The following amendments have been selected: amendment 1 in the name of Jane Hutt, and amendments 2 and 3 in the name of Rhun ap Iorwerth.

The next item is the Welsh Conservatives debate: regeneration projects, and I call on Russell George to move the motion.

Motion NDM6354 Paul Davies

To propose that the National Assembly for Wales:

1. Recognises the importance of regeneration schemes in enhancing the future prosperity of communities across Wales.

2. Calls on the Welsh Government to outline how it proposes to increase investor confidence for regeneration projects.

3. Regrets the Welsh Government’s handling of the Circuit of Wales project and believes this could have a negative impact on potential investment for future regeneration projects in Wales.

Motion moved.

Thank you, acting Presiding Officer. The aim of today’s debate is to recognise the importance of regeneration schemes in enhancing the future prosperity of communities in Wales. We also want to draw out of the Government how it proposes to increase investor confidence for regeneration projects. I know that my colleagues hope to be called with regard to regeneration schemes in north and south Wales, and I hope to have time in my contribution to deal with some aspects of regeneration in mid Wales.

So, I move the motion today in the name of Paul Davies, and we’ll certainly be supporting Plaid Cymru’s amendments, as Andrew R.T. Davies also called for, of course, a public inquiry into the Circuit of Wales last week. I am disappointed that the Government is doing one of its ‘delete alls’ to our motion. I’d say, why not add to our motion rather than delete all? The first part of our motion says this:

Recognises the importance of regeneration schemes in enhancing the future prosperity of communities across Wales’.

How can you object to that? So, I would say that I hope the Government will change its position on its ‘delete all’ tactics. It’s a shame because there’s much in the Government’s amendments that I can agree with, but it doesn’t, of course, address as well the aspects of the handling of the Circuit of Wales that we would have wanted to see.

Acting Presiding Officer, the confidence of both the public and major businesses to invest in the regeneration of our communities across Wales, I think, has been seriously dented by the Welsh Government’s handling of the Circuit of Wales. Millions of taxpayers’ money has been spent, there have been allegations of mis-spending of public funds, and this is the latest of a long line of Welsh Government failure to adhere to simple processes of due diligence, governance and accountability, leaving it wide open to significant financial and legal risk.

Last week’s Cabinet statement explains that, following discussions with the Office for National Statistics and Her Majesty’s Treasury, it was assessed that there was a very significant risk that the full £373 million debt of the entire Circuit of Wales project would be classified against Welsh Government capital spending. So, why wasn’t this spotted by the Welsh Government officials at an earlier stage? And why wasn’t the concern about the projected numbers of jobs to be created being an overstatement communicated at an earlier stage? Both questions are yet to be answered. So, I would say that the Government must take, I think, very significant responsibility in this regard.

The Presiding Officer took the Chair.

As the leader of the opposition said yesterday, there is little evidence that the £100 million business park, which has been announced to soften the blow of the Circuit of Wales disappointment, will create the promised 1,500 jobs or the regeneration of Blaenau Gwent, given the Welsh Government’s track record of creating new jobs in this part of Wales. This is the question: what confidence should we have that the Welsh Government will prioritise effective risk management and accountancy best practice in the future, after its failure to do so with the Circuit of Wales? And this is what I’m concerned about as well: that this episode will have a major negative effect on the confidence that we could see in other projects across Wales as well. We know that TVR are refusing to confirm that their new car deal will build in Wales at all.

So, I do say to the Government: you’ve got to send a positive message now that you’re open for business to the rest of the world. What I would like to see is the Welsh Government immediately offsetting these concerns by setting out clearly how it proposes to increase investor confidence for regeneration projects in the wake of last week’s decision. I would be keen also to ask the Cabinet Secretary to explain his logic in not providing or making public the Welsh Government’s response to the UK’s consultation on the industrial strategy. I know that the Cabinet Secretary has said in the Chamber that he would make that available to Members. Yet all we have as Members is a covering letter to the Secretary of State, and not the detail of that industrial strategy. Can you tell us and explain why on earth you can’t provide us with a copy of the Welsh Government’s response to the UK Government’s consultation on the industrial strategy?

The Cardiff city and Swansea deals, I think, are crucial for regeneration, as is the North Wales Economic Ambition Board as well. I know that my colleagues want to address some points in that regard, which leads me to explore a little bit about the missing middle. I pinched that from Adam Price, who mentioned it this morning in committee. The missing middle a little bit more. It’s a shame that Eluned Morgan is not here, because her work was launched last week with regard to rural Wales. So, it would have been useful for Eluned Morgan to take part in this debate today. I read her report with great interest. I appreciate that she asked me for my feedback as well. I think there is plenty in there that is worthy of consideration. Also, perhaps, timely is the fact that the Economy, Infrastructure and Skills Committee is undertaking some work on city deals and the regional economies of Wales. We have evidence from the Mid Wales Manufacturing Group and also Growing Mid Wales. In fact, they gave evidence to our committee this morning.

There is some recurring evidence throughout our committee sessions, and recurring evidence to me as a rural mid Wales Assembly Member, that has been brought to my attention and that exists about dealing with the challenges of mid Wales. One of those issues, of course, is the lack of land available for business expansion. This is a common theme that comes to me a great deal of the time. In fact, as evidence of that, there is a waiting list of businesses that want to expand. Some of them have threatened to go across the border into Shropshire and some of them have. We want to keep those businesses in mid Wales. So, it’s making the land available for business expansion. Of course, there are the urgent improvements that we need for broadband and mobile that affect mid Wales, particularly Powys and Ceredigion, more than any other part of Wales. There are businesses that are not expanding and not coming to mid Wales as a result of not having sufficient broadband.

I also think that we’ve got to look at the unique challenges of mid Wales as well. I think that we have got to have particular support for small businesses. We know that, pro rata, there is a high percentage of small businesses in mid Wales. There are not so many large businesses, but there are those small businesses, and they’ve got their unique challenges as well. So, we do need something that is packaged specifically for them. One of the other unique challenges, I think, of mid Wales, is the fact that we’ve got relatively low unemployment, which of course is to be welcomed. But what we do need is higher paid jobs. We need higher paid jobs for all the obvious reasons, but what I would also say is that we need higher paid jobs to deal with other issues that affect rural Wales—for example, recruiting GPs. We’ve got GPs who’ve got partners, husbands or wives who are professionals as well, who also want to come, but who would have to have higher paid jobs as well in order to attract them to our area. So, we need higher paid jobs for many reasons outside of the obvious ones as well.

The other issue that often occurs as well, of course, is upskilling people. We’ve got a real high percentage of businesses that don’t feel that they’ve got the right skills in the local community in order to grow their businesses. There is also skill retention as well. We’ve got lots of young people moving out. We don’t want them to move out; we want them to stay in mid Wales. So, it’s having a strategy, I think, as well, to regenerate mid Wales and some of those points as well.

So, to finish, I would just like to say that I do hope that the Cabinet Secretary will also today tell us a little bit more about the long-awaited economic strategy—when we’re going to have that brought to us to scrutinise as Assembly Members. I very much look forward to the debate that will take part this afternoon in the Chamber.

I have selected the three amendments to the motion. I call on the Cabinet Secretary for Economy and Infrastructure to move formally amendment 1, tabled in the name of Jane Hutt.

Amendment 1—Jane Hutt

Delete all and replace with:

1. Recognises the importance of regeneration schemes that work in partnership with interventions such as infrastructure development, the creation of good quality jobs as well as skills and employability in enhancing the future prosperity of communities across Wales.

2. Welcomes the establishment of the Ministerial Taskforce for the South Wales Valleys with its aim of ensuring effective regeneration across the region alongside strong, connective infrastructure; improved access to good quality jobs and skills development.

3. Notes the Welsh Government’s intention to invest £100m over ten years in a new Automotive Technology Business Park in Ebbw Vale to stimulate economic growth across the Heads of the Valleys.

4. Notes the work of the Welsh Government and other stakeholders in driving forward the North Wales Growth Deal to support economic growth on a cross-border basis.

Amendment 1 moved.

Formally.

I call on Adam Price to move amendments 2 and 3, tabled in the name of Rhun ap Iorwerth.

Amendment 2—Rhun ap Iorwerth

Add as new point at end of motion:

Calls on the Welsh Government to meet with all relevant parties in order to explore potential solutions to the issues referred to in its statement on the Circuit of Wales of the 27 June 2017 to increase future investor confidence.

Amendment 3—Rhun ap Iorwerth

Add as new point at end of motion:

Calls on the Welsh Government to commit to establishing a full independent inquiry into the Welsh Government’s handling of the Circuit of Wales project.

Amendments 2 and 3 moved.

Llywydd, once in every generation a specific case comes to light that points to a deeper and more difficult truth about a governing party, often—particularly—when that party has been in power for many years. I’m thinking of the beef tribunal, for example, in Fianna Fáil-led Ireland in the early 1990s, the Scott inquiry in the Conservative Government, and probably too many examples to mention about the Blair Government. But you get the point. I think that the Circuit of Wales is a case in point. Something has gone desperately wrong here. We can’t for certain say what that is yet, but we know that it’s our responsibility to ask that question and get to the truth, and that is at the heart of amendment 3.

I’d just like to speak briefly, though, to begin with, to amendment 2, which is far more straightforward, really, which is simply asking the Government—. Given the fact that probably almost £10 million now has been expended by the Government on this project, surely it would be worth our while, in respect to the taxpayer and the investment in this project, to try and get everyone around the table to see if some of the technical issues that the Cabinet Secretary referred to in his statement on 27 June could be solved.

Now, he may say, ‘Well, look, we’ve got the technology park out of it’. I have to say, though, the idea that actually just building industrial estates is the answer to our economic problems—you know, it beggars belief. Because, if that were true, we wouldn’t have any economic problems in Wales. In economic development, it’s called the field-of-dreams strategy, after the Kevin Costner film about an Iowa farmer trying to create and building a baseball field in an Iowa cornfield—’Build it, and they will come’. They don’t. The whole point about clusters is you have to have a magnet. Read your Michael Porter. The Welsh Government, I think, paid him £250,000 for a cluster strategy in 2002; I got him for free when I studied with him in Harvard Business School. And what he would tell you is, ‘Look, clusters cannot be conjured out of thin air’. The whole point about the Circuit of Wales is that it created an open-air laboratory, a test rink, that would be the magnet, potentially. You can take your view on whether that’s right or wrong, and some Members are sceptical. But, certainly, without it, it doesn’t work. So, surely, the Welsh Government should get around the table to see if these problems can be resolved.

Let’s turn to the calls for an independent inquiry, which both the Conservative party, UKIP, and my own party, have made. There have been a series of misleading statements by the Government—the full range from obfuscation through to statements that are plain untrue, the Government would have known were untrue, and we have 19 words in ‘Roget’s Thesaurus’ to describe that, most of which are unparliamentary, so I won’t test the patience of the Chair. But I’ll go through some of the examples. We might have heard one earlier, by the way. We were told that ONS couldn’t give a definitive statement in terms of balance sheet. We now know, of course, that the Welsh Government themselves had asked for a provisional ruling in relation to its own project at Velindre, but an answer there came not from the Cabinet Secretary as to whether you’d followed that same process to get a provisional ruling in terms of the Circuit of Wales.

The impression was created last week, in terms of the automotive technology park, that TVR and Aston Martin were on board with the technology park without the Circuit of Wales. And yet the record will show, Cabinet Secretary, that they did not know about this until you got up on your feet. That’s what I think the record will show.

Now, I asked the question because what we’ve seen throughout this process is the Government shifting the goalposts and then covering the tracks. I asked whose proposal it was to come up with an 80 per cent guarantee—that was the second proposal that was rejected. I was told by the Government that it was the company that suggested this, in a document dated 15 April 2016. I was then sent a letter by Monmouthshire County Council that actually proved it was the Government. Mick McGuire writing to Michael Carrick on 7 April, before that date, suggesting, and I quote, ‘I’ve spoken to the First Minister’s private office, and they’ve confirmed that he’s happy for officials to advance with the Circuit of Wales and Aviva on a viable alternative business plan B that achieves a fairer sharing of risk. To achieve these objectives, the areas that you need to consider include the guarantee to Aviva should be 80 per cent or less’.

And, most seriously of all, of course, is the statement made by the First Minister during the election campaign, when he gives the reason for the rejection of the first proposal as this: ‘What happened originally was we were looking for a guarantee of £30 million. It went to £357 million.’ When asked when that occurred, he said ‘in the last few days’ and he repeated that in an interview with ‘The Western Mail’ a few days later. And yet we now know, because we have a letter from Aviva, which says this, Llywydd:

the manner in which the deal was rejected did not reflect well on Aviva Investors. Especially as it quoted that we requested a 100% underwrite a few days before the rejection, when in fact this deal had been worked up with the Welsh Government (through civil servants) for many months and nothing in our funding structure changed in the run up to this announcement.’

Now, if what Aviva is telling us is true, then we have been misled in the most serious manner possible. That is why we need an independent inquiry.

The importance of regeneration projects to improving the economy and social conditions in the area cannot be overstated. This is particularly true in my region of south-east Wales, which has many communities that have, sadly, experienced decades of decline. Successful regeneration schemes, bringing jobs and investment to blighted areas, can bring jobs and other benefits that can last for many years. The Welsh Government has a duty to the taxpayer to ensure that regeneration projects are viable and will provide cost-effective benefits in return for the investment. Unfortunately, in many cases, the Welsh Government has failed in its duty. The Circuit of Wales is one example of the Welsh Government’s failure to adhere to simple processes of due diligence, governance, and accountability. I accept, of course, that the current Cabinet Secretary for the economy has only been in office for just over a year. However, it is the case that, over a period of seven years, the people of Ebbw Vale have had their hopes raised and then dashed by false starts and delays to this project. The years running up to the final decision on the Circuit of Wales have been dogged by the allegation of the misspending of public funds, inappropriate intervention by the Welsh Government, and due diligence concerns.

In April this year, the Wales Audit Office published a report into the transfer of over £9 million of public funds to support the project. They found ‘significant shortcomings’ in the way Ministers had managed the risk to the taxpayers. They went on to say that funding decisions were based on ‘flawed’ decisions. The Cabinet statements issued when the final decision was reached not to guarantee the project left serious questions unanswered. Why did it take so long to realise that there was a significant risk that the full debt of the project could be classified against Welsh Government capital spending? Why did it take so long to determine that the estimate of the number of jobs that could be created was significantly overstated? The Welsh Government cannot distance itself from the failure of this project.

Presiding Officer, there is another area that I think we are all ignoring. Right from the beginning, the media only saw one side of the coin. They only wanted this project to go ahead, but they did not look at the other objectives, which were very significant to clear off and to look at, but they totally ignored it. Even though I wrote personally to my local media and the national media, nothing was published. And it is not an isolated incident. The regeneration investment fund for Wales was the subject of criticism by the Public Accounts Committee in the last Assembly. RIFW sold 16 pieces of land to developers at a sum of significantly less than their market value. We found that RIFW was poorly executed due to the fundamental flaws in Welsh Government oversight and governance agreements. The Communities First programme was the Welsh Government’s flagship anti-poverty scheme in Wales. Since its launch in 2001, Communities First has spent over £300 million trying to tackle poverty and deprivation in Wales. Yet, as the communities Secretary admitted, performance had been mixed, and, in his words, poverty remains a stubborn and persistent challenge.’

In some cases, too much money was spent on staffing, instead of front-line projects. In the Communities First cluster in Caerphilly, more than £2 million was spent on staffing in 2015 and 2016. This was more than five times the amount spent on anti-poverty projects in Wales.

Would you take an intervention?

Go on, then.

Thank you. Would you countenance the fact that, without a whole plethora of anti-poverty strategies across Wales, including this one, poverty would remain at a far worse level, due to austerity, due to Welsh block grant cuts, and due to the cruel disinvestment in the welfare system?

Well, the thing is you know that the money that came from the centre was sent back, I think—that’s what I heard—and there is mismanagement in your own Government. Presiding Officer, regeneration is an important driver within the Welsh economy. The Welsh Government must address, as a matter of urgency, the financial mismanagement that has occurred. This is the only way to ensure the best return on and value for the taxpayers’ money and the communities in need in Wales. There are certain areas in which we need to improve our economy, and they are inward investment from overseas after Brexit, expansion of our aviation industry, improving our financial institutions, and also convention centres. There is a long list, Presiding Officer, which I think only Conservatives can deliver. Thank you.

I don’t think that I could improve upon the devastating demolition that Adam Price conducted of the Government’s case on this, so I shan’t even attempt to do that, but I hope I’ll be able to add to it. This is, in addition, a devastating blow to industrial confidence in Wales and I can’t think that any potential investor in the future could rely upon the word of a Government Minister in this administration.

The Circuit of Wales developers have been led up the garden path numerous times and encouraged to believe that a project, which we now know in the Government’s estimation was flawed from the very beginning, was a practical possibility. What have they been doing for the last three to seven years, as we’ve been through endless due diligence exercises for different reasons, if the most elementary point of all was missed by civil servants in the Welsh Government and by Ministers who ought to know better?

We heard from the finance Secretary this morning in the Finance Committee that he was well familiar with the problems of classification under ONS rules, and indeed the Treasury guidelines—of course he was—and previous finance Ministers too. The whole Cabinet should be aware of this, because it’s a problem that has arisen in many different directions, including in the last year in relation to housing associations and social housing projects generally. If it really were the case that this problem was fatal to the project, then that should have been recognised right from the start and £50 million would not have been wasted by the private sector developers, and £10 million of taxpayers’ money wasted by the Welsh Government in the development funding that they’ve provided. So, I think that this is a major scandal that requires to be investigated independently and I fully support the two amendments that Plaid Cymru have put down. I give way to Adam Price.

It’s interesting as well that, in an exchange with me on 8 February 2017, when I asked the Cabinet Secretary whether the two sets of criteria you will recall that he set down to take the project to the final stage—the 50 per cent level of guarantee of the debt and the risk met, and also the investor term sheets—he said to me, according to my officials, it does appear that the criteria…have been met’— have been met.

I can supplement that further with another statement that occurred in the Cabinet Secretary’s most recent statement to this Assembly, where he said also that the level of financial risk borne by the private sector being less than 50 per cent, he explained:

This is because the £210 million underwriting element would carry a higher risk than other parts of the financial package’, which can’t possibly be true, because there’s £48 million of equity risk here that is not protected at all and goes down the plughole if the project fails, and also another £47 million of debt that is subordinated to the Government’s own guarantee. So, that was a factual inaccuracy, as well, on top. I don’t even understand where the £375 million debt figure itself arises from, but that’s a point of detail that we can explore on another occasion. But the fundamental absurdity of the situation we now find ourselves in is that the Government is not asked to put in a single penny up front by way of investment funding for this project, although, out of the back pocket, as I described it in First Minister’s questions yesterday—a description that the First Minister demurred—we now know that that is provided out of the general reserve of the Government, which is, I think, fairly described as the back pocket. We didn’t know this £100 million was nestling there, undisturbed and available for any wizard scheme that could be dreamed up at five minutes’ notice to be blown on a project for which there are currently no takers. And if ever there were a case of due diligence that needs to be done, it’s into the project that the Government now is proposed not only to put in a contingent liability, but an actual liability for the next 10 years, which itself will be at the expense of schools and hospitals and all the other things that they claim not to be able to finance if they went ahead with the Circuit of Wales project.

So, we now are spending, as I described it last week, shedloads of money on a collection of empty sheds, rather than having a world-class racing circuit on the back of which, as Adam Price rightly said, we might be able to attract, as a cluster, a number of automotive companies to take advantage of the celebrity that that potentially can bring. Why would they come to an empty site in Ebbw Vale with nothing that relates to what they intend to do there? So, I do believe that this Government has not just failed the people of Ebbw Vale, but failed the people of Wales, and after 20 years, I think we’ve seen enough of this Government, and it’s time that they went.

I want to concentrate on the first part of our motion and just say that when regeneration is well thought through, it can bring great benefits. Aberdare town centre is an example. Here in Cardiff Bay, we have seen over the last 30 years a most astonishing transformation in our capital city, and, Llywydd, I’m very pleased to say this building itself is a great example of that regeneration, and I pay tribute to one of your predecessors who’s in the Chamber who saw that project through. It gives the potential for all sorts of development and new hope for future generations. What we’re seeing in Cardiff in the tourist press internationally, in reviews of our economic potential, is that they talk very highly of this part of south Wales, and we must use it as a resource for wider economic development throughout Wales. But it just shows you, with imagination, leadership and vision, and the co-operation of all the key players, what can be achieved.

There’s a great body of international best practice that we are part of, and that stretches from Baltimore to Bilbao and many, many places in between. I think that we now need to set new ambitions for what we’re going to do, especially for the Valleys and the Heads of the Valleys. Other speakers have concentrated on one specific project. That’s not my intention; I will look at some other areas where I think we need to see more effort and ambition.

But can I commend some things that have happened? The city deals offer a way of ensuring that regeneration fits in to a pattern of regional growth and development. Also, it’s a great model, I think, for co-operation between UK Government and the Welsh Government, and local government as well—to co-operate constructively on the city region approaches, which, of course, are all about getting that prosperity and that expertise and the potential it can generate right around the region and in ensuring that other things, like transport networks and cultural networks, are properly integrated so that everyone living in the region benefits. I think that it’s a very, very important concept that we are working through now, and I’m pleased to see the progress so far, but I hope it’s taken much, much more in the future.

However, it’s not just about local, devolved and UK Government co-operating—though they do have a vital role to play—but community engagement, I think, is the other key to the real success of regeneration strategies. For regeneration really to be effective, it really needs to be done by the community, and not merely with, or far worse, for the community. That often has been where there’s been drift and disengagement, and that’s something we need to be careful to prevent in the future.

If I may quote from Regeneration Wales’s report ‘A Guide to Effective Community Engagement’, the—and I quote— good progress being made in some of Britain’s most deprived communities was due to the adoption of policies with a strong emphasis on social inclusion strategies.’

I do agree with that. One very simple strategy that ought to be central to this sort of regeneration that involves the community is that the community does much of the regeneration. It sounds simple, but often it just does not happen. So, the community workers are recruited locally. The infrastructure, the work that that requires, what projects are chosen and prioritised—that’s done locally. Housing improvement schemes, a great economic multiplier involving local small and medium-sized enterprises, co-operatives, whatever, and certainly local labour pools—very, very important. Childcare—so important to upskilling the workforce in general and encouraging them into the labour market—being provided by local people in co-operatives and working for the private sector, the independent sector or whatever. And then basic skill development, which frankly, in the most deprived regions, is probably one of the biggest interventions that is required, again being based in community institutions and accessible in ways that local people can respond to.

Can I just finish, Presiding Officer, by saying that I think the heart of this sort of regeneration is also greening our urban spaces? You know, the south Wales Valleys before the age of coal were known as this incredible bucolic idyll, the subject of many great painters—Turner, for instance. That sort of vision of the beauty of the landscape ought to inspire us again. I was delighted a couple of weeks ago to go to Maesteg at the invitation of the local Member, who I’m delighted to see is here, Huw Irranca-Davies, and we saw this wonderful project there of a new forest being developed. That’s just the sort of thing, and the ambition, that we should have to really restore the Valleys and give local people the confidence they need for their own economic regeneration. Thank you.

Coincidentally, Huw Irranca-Davies.

Diolch yn fawr iawn, Llywydd, and thank you, David, for mentioning the Spirit of Llynfi woodland. It was a great visit and I’m pleased that you were delighted with what you saw there. I think it is one potential way forward on regeneration.

I will be supporting amendment 1, despite protestations from Russell, as I think it does better reflect Labour sentiments on regeneration, and it’s probably neater as well. But I welcome the announcement in amendment 1 on the automotive technology business park in Ebbw Vale, even though I’m a little bit further west, and I also welcome the north Wales growth deal, though I’m a lot further south. But I’m going to get a bit more parochial now. So, on regeneration schemes and the ministerial taskforce, let me put some gentle suggestions forward in my patch of Ogmore that I hope may catch the ear of Ministers.

On transport infrastructure, I’m delighted that the Sunday service on the Maesteg line is now, I understand, being written into the new franchise—it’s a major breakthrough—and also increased frequency options on this line are being actively worked up. These are major breakthroughs in embedding the Llynfi line into the south Wales metro project and getting people to jobs as well as to other opportunities. But as part of this, by the way, we also need to resolve the 5 mph problem—yes, a 5 mph issue—with the nineteenth-century railway infrastructure at Tondu. A guard descends, every morning as I travel, with his key, from the signal box, to hand it over to the train driver as the train is on stop. We wave, and it’s very quaint, and it’s a bit like ‘The Railway Children’. It’s very quaint indeed, but hardly the vision of a modern metro and railway that we want to see. I don’t think it’s the Cabinet Secretary’s vision, either. It’s 5 mph and then a full stop.

Actually, as the options for the metro and the new Wales and borders franchise are worked up, then we also need to anticipate—and Transport for Wales and new bidders need to anticipate—the future shape of transport in this region. So, yes, we want the Maesteg line firmly as part of the south Wales metro, and the Sunday service and the enhanced frequency will help do that, but it’s only a start. To get people up and down and across these valleys to the jobs along the M4, we need to be more ambitious. So, firstly—and this is an unashamed request—what about initially rolling out the non-train, non-tram superfast, super-connected buses, the universal ticketing, and so on in the slightly more western valleys? Because if you’re in the relatively isolated Evanstown or Price Town communities, despite being by car only 25 minutes from the M4 on a clear run at midnight with no congestion, if the bus journey to work at peak time takes over an hour, is infrequent, doesn’t run late enough or early enough to get you to your job, requires a couple of connections, has no synchronicity with train timetables or any other modes of travel, well, you’re as far from a job as anyone else in any valley in south Wales.

More fundamentally, the three northern Bridgend valleys decant primarily to Bridgend, unlike the other valleys east, which decant primarily to Cardiff. Now, as such, I really would welcome the continuing engagement of Welsh Government with the Bridgend County Borough Council’s concept of a Bridgend hub, where multimodal transport modes can converge here and then spin off east and west, towards Cardiff and Newport in one direction and towards Neath and Swansea in the other, or south, in fact, into the Vale as well as the southern Bridgend area. This secondary transport hub along the M4 corridor would significantly enhance the south Wales metro, and make the Bridgend valleys and the coast and Vale of Glamorgan an integral part of the metro.

On the new franchise, let’s hope the successful bidders bring forward options that can extend the service, whether tram and train or other innovative options, along and across these valleys, but also into the wider region of Bridgend and beyond. Outdated, inflexible thinking, along traditional, hard rail infrastructure will not meet the needs of our constituents, or of our need to make it easy for more people to park up their cars and travel with ease on more environmentally friendly transport options. In the ministerial Valleys taskforce, options to strengthen the regeneration of the communities of the Llynfi, the Ogmore, the Garw and the Gilfach valleys are essential. The levels of multiple deprivation and isolation from jobs and other opportunities are as pronounced in these parts of these upper valleys as anywhere else in south Wales. Whatever arises from the taskforce must recognise this and provide the same tools of economic regeneration available to all other areas.

Economic regeneration is about moving jobs closer to people or people closer to jobs. The northern Bridgend valleys have the benefit of being relatively close, as the crow flies, to the M4 corridor. But, unfortunately, Presiding Officer, few of my constituents fly like crows. They travel on congested, single-lane roads in peak times. They’re on a single-line, one-train-an-hour railway track. To reduce the distance between people and jobs and opportunities for training and skills development, I simply ask the Welsh Government, Transport for Wales, Network Rail and other transport providers to continue to work with me and my two local authorities and local communities to enhance the transport infrastructure and regenerate these Valleys towns and communities throughout Ogmore. Diolch yn fawr.

If the prosperity of communities across Wales is to be enhanced, regeneration schemes must, first and foremost, empower the people living in those communities. As I’ve emphasised since arriving in the Assembly in 2003, housing is key to sustainable community regeneration, not just in bricks and mortar terms, but adding value by unlocking the human potential in communities. However, although there was no affordable housing supply crisis when Labour came to Welsh Government in 1999, they then slashed new social and affordable housing by nearly three quarters, and even last year, Wales was the only UK nation to see new home completions go backwards. Contrast this with the UK Government’s announcement yesterday of a £2.3 billion housing infrastructure fund for England to accommodate growing communities and get homes built faster. Having failed to understand or ignored successive warnings and Wales Audit Office reports, Labour’s command-and-control approach towards community engagement has left Wales with the lowest prosperity, wages and employment, and the highest poverty, child poverty and unemployment amongst the British nations. As the 2015 Communities, Equality and Local Government Committee inquiry into poverty in Wales report, ‘Poverty and Inequality’, found:

Since the early 2000s, the level of poverty in Wales has been static…with 23% of the population living in poverty.’

In other areas of the UK with high poverty, the report said: like north-east England, the level of poverty has fallen more than in Wales over the same period.’

This relative poverty figure has continued, and absolute poverty is also higher than the other UK nations.

After spending £0.5 billion, in fact, on the Welsh Government’s lead tackling poverty programme Communities First, misapplying the findings of the 2009 Wales Audit Office report on Communities First, and dismissing the recommendations in the Wales Council for Voluntary Action report ‘Communities First—A Way Forward’, at the start of the fourth Assembly, this communities Secretary told the Equality, Local Government and Communities Committee last month that the programme would not be replaced, that the record of its work in Wales’s most deprived areas had been mixed, and that the figures aren’t moving.

In contrast, as the deep place study in Tredegar found, the community empowerment agenda has been increasingly framed within the co-production approach’.

Governance for resilient and sustainable places should seek to engage local citizens, they said, requiring a very different perspective from the normal approach to power and community level, and dependent on a willing and open ability to share power and work for common objectives.

Oxfam Cymru has specifically called on the Welsh Government to embed the sustainable livelihoods approach in all policy and service delivery in Wales, helping people identify their own strengths in order to tackle the root problem preventing them and their communities from reaching their potential. This is what we should have been doing 10 years ago. As the Bevan Foundation states, if people feel that policies are imposed on them, the policies don’t work, and a new programme should be produced with communities, not directed top-down. Local area co-ordination in Derby, referred to before, working to people’s strengths and aspirations, drove collaboration between local people, families, communities and organisations, building on the hugely successful model in Australia.

Will you take an intervention?

Yes.

Would you countenance the fact that the very light regulatory approach of the UK Government in terms of employment has driven up a vast wedge in terms of zero-hours contracts, those working two or three jobs, and the inability of the welfare net to protect those has inadvertently and inappropriately affected the people of Wales due to their propensity for welfare claiming?

In Wales, the only part of the UK governed by Wales, we have the highest level of non-permanent contracts in the UK, and the second highest level of zero-hours contracts amongst 12 UK nations and regions. That is Labour’s legacy. The rest of the UK, look and learn—this is what you would get in London if you repeat their mistakes.

Commenting on the January 2017 White Paper, ‘Reforming Local Government: Resilient and Renewed’, the Bevan Foundation states that, essentially, the public is being asked to agree to major changes in how local services are delivered without knowing how they can make their views heard. Working with the Talwrn Welsh third sector network and the community branch of the union Unite, the Building Communities Trust is identifying the key factors in developing community resilience at local level, using asset-based community development and unlocking people’s strengths. As they say, independent community organisations are well placed to effectively deliver local services, from social care to family support and employability. So let us join the thousands of co-production revolutionaries working in the Co-production Network for Wales. If we believe it’s for Wales, join the people.

Let me finish by addressing the claim in the Welsh Government amendment that it is driving forward the north Wales growth deal, when it was the UK Government that opened the door to a growth deal for north Wales, and it is this that has driven the team north Wales cross-border response. However, from inception, both UK Government and the North Wales Economic Ambition Board have called on the Welsh Government to grant devolved powers to the region, and their silence on this remains perhaps the greatest impediment to the growth deal’s success.

I very much welcome the Welsh Government’s amendment to this debate that welcomes the ministerial taskforce for the south Wales Valleys that includes my constituency of Islwyn. Just last week, I stood in Newbridge train station with the Member for Newport West and representatives from Network Rail and Arriva Trains to discuss the progress of the £38 million investment in the Ebbw Vale-Cardiff railway line, and highlighted the absolute need for the service to Newport, our nearest city.

Since the Ebbw Vale to Cardiff line was opened in 2008, it has been a stunning success. The very latest investment sees, in my constituency of Islwyn, improvements to the station at Newbridge and the laying of additional track across a 7-mile stretch in order to increase capacity. This is the power of Welsh devolution in action, a Welsh Labour Government seeking to put in place transformational transport infrastructure that can revitalise and invigorate Valleys communities, such as Newbridge, Cross Keys, Risca and Pontymister and transform the lives of its people.

In 2015 the Ebbw Vale line was extended with £11.5 million investment from Welsh Government to open an Ebbw Vale town station. This has already improved access to jobs and services for people in Ebbw Vale, and all along the line has transformed access and mobility across its Valleys community. The stunning success of the line is unquestionable, with over 300,000 journeys annually. The Ebbw Vale Town station demonstrates how the line can be expanded as part of a strategic, holistic and multimodal transport interface, as highlighted by Huw Irranca-Davies.

I’m very much of the opinion that, one day, Crumlin should once again have a railway station on the line, and I know, as the line heads towards Cardiff, there’s also demand for a station in St Mellons, which could one day form a Cardiff parkway, linking with the main line to Swansea. These exciting developments are today, and in the future, being progressed by the Welsh Labour Government, using the levers at our disposal and pressing the UK Government to act where relevant powers still reside in Westminster and Whitehall.

Despite the Welsh Government’s call for the devolution of funding for rail infrastructure, the responsibility for its funding remains with the UK Government, and alas, we still await the promised electrification that they have so far failed to deliver for Wales. Maybe the Tory Members opposite would be willing to put a shift in and shake Theresa May’s money tree and get Wales some money. If only they were willing, they would also ensure Wales had the same treatment as the DUP have secured for Northern Ireland—that is the same parity of esteem, the same finance and same treatment.

As Members know, Caerphilly County Borough Council is part of the Cardiff capital region city deal, a deal that—[Interruption.] I have not got time, unfortunately. [Interruption.] I would like to finish—the Welsh Government has committed to contributing—[Interruption.]

Let the Member—[Interruption.]. Let the Member carry on. It is her decision whether she takes interventions or not.

[Continues.]—£503 million, and I will say it again, as I’ve been allowed to say it again, £503 million to the £1.2 billion Cardiff capital city deal. This transformational deal will improve Valleys public transport and create 25,000 new jobs, leaving an extra £4 billion in private sector investment. And I would like to place on record my appreciation to the Caerphilly council new leader and his energetic, hands-on approach to leading the authority as the city deal progresses. I recently met with the council leader, David Poole, to discuss how the communities of Islwyn can benefit from the opportunities that the city deal presents for our Valleys communities and beyond.

Llywydd, let us be in no doubt our Valleys communities have borne the brunt of the Tory UK Government’s cuts, and they have been at the forefront of Government ruthless and cruel changes to welfare benefits, from the introduction of the bedroom tax, to cuts to disability benefits. The impact has been felt most acutely by the communities in the Valleys, and most acutely by our most vulnerable. And while the Welsh Government cannot undo these reforms, it will do everything in its power to support people and help them secure skilled, meaningful work. The new innovative technology park, the city deal, the new employability pathways, enterprise and employment, childcare; and children zones will all play their part in the regeneration of our Valleys heart lines.

Finally, the Welsh Labour Government has a clear and firm direction of travel outlined in ‘Taking Wales Forward: 2016-2021’, creating a south Wales metro, working in partnership delivering an extra 20,000 affordable homes, delivering the Cardiff city deal, and £100 million investment in south-east Wales. No wonder, then, that the nation of Wales overwhelmingly voted Welsh Labour in the recent local election and general elections. Why don’t the Tory Members opposite join us tonight and vote in this debate on the side of the many and not the few?

I call on the Cabinet Secretary for Economy and Infrastructure, Ken Skates.

Thank you, Presiding Officer. Can I start by thanking the Welsh Conservatives for bringing forward this debate today, and for giving me the chance to respond? I’d like to thank in particular David Melding for his positive, forward-looking contribution. He talked about how regeneration cannot be delivered by a silver bullet, and must be delivered at least with the community that it is intended for. I think Rhianon Passmore and Huw Irranca-Davies spoke with equal passion and commitment for their constituencies. I was delighted to hear about how the metro will transform the people that it serves and the Members also reminded us of the historic neglect in Wales’s rail network by the UK Government. Conversely, Mark Isherwood reminded us of the devastating impact that Tory austerity lasting more than seven years has caused, that the bedroom tax has caused, that welfare reform has caused, that UK Government-sponsored zero-hours contracts have caused.

Will you give way?

Yes, of course, I’d be delighted.

I’m sure you’ll agree that Wales is part of the UK and the UK Government welfare reforms apply throughout the UK. Why is Wales bottom on all the key social measures I quoted?

The Member may have neglected to recognise the fact that we’ve now had seven years of crippling austerity, something that, in this Chamber, he is a cheerleader for, but out in north Wales he’s rather a crocodile-tear apologist for. The fact is we are suffering at the hands of Treasury Ministers in Westminster who belong to your party.

Now, both Huw and David, and, I think as well, Rhianon, highlighted that prosperity, and, effectively, regeneration comes only through intelligent and only through co-ordinated interventions that must work together, and without the right training and the right skills, without the right transport infrastructure, people cannot access the jobs that may be brought to a local area. Equally, without good-quality and affordable housing, young people may well be forced out of a community that they want to build a life in. I don’t feel that that was reflected in the original motion today, and that’s why we put down the Government amendment.

The work that I have been undertaking to refresh our economic strategy and develop the economy of each region of Wales, which I spoke about this morning in the Economy, Infrastructure and Skills Committee, is based on that fundamental principle, namely that co-ordinated interventions rather than individual silver bullets are the only viable route to the effective regeneration of communities across the length and breadth of Wales. And that’s also the thinking behind the establishment of the ministerial taskforce for the Valleys. As chair of the taskforce, the Minister for Lifelong Learning and Welsh Language is developing a new approach to investing in the most economically deprived areas of the south Wales Valleys, to ensure there is co-ordination in the interventions from both the private and the public sector, to ensure effective regeneration. That’s why I’m a member of the taskforce and why the Minister for Skills and Science is as well. Crucially, we agreed from the outset that we needed to work collaboratively with key stakeholders and, most importantly, with those Valleys communities in a way that David Melding rightly highlighted. This has involved an intense programme of engagement with communities across the Valleys and a series of workshops and stakeholder events, which have helped us to map out what the primary focus of a plan should be in the years to come. And these findings led to the development of a high-level plan that seeks to create new, fair, secure and, crucially, sustainable jobs in the Valleys, to ensure that public services are better joined up, make better use of public and community assets, and develop an approach to developing activities relating to the environment and tourism sectors in the Valleys.

We are using both the Valleys taskforce and the north Wales growth deal as mechanisms to drive prosperity. The north Wales growth deal continues to be on the UK Government’s agenda. I thought Janet Finch-Saunders’s reaction to Mark Isherwood’s misrepresentation of the partnership approach was accurate, as I thought it was shameful, too. The fact is that the north Wales growth deal vision largely encompasses Welsh Government initiatives, and I’m pleased to be able to inform Members that I have invited the Secretary of State for Wales to co-chair a task group with me, looking at how we can enhance cross-border economic development in north Wales and the Mersey-Dee area, because it’s absolutely crucial that activities on the Welsh side of the border align with activities on the English side as well. And that applies to the whole of north Wales. Given that there is an arc of nuclear—

Will you be asking him to similarly join you in work on joining the north Wales economy with the south of Wales and with Ireland?

Well, there is a need, absolutely, to ensure that there are better communications and that the growth deals and the city deals of Wales align with one another, and that they’re not competing with one another. But the reality is that much of the economic relationship that exists between the north of Wales and the north-west of England is driven by similar sectoral interests. And, for that reason, it’s essential that we focus our attention, primarily, on the emerging growth deals in both the north-west of England and the north of Wales. That is an economic reality. For the Member’s own interest, the nuclear sector on Ynys Môn is probably the biggest economic driver that is going to be emerging in his constituency in the years to come. That, of course, is strongly linked to the development of the energy sector right across north Wales and into the north-west of England. It’s in everybody’s interests to make sure that the skills are developed on Ynys Môn to capture all of the jobs—

The specific point that I put to the finance Minister earlier today. I think there’s a danger in the north-west of Wales that Wylfa is seen as the one that ticks the box. What are your thoughts on what happens if Wylfa is not deliverable for some reason—of course, that is a danger—and the danger then that the north-west has nothing planned to come out of the north Wales growth deal?

I sincerely hope that the leader of your party doesn’t get her way and stops nuclear energy in Wales. I sincerely hope, for the people of Ynys Môn and the whole of north Wales, that the facility is built. The fact of the matter is that the economy of the region is also built on a strong tourism base, and tourism in north Wales right now is experiencing record success, and it’s also based on a vibrant food and drink industry, which, again, is experiencing record success. So, the industry of Ynys Môn and north Wales is in prime position to take advantage, not just of emerging nuclear energy initiatives, but also in the tourism, agriculture and food and drink sectors, if only Members would listen.

I can honestly say, Presiding Officer, that the decision taken over the Circuit of Wales was the most difficult and challenging decision that I have ever been involved in during my lifetime in Government. It was challenging and difficult because the community for which the project was promised is one that is in need of new opportunities, new growth and regeneration, and, perhaps above all, new hope.

I’ve set out the reasons why we could not go ahead, but importantly, in doing so, I’ve also set out an alternative plan, an automotive technology park, in which we will invest £100 million over the next 10 years. This is an investment in the future of Blaenau Gwent that can support economic growth right across the Heads of the Valleys region, and I want our work to demonstrate that Wales is a good place to do business and that Blaenau Gwent and the Heads of the Valleys offer great untapped potential for those investors.

The focus of the project in the initial stages will be threefold and based on evidence from businesses, from local government partners, from industry and academic experts, and from the Ebbw Vale enterprise zone. All elements will be subject to satisfactory business cases and due diligence. They are, first, to develop a new facility designed to encourage entrepreneurship and to grow the number of SMEs; secondly, the development of an advanced manufacturing facility specifically designed to cater for any number of inward investors, many of whom are in the high-tech, ultra-low-emissions sector and who are currently exploring opportunities here in Wales; and, thirdly, to support the refurbishment of an existing building in the enterprise zone that can act as a skills and apprenticeship training centre to make sure that we provide the pipeline of skilled people to take up quality jobs, looking to a future in which we innovate, incubate, launch and grow more Welsh companies, commercialising much of our home-grown intellectual property. I believe that we can support economic growth in the Heads of the Valleys and stimulate the prosperity that I think everybody in this Chamber would want to see.

I call on Darren Millar to reply to the debate.

Diolch, Llywydd. Can I thank everybody for taking part in this important debate? It was tabled because we believe that there needs to be a renewed focus on regeneration here in Wales, and that we need to get some of those impoverished communities, in all of our constituencies, back on their feet and up and running. I think we have to acknowledge that there have been some epic failures by the Welsh Government over the past 20 years. We’ve seen the Communities First programme utterly fail to deliver, as Mohammad Asghar and Mark Isherwood quite rightly pointed out: £0.5 billion-worth of expenditure and the same level of poverty in those communities today as there was—[Interruption.] We won’t be taking any interventions from you, no, not at all.

In addition to that, we saw the scandal of a land bank, of some of the jewels in the crown in terms of a land bank, sold off on the cheap during the last Assembly term by the regeneration investment fund for Wales at a loss, potentially—we don’t know quite what it is—of at least tens of millions of pounds to the Welsh taxpayer: money that could have, and should have, been invested into regeneration projects. And just now we have seen the situation emerge with the Circuit of Wales project where, for seven years, a company has been strung along by the Welsh Government, who’ve given the impression that they’re doing everything they can to support it, and then they’ve pulled the plug just before things were able to be signed on the dotted line, and I think that those—[Interruption.] And I think that those—.

Ken Skates rose—

No, I haven’t got—. I may take time in a second. And I think that stringing people along—. I appreciate you’ve inherited a real mess, frankly, as a Cabinet Secretary, from your predecessor because you’re relatively new to this particular post, but the reality is that, unfortunately, that mess has landed in your inbox and you’ve had to pick up the pieces. I think it’s only right that we should have a public inquiry into the Circuit of Wales debacle, in order that we can get to the bottom of what happened and we can establish precisely what the truth is and whether the Welsh public, whether the businesses that are involved, and whether this Assembly have been misled over what took place.

Other Members have talked passionately about individual issues in their constituency and the regeneration projects that have taken place. David Melding is quite right to point out the fact that there has been some success over the years, particularly in places like Cardiff Bay. I’m seeing a renaissance in the seaside town of Colwyn Bay as well, on the north Wales coast, in recent years, and there has been Welsh Government involvement in that, and I’ll pay tribute to you for helping to contribute to that success. Unfortunately, there are many communities that are still being left behind.

I heard, very carefully, what Rhianon Passmore was saying about the unfairness—the alleged unfairness—of the UK Government in investing in the peace and security of Northern Ireland by making additional resources available to that particular part of the United Kingdom. But what about the need for some fairness within Wales in terms of spending in north Wales and in mid Wales and in west Wales, instead of focusing just on the south, which is what we’ve seen over 20 years from this Government here, Labour-led administrations, and including, of course, Plaid Cymru and the Lib Dems propping those administrations up from time to time? We haven’t seen the same sustained focus on north Wales and mid Wales. Russell George was quite right: we need a growth deal for mid Wales. We need rural Wales to also be on the map in terms of some attention, so that we can ensure that the businesses in those areas—those rural parts of Wales—get the support that they also need.

I think you’re quite right, Cabinet Secretary, to focus on the opportunities that lie in cross-border working: cross-border working between Wales and England, and particularly in north Wales where very strong economic links already exist. We have seen some success in dragging some economic bleed into north-east Wales in recent years, which has benefited that part of Wales’s economy, but we need to get that drift—that economic success—further west. I can hear very loudly the concerns that are being raised about north-west Wales and they are genuine concerns, and we need to ensure that there’s prosperity from east to west as well as from north to south and south to north. We’ve got to get all parts of Wales able to reach their potential, and unfortunately the policies that we’ve seen to date have not enabled them to reach their potential, and that’s what I want to see.

I think you’ve got to work harder with communities. You’ve got to make sure that we take—. I know you’ll laugh at this, but we’ve got to take the politics out of some of this as well, if we’re going to achieve the sort of success that we want, particularly—[Interruption.] Particularly when we’ve got a range of local authorities with different coloured leadership in terms of the politics, and we’ve got different coloured leadership at one end of the M4 to this end of the M4. So let’s try to work together in order to achieve what I hope we all want to achieve, which is a more prosperous Wales. Let’s recognise, though, that continuing to go down the same formula that you think is going to lead to success and hasn’t in the past is not going to work, and I do think, therefore, that we certainly are very concerned. While we welcome the fact that there’s some extra investment for Ebbw Vale, which has been announced, we’re very concerned that that’s not actually going to deliver any sea change in terms of a difference for the economy in Blaenau Gwent and Ebbw Vale. So, I think that there needs to be a fresh approach. There needs to be more collaboration, more working with local government. We’ve had these wonderful city deals, which I think point us in the right direction, in Cardiff and in Swansea bay. We’ve got a north Wales growth deal, which is inching forward, being driven forward by Alun Cairns and the Wales Office, and I believe that if we work together, we will be able to see the difference that that collaboration can make. So, I urge people to support the motion in the name of the Welsh Conservatives this afternoon.

The proposal is to agree the motion without amendment. Does any Member object? [Objection.] I will defer voting, therefore, under this item until voting time.

Voting deferred until voting time.