6. 6. Statement: Circuit of Wales

Part of the debate – in the Senedd at 4:24 pm on 27 June 2017.

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Photo of Ken Skates Ken Skates Labour 4:24, 27 June 2017

Can I thank Lynne Neagle for her questions? I do recognise the strong support that she has given the proposal. I recognise that she has been consistent over many years in supporting the project and I do share her remorse at the fact that we are not able to offer the guarantee that was sought. But I do believe that, reluctantly, it would have been wholly irresponsible to have granted that guarantee, given the likely impact that it would have had on the public purse. As I said in my statement this morning, it would potentially have had an immediate impact on major infrastructure, housing, hospital and school build programmes. Nonetheless, I do recognise that the Member and many of her colleagues have been determined in promoting the need for transformational change in the Valleys, and that is what I am determined to ensure the technology park achieves.

I’ll be working with further education colleagues, with local authorities, with the enterprise zone in Ebbw Vale, I’ll be working with experts in the automotive sector in Industry Wales to ensure that we gain maximum value from our plan, a £100 million plan, to create 1,500 quality full-time jobs for the people of the Valleys in south Wales. This is not a late rabbit. We have known for some time that there is a tier 2 automotive sector that requires support in order to grow, expand, and be at the forefront of the global market, but what this process has highlighted is that, with that demand, there is currently a lack of available space and support. We intend to challenge that, to deal with it, to address it, and to make sure that the automotive sector in the region can grow and prosper.

The project has changed many times over the past seven years. The company’s been aware of the need to ensure that the risk is kept beneath 50 per cent, and I do appreciate that the issue of 50 per cent ONS classifications can be confusing, but the risk profile of the different tranches of the project funding is relevant to the assessment of the effective weight of the Welsh Government guarantee. The different tranches, Presiding Officer, are exposed to significantly different levels of risk, and, based on the guidance, we would expect ONS and Eurostat in their assessment to weight tranches bearing a higher level of risk more heavily than tranches that bear a lower level of risk. A risk-weighted assessment would certainly imply the Welsh Government bearing more than 50 per cent of the weight of the project funding, even if—even if—our guarantee is seen as less than 50 per cent of the total unweighted funding, and that’s the difference between appearing to meet the criteria and actually meeting the criteria. The Member is shaking his head, but he should well know this, having served in Government, albeit 30 or 40 years ago.

Now, I think it’s absolutely essential that—[Interruption.]—. It’s absolutely essential that we avoid committing ourselves to expensive projects that could lead to the cancellation of hospitals, schools or house building. Nonetheless, we will take forward this plan for Ebbw Vale, for Blaenau Gwent, and for the Heads of the Valleys, and I’d urge again Members to work with us. Collectively, we can make a difference, and I’d urge Members to do just that.