5. Statement by the Cabinet Secretary for Economy and Transport: The Recent Airbus Group Announcement

Part of the debate – in the Senedd at 3:35 pm on 26 June 2018.

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Photo of Ken Skates Ken Skates Labour 3:35, 26 June 2018

Can I thank Russell George for his contribution and his questions? I'll say at the outset that I know that there are also good Conservatives in Westminster as well, who, like the Member, share concerns for the future of Airbus. I think, based on the comments that both Stephen Crabb and Guto Bebb have made recently, we do have Conservative parliamentarians who are there to champion Airbus. And although it wasn't featured on Radio 4 when I gave the interview, I did press the case for Stephen Crabb to be brought back into Government and Boris Johnson to be evacuated from the building. 

In order to get the best possible deal for Britain, what Theresa May first of all has to do is drop her red lines and free herself from the handcuffs that people like Boris Johnson and Jacob Rees-Mogg have applied to her. The First Minister, I believe, has issued a statement following discussions that were had during the British-Irish Council, but I will happily ensure that that statement is shared with Members again. The discussions that took place, I believe, in Guernsey covered the announcement by Airbus and the response from the First Minister, and also the joint statement from the First Ministers of Wales and Scotland.

Parking Brexit for one moment, the Member is absolutely right that the Welsh Government can and must have a role in ensuring that the right conditions are created for sustainable economic growth, not just within the aerospace sector, but in other sectors right across the economy as well. For our part, I was determined some time ago—and it was for this reason we built it into the Welsh Labour manifesto some years ago—to ensure that we captured the wing of the tomorrow. This is the future of Airbus composite manufacturing processes. If we don't get the wing of tomorrow, it's going to be far more difficult to ensure that the Broughton site has a long-term, viable future.

In order to capture the prototype of wing of the future, we decided to invest in the Advanced Manufacturing Research Institute. This is based on the well-proven model of the Advanced Manufacturing Research Centre just near Sheffield. It was a proposal that was also promoted by Plaid Cymru Members, including Steffan Lewis. Just a few months ago, I cut the ground on the AMRI. This is a crucial facility that will enable the prototypes of the wing of tomorrow to be developed in Wales. Okay, it may only have been £20 million, which, compared to investments that Airbus makes very regularly, may be a small sum, however, our contribution of £20 million will lead to an increase in GVA for the area of something in the region of £4 billion over the next 20 years. And if we get the right deal from Brexit negotiations, it will also secure employment for 6,500 people for many years to come.

Now, in addition to developing the AMRI, what we are also doing is making sure that the supply chain remains strong. It's quite a striking fact that the aerospace and defence sector in Wales employs 20,000 people across over 150 companies. We are incredibly strong in this sector, and that's part of the reason why we are so vulnerable and exposed in terms of Brexit. Six of the top 10 aerospace and defence companies worldwide have located significant operations in Wales. Airbus have two sites, General Dynamics have two sites, GE Aviation, Raytheon, BAE Systems—[Interruption.] No, the Member, from a sedentary position, says 'in spite of Brexit'. No, these are companies that have been based here for a good length of time and who share the concerns that Airbus have expressed recently, but which Airbus has been telling Members such as himself. If he would only get up to Broughton to talk with managers there. If he would only get over to Newport to talk with managers there. If he would only get over to General Dynamics, to GE Aviation, to Raytheon, to BAE Systems, to Safran who’ve acquired Zodiac. If he’d only get to companies like Qioptiq, like British Airways, the Defence Electronics and Components Agency, Babcock, Triumph. All of these companies have been consistent in the message that they have given to us in Welsh Government and to UK Government—that a 'no deal' scenario will hammer the defence and aerospace sector. In order to keep jobs in Wales, in Britain, we need a decent deal. To get a decent deal, Theresa May has to drop her red lines.

In terms of the wider economic conditions that can be created to support growth, the economic action plan clearly articulates a need to invest more in export and trade. As we exit the EU, we need to make sure that we rebalance the export profile of the Welsh economy. But we also need to make sure that we are exporting in the aggregate far more, that we are trading far more, and that's why we are opening more offices and we're having a greater degree of a presence in key territories around the world. We've opened offices recently in places like Montreal, and we'll be opening in other territories that are crucial to the future of the Welsh economy.

The economic action plan as well is clear in creating a lens through which we will support businesses that is designed to reduce the productivity gap between the Welsh economy and the economy of the rest of Europe. So, we will only invest in projects that can demonstrate that they are contributing to decarbonisation or improving trade and exporting figures, or ensuring that we embrace the fourth industrial revolution, that we are at the forefront of new technological change, or that ensure that we are creating high-quality employment. For that reason, because we are developing a consolidated fund, we expect to be able to allocate more resource in the future to those businesses that create jobs that are sustainable, that require higher skills, that are more productive, that contribute more to the Welsh economy and that offer opportunities for fair work and progression, to ensure that anybody that gets into the workplace can have an escalator of opportunity to get as high as they can possibly get.