5. What discussions has the Cabinet Secretary held regarding the city deal for the Swansea Bay region? OAQ52069

Both I and the Cabinet Secretary for Finance have continued to hold positive discussions with the region to progress the deal towards the next stage of delivery.

Thank you. I wonder if you could update me, please, on whether Welsh Government will be agreeing a capitalisation order, sought by some of the councils on the shadow board. I'm trying to understand, should it go ahead, whether there'd be any adverse effect on existing capital spending plans upon which businesses will have been basing their participation in the deal as direct partners or as pipeline businesses. There's a little bit of nervousness in some quarters, which I hope you might be able to quell today. Obviously, I'm not arguing against the order, but perhaps you can tell us whether the Welsh Government has received a range of representations on this issue from business in particular, obviously, as this is your portfolio. And will you seek reassurances that any unintended negative consequences will have been considered?

Absolutely. I'll ask the Cabinet Secretary for Finance to write to Suzy Davies concerning the capitalisation order. The Member will be aware that some concerns were recently allayed with the agreement on the approach to the retention of non-domestic rates for the city deal. I think this has improved relations and will take the city deal to another level, but I will ask the Cabinet Secretary for Finance to provide you with the latest position concerning the capitalisation order.

Cabinet Secretary, as part of that deal, obviously Neath Port Talbot has responsibility for a couple of those projects, one of which is the steel innovation centre. Now, I understand that there are issues regarding where that will be located and there are concerns that Welsh Government is pushing them towards Felindre, which is actually further away from the university campus and Tata, which are both important partners in that innovation centre. Now, the current steel and metals institute is based in the university campus in Singleton. They want to move it nearer. There's land available, which I understand is Welsh Government land, and there's trouble having that land released. Will you look at this aspect to ensure that, if that land is available, you can release it to the organisations to ensure that the steel research centre is based close to the university and close to Tata, where it actually will benefit?

Can I thank David Rees for his question? This £80 million project is crucially important for the sector and particularly for Port Talbot. I'm pleased to be able to say that I spoke with the vice-chancellor just last week concerning land issues, and we hope to make very positive progress in the very near future.

Clearly, with news today that Port Talbot is the most polluted place in Wales, having a low-carbon focus in the city deal is something that I think is crucial. If it wasn't today, it still was when this deal was set up, and one of the programmes, as part of the deal, is homes as power stations, which is a large investment. So, how are you planning to provide international leadership to ensure that we can show Swansea bay is becoming a renewables area, in light of this news, and how will you be working with the deal to promote this element of the deal?

Well, I think a sector deal is absolutely vital—a steel sector deal. In order to ensure that we're able to corral all interests within the steel sector in Wales towards maximising the opportunities the UK industrial strategy offers, we have designated one of the five calls to action—if you like, the prisms through which we'll be funding businesses in the future—a decarbonisation agenda. We're also inviting businesses to come forward through a challenge facility to ensure that they're well placed to be able to take advantage of sector deals and also challenge fund opportunities within the UK industrial strategy. But we've been very clear through the economic action plan that, in the future, both with the economic contract, to get through the door to Welsh Government, and with the facility that you use in order to get financial support, you'll have to be able to demonstrate that you're contributing towards decarbonisation. I think the steel sector, probably more than any other sector, gets the importance of needing to decarbonise, because it contributes towards energy efficiency. Energy costs are one of the major problems that are hampering steel operations within the UK, with huge, huge differences between energy costs here and continental Europe. That has to be addressed; it has to be addressed by UK Government, but Welsh Government also has a part to play in ensuring that the sector becomes more modern and embraces decarbonisation.

Cabinet Secretary, the success of the city deal is dependent upon first-class infrastructure, whether that's excellent transport links or, more importantly, ultrafast and futureproofed telecommunication networks. What discussions have you had with the UK Government regarding the roll-out of gigabit broadband and 5G mobile communications throughout the Swansea bay region?

Well, this is largely a matter that's being led by my colleague the leader of the house, but digital connectivity has been at the centre of the vision for the city deal in Swansea bay for many years. I'm particularly pleased that we've seen Ed Tomp named as the preferred candidate to take on the chairmanship of the strategic board for the city deal. Ed is somebody who knows the value of digital connectivity, and I'm sure that, with his leadership, we'll see a greater focus and a sharper focus on the need to improve digital connectivity within the city deal area.

In terms of engagement with UK Government, it's absolutely vital that our actions and the actions of UK Government interface well, and that we're not duplicating spend and not duplicating or confusing programmes that both Governments might be leading on. For that reason, both I and the leader of the house have regular discussions with our counterparts in the Department for Business, Energy and Industrial Strategy and in the Department for Digital, Culture, Media and Sport to ensure that we're working to the same end, which is to make Wales, to make the United Kingdom, one of the most digital connected countries anywhere on the planet.