– in the Senedd on 17 May 2017.
The next Plaid Cymru debate is on economic development in the south Wales Valleys, and I call on Steffan Lewis to move the motion—Steffan.
Motion NDM6310 Rhun ap Iorwerth
To propose that the National Assembly for Wales:
1. Notes that Gross Value-Added per head in the central valleys and Gwent valleys NUTS2 areas is consistently below the Welsh average.
2. Notes that unemployment in most south Wales valleys local authorities is above the Welsh average.
3. Notes that insecure work, low wages and poverty are significant problems in the south Wales valleys.
4. Notes a record of under-investment in the south Wales valleys by the Welsh and UK Governments.
5. Calls on the Welsh Government to:
a) create a suitably empowered and accountable Valleys Development Agency;
b) bring forward a positive decision on the Circuit of Wales project, subject to normal due diligence; and
c) give greater priority to investment in jobs and infrastructure in the valleys.
Diolch, Dirprwy Lywydd. I am pleased to move the motion in the name of Rhun ap Iorwerth.
The former south Wales coalfields, the Valleys, have been in a state of economic crisis probably since at least the general strike of 1926. And since then, there have been a number of initiatives over the decades, often in response to social unrest, each one failing to achieve the objective of a just prosperity for the Valleys communities, based on diversification from the old industries to new ones. Indeed, we can go back to the Special Areas Act 1934 where all of south Wales was designated a special economic area, right through to the age of European structural funds that is about to come to an end.
Plaid Cymru’s motion today firstly notes the current economic state of play in the Valleys region, and proposes steps to re-industrialise, rejuvenate and restore the communities of that region. In point (c) in our motion, we draw attention to the importance of prioritising investment. This is a very important theme, because we can see at a state and sub-state level around the world the impact of a geographically unbalanced economy flowing and stemming from unequal investment. We see it here in the UK in relation to London and the south-east of England compared to all other areas, and even in smaller countries, too, like our neighbours in Ireland, who are intervening fiscally and economically now to spread opportunity and investment outside the capital region in Dublin and around the city.
My own view in this field is that we need a new economic and fiscal fairness Bill, and that such Bills should be introduced at both the national and state level, and that that can provide us now with an opportunity to implement a new bespoke regional aid policy for Wales in the context of our leaving the European Union.
Point (b) in our motion calls for a positive Government decision on the Circuit of Wales project, subject to normal due diligence, of course. This is a decision we were told would be made within four to six weeks back in February this year and my friend the Member for Carmarthen East and Dinefwr has articulated earlier in today’s proceedings the sad sequence of events relating to that issue. I just want to add to that that as someone, like others in the Chamber, who’s spent almost all my life in the Valleys communities, it is disappointing and sad that we still see the process of raising local expectations, only to leave them unfulfilled, and that this is in great part the reason why so many people, particularly in the Valleys but not exclusively in the Valleys, are so cynical about politics and politicians and have little hope for the future, and that they feel powerless and disengaged. [Interruption.]
Will you take an intervention?
If you want to toss a coin to decide who. I’ll give way to the Member for—.
Okay; Lee will go second. In regard to investment in infrastructure, would you agree that the Welsh Government initiatives in terms of infrastructural investment around the metro will make a considerable impact? And also in regard to the austerity programme, in regard to the huge impact that that has had on Valley communities, that this is a lever that we really, really need to be working hard to petition the UK Government around?
I think, the Member for Islwyn, I would agree that the austerity agenda has been self-defeating, that it is wrong and that the poorer communities of the UK, including the Valleys communities, have suffered more than any others as a result of it. Of course, the infrastructure project around the metro is something that we fully support. Where I have an issue with Welsh Government and others is, in terms of the transport infrastructure, it absolutely makes perfect sense that we plan that on a south-east capital region basis—in fact, I was big supporter of SEWTA, which was abolished under the previous Government, because that was a regional transport co-ordinating body that I think worked effectively—but, in terms of economic planning, I am yet to have the reassurance from the current Cabinet Secretary for the economy that we are going to have a proper place-based approach to economic development in order to maximise the potential of the metro system. I’m very much looking forward to seeing a pioneering economic development plan and industrial strategy, published before the summer, from the Welsh Government that is going to designate every part of this country a specific economic stake in the future success of this country, because that is the only way we are going to have a just prosperity for all.
Of course, the challenges of the Valleys, economically, are deep-rooted, long-standing and they require more than just one intervention to reverse that trend. That’s why we’re calling for the establishment of a Valleys development agency, suitably equipped and properly accountable. We have recently been taking evidence in the External Affairs and Additional Legislation Committee—some Members are here this afternoon—on future regional policy in Wales following our withdrawal from the EU. I would advise all Members to look at the evidence that we’ve amassed. We’ve had a great deal of useful insight and evidence, not just on what has worked in terms of regional policy in Wales in the past and maybe what hasn’t worked so well, but we’ve also exposed some interesting and exciting possibilities for the future. Among the pieces of evidence that we received was a report by the OECD. They described the shift that needs to occur and has occurred in many countries in terms of regional policy, and there’s one passage that I’d like to quote. They say that, in the past, regional policies tended to focus on addressing disparities between regions through the provision of subsidies to compensate them for lower incomes. Policies were designed by central governments through departments of state that delivered narrowly defined economic development programs. This approach was seen as increasingly ineffective and not sustainable from a fiscal point of view. The new approach to regional policies emphasise a focus on competitiveness and working with regions to unlock growth potential. This approach has significant implications for how government works. Governments need to work in a more integrated way at a regional and local level.’
I.e. not doing things to people and not looking at regions specifically in terms of their competitive disadvantage, but unlocking the potential that already exists within regions and empowering those regions to get on and fulfil their potential. So, this amounts a place-based approach that I mentioned in my response to the Member for Islwyn earlier, effectively saying that the days of governments doing things to areas are over and that public policy must be used to empower regions to do things for themselves.
In studies carried out by the OECD among others, place-based approaches to regional policies are shown to be effective in improving regional performance in those regions where there is a tangible regional identity. The Valleys is a tangible region. We are linked culturally, socially, historically. The Valleys entity is among the strongest in this country, so there is an outstanding opportunity to draw on that shared cultural, historic and social basis to unlock the potential. So, there’s a basis for prosperity, let Government now give that region the means to realise that prosperity. Diolch yn fawr.
Thank you very much. I have selected the two amendments to the motion. If amendment 1 is agreed, amendment 2 will be deselected. So, I call on the Cabinet Secretary for Economy and Infrastructure to formally move amendment 1 tabled in the name of Jane Hutt.
Amendment 1—Jane Hutt
Delete all and replace with:
1. Recognises the impact of the UK Government’s ongoing programme of austerity on communities in the south Wales valleys and the rest of Wales, and calls on the next Westminster government to invest in more balanced economic growth across the UK.
2. Supports the aim of the Welsh Government to make Wales a fair work nation where everyone can access better jobs closer to home.
3. Notes the work of the Welsh Government in:
a) supporting nearly 150,000 jobs in the last Assembly term, many of which were in valley communities;
b) preparing a new approach to economic development to stimulate stronger regional growth;
c) planning major infrastructure investments in the valleys and across Wales in a way which supports more resilient regional economies and strengthens local supply chains;
d) setting up a Ministerial Taskforce for the South Wales Valleys working with local communities to attract new jobs, raise skills and improve local services;
e) developing a Better Jobs Closer to Home programme using procurement levers to stimulate the creation of meaningful employment in areas of economic need, such as the valleys; and
f) establishing a Fair Work Commission to help build an economy where more people in valley communities and across Wales can access good work and a secure income.
Formally.
Formally, thank you. I call on Russell George to move amendment 2, tabled in the name of Paul Davies.
Thank you, Deputy Presiding Officer. I move the amendment in the name of Paul Davies. I have to say, in principle, I and the Welsh Conservative group can support the Plaid Cymru motion today, which seeks to boost the investment in jobs and infrastructure in the Valleys after historic underinvestment, I think, from the Government here. Nobody could argue, I don’t think, either, with the assertion from Plaid Cymru that the economic performance of the Valleys has been consistently below the Welsh and UK average. The motion, of course, does fail to recognise the significant investment and supply-chain opportunities created by the UK Government through the Cardiff and Swansea city regions. Interestingly, despite significant funding from the EU, the west Wales and the Valleys region has seen very little in terms of tangible improvements to economic prosperity. Perhaps that’s why the Valleys voted to leave in such big numbers—people living in the Valleys felt that the EU and the Welsh Government had not delivered as promised.
The president of the South and Mid Wales Chambers of Commerce has said that the Swansea and Cardiff city deals have the potential to transform the economy of south Wales and I agree with that. So, I do—
Will the Member give way?
Yes, I will.
Would he acknowledge that the city deals rather than the city regions, which I think he mentioned, which, of course, the Welsh Government set up, are simply displacing cuts in public spending through austerity, and the failure of the UK Government to acknowledge the case for fair funding? So, when put in the whole context, this bit of funding that has been passed down through the city deals is much smaller than the amount of money that’s been sucked out of Wales by the Government.
Well, I was just making the point that the area has had significant investment from the EU, but there’s no tangible difference. That’s in the power of Welsh Government—in their hands—as to how that money is spent, and the Welsh Government hasn’t made any tangible improvements with that.
So, from my point of view, I do, of course, welcome the UK Government’s support for the region through the city deal, which aims to raise the area to 90 per cent of UK productivity levels. The Cardiff capital region city deal is also a major £1.2 billion investment, which, we are told, will deliver an extra 25,000 new jobs and lever in an extra £4 billion of private sector investment. So, such developments of the Cardiff city region, will, I think, improve the opportunities of the south Wales Valleys. So, I do find the Government’s amendment highly hypocritical on a number of levels. It calls for the Westminster Government to invest in Valleys communities while ignoring the levers that the Welsh Government has at its own disposal to stimulate economic developments in the region.
We’re yet to see, of course, an economic strategy over a year after it was first promised, and that’s in contrast to the UK Government, which has set out its ambitious industrial strategy, which focuses on regional economies that will provide stability and direction to British industry. Furthermore, not only does the Government’s amendment ignore the substantial investment proposed by the UK Government on large-scale infrastructure projects, including increases to the Welsh Government’s capital budget, but it also calls for the use of procurement levers to stimulate the creation of meaningful employment in areas of economic need such as the Valleys.
There was, of course, a review of Welsh public procurement in 2012, and procurement has not substantially changed in Wales on capital improvement. The Welsh Government awarded just 44 contracts worth more than £0.5 million in 2016, and only 36 per cent went to Wales-based businesses. So, I think that’s further hypocrisy of the Government here and it shows that they’ve failed to present a coherent plan on how it will improve the economy of the Valleys. So, I would urge Members to support our amendment, which aims to recognise, in fairness, the UK Government’s commitment to improving living standards, economic growth and a more prosperous south Wales Valleys. This is something that will only happen—and you would expect me to say this, of course—if we elect Theresa May and a strong Conservative Government on 8 June.
I welcome this debate and welcome Plaid Cymru’s interest in our south Wales Valleys communities. Indeed, I gather from the press that the Member for Carmarthen East and Dinefwr is holding a public meeting in Neath this evening, so I commend to him the Gwyn Hall as an outstanding performance venue. It has a lot to offer in terms of theatre, film and, of course, pantomime [Laughter.] I’m sure that the opportunity to excite local party members with his revivalist preaching will stand him in good stead in the future—perhaps the not-too-distant future. But people in our Valleys communities will judge Plaid Cymru on its actions, and not on the sermons and the slogans. They will recall that the last time Plaid Cymru held the economic development brief, when Lehman’s was collapsing, they were prioritising building bypasses in Porthmadog, so they will not forget those actions on their part—
Will you take an intervention?
And communities—. And communities in—[Interruption.] I won’t be taking interventions.
No, I don’t think—[Interruption.] Just a moment. I don’t think the Member is giving way. I don’t think the Member is giving way—
I don’t think he is either.
No, and so if the Member would like to start again, because I missed the last sentence because of all the shouting. So you can go back and start again. Thank you.
Communities in Neath Port Talbot, in Merthyr Tydfil and Rhymney, in Ogmore, in Rhondda Cynon Taf, in Blaenau Gwent, in Caerphilly, and in Torfaen know one fact, and that is that if Plaid Cymru had its way the money available to those local authorities would be less, not more—money taken away from Valleys councils to other parts of Wales. So, when they come to the Chamber and beat their chests and point their fingers, it rings all rather hollow.
Would you take an intervention?
I will, yes.
Does the Member think that, actually, those promises do ring rather hollow, in particular when it comes to the Circuit of Wales? Because they feign support, but their chief executive is on record as saying that the Circuit of Wales project is the most ridiculous and destructive project ever. That is the chief executive of Plaid Cymru. Where do we get that from? A blog post. A blog post that has now been taken down—
This is an intervention not a speech, please.
I think it’s worth pointing out that these hollow promises are, indeed, hollow.
Thank you for another example of a double standard. Thank you for that. At the end of last year I convened a conference—[Interruption.]
Sorry. Can we have some quiet? Can we have some quiet on the benches, please? Can we just settle down? This is important for the Members in south Wales and important for all of Wales, so can we listen, please?
At the end of last year, I convened a conference in Neath looking at the local economy, and I’m grateful to the Cabinet Secretary for the economy and the Minister with responsibility for the Valleys taskforce and for skills for making time available with their officials to discuss the findings of that event and the report that arose from it. As they will know, people in the Valleys communities in my constituency are looking now for a changed approach. What people of all ages want in our Valleys is work, and whilst I genuinely applaud the Welsh Government on our low unemployment figures in Wales, we all know that there are parts of our Valleys where jobs are hard to come by, especially if you haven’t worked for years or may never have worked. So, when the Cabinet Secretary publishes his new economic strategy, as he knows, my constituents will be looking for solutions particular to our communities, and not a one-size-fits-all solution, but measures that tackle the specific challenges of our Valleys.
We would love to see the return of large-scale employers at the tops of our Valleys, but we also know that we’ve tried to do that and we have struggled to deliver that. The challenges are immense, but we do know that much more can be done to use the power of public sector procurement to try to deliver better jobs closer to home. So, I welcome the Government’s pilot programme to see how it can use its purchasing power intelligently to create and nurture suppliers and employers in places where jobs are scarce, and I urge the Welsh Government to be as ambitious and as bold as it can be. But we also need our large private businesses to see themselves as stewards of our local economies and proactively help support other local employers to grow and take on local people.
Let’s also make it easier for people to start a small business in the Valleys. Let’s develop those live/work spaces, or shared business hubs, connected with good broadband and powered with low-cost green energy. Energy is an industry that is a part of the heritage of our Valleys and can be a part of their future too, not just as recipients of community benefits, but as a job creator and as a community asset. I know the Cabinet Secretary and the Minister understand the potential of this, and I hope the taskforce can bring forward concrete plans to deliver that sort of opportunity.
I hope I can pour a little consensual oil on the troubled waters of the relationship between Plaid Cymru and the Labour Party. Anybody would think, from the last few speeches and interventions, that there was an election campaign going on. UKIP can agree with Plaid Cymru’s motion today, and, indeed, with the Conservative amendment. The motion itself is a standing indictment of the failure of all Governments for the last couple of generations to do something about the situation that exists, and was so graphically illustrated by Steffan Lewis in his speech, and has existed for many, many decades. It’s something that should trouble us all, but the one thing that you can’t say credibly, I think, is that this is due to the present Government’s policy of so-called austerity. I mean—
Will you take an intervention?
Not yet; I’ve only been going for less than a minute. A Government that has had one of the largest budget deficits ever, apart from Napoleonic wars and the second world war, for the last 10 years—this includes the Labour Government that preceded this one—can hardly be described as carrying on a policy of austerity. Today, we have a Government deficit of £52 billion a year—3 per cent to 4 per cent of GDP—and it has been up as far as 10 per cent of GDP in 2010. A national debt that stood at £1 trillion in 2010 is £1.8 trillion today. Spending money of that order can certainly not be regarded as austerity. I think it’s an insult to the Greeks and the Spaniards and the Portuguese, who really are suffering an economic contraction unprecedented since the great depression of the 1930s, to call what has happened in Britain following the financial crisis of 2008 ‘a policy of austerity’. We can certainly criticise. We can certainly criticise the UK Government for the priorities that it has within its spending plans, but I don’t think we can criticise the overall scale of spending as anything to do with the cause of the problems that the Valleys of south Wales suffer from today.
That’s what brings me, I think, to the main point of my speech, which is that we’ve had endless Government intervention in the Valleys over my lifetime, and what has it achieved—the point that Russell George made a moment ago. Yes, we’ve improved the infrastructure, we’ve done lots of good things, but it has not actually transformed the life chances and hopes of the peoples of the Valleys. EU funding is about £300 million a year. It’s a drop in the ocean. It’s peanuts compared with the amount of money that the private sector should spend in order to create the kinds of jobs that we need in the numbers that we need. That’s exactly what the Circuit of Wales project, of course, would do—a transformative project if ever I saw one. And it is very disappointing that the Government has been so timid and so dilatory—
Will the Member give way?
[Continues.]—in coming to a decision on this. I give way.
I give you some credit: having been part of a Government that did have a transformative impact on the Valleys, you are in a position to judge. [Laughter.] But, on the Circuit of Wales, as members of the Public Accounts Committee, we’ve both read the auditor general’s report on that, and there are significant concerns in there about the way the project has been handled to date. Wouldn’t it be better to take the time to do this properly, to make sure we don’t have another white elephant?
The point is that, for all the delays, and the so-called ‘due diligence’ that has been undertaken by the Welsh Government, the auditor general made no disparaging remark about the private sector project itself, but made lots of disparaging remarks about the capacity of civil servants and advisers of the Cabinet Secretary to reach a decision on what is a minute portion of the total amount of money that will ultimately be spent if this project goes ahead. Yes, of course, we must do due diligence, but the limitations on the risks to the public that are evident in this project are out of all proportion to the proposed benefits that are likely to arise. After all, all that the Government is being asked to do is to provide a secondary contingent guarantee of a portion of the private sector funding—there’s no public money going into the project—which will only kick in when the assets are actually created. So, the contingent liability, which is less than 50 per cent, will be secured on 100 per cent of the assets, and it will only be a maximum of £8.5 million a year that the Welsh Government would be on the hook for, because it would guarantee the annual payments that are due to Aviva, the principal funder of the scheme, over a period of 20 years, so that although, technically, if the project fails completely, never makes any money and none of the assets can ever be sold, there is a potential loss of £8.5 million for 20-odd years, that, in the scale of the resources available to the Welsh Government, is nothing.
If this project were to go ahead and be successful, on the back of the transport infrastructure improvements that Rhianon Passmore introduced into the debate in her intervention earlier on, and many other good things that are happening as well, like the improvement to the Heads of the Valleys road, and, we hope, electrification of railway lines as well, then this would be the real catalyst of beneficial change to those northern Valleys communities who, throughout my lifetime, have been the Cinderella of the United Kingdom.
Thank you very much. I call on the Cabinet Secretary for Economy and Infrastructure, Ken Skates.
Thank you, Deputy Presiding Officer. I’d like to begin by thanking Members for their contributions today, and also for giving me an opportunity to respond. I’d like to reiterate this Welsh Government’s absolute determination to spread prosperity to every part of Wales, including to the south Wales Valleys. It’s our aspiration to create prosperity for all.
Now, as Members will be aware, we are currently undertaking work to refresh our economic strategy to develop the economy of each region of Wales more fully, and so today’s debate is indeed very timely. In Steffan Lewis’s measured contribution, he essentially, I believe, presented the justification for the vision that I’ve already outlined for our new regionally-focused, place-based approach to economic development. I think it’s important in this debate to recognise both the challenges, but also, crucially, the strengths of the economy of the Valleys, in order for us to develop that strategy effectively, and, in looking at the data, to understand exactly where our collective efforts should be targeted.
Now, whilst gross value added per capita is below the Welsh average in both the central Valleys and the Gwent Valleys, productivity in the central Valleys is the highest in Wales, whilst, in the Gwent Valleys, productivity is the same as the Welsh average. So, it’s clear—absolutely clear—that the people of the Valleys work hard. But they don’t necessarily get the return they deserve for that hard work.
Economic inactivity and the work we are doing as a Welsh Government through our new employability programme is crucial to addressing the structural problems in Valleys communities, and in many more post-industrial communities across Wales. Unemployment in most south Wales Valleys local authorities has fallen faster than the Welsh average over the last year. In that time the unemployment rate fell in both Blaenau Gwent and Merthyr Tydfil, down by 2.8 per cent and 1.6 per cent respectively, but we all know that progression in work for those who have a job is still a major problem, as is the quantity of quality work available to people. All too often we’ve seen good, skilled, well-paid work replaced by poorer quality casual work, with little security and no certainty for the future. This casualised economy is not the future that any of us want for communities in the Valleys. We must be mindful, though, that the Valleys is not a single homogenous area blighted by the same problems across all communities. In some areas, we have seen economic renewal, encouraging employment figures and improvements in skills, educational attainment, health and well-being. Earnings in Rhondda Cynon Taf and Caerphilly are close to or above the Welsh average, and the employment rate of 16 to 64-year-olds in Wales is on the up, growing fastest in west Wales and the Valleys.
These very latest statistics are encouraging, showing an improving employment rate, particularly in west Wales and the Valleys. In the last Assembly term, the Government supported or created nearly 150,000 jobs across the supply chain. Many of these were of supply chains of many sectors, and, across Valleys communities, many thousands of people secured work as a consequence of our interventions. One only needs to look at the likes of General Dynamics to see the faith that employers now have in skilled workers across Valleys communities. But we also know that gains, as I said earlier, in economic growth in recent years have not fallen equally across Wales, the UK, or indeed the world. Many communities in the Heads of the Valleys do not feel part of the growth story that we have seen across the country and the world. So, as a Government, we are working relentlessly to ensure the right economic conditions to create and safeguard sustainable jobs throughout the Valleys and across Wales continues—better jobs closer to home in all parts of Wales.
Last year, we established the Valleys taskforce to help drive growth and economic prosperity across the area. The taskforce provides a real opportunity to support a strengths-based approach and to draw upon opportunities in a shifting climate to develop and grow the economy of the Valleys. The taskforce has a very clear mandate to engage with the communities it serves and to bring forward an ambitious plan, which it is doing in July. This will include setting a target of creating 10,000 jobs in the Valleys. But we also need to make sure that people living in Valleys communities have the skills required to compete for these jobs. This is why the employability programme is also crucially important. The taskforce will be working closely with city deal leaders to ensure that we maximise opportunities for people in the Valleys, and we will maintain our programme of investment, including the dualling of the A465, the biggest road project currently being delivered today—stopped by Plaid Cymru, but being delivered by Labour.
The south Wales metro, as Members have identified, will be a crucial catalyst for investment, and we’ll be working with our local partners to ensure the benefits from economic growth are tied closely to the development of the metro.
Are you coming to a conclusion?
It’s my belief that the work that we are bringing forward as a Government will deliver prosperity for all—prosperity for the Valleys, prosperity for all communities across the Valleys. Deputy Presiding Officer, we understand that the Valleys of south Wales need, require, and, indeed, deserve, to be at the heart of the focus of Government. Under this Government, they will be.
Thank you. I call Adam Price to reply to the debate, briefly. Thank you.
I have very limited time, so I’ll say just this. I think the Valleys—the economic history, the political history, of the Valleys, has been characterised by two forms of persistence, I think, over the last 80 years: the persistence of the problems that have been there right back to the crisis in the 1920s and 1930s and the creation of UK regional policy in the Special Areas Act 1934, which was born in the south Wales Valleys. We’re still talking about, in a different form, essentially the same underlying problems. The other form of persistence is the persistence of the promises made by politicians—promises made only to be dashed. Whether it’s the two Valleys initiatives that we had in the 1980s and 1990s—and here we are, 40 years later, talking about the same problems.
I wish the Cabinet Secretary well with his new economic strategy. The whole of Wales needs new economic ideas, because the ones that we have haven’t served us. But I have to say this: I worry, because strategy follows structure, and the structure that we have adopted, the city region approach, we’ve slavishly imported from over the border in England. These are the ideas of the former Chancellor, remember—the failed economic ideas. The distinctive economic problems—and, yes, opportunities, because there are opportunities there as well—cannot be fully addressed, will not be marshalled, if we simply import the failed ideas based on a city region model. You know, this idea that a rising tide lifts all boats—trickle-down economics, or trickle-up—doesn’t work, won’t work for the Valleys. It hasn’t worked over 70 years, and that’s why we need real new ideas. We don’t have them, unfortunately, in Government policy.
Thank you. The proposal is to agree the motion without amendment. Does any Member object? [Objection.] Therefore, we defer voting under this item until voting time.