? What is the future of that vital skills project in our community? What is the future of that vital railway upgrade? We simply do not know. We do not have answers to those questions, and the clock is ticking. We are talking about 2020 as if it is a decade away. It is not; it is just around the corner. These are multi-annual programmes that have a time lag in them, and the clarity should have been forthcoming months ago.

I and many other Members asked for a guarantee that Wales will not receive a penny less, a guarantee that the devolution settlement will be fully respected, and clarity on when the shared prosperity fund consultation will launch. It is a matter of great regret that answers to those three questions were not forthcoming. We will therefore continue to press the Government for some clarity on those vital points.

European Council

Stephen Kinnock Excerpts

Thursday 11th April 2019 Commons Chamber

[The Prime Minister]

What I have said—and this is the Government’s intention—is that if the talks with the Opposition fail to find a point of agreement between us that we believe would get a majority across this House, we would work with the Opposition to identify options and votes to be put to this House to find a way of determining a single result. There are a number of ways in which it is possible to do that. I think it would be important to ensure, were we in that position, that whatever system was chosen was genuinely going to come to a proper reflection of the views of this House.

[Stephen Kinnock (Aberavon) (Lab)]

The Prime Minister knows that full membership of the single market is the only way we can guarantee workers’ rights and the integrity of the Union and do something for the services sector, which represents 80% of the economy. A stand-alone customs union simply does not cut it. In the options that will be presented to us if the talks do not work, can she guarantee that full membership of the single market through the European economic area will be on offer?

[The Prime Minister]

I do not recognise the picture painted by the hon. Gentleman. It is not the case that full membership of the single market is the only way to achieve the benefits that he has referred to. He is right that it is particularly important, as we leave the European Union, that we have a care for our services sector, given the significant extent to which it plays a role in our economy. On flexibility, maintaining and recognising the importance of the City of London, particularly in financial services and the risk borne here in the United Kingdom, leads us to want to see that greater flexibility in relation to services.

It is not the case that the only way to ensure that we maintain and enhance workers’ rights in the United Kingdom is through full membership of the single market. This is a Government who are enhancing workers’ rights, because we believe that is what is right in the United Kingdom.

UK’s Withdrawal from the EU

Stephen Kinnock Excerpts

Wednesday 27th February 2019 Commons Chamber

[Mr Lidington]

The hon. Lady does not characterise the Prime Minister’s words yesterday accurately at all. The Prime Minister could not have been clearer in many appearances at this Dispatch Box that in every conversation we have had with the European Commission or with Heads of member state Governments, they have said that were we at any stage to seek an extension of article 50, they would want to understand for how long one was being sought and the purpose for which it was being sought, so I do not think that anything President Macron said today came as a shock to us.

[Stephen Kinnock (Aberavon) (Lab)]

rose—

[Mr Lidington]

If the hon. Gentleman will forgive me, I will try to give way to him later, but I hope he will let me move on for the moment.

The Government believe that leaving with our deal is better than leaving without a deal. Members who have seen the summary paper published yesterday, and other sources, too, will know that there is no avoiding the fact that an abrupt departure from the European Union without an agreement of any kind would lead to a shock to our economy, and that it would not be possible for a Government, even with the most meticulous planning of arrangements in this country, to mitigate and plan entirely for what might happen outwith our own jurisdiction. In those circumstances we would, for example, be reliant on the readiness of the authorities in France and elsewhere to introduce streamlined checks and procedures, or on the readiness of the European Commission to allow a short-term derogation from its normal rules and practices. As a responsible Government, we have therefore been taking appropriate steps to minimise that disruption and have published extensive information to ensure the country is prepared. We have published and updated 106 technical notices and contacted the 145,000 businesses that trade with the European Union to help them to prepare for no-deal customs procedures.

It is a fact that as long as this House is unable to agree to an alternative course of action and get behind a particular agreement on exit from the European Union, businesses and individuals will have to plan for and take action as well. The Government have taken and will continue to take steps to provide businesses and citizens with advice to help them to make preparations to mitigate the potential impacts of a no-deal Brexit. The paper published yesterday showed that there are more actions that businesses should consider taking and which the Government urge them to plan for as necessary.

Leaving the EU

Stephen Kinnock Excerpts

Tuesday 12th February 2019 Commons Chamber

[The Prime Minister]

I can give my right hon. Friend that assurance. I have heard the message clearly that Parliament gave in relation to the backstop, and we are working for those legally binding changes that this Parliament wishes to see.

[Stephen Kinnock (Aberavon) (Lab)]

The withdrawal agreement and implementation Bill is legislation of the highest political, legal and constitutional significance. It is absolutely vital that this House has sufficient time to debate and scrutinise it. It would be a constitutional outrage if that were not the case. Does the Prime Minister not then agree that it is crystal clear that we cannot do justice to this vital piece of legislation without an extension of article 50?

[The Prime Minister]

I assure the hon. Gentleman that, of course, the House will have looked at the nature of the withdrawal agreement through the meaningful vote that it conducts, and giving support for that withdrawal agreement will then enable us to get on with the withdrawal agreement and implementation Bill. I can assure the hon. Gentleman that the House will have sufficient time, I believe, to scrutinise that Bill.

Oral Answers to Questions

Stephen Kinnock Excerpts

Wednesday 6th February 2019 Commons Chamber

[Mr Lidington]

What is happening in Venezuela is appalling. We have seen the suppression of democratic institutions and traditions, and we have seen 3 million people forced to leave their country and live as refugees. We and our EU partners have been clear that we need to put pressure on those around Maduro. We need to keep that pressure up, and we are looking at what further steps we can take to ensure peace and democracy, including through possible sanctions. It would be a help if, in this House, we spoke with a united voice, rather than having the Leader of the Opposition looking to Maduro’s Venezuela as a role model for this country.

[Stephen Kinnock (Aberavon) (Lab)]

Q14. The Prime Minister is on record as saying that she does not want a “business as usual” relationship with Russia. Will the Minister explain, then, why in the past year, the Conservative party has trousered £1 million in donations from individuals with strong links to the Kremlin, including a former Russian Defence Minister and the wife of President Putin’s former Finance Minister?

[Mr Lidington]

Party matters are not a subject of Government responsibility, but all donations to the Conservative party have been properly accounted for and declared to the Electoral Commission in accordance with the law. There are people of Russian origin who are United Kingdom citizens and as entitled as any other naturalised UK citizen to support and donate to the political party of their choice.

European Union (Withdrawal) Act 2018

Stephen Kinnock Excerpts

Tuesday 29th January 2019 Commons Chamber

[Hilary Benn (Leeds Central) (Lab)]

I think we all realise that today’s debate is predominantly about process, but that cannot hide one essential truth: we are facing a crisis; our country is in a state of suspended animation because of that crisis; and the intemperate nature of the debate—partly here today and certainly outside the Chamber—is a consequence of that crisis, because in truth every single one of us present is anxious about what is going to happen to our country.

Following the defeat of the Prime Minister’s withdrawal agreement and political declaration, she said that she would reach out, and I welcomed that, although it would have been much better had it been done two years ago. We now know that she is not for turning on the political declaration but seeks somehow to change the backstop. I am all for optimism, but I somehow doubt that the EU is for turning on this issue either. Unless the Prime Minister knows something that we do not, I do not see how it is going to be changed.

[Stephen Kinnock (Aberavon) (Lab)]

Is my right hon. Friend aware of the fact that Guy Verhofstadt has today said:

“The deal we have is fair and cannot be re-negotiated. The backstop is needed because of UK red lines and was crafted by the UK and the EU to secure the Good Friday Agreement…We remain open to positive changes regarding the future relationship and it is time for a more consensual cross-party approach to deliver this”?

Does that not make it absolutely clear that the Prime Minister’s approach is a charade, and it needs to be stopped now?

[Hilary Benn]

I fear that my hon. Friend is right, as the Prime Minister will find out. She will have to return to the House, I suspect, and say, “I am sorry, but I could not get the thing to which some Members object removed.” I simply say that if Members do not want Northern Ireland and the rest of the United Kingdom to have different rules, and if they want to ensure that, in all circumstances, goods can flow freely without tariffs, delays, paperwork or checks then it is the political declaration that needs to be changed.

Oral Answers to Questions

Stephen Kinnock Excerpts

Wednesday 9th January 2019 Commons Chamber

[The Prime Minister]

Obviously, I recognise the concern raised by my hon. Friend. The £65 fee to apply for status under the scheme is in line with the current cost of obtaining permanent residence documentation, and it will, of course, contribute to the overall costs of the system, but applications will be free of charge for those who hold valid permanent residence documentation or valid indefinite leave to enter or remain, and for children being looked after by a local authority. Where an application is granted pre-settled status under the scheme, there will, from April 2019, be no fee for applying for settled status. As I said in an earlier response to another Member, the EU settlement scheme will make it simple and straightforward for people to get the status that they need.

[Stephen Kinnock (Aberavon) (Lab)]

Q9. This week, our cross-party Norway Plus group published “Common Market 2.0”, a clear plan that respects the 52:48 mandate, addresses concerns about free movement, protects jobs in my Aberavon constituency, and helps to reunite our deeply divided country. If the Prime Minister’s deal is rejected on Tuesday, will she give the House the opportunity to vote on a range of options, including “Common Market 2.0”, and will she give Members on her Benches a free vote on those options?

[The Prime Minister]

As the hon. Gentleman knows, I am working to ensure that the deal that has been negotiated by the UK Government with the European Union is voted on positively by this Parliament. It is a good deal. It does what he wants: it protects jobs and security. It also delivers in full on the referendum result, which is a key issue. We owe it to people to deliver what they wanted, which was control of money, borders and laws, and that is what the deal does.

European Council

Stephen Kinnock Excerpts

Monday 17th December 2018 Commons Chamber

[The Prime Minister]

I am happy to confirm that we will be leaving the European Union on 29 March next year. I am grateful to my hon. Friend for pointing out the significant number of Members who stood on a manifesto commitment to deliver on the vote that people took in 2016.

[Stephen Kinnock (Aberavon) (Lab)]

The Prime Minister repeatedly claims that the Norway plus option would require a backstop, but on 3 December her Attorney General told me from the Dispatch Box that he could see no reason why Norway plus

“would not satisfy the stated objectives of the backstop”.—[Official Report, 3 December 2018; Vol. 650, c. 572.]

Can she confirm that she agrees with her Attorney General on that point?

[The Prime Minister]

The issue is partly about whether we have the customs union within the Norway plus model. However, the point about the backstop is that it is there to deal with the period from the end of a transition period to the new relationship—the new relationship being one that will deal with the guarantee to the people of Northern Ireland that there will be no hard border. In any alternative arrangement, it would be necessary to have that negotiation.

Norway-plus is not something that can just happen. This House might want to say it will happen; actually, Norway-plus requires such a negotiation, because we would have to negotiate to be a member of EFTA first in order to get such an arrangement in place. In doing that, there would therefore be a risk that there would be a period of time when no arrangement was in place, and that would require a backstop.

Leaving the EU

Stephen Kinnock Excerpts

Monday 26th November 2018 Commons Chamber

[The Prime Minister]

I am sure that my right hon. Friend will recognise that the commitments that the Government have made to increase funding for our public services in a number of areas, which do affect his constituents, reflect the needs that he has consistently raised in this House and raised with Government. I return to the point that I made previously about the financial settlement with the European Union—there are legal obligations that this country has, and I believe that, as a country, we should be the sort of place that actually meets our legal obligations.

[Stephen Kinnock (Aberavon) (Lab)]

The Prime Minister must surely now recognise that she is flogging a dead horse. May I urge her to join forces with senior members of her Cabinet and Members on both sides of the House to back a Norway plus-based Brexit? It is the only option that protects jobs, solves the Northern Ireland border issue and has a chance of reuniting our deeply divided country.

[The Prime Minister]

Actually, the option that the hon. Gentleman puts forward does not deliver on the vote of the British people, which is what I believe we should do.

October EU Council

Stephen Kinnock Excerpts

Monday 22nd October 2018 Commons Chamber

[The Prime Minister]

There was a wider discussion on the importance of continuing to work together on key security issues. Of course, the details of the future relationship on internal security, such as those relating to the European arrest warrant, are being looked at in the negotiations, but there was a very clear sense around the table of the importance of us all continuing to work together on key security issues.

[Stephen Kinnock (Aberavon) (Lab)]

The backstop is an insurance policy. Can the Prime Minister give us an example of any insurance policy she has ever seen or signed up to that was based on an expiry date?

[The Prime Minister]

I do not know what insurance policies the hon. Gentleman takes out, but most insurance policies have a renewal date.