Port Talbot Steelworks

Stephen Kinnock Excerpts

Tuesday 30th April 2024 Commons Chamber

[David T. C. Davies]

My hon. Friend is right that if we wanted to, we could probably find iron ore, coke, coal and limestone in the UK, but I do not see any great enthusiasm at the moment for opening up the mines to do that. As for the 8 million tonnes of scrap in the UK that will go into the arc furnaces, officials from the Department for Business and Trade and EY have gone over very carefully the business plan being put forward by Tata. Let me point out to my hon. Friend that not only are the UK Government investing half a billion pounds, but Tata is investing £750 million, so Tata obviously feels that there is a good, strong, commercial case for building that arc furnace, and is putting its money where its mouth is.

[Stephen Kinnock (Aberavon) (Lab)]

The Port Talbot steelworkers in my constituency have given their life to the steel industry and to Tata Steel. The reckless deal that has been done by the UK Government and Tata is a hammer blow for them, and we hope that there is still time for the employer and the unions to come together, drop the bad deal for steel, and adopt the compelling and robust multi-union deal instead.

May I ask the Secretary of State about the role of contractors in all this? Everyone knows that for every job lost in a steelworks, between two and three more are lost through supply chains and contractors, so the figure of 2,800 that is being used is a massive underestimate of the devastating impact, as there will be job losses through supply chains and subcontractors. Does he agree that the number of job losses will be far higher than 2,800 if this reckless deal is adopted? If so, does he agree that it is time for everyone to pull back from the brink and adopt the multi-union plan, which offers us a bridge to the future, rather than the cliff edge that is currently being pursued?

[David T. C. Davies]

Clearly, there will be an impact on those in the supply chain; there has been absolutely no doubt about that. At the last transition board meeting, at which the hon. Gentleman was present, we discussed that, and we agreed that we would want to support anyone in the supply chain who has been affected, but we cannot start putting numbers on this. It would be irresponsible to start guessing the number of people who will lose their job, but I agree with the hon. Gentleman that there will clearly be an effect.

The hon. Gentleman talks about a reckless plan, but ours was the only plan on the table. He keeps suggesting that we adopt the Syndex plan, but it is not a plan unless Tata agrees to it. I have discussed the Syndex plan with senior management at Tata and with the head of Tata Holdings, Mr Chandrasekaran, in Mumbai. He does not believe that it is commercially viable, and he believes that it would be technically far too difficult to try to build an electric arc furnace on the site of the steel melt shop.

[Stephen Kinnock]

indicated dissent.

[David T. C. Davies]

The hon. Gentleman shakes his head. I do not know what the answer is; he says that it is possible to implement the Syndex plan, but Tata says that it is not. What the hon. Gentleman has to realise is that it is not the UK Government he has to convince; it is Tata. The UK Government have never said that they would be against the Syndex plan. It is Tata that has to be persuaded.

Oral Answers to Questions

Stephen Kinnock Excerpts

Wednesday 5th July 2023 Commons Chamber

[Dr Davies]

I certainly can. The two new freeports will help to level up north-west and south-west Wales and bring new high-skilled jobs to successful areas. They will become drivers of growth and employment in their areas, acting as hubs for regeneration, innovation and global trade. I understand my hon. Friend’s desire to see rapid progress. Both the UK Government and the Welsh Government will work closely with the successful bidders to develop their outline business case so that we can understand the benefits, costs and the most beneficial intervention options.

[Stephen Kinnock (Aberavon) (Lab)]

The Celtic freeport bid is based on floating offshore wind. The floating offshore wind manufacturing investment scheme is a vital programme to get the infrastructure in the port ready for the fabrication of substructures and turbines for floating offshore wind. As the voice of Wales in the Cabinet, what steps is the Secretary of State taking with Cabinet colleagues to secure FLOWMIS to maximise the benefits of the Celtic sea freeport?

[Dr Davies]

The hon. Gentleman is absolutely right about that. He may also be aware of yesterday’s announcement of the leasing area in the Celtic sea for floating offshore wind. My right hon. Friend the Secretary of State has regular meetings with stakeholders, as do I, about FLOWMIS and the necessary infrastructure to bring that into being.

Oral Answers to Questions

Stephen Kinnock Excerpts

Wednesday 24th May 2023 Commons Chamber

[Dr Davies]

It is important that we grasp all opportunities to level up our economy through tourism. That could include a passenger ferry between Ilfracombe and south Wales. Many of the policy levers affecting the visitor economy in Wales are devolved. It is important that interested parties work closely with the relevant councils on the matter. The UK Government are passionate about tourism, unlike the Welsh Government, who seem more focused on putting in place a tourism tax.

[Stephen Kinnock (Aberavon) (Lab)]

6. What steps he is taking to support the steel industry in Wales.

[The Parliamentary Under-Secretary of State for Wales (Dr James Davies)]

Steel is vital to the UK. We are actively engaging with our industry to secure a positive and sustainable future. Industrial sectors, including steel, have been able to bid for Government funds worth more than £1 billion to support them to cut emissions and become more energy efficient.

[Stephen Kinnock]

The Governments of the United States and the EU have developed active industrial strategies, with multi-billion-pound investments to support their steel industries as they transition to green steel production. Here in the UK, the cavalry is coming in the form of a Labour Government and our £3 billion green steel fund. What a contrast with the Government party, which is completely and utterly asleep at the wheel on steel. When will the Secretary of State start standing up for our proud Welsh steel industry? When will he get his colleagues in Cabinet to wake up to the fact that we are losing the race for green steel investment?

[Dr Davies]

The hon. Member will be aware that the Secretary of State for Business and Trade visited Tata Steel in Port Talbot only recently. That shows her commitment to it. He will also be aware of the British Industry Supercharger announced only a few months ago, which aims to bring energy costs for energy-intensive industries such as steel production in line with those of other similar countries.

Spring Budget: Wales

Stephen Kinnock Excerpts

Wednesday 29th March 2023 Westminster Hall

[Ruth Jones]

Absolutely. My hon. Friend has made a perfect point; the Bevan Foundation in Wales is very clear and accurate in its reporting. I pay tribute to Victoria Winckler and the other staff there. That is why I welcome Labour’s mission to secure the highest sustained growth in the G7; that will be good for Wales, the Welsh economy and the people of Wales.

[Stephen Kinnock (Aberavon) (Lab)]

My hon. Friend is making an excellent speech. On the point around growth, does she agree that a vibrant and competitive steel industry has to be at the heart of any growth strategy, and that the UK Government’s continued dithering and delay when it comes to stepping up and showing the Welsh steel industry the support that it requires is a massive issue? Does she also agree that UK Labour’s £3 billion clean steel fund is exactly what we need to ensure that we get our economy firing on all cylinders?

[Ruth Jones]

Absolutely. My hon. Friend makes a powerful point, because steel is integral to the industry and heart of Wales. In my constituency, in the last week we have had issues with a steel company, which I will be talking to my hon. Friend about shortly. We all want steel to thrive and grow in Wales.

Only with strong, inclusive growth, including in the steel industry, will Wales get the good jobs and productivity gains for which our people are crying out. It is not rocket science; in fact, it is pretty simple. Despite all the claims from the Chancellor, the Office for Budget Responsibility downgraded the UK’s long-term growth forecast; there are downgrades in each of the last three years of the forecast period. We will be the only country that will see negative growth. No other G20 economy, apart from Russia, is forecast to shrink this year. The OECD has confirmed that the UK will be the weakest economy in the G7 this year. What a ringing endorsement of 13 years of Tory Government! The blame for that lies squarely with the Tories, their Prime Ministers, and the current Chancellor—and the one before, obviously. They are the party of economic mismanagement.

It is worth noting that the average French family is now a 10th richer than their British counterparts, while the average German family is a fifth richer. After 13 years of Tory Government, and a failed spring Budget, our people are paying more, earning less and bearing the overwhelming brunt of this Conservative cost of living crisis. This Government have let down the people of Newport West, and of Wales. The spring Budget was a wasted opportunity for Wales; it delivered a tax cut for the richest and nothing for the many. It continued a Conservative agenda of delay and decline. As my constituent Dawn Jones wrote in her heart-rending correspondence:

“This should not be allowed to happen in this day and age, these conditions are not acceptable.”

The best way—the only way—to change course, to deliver for our people and to move forward is with a UK Labour Government, and the sooner the better.

Welsh Affairs

Stephen Kinnock Excerpts

Thursday 2nd March 2023 Commons Chamber

[Stephen Crabb]

The hon. Gentleman makes an important point. He is exactly right, and I encourage him to follow the output of the Welsh Affairs Committee as we continue our inquiry into broadcasting in Wales. He may have seen a few weeks ago that Netflix chose to use the incredibly important forum of the Committee to announce its investment in its first Welsh-language drama. It is great to see Welsh-language productions from Wales, made in Wales and projecting the Welsh language through new global streaming platforms. It is an opportunity to project Welsh culture and identity, and perhaps a challenge and even a threat to some of the traditional broadcasters. Overall, he alludes to a healthy picture.

I referenced our visit to north America, where there are huge opportunities. I often think that we perhaps make too much of the slightly odd colonial experiment in Patagonia and not enough of the Welsh diaspora that moved to the US, particularly in the late 18th and early 19th century. Welsh people were at the heart of the US industrial revolution experience. When the Welsh Affairs Committee was in Washington in January, we had the opportunity to visit Capitol Hill and were hosted by the Friends of Wales Caucus in Congress.

I thank Congressman Morgan Griffith from Virginia for welcoming us and for the fascinating discussion that we had in his office about the links between our nations. He has people in his district with strong Welsh heritage, and there are towns and villages in his district and throughout Pennsylvania that bear the names of Welsh towns and villages that we are familiar with. That means that there are opportunities for us. Sometimes, I think that the Irish and Scottish make far more of their diaspora and use it more intelligently to further strategic and economic objectives than we do. We were looking at that as a Committee. I pay tribute to Ty Francis for his work in creating New York Welsh, a diaspora community in New York City, and for his further work to create a network of people with Welsh heritage internationally who all want to feed back and support the growth of Wales back home.

I will conclude on an area where I feel upbeat and optimistic this St David’s day—energy. Wales has an important role to play in helping the UK to meet energy security objectives and to make strides towards achieving net zero. Wales already has an enormous heritage when it comes to energy. In my constituency, Milford Haven has a history of 50 years of oil and gas processing and import. The opportunity in front of us is the launch of a brand-new industry—floating offshore wind. We have made great strides with fixed-bottom offshore wind in this country, particularly on the eastern seaboard of the UK. But with floating offshore wind, we can have bigger turbines, go to deeper waters where it is windier, get a better load factor on the turbines and create more electricity.

With this new industry we cannot repeat the mistakes of the past. I am looking forward to the remarks by the hon. Member for Aberavon (Stephen Kinnock), who has been working hard on that. If we do this right, we can create new domestic economic opportunities and genuine supply chains here in the UK and in Wales, and centre this new industry around Port Talbot and Milford Haven. It is great that our ports are collaborating on the Celtic freeport bid. It would be wonderful to hear from the Secretary of State when we might hear the outcome of that bidding process. That is the prize in front of us that is worth capturing. Big industrial economic opportunities do not come along that often in Wales, as you know, Mr Deputy Speaker. We have one now and we should seize it.

[Stephen Kinnock (Aberavon) (Lab)]

The right hon. Gentleman is making an excellent speech and some very good points about floating offshore wind. On ensuring that we capture the benefits in Wales, does he agree that a very hard line should be taken with the Crown Estate to ensure that when leasing the seabed, there are clear conditions on the developer to ensure that the manufacturing, the supply chain, the jobs and the skills stay in Wales? We must not make the tremendous and awful mistakes of the past, when we allowed all the supply chains to go overseas.

[Stephen Crabb]

I agree. We need to achieve alignment between the Crown Estate’s leasing auctions, the Treasury’s contracts for difference process and the commitments that developers make. The hon. Gentleman is exactly right that we need to hold their feet to the fire—whether the developers’ or the Crown Estate’s. When companies make promises to create x number of jobs and apprenticeships in his constituency or mine, we want them to be realised. That is the opportunity in front of us.

I have probably exhausted my time. I hope that you feel as upbeat and optimistic as me, Mr Deputy Speaker. We spend a lot of time in this Chamber debating the problems and challenges facing Wales. Sometimes, as a nation we are prone to a little too much negativity. I hope on this St David’s day we can be positive and upbeat, and certainly follow the spirit in which the debate was opened by the hon. Member for Swansea East.

--- Later in debate ---

[Stephen Kinnock (Aberavon) (Lab)]

I wish everyone a belated happy St David’s day if I did not wish it to them yesterday. I congratulate my hon. Friend the Member for Swansea East (Carolyn Harris) not only on her wonderful, poetic opening speech, but on the Everyone Deserves a Christmas, Summer and Easter campaign. It seems to be an all-year-round campaign this year. I have had the pleasure of taking part in that initiative, which does a huge amount to tackle holiday hunger by providing hampers to families who are struggling at Christmas. I am proud to say that those hampers provided 447 children and their families across Neath Port Talbot with a lovely Christmas dinner with all the trimmings, plus lots of other treats. It was a great pleasure to be part of the hamper packing process, which also enabled us to hang out with some of our heroes from the Ospreys, the Aberavon Wizards and the Swans—even though I say that as a Bluebird.

That achievement was possible only thanks to the generosity of businesses and individuals across Aberavon and the whole area covered by the Everyone Deserves campaign, whose donations helped pay for the hampers. It also reflects the fact that many of my constituents, and I am sure those of all of our colleagues assembled here, are struggling with the rocketing cost of living. Record energy prices, soaring costs of household essentials, falling wages and the highest interest rates for 40 years are really biting. Real wages in Aberavon have plummeted since 2010, leaving my constituents £1,123 per year worse off on average. Incomes are simply not keeping pace with rising costs, and they no longer cover the essentials. Many talk of a cost of existing crisis rather than a cost of living crisis. Constituents are not putting the heating on or are cutting back on essential groceries. They are worried sick about whether they can pay their energy bills or afford their rent or mortgage payments. The numbers of people turning up to food banks is up, up, up.

In December, more than 33,000 people in Wales experienced financial hardship to the extent of accessing £2.36 million from the Welsh Government’s discretionary assistance fund. The Welsh Government have since pledged £18.8 million to the fund to protect people who are facing financial hardship. Despite having fewer economic levers at their disposal compared with the UK Government, the Welsh Government have stepped up to the plate by providing a £51 million household support fund targeted at those who need it most. They have doubled the winter fuel support payment to £200 to help those on low incomes with their energy bills, and have provided £1.1 million to support food banks, community food partnerships and community hubs.

The Welsh Labour Government are doing their level best to shield Wales from the worst of the crisis, but the reality is that energy bills will go up by £900 in April. Hard-working families are feeling the pinch, while oil and gas giants are celebrating record profits and laughing all the way to the bank. On behalf of my Aberavon constituents, I urge the UK Government to step up and help them and others across the country by closing the loopholes and bringing in a proper one-off windfall tax on energy giants. The money raised could be spent on a package of support for energy bills, passing savings on to households immediately, and stopping the energy price cap going up in April. An end must be put to the scandalous penalties imposed on prepayment meter customers, who should not be paying more than those who pay by direct debit. There also needs to be a three-month moratorium on the forced installation of prepayment meters.

Learning the lessons of the energy crisis is essential to prevent it from happening again. If our country is to better protect itself, we must become more resilient and less exposed to fluctuating global energy prices. That brings me on to a topic that the right hon. Member for Preseli Pembrokeshire (Stephen Crabb) mentioned: floating offshore wind. FLOW will be hugely important in allowing our country to stand more firmly on our own two feet. It will also be essential in helping us reach net zero.

Port Talbot, along with the right hon. Gentleman’s constituency, has the potential to be at the heart of this 21st-century green industrial revolution. Our deep-sea harbour, our land for development, our excellent transport links, our world-class steelworks and our existing manufacturing supply chains and skills base make us well placed to deliver 24 GW of FLOW in the Celtic sea, a quarter of the UK’s total target.

[Mark Tami (Alyn and Deeside) (Lab)]

My hon. Friend hits the nail on the head. If we are to go down that road, we have to do it on a scale that will make a real change. The problem with our energy policy has been that we have tended to dabble in things without putting investment in. These things are not going to happen by themselves. We need to put investment in, and we need to put it in now.

[Stephen Kinnock]

My right hon. Friend is absolutely right. I think we can agree that energy policy across the UK has tended to ebb and flow. It has not given investors the clarity or the long-term stability and certainty that they need. These are big investments that require confidence in the Government that things will not shift from one thing to another. Stability, strategic purpose and mission-driven government are what we need.

FLOW is a genuine game changer for the south Wales economy and the labour market, creating thousands of high-quality, high-skill local jobs. It is a once-in-a-generation opportunity to transform Aberavon and south Wales and turn us into a green power superpower, and what makes it even more exciting is that it can support green steel making. The steel industry has been crying out for years for UK Government support to mitigate crippling energy costs. UK steel producers pay an estimated 63% more than their German counterparts. They need to be able to compete internationally on a level playing field. Tata Steel estimates that producing 60 floating substructures and turbines a year for FLOW would require 6 million tonnes of steel. The real win-win is that the green, clean energy produced through FLOW can help to produce the green steel that Tata plans to make in its future electric arc furnaces, which will replace the current blast furnace technology, at a lower cost per unit than is possible with the sky-high electricity prices that are currently holding our steelworkers back.

There are two key decisions that the UK Government, working in very close collaboration with the Welsh Government, need to make to kick-start this hugely exciting opportunity. The first is on the freeport bid. Delivering FLOW at the necessary scale and speed will require support. Backing the Celtic freeport bid can unlock £5.5 billion of new investment and 16,000 jobs. It will also provide the launchpad for accelerating the development of FLOW and bring household energy bills down. This is not a transactional opportunity; it is a transformational opportunity.

The second decision is on the floating offshore wind manufacturing investment scheme. FLOWMIS is another vital building block of this game changer for renewable energy. The Welsh Government have already stepped up to the mark and provided a £1 million grant to help the transformation of Port Talbot dock, with a dry dock and other facilities necessary to provide the manufacturing capability for FLOW. It is time the UK Government followed their lead and urgently launched the FLOWMIS programme. FLOWMIS co-funding would demonstrate the UK Government’s clear long-term commitment to developing the ports and the sector, giving confidence to investors and other funding providers to back the project and unlocking sizeable private sector investment potential. I really hope that the Secretary of State will say something about FLOWMIS at the Dispatch Box today.

For much of the 19th and 20th centuries, Welsh coal, slate, copper and steel were known around the world. In the 21st century, if the opportunity is seized, Wales could just as well be known for FLOW. The prize is clear: the creation of a new long-term industry whose high-value manufacturing has “Made in Wales” firmly embossed on the tin. Wales was the cradle of the first industrial revolution; now let us make it the cradle of the green industrial revolution.

It is not just FLOW that could be embossed with “Made in Wales”. Universities in Wales have been at the forefront of innovative ideas that could change the way we live, thanks to the £370 million of EU structural funds that have been invested in university-led projects in Wales. SPECIFIC—the sustainable product engineering centre for innovative functional industrial coatings—is a Swansea University project based in Aberavon. It has been doing wonderful work on creating buildings that store and release heat and electricity from solar energy, but no replacement funds offer the parity of support that is needed for that research and innovation work. More than 60 projects across Wales, including SPECIFIC, now face a very uncertain future. Approximately 1,000 jobs are at risk. Will the Secretary of State give a commitment today to speak with colleagues about bridging funding to enable these important projects to continue, to prevent Wales from losing this talent and to avoid the cliff edge that exists under the shared prosperity fund?

My Aberavon constituents and the people of Wales need something better. They need a UK Labour Government working in tandem with a Welsh Labour Government to deliver for Wales and deliver for our entire United Kingdom.

Freeports: Wales

Stephen Kinnock Excerpts

Tuesday 21st February 2023 Westminster Hall

[Stephen Kinnock (Aberavon) (Lab)]

It is a pleasure to serve under your chairship, Mr Vickers, and to follow the hon. Member for Ynys Môn (Virginia Crosbie), who has been making this case very strongly throughout her time in this place.

The decision that the two Governments are set to make on the location of the Welsh freeport is right at the heart of the debate about what a future British economy will look like and of the ambition that the Government have for Britain in the world. It is clear that by backing the Celtic Freeport bid, both Governments would be sending a clear signal that they are not looking backwards or simply managing decline by seeking to make up a bit of missing post-Brexit trade here or restoring a bit of pre-covid demand there; rather, it would show that Britain is truly ready to become a world leader in the green industries of the future.

The Celtic freeport, situated in the ports of Port Talbot and Milford Haven, would bring with it initial business rates exemptions, capital investment exemptions and seed funding that would drive £5.5 billion of inward investment into the local economy. Perhaps even more importantly, it has the potential to bring £54 billion into the supply chain of the vital new renewable technology of floating offshore wind.

The Celtic freeport would sit at the heart of the emerging green ecosystem in south Wales, which is set to play a central part in providing the green, competitive and secure energy supply our country is crying out for. South Wales was the cradle of the first industrial revolution, and we can now be the cradle of the green industrial revolution. The Celtic freeport can drive forward the green technology that will power our domestic, sovereign and sustainable energy supply, drive down household energy bills, support green steel making and, of course, create up to 16,000 new local jobs. The new technology at the heart of this green manufacturing revolution will be floating offshore wind.

The UK has led the world on the mass deployment of offshore wind power generation. Across nearly 50 sites, offshore wind contributes about 13% to the UK electricity mix. No one country—even giants such as China—can touch our footprint, so we have a lot to be proud of. Britain can ill afford to let this new technology of floating offshore turbines pass by, because if we do, we risk falling behind.

Floating offshore wind is a technology whereby wind turbines are attached to floating platforms that are secured by mooring lines and anchored to the seabed to keep them in place. This modern science uses the same technology as wind turbines that are fixed to the seabed to generate electricity, but the floating platforms can be installed in deeper areas of the sea, which frequently have higher wind harvesting potential.

This modern manufacturing renaissance, which will bring a £54 billion supply chain  to the heart of Wales’s new economy, could drive forward a green ecosystem of sustainable growth and good jobs across Aberavon, Wales and the entire United Kingdom for future generations. Whether people are looking to become welders, electricians, data specialists or marine surveyors, floating offshore wind will create thousands of high-quality, high-skilled jobs right on our doorstep.

The Celtic freeport bid is about prosperity, but it is also about pride. It is, of course, about prosperity for our economy and people, but it is also about pride in our country and community. We can once again lead the world in tackling the major global challenge of the 21st century, namely climate change. For our local communities, it is about taking pride in the fact that their work will contribute to that national and global mission.

The new green ecosystem can also play a critical role in strengthening the backbone of our national economy. The covid pandemic and Putin’s barbaric invasion of Ukraine have turbocharged the need to build resilience into our supply chains. Floating offshore wind in the Celtic sea will be able to generate 24 GW of clean, green, renewable energy by 2045, which is a quarter—an enormous amount—of the UK’s total target.

To generate that amount of energy, we will need to build and deploy over 60 turbines a year. Tata Steel estimates that that would require 6 million tonnes of steel between now and 2045. The energy produced through floating offshore wind could then help to produce the green steel that Tata Steel plans to make in its future electric arc furnaces—which will replace the current blast furnace technology—at a lower cost per unit than is possible with the sky-high electricity prices that are currently holding our steel industry back.

The driving purpose of the Celtic freeport bid is to be a force multiplier, catalysing our green economy through floating offshore wind, building our energy security and strengthening our ability to stand on our own two feet by making, buying and selling more in Britain. The Celtic freeport offers one of the biggest opportunities of its type for Wales, which is why I and many hon. Members are backing the bid.

The cross-party support from Members in this place runs broad and deep, from the right hon. Member for Preseli Pembrokeshire (Stephen Crabb)—my fellow lead on the campaign, to whom I pay tribute—to hon. Members from Plaid Cymru. We also have support from a large number of businesses, ranging from Tata Steel to South Hook, from LanzaTech to SSE Renewables. They can see that the potential for the Celtic freeport bid will be as a platform for floating offshore wind, thus putting Wales at the forefront of the green industrial revolution. They understand that the Celtic freeport is a multi-port solution that builds on the strengths of two of the UK’s leading ports—Port Talbot and Milford Haven—to create a green investment corridor.

Combined with the supporting infrastructure, heavy engineering, industrial clusters and skills base along the M4 corridor, as well as the immense connectivity we have along the M4 corridor, our bid has what it takes to be a genuine game changer for our economy and security and in the battle against climate change. The prize is clear: the creation of a new long-term industry, where high-value manufacturing has “Made in Wales” firmly embossed on the tin.

Our ports are playing their part too. Associated British Ports and the Port of Milford Haven have committed to invest £710 million in their green energy-focused ports, while the first phase of construction at Pembroke Dock is already under way, as I am sure the right hon. Member for Preseli Pembrokeshire will illustrate in his remarks. That port infrastructure will act as a launch pad to help leverage a further £700 million of investment in factories to build the massive renewable sub-structures and turbines.

The decision about the selection of the Celtic freeport is the next vital step to secure this industry for Wales. It will provide the signal to global markets that will be needed if we want to lever in the high-impact private sector investment we need to take us forward. I will continue to make the case, and I hope that local businesses and residents across the Celtic freeport area and beyond will join me in making it. At the stroke of a pen, British and Welsh Ministers can unlock this new industry and repurpose our strengths for a green future. I hope that the UK and Welsh Governments will seize this opportunity. Wales was at the forefront of the first industrial revolution. With the right investment, commitment and decisions, we can put ourselves at the forefront of the net zero revolution.

[Stephen Crabb (Preseli Pembrokeshire) (Con)]

It is a pleasure to serve under your chairmanship, Mr Vickers, and to follow the hon. Member for Aberavon (Stephen Kinnock). I agreed with pretty much everything he said; thankfully, there is no rule against repetition in this place, so I will proceed with my remarks.

First, I would like to put on record my respect and appreciation for my hon. Friend the Member for Ynys Môn (Virginia Crosbie) for securing this important and timely debate, and for the articulate and energetic way she has championed her constituency and a freeport for Wales. In all seriousness, I do not think Ynys Môn has had a stronger voice in the House of Commons in its history as a constituency. I encourage my hon. Friend in the work she does.

Welsh ports have a long history in helping to shape the economic, social and cultural fabric of Wales, as one would expect from a nation with a coastline in the north, west and south. It is three years since the Select Committee on Welsh Affairs examined the proposal for a freeport in Wales. In our report, we noted the positive response from ports around Wales in the written evidence they gave, often citing the potential role of a freeport in regeneration. However, we argued that to make a lasting contribution to the regeneration of the poorest regions and nations of the UK, including in Wales, freeports should be assessed on the economic and social gains they are forecast to bring to local communities. In our view, freeports could help to revitalise the Welsh economy only when they fit with other policies that help Welsh ports and their local communities to thrive.

We noted that many areas of port policy and supporting infrastructure are either devolved to the Welsh Government or are shared responsibilities between the Welsh and UK Governments. We urge the two Governments to work together constructively, especially if a freeport bid is successful in Wales. Crucially, in our report we urged the UK Government not to cap artificially the number of potential freeport sites in Wales, nor to create a Welsh freeport purely for optical or political purposes.

I am pleased we have got to this hopeful and expectant point to hear the outcome of the bidding process for a freeport in Wales. I congratulate the Wales Office on its role in working with the Welsh Government and Ministers across Whitehall to bring us to the point where there could be agreement. There were moments, certainly three years ago, when some of us on the Welsh Affairs Committee were concerned that we might not get to this point, and that the differences in opinion between Welsh and UK Governments would be so great that the freeport policy would not happen in Wales. I am pleased we are at this point; the role the Wales Office played in that was extremely important.

I obviously have a constituency interest. Pembrokeshire is home to the port of Milford Haven, which is one of the UK’s leading energy hubs, hosting a wide range of conventional energy companies such as the Valero oil refinery, the Dragon liquefied natural gas import terminal, South Hook LNG import terminal, the RWE gas-fired power station and the Puma fuel storage site, among others. Those are all located on the Haven waterway. The port of Milford Haven is strategically one of the most important energy hubs in the UK, and the infrastructure it hosts plays a critical role in our national life. Undoubtedly, that port has played an integral role in shaping Pembrokeshire’s local economy through the high-quality job opportunities that those energy companies have provided to local people for many generations.

Those industries are changing, and need to change. The hon. Member for Aberavon made the point that recent events have highlighted the need for our energy mix to diversify, and our demand for home-grown renewable energy has never been greater. Right now we have a unique opportunity to build on that heritage and the excellent skillset in Pembrokeshire to use vacant brownfield sites for the new and exciting energy revolution that is just in front of us.

The port of Milford Haven is in prime position to shift from being one of the UK’s leading conventional energy hubs to being one of the UK’s leading renewable energy hubs. The decarbonisation of Wales’s primary industrial cluster, which stretches from Milford Haven all the way to Port Talbot and further east across the south Wales coast, is the prize in front of us. That decarbonisation has already begun, as we have already heard this morning, and will make a significant contribution to helping the UK meet its net zero targets.

In 2019 the Conservative party stood on a manifesto to deliver at least one freeport in Wales. Fast-forward four years and the necessary steps have been taken to ensure that that ambition becomes a reality. The Welsh and the UK Governments will jointly evaluate bids and select a freeport for Wales in early spring. As we know, for politicians “early spring” can mean anything, but I hope that it means in the days and weeks ahead. We have a prime opportunity, if the Government want to take it with St David’s Day just around the corner, for a really significant announcement that would make a difference for people and communities across Wales. We therefore expect to receive confirmation of the winning bid imminently.

I want to briefly put on the record why I think the Celtic freeport bid should be the frontrunner in this race—it is a competitive process. The Celtic freeport bid is a private-public sector partnership led by Associated British Ports, Neath Port Talbot Council, Pembrokeshire County Council, and the port of Milford Haven. The bid has been backed by prominent businesses across Wales as well as numerous MPs from all parties and Members of the Senedd as well, demonstrating the evolution of a collective consensus that is necessary to drive forward the Celtic freeport vision. The bid goes far beyond party political lines, with a broad recognition of the wide-ranging benefits that the Celtic freeport will bring to Pembrokeshire, Port Talbot and the whole of south Wales. That is why I have been working so closely with the hon. Member for Aberavon to help build momentum behind that important bid.

It was encouraging to see so many MP colleagues from across different parties attend our recent drop-in event to hear more about the exciting potential of the bid. I was delighted that so many of my colleagues put pen to paper that day to confirm their backing for it. If we are awarded freeport status, more than £5 billion of new investment will be unlocked, potentially creating more than 16,000 new high-quality green jobs across the south and west Wales economy. Furthermore, securing freeport status across the key sites of Milford Haven and Port Talbot will enable them to begin their journey towards energy diversification through, as we have already heard, the emergence of the new floating offshore wind technology.

As I explained in my debate on floating offshore wind in this Chamber last October, offshore floating wind represents a major, exciting new opportunity for the UK to tackle pressing issues: jobs and skills regeneration, wholesale energy prices, energy security, levelling up and, as I have said, net zero targets. The UK Government have set ambitious targets to deliver floating offshore wind in the years ahead, and both Milford Haven and Port Talbot have already been identified by leading developers as key locations for the early development of this new industry for Wales. Hopefully Milford Haven will be a hub for operations and maintenance, with Port Talbot at the forefront of assembly and manufacture.

The potential to unlock a UK market in the construction, maintenance and operations of floating offshore wind projects could be worth more than £54 billion in the decades ahead. That is the prize in front of us. It is clear that the establishment of a freeport across the sites at Milford Haven and Port Talbot will enable this exciting renewable vision to flourish. The war in Ukraine, coupled with rising energy prices, has underlined the urgent need for the UK to become less energy dependent. The need to diversify our energy mix has never been more apparent as the dial shifts to the development of green, sustainable energy. Floating offshore wind represents the next big renewable opportunity for Wales. With the expertise and heritage in the Milford Haven waterway, and the skillset and industry in Port Talbot, these two locations at the heart of the Celtic freeport bid are ideally suited to supporting the industrial-scale deployment of floating offshore wind.

Freeport status would be hugely advantageous in that process as it would allow this new green vision to flourish, with the tax breaks, simplified customs procedures and streamlined planning processes helping to ease the transition from conventional to renewable energy. In turn, there is a potentially enormous investment to be unlocked in the supply chain, and that is the prize here. The UK has made enormous progress in the fixed-bottom offshore wind industry and has taken strides in expanding that deployment, but the one thing that did not happen in was we did not create strong domestic content for the UK. We did not capture a bigger share of the full economic value of offshore wind as we should have done. We now have the opportunity with floating offshore wind to get it right and to deploy these structures to give us clean energy in a way that creates long-term jobs and training opportunities in our communities.

[Stephen Kinnock]

The right hon. Member is making an excellent speech. Does he agree that it is vital that the Crown Estate sets up a licensing process that guarantees localised supply chains and that there should be penalty clauses in the process, so that developers will be held to account?

[Stephen Crabb]

The hon. Gentleman makes a crucial point. He is absolutely right that the Crown Estate must ensure those contracts have teeth. That will be crucial to ensuring that developers deliver on their commitments because, as he knows, it is one thing for them to speak to us politicians and tell us about all the good things they will do in our communities, but actually making sure they do them when push comes to shove is another.

The other part of the equation is ensuring that we get the contracts for difference right and ensuring that the financial architecture around floating offshore wind is the right one to enable that investment in the UK and Welsh economies. Of course, there is a potential first-mover advantage waiting for the nation that makes the biggest and earliest strides to deploy floating offshore wind at an industrial scale. The Welsh Affairs Committee was recently in the US and met with a floating offshore wind developer there who was also looking to develop in the Celtic sea. They have secured seabed leases off the coast of New York and in California. There is a global race to be the first nation to see serious industrial-scale deployment of offshore wind, and I believe it should be Wales and the UK that does that.

--- Later in debate ---

[Dr Davies]

I take that point on very much board and thank my right hon. Friend for all his efforts in that regard.

Let me take the opportunity to outline other core elements of the Government’s levelling-up agenda. Wales is front and centre of our plans to level up the whole of the UK, and areas across Wales are already benefiting from more than £1.7 billion of local growth funding. From large-scale transport improvements to regenerating town centres and refurbishing cultural assets, the levelling-up fund will deliver lasting improvements in local communities across Wales, giving people renewed pride in their local areas. Ynys Môn alone is receiving £17 million from the levelling-up fund for the cultural regeneration of Holyhead town centre. I was pleased to visit a few weeks ago and see the efforts being made to ensure that people who use the port see all that Holyhead has to offer.

In total, the Government are investing more than £208 million in 11 projects across Wales through the second round of the LUF. That is almost 10% of the total UK allocation and builds on the £120 million that the Government invested in Wales in the first round of the fund. It is far more than Wales would have received through a Barnettised formula and is testament to the dedicated work of local authorities across Wales, which developed high-quality applications. The Government are also investing more than £790 million in Wales’s four city and regional growth deals. The deals are starting to deliver real change on the ground, from the Swansea Arena to investment in the digital signalling processing centre at Bangor University.

Furthermore, £2.6 billion has been allocated to places across the UK through the UK shared prosperity fund. Of that, £585 million has been allocated to Wales, including more than £126 million for north Wales. This trailblazing new approach to investment and the empowerment of local communities to level up and build pride in place will see direct investment in three local priorities: communities and place; support for local businesses; and people and skills. The funding is now in the hands of Wales’s four regional partnerships, through which local leaders are empowered to decide how best to invest the funding to better promote local growth, help to regenerate local economies and build a better future.

[Stephen Kinnock]

We are in danger of going down an SPF rabbit hole rather than discussing freeports, but as the Minister raised the SPF, I cannot resist. May I ring an alarm bell? As we head towards March 2025, when the long tail of European funding will tail off, there is going to be a cliff edge. Organisations that are delivering what is currently a sort of hybrid of EU and SPF funding are terrified that their projects will collapse, and have not had enough lead time to plan. Can I mark the Minister’s card in respect of the ticking time bomb with regard to the SPF? If he could look at a more flexible way of conducting the comprehensive spending review that does not have the arbitrary March 2025 deadline, that would salvage the programme. If he does not do that, we are in danger of seeing some difficult decisions having to be made in the very near future.

[Dr Davies]

I thank the hon. Member for raising his concerns about the shared prosperity fund. He will know that very large sums of money are being allocated through local authorities, and I hope he is having some input into that process in his own area, as I am in mine, and articulating his concerns, to ensure that projects that he feels are in need of support and protection in that respect get the hearing that they need.

I will move on from the SPF to conclude this excellent debate by again thanking my hon. Friend the Member for Ynys Môn for securing it. She is a champion for Ynys Môn on issues from the freeport bid to nuclear and green energy and transport connectivity. I know how important it is to her to see well-paid jobs on the island and to provide good reasons for young people to stay on Anglesey. I would welcome the opportunity to have further conversations with my hon. Friend about freeports in Wales once the competitive process concludes. Of course, that invitation extends to all right hon. and hon. Members.

Support for the Welsh Economy and Funding for the Devolved Institutions

Stephen Kinnock Excerpts

Tuesday 5th July 2022 Commons Chamber

[Jonathan Edwards (Carmarthen East and Dinefwr) (Ind)]

It is a pleasure to speak in this debate on the Welsh estimates. Let me start by congratulating the right hon. Member for Preseli Pembrokeshire (Stephen Crabb) on securing this debate and on making a fine speech, which seemed to be a damning indictment of the failures of Westminster economic policy as it applies to Wales—I hope he will be sending a copy of his speech to YesCymru.

When we have discussed regional economic policy over the years, I have often equated the scale of the challenge facing the British state to that which faced the German state following reunification. That is itself a damming indictment of the state of matters in this disunited kingdom. Germany, of course, had literally been split in two, and not only in terms of political entities and economic systems; there was a physical barrier between east and west. The Prime Minister mentioned the German example when launching his levelling-up mission.

What lessons can be learned from Germany? Although it has not fully managed to close the gap between east and west, the east of Germany now outperforms most of the geographical parts of the British state outside the south-east of England. The first lesson that all political parties need to learn is that levelling up will not be a one-term or one-Government policy agenda; such is the scale of the challenge that it will take decades, and Governments of different colours will have to be committed to the agenda. Secondly, it will not come cheap and will require considerably more funds than have been allocated to date. The flagship fund, the levelling-up fund, has an allocation of £4.8 billion. The Centre for Cities estimates that the federal German Government have invested €2 trillion between 1990 and 2014, equating to £71 billion per annum. Of course, a large part of that sum represented fiscal transfers in the shape of pensions and benefits, but 21% was deliberate financial equalisation, 13% was infrastructure investment and 9% was business support. Redistribution in the context of the British state is mostly based on welfare payments, which are largely required as a result of a failed macroeconomic policy. Without serious investment, there will not be serious levelling up. Infrastructure investment should be redirected to low-productivity areas.

[Stephen Kinnock (Aberavon) (Lab)]

I am interested in the hon. Gentleman’s comparison with Germany. Does he agree that one secret of the German success is a radical devolution model, held together in a federal state—but very much together? It is interesting that he is making the case for the German model, which is based, by definition, on a federal state, not on separating. If the German Länder had separated from each other, it probably would have ended in disaster.

[Jonathan Edwards]

I will get to the point about government structures later, but there is a definitely a debate to be had about the constitutional question. In my view, the constitutional question in Wales is very much an economic one, which is why I ultimately support independence for my country.

Finally, the post-reunification German constitution is underpinned by a coherent political structure based on powerful Länder and local governments, as the hon. Gentleman said in his intervention. Levelling up cannot be delivered from Westminster alone. What English politicians want to do with regional governance in England is a matter for them, but the Welsh, Scottish and Northern Ireland Governments must be empowered with a full portfolio of fiscal powers. I was no Brexiteer, but I will say that if the British Government were genuinely interested in maximizing their new freedoms to boost levelling up, Wales should have full powers over income, corporation tax and VAT. Of course, not only are this British Government anti-European, but they are anti-devolving powers from Westminster, and that is leading to complete economic and political stasis.

Talking about ironing out Brexit teething problems will not solve the crisis either. I often consider political discourse in this place to be outside the paradigm of reality, but the truth is that Wales and the UK are in a state of limbo. The UK is facing an inflationary spiral not witnessed in my lifetime, and it is running the worst current account deficit since records began, at a staggering 8.3% of GDP. As Will Hutton wrote in The Observer over the weekend, this is the sort of deficit

“recorded by banana republics before they collapse”.

As a direct result of post-Brexit trade policy, real export volumes are down 4.4% and import volumes are up a staggering 10.4%. Within the EU single market and customs union, the UK was the leading destination for foreign direct investment, but that is no longer the case.

All that is leading to reduced investor confidence and a slump in the value of sterling, adding fuel to the inflationary fire, which hurts every one of our constituents. The Bank of America warns that sterling is facing an existential crisis. This place should be in complete panic mode, yet Westminster plods along sticking its fingers in its ears and whistling to itself in a happy bliss of ignorance. If the British Government are unwilling to provide economic levers for Wales to solve its own problem, the only sensible solution is to rejoin the safe harbour of the European Union economic frameworks. That would boost exports, help investment and, critically, return some much-needed economic confidence and strengthen sterling.

In the time left to me, I turn to capital projects associated with the city deals. Jonathan Burnes, the director of the Swansea Bay city region deal, has warned that construction costs were high as a result of inflationary pressures, which might endanger some of its proposed projects. Furthermore, there are worries that the promised private sector investment that makes up the vast majority of the Swansea deal could fall if economic conditions worsen as expected. The key plank of the British Government’s economic policy for the communities I represent is therefore at “red” risk level. It would be helpful if Ministers could outline, in winding up, what they will do to make up the expected shortfalls.

Lastly, I highlight the challenges facing the Welsh Government’s budget, as day-to-day funding for Wales remains slightly below the 2010 level. Furthermore, the rate of real-terms reduction is currently greater than the British Government’s departmental average. When Unionists speak of the dividend that Wales gets from being part of the British state, it clearly does not apply to the funding we receive as a nation.

--- Later in debate ---

[Stephen Kinnock (Aberavon) (Lab)]

It is a real pleasure to follow the hon. Member for Ceredigion (Ben Lake), and I congratulate the right hon. Member for Preseli Pembrokeshire (Stephen Crabb) on securing this important debate.

The people of Wales need answers from this Westminster Government about the cost of living crisis that they are facing right now, because the Conservative Government’s response to the crisis has been deeply disappointing. They are out of touch, out of ideas and out of excuses. They delayed bringing in the windfall tax on the energy giants; we in the Opposition had to drag that policy out of them. Meanwhile, they also refused to deliver an emergency Budget and they are the only Government in the G7 who are raising taxes during a cost of living crisis.

Hard-pressed households and businesses need support in these profoundly challenging times. Labour has a plan to tackle the cost of living crisis. We would cancel the national insurance contributions rise, which comes at the worst possible time and will do nothing to fix the Tory’s social care crisis. We would cut VAT on home energy bills. We would cut the red tape that has been created by the Prime Minister’s botched Brexit and we would implement policies to buy, make and sell more in Britain, particularly through commitments such as the £3 billion green steel fund to support our steel industry as it transitions to net zero.

For an object lesson in the difference that a Labour Government in Westminster would make, we need just to look at what the Welsh Government are delivering for Wales. Welsh Labour has delivered a £51 million household support fund, which was announced in December 2021. That package of support is targeted at people who need help the most. The Welsh Labour Government have doubled the winter fuel support payment to £200, which is already helping almost 150,000 people across Wales. Free prescriptions continue in Wales, helping households to keep more of their hard-earned money, whereas prescriptions in England currently cost £9.35 an item. The average band D council tax bill in England is £167 more than it is in Wales, totally undermining the argument made by the hon. Member for Clwyd South (Simon Baynes). Even with the UK Government’s council tax rebate, which was just announced, households in Wales still pay £17 less than in England. Wales already has the £244 million council tax reduction scheme, which helps more than 270,000 households with their council tax bills. Some 220,000 households in Wales pay no council tax at all, thanks to the Welsh Labour Government’s interventions. The Welsh Labour Government have committed to providing free school meals to all primary school pupils. An extra 196,000 primary schoolchildren will benefit from that offer.

All that has been underpinned by a Welsh labour market that is significantly stronger than the UK labour market. Welsh unemployment levels are lower than those in the UK at 3.5%.

[Stephen Crabb]

I will challenge the hon. Gentleman on his complacency about the labour market figures in Wales. Yes, in Wales, unemployment—in its narrow definition—is lower than the UK average, with 53,000 jobseekers in Wales, but more than 440,000 working-age people are economically inactive in Wales. That is the major employment and welfare challenge of our time, and the figure is worse than the UK average in a Welsh context.

[Stephen Kinnock]

Perhaps if the UK Government had a proper industrial strategy that would grow our manufacturing base, rather than having allowed it to go to the wall since 2010, we would be creating high-paid jobs and adding value to our economy and productivity. We face a productivity crisis in this country, created by successive Conservative Governments since 2010.

There has been a strong performance by the Welsh Government, who have made a commitment that

“no one would be held back or left behind…in a recovery that is built by all of us.”

We have seen the creation of the young person’s guarantee—the offer of work, education, training or business start-up help for all under-25s—and ReAct Plus, which will provide practical and bespoke employment support as unique as the person looking for work. The ReAct Plus programme will offer up to £1,500 for training, £4,500 to help with childcare costs and £300 for travel costs. Welsh Labour is also investing £8 million to continue employment services, helping people recovering from physical and mental ill-health and substance misuse to get back into work and, crucially, remain in work. Through the young person’s start-up grant, Welsh Labour will invest £5 million to support 1,200 young people to start their own business.

That is what Labour in power looks like: a Welsh Labour Government backing Welsh workers, Welsh families and Welsh businesses to thrive, protecting our people from the worst excesses and failures of this Tory Government, who are letting people down with their incompetence and indifference.

[Simon Baynes]

Notable by its absence from the hon. Gentleman’s list is the performance of the NHS in Wales. Without wanting to score cheap political points, I have to say that there is a major issue there. Waiting lists are massively higher in Wales, particularly north Wales, than in England. Perhaps the hon. Gentleman would like to comment.

[Stephen Kinnock]

Madam Deputy Speaker, I am sure that you would love to give me another 10 minutes to talk about the achievements of the Welsh NHS, but unfortunately I am not sure that I would get away with it. The fact is that there is a list of achievements. It has invested more in the recruitment of nurses, which is at record levels. The Welsh NHS vaccine roll-out programme was a tremendous success; I recognise that the roll-out has been a success across the United Kingdom, and I am absolutely delighted about that, but the Welsh NHS really stepped up and delivered. There are so many achievements that we do not have time to discuss today, so perhaps the right hon. Member for Preseli Pembrokeshire would like to secure another debate on the topic.

I feel for the people of England and Scotland, who have not had the support that we have had in Wales. The answer is clearly for them and their fellow British citizens across the UK to vote to replace this pitiful, debased and degraded UK Conservative Government with a Labour Government driven by purpose, patriotism and the national interest, rather than the self-interest and saving of their own skin that we are seeing from the current Government.

[Liz Saville Roberts]

Does the hon. Gentleman join me in welcoming the decision taken by Labour in Wales over the weekend to increase the size of the Senedd? Surely the point is that we need better scrutiny of the services carried out in Wales. Does he also join me in welcoming the major initiative, also agreed to in the vote over the weekend, to change the voting system, moving away from first past the post and towards a list system? It shows that in Wales we can bring about a different sort of politics by working together.

[Stephen Kinnock]

The reality is that the Senedd simply did not have enough Members to hold the Government to account. There were not enough Back Benchers on Committees. Scrutiny is a vital part of our democracy—the right hon. Lady is right about that point.

Wales faces a UK Government who have broken their promises to the people of Wales. It has become clear that when providing a replacement for EU farm funding, the UK Government are deducting EU receipts due to Wales for work that was part of the 2014 to 2020 rural development programme, meaning that Wales’s rural communities are £243 million worse off than they should be. That is a devastating blow to those communities.

[The Parliamentary Under-Secretary of State for Wales (David T. C. Davies)]

Does the hon. Gentleman agree that in the last year for which agricultural funding was calculated, £337 million was spent on agriculture—in 2019 before Brexit— and that in each year afterwards £337 million is being spent? If my figures are correct, Wales has not lost out by one penny as a result of leaving the European Union.

[Stephen Kinnock]

I thank the Minister for intervening, but these figures are from the House of Commons Library briefing, they have been checked and triple-checked, and the reality is that Wales’s rural communities are £243 million worse off than they should be. If the Minister wishes to contest that claim he is welcome to do so, but those are the facts of the matter.

The Government are also undertaking a game of smoke and mirrors around the pot of money being offered to Wales through the UK shared prosperity fund, which, of course, is replacing EU funding. What is absolutely clear is that over the coming decade and beyond—not just the next three years, which is the commitment that the Government have made, but the next three decades—the funding that Wales receives must match the amount that the EU would have given to Wales. Ahead of us now is a cliff edge. We need guarantees that when the £1.5 billion-a-year UK-wide commitment falls away, the £1.5 billion will continue, and I hope that the Secretary of State will confirm that from the Dispatch Box today. This is an issue of long-term planning that supersedes party politics and manifestos. It is about the key stakeholders who are on the coalface of delivering these shared prosperity fund projects. They need much more long-term planning capability than this three-year cliff edge is allowing them.

It is also essential that the Welsh Government are given a real and meaningful say in how these funds are administered. Devolution must be respected, and it is deeply disappointing that the UK Government are seeking to ride roughshod over fundamental constitutional principles, as manifested in the UK shared prosperity fund and the way in which it works.

It is time that the Conservative Government started to take levelling up seriously. Tory inflation and under-investment risk levelling down communities like mine in Aberavon. The decision not to support the Swansea Bay tidal lagoon, as well as the failure to implement the green steel deal that Labour is proposing, has shown a disregard for parts of our country that are desperately in need of investment and development. This must start with a fairer package of funding for Wales, less smoke and mirrors around budgets, and an emergency budget to meet the Tory cost of living crisis.

Let me end by saying that I agreed wholeheartedly with the right hon. Member for Preseli Pembrokeshire when he said he objected to the “older, sicker, poorer” narrative. We are a proud people: a proud, dynamic, entrepreneurial, innovative people. We are not victims and we are not looking for charity, but we need a level playing field, and that level playing field can only be delivered by a UK Government in Westminster—a Labour UK Government, delivering in partnership with the Welsh Labour Government for the people of Wales.

[Several hon. Members rose—]

Welsh Affairs

Stephen Kinnock Excerpts

Thursday 3rd March 2022 Commons Chamber

[Wayne David]

I thank my hon. Friend for his kind words. On the community renewal fund, he is right that there was tremendous concern in the Caerphilly borough and in his constituency in the Bridgend area that those valley areas were, for some mystical reason, excluded from the Government’s list of 100 prioritised areas. Thankfully, as far as Wales was concerned, that prioritisation list was pushed to one side and all local authorities bar one received support from the community renewal fund.

[Stephen Kinnock (Aberavon) (Lab)]

My hon. Friend is being very generous in giving way. I echo the words of my hon. Friend the Member for Ogmore (Chris Elmore) on the huge contribution that he has made to this place and to Welsh politics more broadly.

The mess that my hon. Friend is talking about—the community renewal fund, the lack of information and the governance issues mentioned by my hon. Friend the Member for Ogmore—is symptomatic of a strategy to cut the Welsh Government out of the shared prosperity fund, and that is symptomatic of a broader strategy to completely dismantle devolution in our country. Does my hon. Friend the Member for Caerphilly (Wayne David) agree that it simply does not make sense to cut the Welsh Government out, because we need that strategic overview of what is happening with economic development in Wales? Unfortunately, this is due to a politically motivated aim to dismantle devolution, and the UK Government are using the shared prosperity fund as a vehicle for those purposes.

[Wayne David]

I absolutely agree. My hon. Friend has made, and is making, a huge contribution to this debate through his able chairpersonship of the all-party parliamentary group on the shared prosperity fund.

Support for People and Businesses in Wales: Covid-19

Stephen Kinnock Excerpts

Wednesday 21st October 2020 Westminster Hall

[Fay Jones (Brecon and Radnorshire) (Con)]

It is a pleasure to see you in the Chair, Sir Edward. I congratulate the hon. Member for Islwyn (Chris Evans) on securing this important debate. The last time he and I were in Westminster Hall, he reminded me of a day we spent in Blackwood, walking to raise funds for Velindre Cancer Care, which at that time was treating the late Steffan Lewis, a great man and a Plaid Cymru Member of the Senedd. We have sadly lost Steffan now, but every time I see the hon. Gentleman, I am reminded of that uplifting day and the collegiate, cross-party support that came with it, which I hope will seep into this debate.

Coronavirus has devastated businesses across Wales. I am incredibly proud and thankful for the level of support that both Governments have made available. Schemes such as the coronavirus business interruption loan scheme and the bounce back loan have directly supported businesses of all sizes right across Wales. Some 11,000 jobs in Brecon and Radnorshire have been protected through the UK Government’s furlough scheme. These schemes have been a lifeline to businesses that have lost the ability to trade for the better half of a year, with no clear end in sight.

Every sector in Brecon and Radnorshire has lost out, but I want to speak in particular for the tourism and hospitality sector. Many of the most beautiful parts of Wales can be found in my constituency. In a normal year, they would draw hundreds of thousands of tourists from all corners of the United Kingdom and, indeed, from around the world. For example, the small, independent book shops in Hay-on-Wye attract thousands of visitors each year, with the Hay festival being one of the world’s foremost literary events—yet another example of a loss to our community during this pandemic.

Following the easing of restrictions in Powys, pubs, restaurants and hotels were slowly coming back to life. Supported by the unique eat out to help out scheme, demand picked up in August. Many restaurant and café owners have told me how much they valued this scheme, which resulted in more than 77,000 meals being enjoyed in the constituency. The argument that it contributed to increasing rates of the virus in September is simply not borne out in Brecon and Radnorshire, where coronavirus rates have stayed mercifully low.

The First Minister’s decision on Monday to put the entire country into lockdown once again is, to use the words of the hon. Member for Islwyn, a hammer blow for those businesses that were just starting to recover. The decision penalises everyone across Wales, irrespective of the number of virus cases in a certain area. To make the problem worse, businesses have no foresight as to what comes next. The businesses in my constituency, which have relied on customers being able to travel up from the south Wales valleys, have no idea whether those people might be allowed back after the lockdown is lifted.

Like the hon. Gentleman, since Monday I have been flooded with emails from businesses and workers who are now deeply uncertain about their future. I was saddened to read on Facebook this morning that Aroma, a café in Llandrindod Wells, has announced that it cannot survive lockdown 2 and will be closing its doors permanently.

[Stephen Kinnock (Aberavon) (Lab)]

The hon. Lady is making an excellent speech. Is there not more certainty around the idea of a firebreak, or a circuit breaker, because it is time-limited, with a specific deadline of 9 November, whereas a very open-ended tier-based system leaves people in a vacuum for an indefinite period of time? Surely the Welsh approach provides far more certainty than the UK Government’s approach.

[Fay Jones]

The hon. Gentleman makes a good point, but we do not know what will happen after 9 November, as I will address in my speech.

It is clear to me that businesses do not want to be kept on life support through Government grants and loans. They want to be open and busy, serving customers and playing an important role in our communities. Throughout coronavirus, the tourism and hospitality sectors in Brecon and Radnorshire have reacted admirably and have done everything they can to stay open, while ensuring that their customers are safe.

I was pleased to visit Cantref activity centre in Brecon in the summer, which has worked incredibly hard to implement social-distancing measures and limit capacity, as have Dan yr Ogof caves, a 60-year-old underground caving attraction in Abercrave. They have all now been told by the Welsh Government that that work was for nothing and that they are to lose their half-term revenue—the only glimmer of hope in an otherwise dreadful year.

The lockdown is being imposed, and we will all have to comply, businesses included. I welcome that the Welsh Government have made £300 million available, but I hope that that can be targeted at businesses in the tourism and hospitality sectors, which are now facing their third winter of 2020. I will play my part by urging the Chancellor and the Treasury to maintain the 5% VAT rate, but I urge the Welsh Government to commit to scrapping business rates for tourism and hospitality businesses for another year. Above all, in answer to the point made by the hon. Member for Aberavon (Stephen Kinnock), the Welsh Government need to explain what happens next. It is vital that we avoid an endless cycle of rolling lockdowns, as trailed by the hon. Member for Leeds West (Rachel Reeves) on Sunday morning.

Before I conclude, I want to highlight the plight of the events sector, which is another important employer in my constituency. The Royal Welsh show is the largest agricultural show in Europe. Each year, it welcomes a quarter of a million visitors to Llanelwedd, just outside Builth Wells. It creates £45 million for the UK economy and, more than that, it is a rich seam in our cultural fabric. For many, it is the highlight of the year—an annual holiday and a chance to catch up with friends right across the agricultural sector. Just before the Royal Welsh show was cancelled for 2020, the Department for Digital, Culture, Media and Sport provided the Welsh Government with £59 million to support cultural activities in Wales hit by the pandemic. I find it curious that only £53 million of that money has been made available so far. The Royal Welsh show is one of the biggest cultural events in Wales. It is on a par with the Urdd eisteddfod, which received £3.1 million in support from the Welsh Government. The Royal Welsh show has received next to nothing in comparison. I implore the Welsh Government to consider the rural economy and find some extra funding for the show, which faces an uncertain future.

Support for businesses comes in many forms, not just lifeline funding. Businesses need to know what comes next. We in Wales know that half-term, Halloween and bonfire night are all cancelled. Valuable chances to recover are gone. Where do we go from here? How do we fight the virus on an economic and a public health front after 9 November? The Welsh Government need to come forward with a plan urgently.

--- Later in debate ---

[Stephen Kinnock (Aberavon) (Lab)]

It is a pleasure to serve under your chairmanship, Sir Edward. I congratulate my hon. Friend the Member for Islwyn (Chris Evans) on securing this vital debate.

To start, I pay tribute to all those across my constituency and, indeed, across Wales and the UK for doing their bit to fight this pandemic. Community groups in Aberavon sprang into action to help residents across our community, to help with food shopping, prescription pick-ups and so many other forms of support, and often just with acts of human kindness. Demand on our food banks has increased dramatically. I thank the Port Talbot, Briton Ferry, Cwmafan and the Skewen Salvation Army food banks, as well as Age Cymru West Glamorgan for ensuring that those most in need in our community do not go without.

Our key workers have, of course, played an absolutely pivotal role. Our health and social care workers have been right on the frontline of this fight, working so hard in the toughest of conditions. However, so have many of our other unsung heroes, such as our transport workers, waste disposal men and women, food producers, steelworkers and many more who have kept our economy going even during the national lockdown.

Manufacturers have also played a critical role. I visited local Aberavon firms which have shown incredible innovation, flexibility and adaptability in producing essential frontline equipment: BOC kept our Welsh NHS stocked with oxygen; Ministry of Furniture, also in my constituency, flipped on a sixpence to start producing shields and screens for frontline workers; and a company called RotaTherm, which turned its hand to PPE, also moved from its core business to a very different type of activity almost in the blink of an eye. It has been truly inspirational to witness such a community effort.

I have also been profoundly impressed by the response of my local authority, Neath Port Talbot, and of course by the Welsh Government, as many of my hon. Friends have pointed out. Our First Minister has led by example. He has followed the science and provided adequate support for businesses and individuals, where it is the Welsh Government’s responsibility and capability to do so. The £300 million of financial support to firms and workers, to help them through the upcoming firebreak lockdown, is a case in point. That is leadership, and it is truly welcome and much needed.

Contrast that—as a number of my hon. Friends have already observed—with the events in Greater Manchester, where the UK Conservative Government are certainly failing to deliver on their levelling-up rhetoric. One specific issue that my constituents regularly raise is the need for more support from the Chancellor for the self-employed. Creative industry workers have told me that their work has dropped off a cliff, and because of the nature of their employment—short-term pay-as-you-earn contracts, freelance work and so on—many of them fall outside the income support schemes.

We also need far more support for our steelworkers. The Port Talbot steelworks is the biggest employer in my constituency by far, but Tata Steel has fallen through the cracks in the UK Government’s schemes and has yet to receive any emergency funding or loans. It took the French and German Governments just weeks to provide their major steel producers with the finance to cover their short-term cash flow issues—issues that are, of course, due to the impact of the pandemic—yet there still has not been a penny for the British steel industry from the UK Government. They continue to sit on their hands.

Steelworkers are key workers. The steel industry continues to operate and serve our country through the current crisis, and will be critical to rebuilding our economy after it. It is the backbone of modern manufacturing, and it should be noted that every other sizeable economic power in the world has a significant steel industry. It is also far greener to make steel in the UK than it is to import it, and lots of incredible work is taking place in this sector, including the SPECIFIC project at the Innovation and Knowledge Centre on Swansea Bay campus, in partnership with Tata Steel. That project is making steel-based materials that form the basis for photovoltaic cells, potentially turning every building in our country into a power station.

Steel is very much a 21st-century industry, and it is the backbone of our economy and our manufacturing sector. We need our steel industry, yet because of the extraordinary nature of the situation we find ourselves in, that industry can only get through this crisis with Government support. Of course, part of the reason why the steelworks needs this short-term support is that over the past 10 years, the Government have consistently failed to back the UK steel industry with the long-term support it requires. The UK Government have not offered a sector deal similar to those that are in place with industries such as aerospace and construction, and have not done enough to create the policy framework around energy prices, procurement, and dealing with the dumping of steel by countries such as China that is needed to form the foundation for a strong and healthy steel industry. The message to the UK Government is clear: we need our steel. There can be no post-pandemic economic recovery without a strong and healthy steel industry, and the Government should be backing this industry to the hilt.

It is not just the steel industry that the UK Government have failed to back in the long term. The impact of 10 years of austerity on public services in Wales, including a reduction in the Welsh Government’s grant, has affected the ability of local services to meet the challenge that this pandemic poses. Neath Port Talbot Council has had to remove £90 million from its budget since 2010, and is expected to find another £50 million reduction by 2025. Now coronavirus has hit, meaning that like other councils across the UK, both the extra spend and the loss of revenue for Neath Port Talbot Council will run into the millions. This really is going to be a test for public services whose resilience has been undermined over the past decade.

Local councillors need the Chancellor to heed the words of the Secretary of State for Housing, Communities and Local Government, who promised in May that the Government

“stands with local councils at this difficult time”

and that they would do “whatever is necessary”. So far, there is scant evidence of the UK Government making good on that pledge, but they need to, because “whatever is necessary” needs to mean what it says.

Take also the long-term issue of strategic independence. I recently visited one local company, which has turned its hand to manufacturing PPE for the Welsh NHS in a truly flexible and inspirational way, but what came home to me during that visit was that at that point, there were no Welsh companies making PPE for the Welsh NHS. That is because the whole supply chain had been moved offshore to countries such as China.

Every single one of the firm’s employees who I spoke to expressed their profound concerns about the way in which our sovereign capability had been eroded, to the point where we are left dangerously exposed and over-reliant on other countries. Frequently, those countries are not allies of ours or our national interest and security. The UK Government must understand that when we talk about supporting UK businesses through covid-19, we also need to have an eye to the future, and the reliance and resilience that UK manufacturers would bring to the economy. We cannot go on in a situation where so much of our critical infrastructure is exposed to forces that we cannot control.

Finally, Sir Edward, I want to touch on skilling and reskilling. After the pandemic we are going to need significant investment in vocational training for my constituents and for people across the country, to help them get back into the job market, because, I am afraid, there will be a huge shift of people losing their jobs. We are going to need to retrain those people and bring them back into the labour market.

Skilling and reskilling programmes have frequently been funded through European structural funds in Wales and other economically challenged parts of the United Kingdom. That money will disappear in January, when the transition period ends, leaving a huge black hole. The UK Government have promised that a UK shared prosperity fund will replace EU development funding, but we still know next to nothing about the SPF. How much money will be in the envelope? What development programmes will it cover? What will be the focus of those programmes? Who will be in charge of administering the scheme? There is a tremendous risk that the UK Government will undertake both a money grab and a power grab from the devolved nations with regard to how that development funding is spent. We have even recently heard suggestions that the UK Government plan to funnel money directly into marginal or Conservative-held seats in what can only be described as the worst sort of pork barrel politics.

It is frankly unacceptable that we are just two months away from the day on which the shared prosperity fund is supposed to be launched, yet we have no idea about its overall size, focus or governance. That is yet another example of the UK Conservative Government treating the regions and local areas of our United Kingdom with contempt. As chair of the all-party parliamentary group on post-Brexit funding for regions, nations and local areas, I will be working closely with colleagues to hold the Government to account and to ensure that they deliver on their promises.

With those words I close, and simply add that we have seen some inspiring examples in all our local communities. In this time of crisis, we all need to pull together in the interests of those communities, our constituents and our entire country. That will require leadership, investment and a new way of working across our United Kingdom. I look forward to the Minister’s comments on all those issues.

Welsh Affairs

Stephen Kinnock Excerpts

Thursday 27th February 2020 Commons Chamber

[Stephen Kinnock (Aberavon) (Lab)]

It is such a pleasure to follow my hon. Friend the Member for Pontypridd (Alex Davies-Jones). She has made a real impact since coming to Parliament some months ago, and she is also in the process of organising the Welsh parliamentary Labour party social. That is an excellent role and a task for which she is perfectly qualified, and I am glad she has taken it on.

I want to look forward to this year, because I think 2020 promises to be truly memorable. That is not because it will be the first year of this Tory Government—far from it—but because having waited 58 years to reach a major tournament in 2016, the Welsh football team, just like a London bus, is now back at the Euros. Let us cast our minds back to 2016—what a summer that was! Great memories. Who can forget Gareth Bale’s free kicks against Slovakia and particularly England, or Hal Robson-Kanu’s Cruyff turn in the comeback win over Belgium, en route to the semi-finals? Euro 2020 may be even more extraordinary and unforgettable—I certainly hope so.

The summer of 2016 typified what it means to be Welsh: a proud nation, punching above its weight, with everybody coming together. Indeed, that was summed up by the team’s motto, “Together Stronger”, and over past few weeks, as Wales has been buffeted by truly terrible weather—first Storm Ciara, and then Storm Dennis—“Together Stronger” has felt appropriate. More than a month’s worth of rain fell in just 48 hours, and despite being left to fend for ourselves as usual by the part-time Prime Minister and the Tory Government, communities across Wales stepped up to the plate. I pay tribute to them, and to our wonderful emergency services and brilliant council workforces who have worked tirelessly in these challenging circumstances.

We have always been tough and resilient in Wales, but we are experiencing more and more extreme weather, and such events bring into sharper focus the need to do more to address the climate and environmental crisis that we face. Out of every crisis should come an opportunity—an opportunity for Britain to lead the world in renewable energies. The Swansea bay tidal lagoon would have provided heat to thousands of homes, using clean, green, reliable and sustainable energy, and saving almost 0.25 million tonnes of carbon during each year of its operation. If the Government are serious about tackling climate change, they should reconsider that opportunity and back that game changer for the industry. What an opportunity to “level up” the country, as the Prime Minister likes to put it, by putting the Swansea bay area at the forefront of that clean, green, energy technology.

In reality, while the Tory Government talk a good game on caring about Wales, they are not willing to put their money where their mouth is. Just look at rail electrification to Swansea. In 2016, the then Secretary of State for Wales gave me a categorical commitment on national TV to electrify the line to Swansea. It was even a Tory manifesto commitment in 2017, but it has fallen foul of one of those famous, or perhaps I should say infamous, Tory U-turns. The entire budget for electrifying the main line to Swansea would be less than 1% of the vast sums that will be spent on High Speed 2. Will the Secretary of State do what his predecessors have failed to do, and stand up for Wales by committing to electrify the main line to Swansea?

This is not just about rail infrastructure. For decades, wealth, power, opportunity and talent have been agglomerating in our major cities at the expense of industrial, rural and coastal areas. To truly rebalance our economy, or level up as the Government like to say, we need the Government to back a modern manufacturing renaissance, starting in places like Aberavon. Part of the package must be a sector deal for steel. Steel is a 21st-century industry and is integral to our everyday lives—to transport, to infrastructure and to our defence industry. It underpins our entire manufacturing base. HS2 will use 2 million tonnes of steel and is a real opportunity for the Government to back British steel through a patriotic approach to procurement. The Government need to strike a sector deal for steel if they are going to foster growth. Automotive, aerospace and construction all have sector deals. Why does the steel industry not have one? Action on energy prices is essential. UK steelmakers are paying prices that are double those of our German competitors and 50% higher than in France. UK steelmakers are fighting with one hand tied behind their back.

Industrial towns need clarity on replacing EU funding. The UK shared prosperity fund—I am proud to chair the all-party group—is set to replace EU funding, but it has taken on near mythical status. What has happened to the promised consultation? Everything about the fund is still to be worked out and the clock is ticking down every day towards 1 January 2021. What is certain is that the Government must not use the fund to row back on the devolution settlement or to short-change communities like Port Talbot by a sleight of hand in Westminster. The Government must guarantee not a penny less and not a power lost. It is the duty of the Secretary of State to be a strong voice for Wales on this issue.

The Welsh Government must also give Wales a voice in the EU trade negotiations. The First Minister today made clear that the Government’s negotiating position would almost certainly result in a loss of jobs in Wales and a diminishment of livelihoods. He made it clear that there has been no consultation on the UK’s negotiating mandate and that we are not represented in the talks.

Labour is a proud party of devolution, but devolution only works if the UK Government respect the devolution principle. The Welsh Government have suffered a decade of diminishing budgets. Even with the previous Chancellor’s extra £600 million for Wales, the Welsh Government’s budget for 2021 will be £300 million lower in real terms than it was in 2010-11. As a result, my council, Neath Port Talbot Council, has had to remove more than £80 million from its budget since 2010 and is expected to find a further £42 million in cuts between now and 2023. Despite the sterling efforts of the Welsh Government and Welsh councils to shield our communities from the worst of the cuts, my constituents have suffered due to the Conservatives’ dismissive attitude towards Wales. They are quick to devolve blame, slow to devolve resources. The first step must be to junk the Barnett formula and replace it with a fair funding formula for Wales.

This year marks 35 years since the end of the miners’ strike, which will be marked in mining communities across Wales and in coalfield communities across the UK. During the strike, we saw the true meaning of community spirit. That has not left us and it never will. As the grandson of a coalminer, I know that that never-say-die attitude and commitment to local community has been passed down through the generations. It is with that spirit that I will continue to fight for Aberavon in Westminster. My Aberavon constituents deserve better than what is being offered by the current UK Government. They need a Government who deliver on their promises to Wales and recognise the potential of our fantastic, vibrant and talented communities. We in Wales know that together we are stronger. It is high time that the Government realised that, too. Diolch, and happy St David’s Day.

--- Later in debate ---

[The Parliamentary Under-Secretary of State for Wales (David T. C. Davies)]

I thank all Members for their contribution to the debate. I will do my utmost to try to address as many of those contributions as possible.

I thank my friend and constituency neighbour the hon. Member for Torfaen (Nick Thomas-Symonds) for his comments. We may disagree on rather a lot, but on the issue of revolving doors in the Wales Office I stand with him 100%. Perhaps at another time we will discuss some of the other issues.

A third member of the Wales Office team has just been appointed: my hon. Friend the Member for Wrexham (Sarah Atherton). She has in common with the other two members of the team the fact that she, too, has worn the uniform of the British Army, although I believe for rather longer than either I or the Secretary of State did, and in a full-time capacity. I thank her for her help.

As Minister, I look forward to working closely not only with the Secretary of State but with all Members of Parliament from all parties and, of course, Members of the Welsh Assembly from all parties.

The hon. Member for Swansea East (Carolyn Harris) made a powerful contribution, as she always does, and channelled her inner Bonnie Tyler. She made a very good point: she achieved a change in the law, not just in Wales but in the rest of the United Kingdom as well, because people were willing to listen to what she had to say, and she was willing to work with members of other parties. That is something we must continue to do.

I thank my right hon. Friend the Member for Preseli Pembrokeshire (Stephen Crabb), who will take over as Chair of the Welsh Affairs Committee, for his comments. I am sure that he will do an outstanding job and continue the tradition of ensuring that members of that Committee are willing to travel the length and breadth of Wales to find out anything that may be of importance to that Committee’s inquiries.

Let me turn to the flooding that has devastated Wales. We heard about the issues from my hon. Friend the Member for Montgomeryshire (Craig Williams) and the hon. Members for Caerphilly (Wayne David), for Pontypridd (Alex Davies-Jones), for Aberavon (Stephen Kinnock), for Cynon Valley (Beth Winter) and for Newport East (Jessica Morden). I echo the thanks that all Members gave to the emergency services—to the police, the fire service and the rescue services, including the Royal National Lifeboat Institution, the Severn Area Rescue Association and others.

Various Members also mentioned perhaps forgotten heroes. Like a few other speakers, I pay tribute to local authority workers. I was privileged to be able to thank those who helped out recently in Monmouthshire at a depot, where they had worked 24 hours a day to fill thousands upon thousands of sandbags and get them out. I have to say that when I got a complaint from one constituent that somebody’s bin had not been put back in the right place in the garden, I had to restrain myself from sending a rather strong message, given what workers in Monmouthshire and across Wales had been responsible for.

I also pay tribute to other forgotten heroes: the workers of Dŵr Cymru—Welsh Water. The water treatment centre in Monmouth was inundated over that terrible weekend. As soon as it was safe to do so, Welsh Water went in there and took out all the pumps, dried them out, replaced them, and put in more electrical fittings. Again, they were working 24 hours a day, although in 12-hour shifts. At the same time, Monmouth and its surrounding areas faced running out of water within 12 hours, so 40 tankers were sent in to make sure that water was still pumped into homes—ironically, it came from England—and there was bottled water ready. The chief executive of Welsh Water, Peter Perry, did an absolutely outstanding job. He was on the phone to me, my right hon. Friend the Secretary of State and others at all hours of the day and night. He made himself available, and I absolutely pay absolute tribute to him and to Welsh Water—

[Stephen Kinnock]

That is the co-operative model.

[David T. C. Davies]

Sorry?