House of Commons Welsh Affairs Committee

The responsibilities of the Secretary of State for

Oral evidence

10 July 2013 Rt Hon. David Jones MP, Secretary of State for Wales, and Glynne Jones, Director, Wales Office

Ordered by The House of Commons to be printed 10 July 2013

HC 533-i Session 2013-14 Published on 6 December 2013 by authority of the House of Commons London: The Stationery Office Limited £4.50

The Welsh Affairs Committee

The Welsh Affairs Committee is appointed by the House of Commons to examine the expenditure, administration, and policy of the Office of the Secretary of State for Wales (including relations with the National Assembly for Wales).

Current membership David T.C. Davies MP (Conservative, Monmouth) (Chair) Guto Bebb MP (Conservative, Aberconwy) Geraint Davies MP (Labour, Swansea West) Glyn Davies MP (Conservative, Montgomeryshire) Stephen Doughty MP (Labour, South and Penarth) Jonathan Edwards MP (, Carmarthen East and Dinefwr) MP (Labour, Llanelli) Simon Hart MP (Conservative, Carmarthen West and South Pembrokeshire) Mrs Siân C. James MP (Labour, Swansea East) Karen Lumley MP (Conservative, Redditch) MP (Labour, Newport East) Mr Mark Williams MP (Liberal Democrat, Ceredigion)

The following Members were also members of the Committee during this Parliament

Stuart Andrews MP (Conservative, Pudsey) Alun Cairns MP (Conservative, Vale of Glamorgan) MP (Labour, Clwyd South) MP (Labour, Pontypridd) Robin Walker MP (Conservative, Worcester)

Powers The Committee is one of the departmental select committees, the powers of which are set out in House of Commons Standing Orders, principally in SO No 152. These are available on the internet via www.parliament.uk

Publications The Reports and evidence of the Committee are published by The Stationery Office by Order of the House. All publications of the Committee (including press notices) are on the internet at www.parliament.uk/welshcom

The Reports of the Committee, the formal minutes relating to that report, oral evidence taken and some or all written evidence are available in printed volumes.

Additional written evidence may be published on the internet only.

Committee staff The current staff of the Committee is Marek Kubala (Clerk), Anwen Rees (Committee Specialist), Alison Mara (Senior Committee Assistant), Baris Tufekci (Committee Assistant), and Jessica Bridges-Palmer (Media Officer).

Contacts All correspondence should be addressed to the Clerk of the Welsh Affairs Committee, House of Commons, 7 Millbank, London SW1P 3JA. The telephone number for general enquiries is 020 7219 3264; and the Committee’s email address is [email protected]

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Welsh Affairs Committee: Evidence Ev 1

Oral evidence

Taken before the Welsh Affairs Committee on Wednesday 10 July 2013

Members present: David T. C. Davies (Chair)

Guto Bebb Nia Griffith Geraint Davies Simon Hart Glyn Davies Jessica Morden Stephen Doughty Mr Mark Williams Jonathan Edwards ______

Examination of Witnesses

Witnesses: Rt Hon. David Jones MP, Secretary of State for Wales, and Glynne Jones, Director, Wales Office, gave evidence.

Chair: Good morning, Secretary of State for Wales. saying that the whole project was written on the back Thank you very much for coming along this morning. of a packet of cigarettes. As we all know each other very well, I do not see any Mr David Jones: That, of course, is the view of the point in going through introductions, so I ask Geraint Mayor of London. I was wondering how long it would Davies to put the first question. take us to get around to HS2, Mr Edwards, but I personally think that HS2 has tremendous benefits for Q1 Geraint Davies: Secretary of State, you will the United Kingdom as a whole, not least for Wales, know that Swansea bay has been shortlisted—it is one because of the improvements in travel times. of four places—for the City of Culture 2017, and I am sure that you welcome this. I wonder what you Q4 Jonathan Edwards: What analysis have you thought you could do, and what you have done, to done of the impact of HS2 on the south Wales support the bid. The last references to the bid will be economy? Surely a major infrastructure rail line, in September and it will be announced in November. making travel between the north of England and What can you do to support the only Welsh bid? London far shorter, is going to have a huge impact on Mr David Jones: It is to be welcomed. Clearly, the south Wales economy. Swansea will have the attention of the world focused Mr David Jones: I think that the south Wales on it in the Dylan Thomas centenary, which is coming economy will take cheer from the announcement that up shortly and the Wales Office is very happy to do we made in July last year that we will be electrifying whatever it can to support it. To that extent, we will the Great Western line to Swansea, which will probably get in touch with Swansea city council and significantly improve journey times. In respect of see how it feels we can be most helpful. Cardiff, which of course is Wales’s capital, it will Geraint Davies: And me. bring it within the magic two-hour isochrone of Mr David Jones: And certainly you too, Mr Davies. London.

Q2 Jonathan Edwards: Being an experienced Q5 Jonathan Edwards: Is it not really the case, Minister and now Secretary of State, how do you based on the benefit-cost ratio and the huge escalating think prudent Ministers should respond when they costs, that HS2 is the biggest white elephant in the have a project in their in tray that has a benefit-cost history of white elephants? ratio of only £1 for £1—in other words, no multiplier? Mr David Jones: I would not accept that. Mr David Jones: Is that a hypothetical question? Jonathan Edwards: It is a hypothetical question. Q6 Mr Williams: I turn now to the Silk commission. Mr David Jones: Would you like to be a bit more When do you expect to be able to publish a response? specific, Mr Edwards, and I can then give your I appreciate that it is a complicated matter, with lots question due attention. of discussions within Government, but when do you Jonathan Edwards: Do you think that £1 for £1 expect to publish? We talked in the last Welsh Grand would be good value for an infrastructure project about the elastic definition of the term “spring”. You investment? added a new definition to “spring” in your response Mr David Jones: I would certainly like to see a better to the question, yet we are still waiting. return, with more bang for the buck. Mr David Jones: I think that it was an accurate definition of spring, but I am quite happy to concede Q3 Jonathan Edwards: How would you respond, that spring has now sprung and we have not published hypothetically, if the costs of a project were escalating our response to the Silk recommendations. You are severely? The London Mayor this week is saying that quite right that discussions are continuing within the cost of HS2, for instance, could now be up to Government. We have a position on most of the 33 about £70 billion, with the architect of the project recommendations, but there are a few on which we cobber Pack: U PL: COE1 [E] Processed: [04-12-2013 14:54] Job: 034876 Unit: PG01 Source: /MILES/PKU/INPUT/034876/034876_o001_MP Corrected transcript -FINAL - SoS - WAC 10 July 2013.xml

Ev 2 Welsh Affairs Committee: Evidence

10 July 2013 Rt Hon David Jones MP and Glynne Jones have yet to strike agreement and we hope that we will Government, subject of course to there being an be publishing our response very soon. income stream. One of the potential income streams could arise from the recommendations of the Silk Q7 Mr Williams: There was some speculation in the commission. press this morning—indeed, it responded to what was in our coalition Government document—about the Q11 Glyn Davies: I want to ask an associated English question and some suggestions of what the question about the Silk recommendation for a Government could bring forward in the autumn to referendum before going ahead with the Silk 1 deal with that. Is there any risk that the formulation proposals. I must admit that I have never been very and delivery of those policies could delay our push keen on referendums. I feel that Governments should for the Silk proposals any further? stand behind their policies. The Wales Office and the Mr David Jones: Are you talking about the McKay Government are very keen to give fiscal responsibility recommendations? to the Assembly, which I think would transform it as a responsible body of government. Is there any Q8 Mr Williams: Indeed. possibility of the Silk 1 recommendations going ahead Mr David Jones: The McKay recommendations are with a firm recommendation from the Government, extremely important. As you know, Chairman, they which would then mean that it was not necessary to address issues that have been raised by you on many have yet another referendum on the devolution of occasions. That is the West Lothian question. We powers? regard it as an important piece of work and we are Mr David Jones: Clearly, in due course, we will be considering Sir William McKay’s report seriously. announcing our response to Silk, but I would say that Again, we hope to respond to that shortly. similar powers in Scotland were the subject of a separate question in the referendum back in 1997. It Q9 Mr Williams: While our coalition Government is fair to say that this is something that the can quite rightly be very proud of what we are Government will have very much in mind when achieving in terms of the Scotland Bill and what I formulating their response. hope we will see coming from the Silk commission— your predecessor established the Silk commission and Q12 Guto Bebb: May I take you back to the issue of you hope to pursue that agenda—it is very much a the McKay report and the press’s attention this package, but there is nothing to impede a Wales Bill morning? I respect the comments that you made, and the implementation of Silk before the work of the saying that the information in the papers today is McKay commission. speculative and that the comments that have been Mr David Jones: No. The Silk recommendations are made are not attributed. In view of the Prime discrete proposals and they are being considered as Minister’s comments when he went to Scotland that, discrete proposals. if the Scots voted no to independence, further powers would be devolved, and in view of the McKay report’s Q10 Nia Griffith: Secretary of State, if I may, I shall view that there is a need to deal with the West Lothian press you further on that point. Newspaper reports this question, is it not the case that it is difficult to separate morning imply that the borrowing powers of the the Silk commission’s recommendations from any might be tied up in the same further attempt to deal with the impact of devolution package as the idea of Fourth Reading procedures for on the way in which this country is governed? English MPs. Are you saying that what we are doing Mr David Jones: I can only repeat that the Wales about English MPs would, in your mind, be Office is treating the Silk recommendations as an completely separate from what would be contingent entirely discrete issue. The reports this morning, I on Parliament—the talks that were held last October repeat, are speculative and I cannot comment more with the Welsh Government about borrowing powers, on them. which we understand are in the pipeline? Are these Chairman, the air conditioning unit is making quite a things completely separate, or are they integrally lot of noise and it is quite difficult to hear the linked in your mind? questions. Mr David Jones: I saw the reports in the Daily Mail and The Independent this morning. I would remark Q13 Chair: I suggest that the matter gets dealt with. immediately that they are speculative and are not The acoustics are quite bad in this room. attributed. Certainly, there are constitutional issues I think Ron Davies described devolution as a journey, that the Government have to consider, but in so far as but my concern is that it seems to be a journey with Silk is concerned, certainly we are dealing with them no reverse gear. How far along the road towards as discrete proposals. independence can we go without undermining the In terms of the announcement last October, as you United Kingdom? Are there a lot more powers that know, that was a commitment to consider convergence we can devolve to Wales but still be certain that Wales at the time of the spending review. That was remains part of the United Kingdom? considered at the time of this spending review; there Mr David Jones: You are quite right. Theoretically, was an exchange of correspondence between the Chief of course, if you were to continue devolving you Secretary and the Welsh Finance Minister agreeing would arrive at the point where there would be no that convergence had not taken place. The such thing as Wales within the Union. However, my announcement in October also made a commitment to perception is that there is very little appetite for borrowing powers for the Welsh Assembly independence in Wales. Historically, support for it has cobber Pack: U PL: COE1 [O] Processed: [04-12-2013 14:54] Job: 034876 Unit: PG01 Source: /MILES/PKU/INPUT/034876/034876_o001_MP Corrected transcript -FINAL - SoS - WAC 10 July 2013.xml

Welsh Affairs Committee: Evidence Ev 3

10 July 2013 Rt Hon David Jones MP and Glynne Jones always been less than 10%. Lord Elis-Thomas own view, as I said in Cardiff a couple of weeks ago, recently acknowledged that there had never really is that asymmetric devolution is a model that works been any appetite in Plaid Cymru for independence, pretty well in the United Kingdom because it respects although Mr Edwards might take issue with that. the history of the various nations within the Union. The terms of reference of the Silk commission are These are matters that we will no doubt debate very clear. They are to recommend modifications to extensively in due course when the McKay report the present constitutional arrangements that would recommendations fall to be considered by the House. enable the United Kingdom Parliament and the National Assembly to better serve the people of Q17 Geraint Davies: Do you accept that, when the Wales. Welsh Government successfully invest money in new jobs in Wales, the cost of unemployment benefit goes Q14 Chair: The First Minister is on record as saying down and tax revenue to the Exchequer goes up and, that anything that affects Wales should be decided in therefore, that the Welsh Government should get some Wales. Virtually everything affects Wales in some money back from that investment? Have you factored way: defence, foreign affairs and HS2 affect Wales. Is that thinking into your response? he not making an argument, perhaps inadvertently, Mr David Jones: Are you talking about Jobs Growth that virtually everything should be decided in Wales Wales? and that Wales should be independent? Mr David Jones: If that is what the First Minister Q18 Geraint Davies: No, I am talking theoretically said, I suggest that he was not giving the question and generally. When Wales spends money on jobs, sufficient attention. It seems to me, as you rightly say, the Exchequer saves money in benefits and gets tax. that if everything affecting Wales were to be However, Wales does not get a return on the money determined in Wales, then Wales would be an that it is spending; instead of spending it on health, independent state. education or on jobs, the money ends up in the Exchequer. Should Wales not get some of that return? Q15 Chair: I do not want to hog this and abuse my You are the Secretary of State for Wales, so don’t you position, but do you not worry, as I do, that every think that is reasonable? couple of years another tranche of powers gets Mr David Jones: In response to that, I point out that devolved to the Welsh Assembly but that there seems every penny that Wales spends—to be more accurate, to be no way back from it once they have gone and that the Welsh Government spend—is money from that, because this is only going in one direction, Wales the Exchequer. will inevitably end up semi-independent? Geraint Davies: I know that. Mr David Jones: You have to bear it in mind that, Mr David Jones: Your question appears to be that the when the coalition agreement was made, the Silk more Wales spends of Exchequer money, the more process, as it has become, was being described as a money it is entitled to get back, which I think is an Calman-like process. You will recall that the Calman unusual policy. commission in fact made recommendations that were for further devolution to Scotland but also for the repatriation of further powers from Scotland. It is Q19 Geraint Davies: No; but if it makes money for entirely a matter for the Silk commission, when the Exchequer, should it get a share? considering the matters under its remit, to decide Mr David Jones: I would like further details of your where it thinks powers best lie. It may well think, proposition, but it seems to me to be unusual. for example, that some powers that have already been devolved to Wales best lie with Westminster, but that Q20 Mr Williams: This relates to my earlier is entirely a matter for the commission and I am not question on the timetable. I know that I speak for my disposed to second-guess what its findings may be. colleagues in looking forward to the draft Wales Bill Chair: Shall we seek an alternative view? coming before this Committee for us to undertake pre- legislative scrutiny of it. How likely is it that the draft Q16 Jonathan Edwards: Going back to the point Wales Bill will include provisions related to devolving raised earlier by Guto, if the reports today are correct, financial powers? is it not true that we would have to move quickly to Mr David Jones: It depends entirely on the a symmetrical devolution settlement? Otherwise, you Government’s response to the Silk commission’s would have four tiers of MPs. For instance, if there recommendations. In fact, if it were necessary for was a Fourth Reading vote on a matter relating to primary legislation in respect of that response, it policing, English and Welsh MPs, based on the current seems to me that the Wales Bill would offer a useful devolution settlement, would vote on that, but vehicle to incorporate that into law. Northern Irish and Scottish MPs would be excluded. Obviously, that is quite a simple one, but I imagine Q21 Chair: Minister, when the former Welsh that a number of Bills would be very complicated and Assembly Education Minister decided, unilaterally in it would be far simpler to have that symmetrical Wales, to upgrade GCSE results, what conversations devolution when moving towards a federal settlement. did he have with you or his English counterparts Mr David Jones: That, of course, is predicated on the before doing so? reports today being correct, but they may well not be Mr David Jones: He certainly had no discussions with correct. Indeed, being speculative reports, they me. Whether he had conversations with the Secretary probably are not correct—at least not entirely. My of State for Education I do not know, but I am bound cobber Pack: U PL: COE1 [E] Processed: [04-12-2013 14:54] Job: 034876 Unit: PG01 Source: /MILES/PKU/INPUT/034876/034876_o001_MP Corrected transcript -FINAL - SoS - WAC 10 July 2013.xml

Ev 4 Welsh Affairs Committee: Evidence

10 July 2013 Rt Hon David Jones MP and Glynne Jones to say that I thought it a rather dangerous move on that we are quite successful at it—to devolution-proof his part. legislation that comes from Westminster. Certainly there are officials in each Department who are charged Q22 Chair: At the moment, clearly there are plans to with paying close attention to the devolution change GCSEs in England and some people in the settlement and its possible consequences in the Welsh Assembly and in Wales are concerned about devolved Administrations. this. Has there been any discussion with those in Wales about the plans that are taking place in Q26 Jessica Morden: On the decision to restructure England? GCSEs, how much were the Wales Office and you Mr David Jones: I know that the Secretary of State involved with the Department for Education in for Education regularly speaks to his counterpart in advance? Cardiff, but you are absolutely right that one of the Mr David Jones: That is an announcement that was issues that parents and pupils need to be assured about made by the Department for Education. It is is that the qualifications that they receive, be it in something in which the Wales Office would clearly England or in Wales, are readily understandable and want to become further involved, both with the are portable. This is a concern that has been expressed Department for Education and the devolved to me also by business leaders in Wales who are Administrations. becoming concerned about the divergence of qualifications. Q27 Jessica Morden: Were you consulted in advance? Q23 Chair: One of the things that surprises me a Mr David Jones: No. The policy formulation was little is that I hear complaints from the Assembly that carried out by the Department for Education. nobody in Government is talking to them, yet when the Assembly decides to do something unilaterally on Q28 Nia Griffith: On Whitehall’s understanding of exams in Wales they do not appear to talk to England. the devolution settlement, I had two responses from a Is it not inevitable that England will feel that it has a Health Minister about the plain packaging right to do whatever it wants with its exam consultation, which was UK-wide. Both times she qualifications, just as Wales now does with its? insisted that it was a matter for the Welsh Mr David Jones: Divergence in devolved policy areas Government. I responded and asked again and had the is a natural consequence of devolution. However, same answer back. Finally, she recognised that it had when one is talking about something as important and been a UK-wide consultation. fundamental as educational qualifications, it is Obviously, consumer legislation is a UK-reserved absolutely necessary for Ministers both in London and responsibility. I wonder if there are further steps that in Cardiff to speak to each other and particularly to you could take to ensure that, throughout Whitehall at ensure, as I say, that those qualifications are readily all levels, whoever is answering letters, there is an understandable, portable and, perhaps most understanding that these things are very complex. You importantly, are intelligible to prospective employers cannot say that all health and education is devolved. and further and higher education institutions. There are aspects of almost every Department that are partly reserved and partly devolved. Q24 Chair: Finally, would you encourage the Mr David Jones: You are absolutely right. I am sure Assembly Minister responsible for education to look that my predecessor, her predecessor and his carefully at what England is doing and to consider predecessor understood that trying to implant following suit and not try to do something different devolution awareness across Whitehall is not always just for the sake of it, given the relative size of Wales easy. But the example that you have given is a stark to England? one. You might like to write to me further about that Mr David Jones: Clearly, I respect the devolution and we will certainly pursue the matter. settlement and I respect the fact that the Welsh Nia Griffith: Thank you. Education Minister has competence in that particular area. Speaking personally, however, it seems to me Q29 Simon Hart: On that point, which is important, that the Secretary of State for Education is proposing I add to your list of concerns. Business rates is improved and more robust qualifications. I am sure something that you and I have talked about privately. that the Welsh Education Minister will pay close We probably all possess letters from Cardiff, as I do, attention to what is happening here. saying that business rates is a matter for Westminster, with Westminster saying that it is a matter for Cardiff. Q25 Jessica Morden: On the general issue of Leaving aside the frustration that that causes us, there communication, under your predecessor there was a are plenty of businesses around Wales, and “Devolution Ministers’ Group”, but it does not appear particularly in my part of Wales, for which all it in this year’s annual report. Does it exist any more? achieves is a frustration that we are all incompetent Mr David Jones: There are Ministers in each and that none of us knows one part of our body from Department who are considering issues of devolution. another. Therefore, the whole reputation not only of However, it is fair to say that implanting devolution Cardiff but of Westminster is damaged in the process. awareness across Whitehall is challenging. That is one Anything that you can do to make that simpler would of the reasons why the Wales Office has an important be appreciated. function, and it is a function that we take very Mr David Jones: It is a bit like painting the Forth seriously. It is, as far as we possibly can—and I think bridge, Chairman. cobber Pack: U PL: COE1 [O] Processed: [04-12-2013 14:54] Job: 034876 Unit: PG01 Source: /MILES/PKU/INPUT/034876/034876_o001_MP Corrected transcript -FINAL - SoS - WAC 10 July 2013.xml

Welsh Affairs Committee: Evidence Ev 5

10 July 2013 Rt Hon David Jones MP and Glynne Jones

Q30 Stephen Doughty: Secretary of State, were you to tell you which way I shall vote, but given that it is satisfied with the Government’s infrastructure wholly hypothetical, I shall not tell you now. announcement as it relates to Wales? Mr David Jones: Do you mean in the spending Q37 Stephen Doughty: I have one last point. Would review? you accept, Secretary of State—particularly in the area of infrastructure—that Wales has significantly Q31 Stephen Doughty: Yes, the Chief Secretary’s benefited from its membership of the European announcement. Union? Mr David Jones: Yes. I thought that there were some Mr David Jones: Do you mean to the extent that very good announcements for Wales. I was Wales has been the recipient of structural funding? particularly pleased with the announcement of a Stephen Doughty: Yes, and in many other ways. proposed prison in north Wales. That is long overdue. Mr David Jones: In terms of structural funding, it is In fact, I remember that when I was a member of this quite clear that Wales has been the recipient of many Committee we had an inquiry into the Welsh prison hundreds of millions, if not billions, of pounds of estate and it was identified then as a need. That is a structural funding. That, I suppose, is beneficial to very important piece of infrastructure; it will benefit Wales, although— north Wales prisoners, their families and their legal advisers. Q38 Stephen Doughty: You would suppose it was beneficial? Q32 Stephen Doughty: With the exception of the Mr David Jones: I was going to add that, in some prison, is it not the case that most of the things that cases, it is really quite hard to discern the benefit. I were announced as big infrastructure projects had would also gently remind you, as I am sure others will already been announced, such as electrification, the in due course, that Britain is a net contributor to the M4 and so on? Apart from the prison, what was in European Union. Therefore, the money that flows there for Wales? from the European Union at the moment could Mr David Jones: Actually, there was not an conceivably flow from a Britain outside the European announcement on the M4 but there were certainly Union. That is not to say that I am indicating one way very warm words from the Chancellor. Given that the or another. upgrade of the M4 at Newport would be a project the value of which is estimated at something like £800 million and given that the prison is worth another Q39 Stephen Doughty: That sounds like a strong £250 million, we already have £1 billion of indication to me, Secretary of State. infrastructure—ignoring, as you invite me to do, the Mr David Jones: The point is that you were positing upgrade of the Great Western line and the Valleys an argument that was based, it seemed to me, on the lines, which will be of tremendous benefit to south fallacy that the money that has come to south Wales, Wales. primarily from European structural funds, would not have come in if Britain had been outside the European Q33 Stephen Doughty: Obviously, Wales has Union. That is a fallacy and I am sure that others will benefited a lot from European structural funds over make that argument strongly. the years, particularly in infrastructure investment, yet I think that the Chairman wants to intervene. you described Europe recently as a basket case. Chair: I am tempted to let this carry on and to join Mr David Jones: I described the eurozone as a in on a particular side, but we are getting a little bit basket case. far from your responsibilities in Wales.

Q34 Stephen Doughty: Not the European Union as Q40 Geraint Davies: Very briefly on the last a whole? question, Secretary of State, you will be aware that Mr David Jones: I described the eurozone as a 150,000 jobs in Wales rely on Europe. If the next four basket case. years consist of arguing about whether we are in or out, would you not expect that a lot of prospective Q35 Stephen Doughty: Which way would you vote investors from emerging markets who want access to in a referendum? the biggest market in the world, namely Europe, Mr David Jones: That is a hypothetical question would choose to go for a safe option within Europe because there is no referendum. rather than in Wales? That would be completely against our interests. Q36 Stephen Doughty: But if there was? Mr David Jones: I do not accept that at all. The Prime Mr David Jones: If I may finish my answer, I think Minister has made his position very clear. He that the people of this country have a right to a recognises that the European Union is an important referendum. I find it interesting that the Labour party free trade area, if nothing else. He has acknowledged seeks to deny them that right. Certainly, before any that he would like Britain to remain within a reformed referendum takes place there will first be a EU and he is seeking to renegotiate Britain’s place negotiation, which the Prime Minister will conduct— within Europe so as to create that reformed EU. I do if he is still Prime Minister, but I have no doubt that not accept at all that investors would be put off by the he will be—in 2017. At that stage, based upon the Prime Minister’s stance. The Prime Minister has in outcome of that negotiation, the people of Britain will fact made it absolutely clear that his preference is for make their minds up. At that stage, I shall be delighted Britain to remain within the EU. cobber Pack: U PL: COE1 [E] Processed: [04-12-2013 14:54] Job: 034876 Unit: PG01 Source: /MILES/PKU/INPUT/034876/034876_o001_MP Corrected transcript -FINAL - SoS - WAC 10 July 2013.xml

Ev 6 Welsh Affairs Committee: Evidence

10 July 2013 Rt Hon David Jones MP and Glynne Jones

Q41 Geraint Davies: If you are Toyota or Tata, or thing on which we would like to have confirmation whoever it happens to be, and you say, “Either we get is whether the announcement is significantly different four years of big arguments about, ‘Are we in or out, from the one that we had in 2009. shake it all about,’” and the Secretary of State says, Mr David Jones: Do you mean the one that did not “I prefer to be out than in”— go ahead? Mr David Jones: Forgive me, but may I correct you? Guto Bebb: Absolutely. I did not say that. Mr David Jones: It is significantly different because it will go ahead. You are quite right that it has been Q42 Geraint Davies: There is a mixed view. If there widely welcomed in north Wales. I had a very nice was a chance of being out or in, would you put your note from Councillor Dyfed Edwards of Gwynedd bet on a long-term investment in that sort of country council, Mr Edwards’s colleague, who commended or on a stable country within the EU if you wanted the Wales Office for the work that it had done. We access to the EU? Surely, you would go for the latter, also had some nice press releases last week from Secretary of State, but that must be bad for Wales. Councillor Dilwyn Roberts, another of Mr Edwards’s Mr David Jones: You are citing Tata. I have had no colleagues, from Conwy. such representation from Tata. Have you? You are quite right. I am delighted at the response that Geraint Davies: I am talking generally. They are very we have had from north Walians of all parties to the concerned about the issue. announcement. It certainly will go ahead. Like you, I Chair: Order. This is a bit beyond us. was deeply disappointed that the one at Griffiths Crossing did not go ahead; I was never persuaded Q43 Geraint Davies: I turn to the infrastructure, about the grounds for not going ahead with that Chair. prison. In the Chief Secretary’s statement on infrastructure, you will know that 90% of the transport infrastructure Q46 Guto Bebb: In view of your comments in and 80% of the overall infrastructure is in London relation to the congratulatory notes from various and the south-east, let alone England, with virtually council leaders, what sort of approaches have you had nothing for Wales other than a prison. Why are you from local authorities in north Wales that are willing not arguing for a high-speed link with Wales? to offer sites for this proposed prison? What sort of Mr David Jones: I am sorry, but that is manifestly involvement have you had from local authorities? and palpably not true. Mr David Jones: There has been huge engagement. Geraint Davies: It is. For example, Denbighshire was very anxious to be Chair: Order. Please let the Minister answer. considered. Wrexham, too, is anxious to be Mr David Jones: You mentioned the prison, and I am considered. A couple of the sites that we are glad that you welcome it, but in addition to that we considering are in Wrexham. Councillor Neil Rogers, have the announcement of improved rail infrastructure the Labour leader of Wrexham council, has been in south Wales and the announcement of additional extremely supportive. Generally, it is welcomed and money for broadband. Generally, I think that Wales north-Wales authorities are quite willing to see the has had an extremely good deal. By the way, I remind prison accommodated in their area. you that national spending, such as on the prison, is over and above what is delivered to Wales under the Q47 Guto Bebb: In view of the fact that the prison block grant. will probably accommodate 2,000 inmates, will the catchment area be north Wales, south Wales or will it Q44 Geraint Davies: Jonathan Edwards mentioned also include the north-west of England? the white elephant of HS2, but isn’t it more of a red Mr David Jones: It will also comprehend the north- and white elephant? It is an English elephant and we west of England. I have to say that we have had should have our share of it. That would be about £2.5 extremely strong support from Cheshire West and billion, but we are getting only £1.5 billion overall. Chester council and also from Shropshire council. I Aren’t we just being short changed and you are not think that there is general recognition in the area, on standing up for Wales? both sides of the England-Wales border, that this is an Mr David Jones: Clearly you do not agree with your important development for the region. colleague Mr Albert Owen, who thinks that HS2 is absolutely wonderful because it will cut the journey Q48 Guto Bebb: My final question is what time considerably from Holyhead, where he lives, to assessment have you made of the economic impact of London. You probably do not agree with Mr Mark this prison when it finally gets built? What is the Williams, who I am sure is looking forward to vastly actual value to the local economy? improved journey times via Birmingham. To suggest Mr David Jones: The building cost alone is going to that it does not benefit north Wales, again, is be about £250 million. In addition, there will probably palpably untrue. be up to 1,000 permanent jobs on the site. An estimate Chair: That is probably enough on HS2. I bring in of something in the region of £23 million of positive Guto Bebb. impact on the local economy has been made.

Q45 Guto Bebb: It is fair to say that most people in Q49 Jonathan Edwards: I have a quick question, north Wales, and certainly local authorities and elected Secretary of State. Do you have any figures on the representatives, acknowledge the work of the Wales number of prisoners from north Wales currently Office on the announcement about the prison. The one housed in prisons in England? cobber Pack: U PL: COE1 [O] Processed: [04-12-2013 14:54] Job: 034876 Unit: PG01 Source: /MILES/PKU/INPUT/034876/034876_o001_MP Corrected transcript -FINAL - SoS - WAC 10 July 2013.xml

Welsh Affairs Committee: Evidence Ev 7

10 July 2013 Rt Hon David Jones MP and Glynne Jones

Mr David Jones: It varies, but I think that I am right Mr David Jones: You will have every opportunity to in saying that about 700 or 800 prisoners on average ask him again, but I have discussed this with him and from north Wales are accommodated outside north with the Secretary of State for Transport. Wales, but not necessarily in England; for example, they may be in south Wales. Q57 Chair: Would you agree, hypothetically, that if we could remove the VAT charges on the tolls it Q50 Jessica Morden: What are your plans for would be a good thing to do? improvements on the M4? Mr David Jones: I saw his reply to that question last Mr David Jones: The Chancellor, of course, described time around and I can only suggest that you ask him it as an impressive project. The UK Government are the same question again. in discussions with the Welsh Government on this issue. As you probably know, Edwina Hart, the Q58 Chair: What was your thought on his answer? Business Minister, has ordered preparatory work to be Mr David Jones: I thought that your proposition was done in scoping the project. We are actively engaged ingenious and I thought that he gave a very good both with the Welsh Government—I spoke to the First answer. Minister about this issue on Monday—and with the Department for Transport and HM Treasury. Q59 Chair: Okay. In general terms, would you say that it would be a good or a bad thing if the toll could Q51 Jessica Morden: When are we likely to know be reduced in some way? how it will be funded? Mr David Jones: Clearly a reduction in the toll is Mr David Jones: I think that the response to the Silk something that would be beneficial not just to south commission would probably be the appropriate time. Wales but to the whole of the United Kingdom. However, we have to have regard to the fact that the Q52 Jessica Morden: If the Government suggested two crossings are important pieces of national the devolution of financial powers to help with the infrastructure. I am sure that we would all agree that improvements on the M4, would that delay any it is far better to have the bridges than not to have improvements? them and that they have to be paid for somehow. Mr David Jones: I cannot see that it would. The M4 Clearly, as a proposition, reducing the toll would be is very important, a strategic route not just for Wales desirable and it is a matter for the Department for but for the UK as a whole. There is keenness not only Transport to decide how that should be done in due in Cardiff but also in the Department for Transport to course. see it upgraded. Q60 Chair: If it were possible to reduce the toll but Q53 Jessica Morden: It is obviously an important to maintain it at a level that covered the costs of strategic route, but the M4 relief road might go slap- maintaining the two crossings, it would be a desirable bang through the middle of my constituency, so would thing to do; provided that we maintain the costs of you also think it right that any consultation that the maintaining the two crossings, that would be fine? Assembly undertakes should take full account of the Mr David Jones: That would be desirable, but you environmental and local impact that any need to speak to an expert such as the Transport improvements may have? Minister, who I am sure will be able to give you a Mr David Jones: I am aware of the sensitivity of the very good and comprehensive answer to that question. proposed route. I do not know where you stand on that, Ms Morden, but I am sure that environmental Q61 Chair: Do you think that it would be issues will be a prime concern. Clearly this is going undesirable if any proportion of the tolls being paid to be a matter for the Welsh Government, who have in future were simply to go back to the Treasury to responsibility for highways in Wales. create a profit for HM Government? Mr David Jones: Speaking as a Welshman, I would Q54 Jessica Morden: Will you assure me that any agree with that proposition. I would like to see the money given for improvements for the M4 will be tolls as low as possible. Equally, speaking as someone substantial enough to take all those factors into who uses that road from time to time—in fact, more account? often than I used to—I am mostly anxious to ensure Mr David Jones: I reiterate that it is a matter for the that the crossings are properly maintained. Welsh Government, but we intend to ensure that Chair: Absolutely. sufficient support is given to secure the project and Mr David Jones: I think that everybody would agree the upgrade of the road. that a fair toll is probably necessary to maintain those bridges. Q55 Chair: Minister, what discussions will you have Chair: A few people want to come in on this. I shall about the future of tolls on the Severn bridge with work my way around from Geraint Davies. your counterpart in the UK Government in the Transport Ministry? Q62 Geraint Davies: We obviously know the history Mr David Jones: I see he appeared before you fairly of the toll operation and how it is paying for the recently. bridge and so on. That being said, in the case of the latest infrastructure plans, including HS2, the Q56 Chair: We will be seeing him again later this Government are obviously paying for the morning. infrastructure with no requirement for a payback from cobber Pack: U PL: COE1 [E] Processed: [04-12-2013 14:54] Job: 034876 Unit: PG01 Source: /MILES/PKU/INPUT/034876/034876_o001_MP Corrected transcript -FINAL - SoS - WAC 10 July 2013.xml

Ev 8 Welsh Affairs Committee: Evidence

10 July 2013 Rt Hon David Jones MP and Glynne Jones the consumer. Yet in the case of the Severn bridges— Q66 Jonathan Edwards: Following up on that last and we understand the lessons of history—Welsh and question, Secretary of State, is it not the case that the English commuters or visitors are paying towards that Welsh Government have had far less of an increase in infrastructure. Given that we face difficult times and capital expenditure in the spending review than both we need our infrastructure, do you not think that there Northern Ireland and Scotland? is a case to be made for some of the infrastructure Mr David Jones: You have to have regard to the fact spend being used to bring down the tolls? that the devolution settlements are different and that Mr David Jones: Again, we are rehearsing what you more is devolved in Scotland than in Wales. You are obviously very well aware of. Severn River cannot just pro-rata the calculation. I think that Wales Crossings is entitled to tolls until 2018. was very fairly treated in the spending review. Geraint Davies: I know the background. Mr David Jones: Whichever way you look at it, the Q67 Simon Hart: I have a less miserable outlook Transport Minister has indicated that it will be at least than Mr Davies in terms of infrastructure. I emphasise the summer of 2018 before they are paid off. There that the value of the M4 improvements are almost as are also ongoing charges on the bridges, which he important for west Wales as they are for the Newport indicated to you, that have to be repaid to the and Cardiff area. Businesses largely welcome the Government. Although one clearly would like the tolls comments that have been made and the expectation to be relieved—and, in an ideal world, to be removed that something is at long last going to be done. The only thing on which I would ask for your assistance altogether—we have to face the reality that these two is the business of clarity. important pieces of infrastructure, the second one in I asked a question yesterday of the Deputy Prime particular, have to be paid for before we can arrive at Minister, making a point about what the Chief the point that you mention. Secretary to the Treasury had said about the connection with the M4 improvements and the Q63 Geraint Davies: On timing and infrastructure, outcome for the Silk negotiations, and his answer was, do you accept—given previous comments like, “We “It is a very complex issue and we will endeavour to are not getting our fair share of the overall respond as soon as possible.” A lot of businesses have infrastructure spend,” alongside the issue that Silk, it been teased and tantalised and they think that appears, is delaying a capital settlement for Wales— something decent is coming down the line. If we are that, not only is there discussion about whether we get going to get the maximum inward investment, a fair share, but about the timing of investment that certainty of some sort would be valuable. The lack of we desperately need now, which is being pushed into certainty is my only criticism. the future by Silk? Wouldn’t you accept that is a Mr David Jones: I agree that commuters and business problem for Wales? people in your part of the world would like to see the Mr David Jones: No, I do not accept that at all. In M4 upgraded. I think that the Chancellor gave a very the context of the time span that we are talking strong indication that the Government are very about—after all, it is 25 years—a few more weeks favourable towards the Newport upgrade of the M4. while Silk is considered is not really going to add However, one of the issues that concerns you, Mr anything to the equation one way or the other. In any Hart, is what happens when you drive west beyond event, I am not entirely sure of the correlation Carmarthen. Ultimately, as you know, the road between our response to the Silk commission and the becomes a dual carriageway, then a single terms on the Severn bridge. carriageway and by the time it gets to Fishguard it is not a very good single carriageway. But this is an Q64 Geraint Davies: Will you confirm that you are important European route. One of the things that I believe the Silk commission should be looking at is consistently fighting for Wales to have a fair share of the arrangements for the maintenance and potential capital, alongside Silk, and not holding back? When I upgrade of these important trans-European routes, the put the question to the Chief Secretary to the Treasury M4 being one of the two in Wales. about the failure to provide enough infrastructure investment in Wales, he said, “Don’t worry, we’re Q68 Simon Hart: I absolutely agree, but there is a waiting for Silk.” We could wait forever for Silk, but problem when you get as far west as St Clears: your we need the money now. We are in desperate straits. colleague in the Wales Office wants a dual Mr David Jones: We have to have regard to the fact carriageway to Fishguard and I want one to Pembroke that, since the last spending review, Wales has had Dock, but that probably will not be resolved on any £850 million-plus of capital over and above the block of our watches. The Chancellor’s words were indeed grant. In terms of Wales’s benefit from being part of warm and everybody now has a genuine expectation the UK and the extent to which the UK is having that the Newport upgrade will be done. But if we can regard to Welsh interests, that speaks for itself. narrow it down to which decade it will be done in, that would be of value to people who are looking to Q65 Geraint Davies: But it is a very small share of invest in west Wales. the overall spend. It is much less proportional. The Mr David Jones: I would certainly hope that we are capital spend that we get in Wales is a small fraction not talking about future decades. of the 5% of the population that we have. Mr David Jones: No. Wales has done extremely well, Q69 Glyn Davies: This is a linked point, Secretary I think. of State. We know that the south Wales economy is cobber Pack: U PL: COE1 [O] Processed: [04-12-2013 14:54] Job: 034876 Unit: PG01 Source: /MILES/PKU/INPUT/034876/034876_o001_MP Corrected transcript -FINAL - SoS - WAC 10 July 2013.xml

Welsh Affairs Committee: Evidence Ev 9

10 July 2013 Rt Hon David Jones MP and Glynne Jones greatly advantaged by the Severn bridge and that a Q73 Guto Bebb: I should declare an interest. change in the toll regime would make a difference. Specifically, it is important to state that the settlement Exactly the same thing applies to mid-Wales. The of the continued security of funding for S4C in 2017 mid-Wales economy depends on links to the English illustrates the fact that the Wales Office takes its market. Devolution has produced a situation—I have responsibilities towards the Welsh language very raised the matter before—which is devastating for us. seriously. Regarding the links on the A458 and the A483, the Would you advise the Committee about your views on Welsh Government would be willing to put in the the proposed changes to legal aid and the impact of investment on our side of the border, but the those changed recommendations in terms of Welsh Department for Transport have almost no economic language provision in parts of Wales? benefit at all because they do not have any markets, Mr David Jones: Yes. It was always the case that the so they are not willing to do so. What discussions are Ministry of Justice recognised the importance of you having with the Department for Transport to Welsh language provision. This was something that I ensure that we have a British response to improving had spoken to the Lord Chancellor about and I am the economy of mid-Wales and not just south Wales? satisfied that he is aware of the importance of Welsh Mr David Jones: You are absolutely right. The A483 language provision. You will probably know now that in particular is an important and strategic north-south he recently indicated that he has acknowledged the route in Wales. The problem, as you rightly say, is importance of choice in terms of legal aid. This, I that on the Welsh side of the border it is a route that hope, will give further comfort to those individuals is ripe for upgrade, but on the English side of the who are concerned about Welsh language provision. border it is basically a quiet country road. It was actually worse before we took power. It was then a Q74 Jessica Morden: On the annual report, as part route that was controlled by an entity called the West of the spending review, you are going to have to find Midlands Regional Assembly, which I had never an extra 10% of the administration costs of the Wales heard of before, and by the time I did hear of it, it Office in 2015–16. Why did you give bonuses to 10 had been abolished. At least we have the Department of your staff last year? for Transport. Mr David Jones: The bonuses, in fact, were not This is another issue that Silk should be giving provided by the Wales Office, because the Wales consideration to. You make the very important point Office is not an employer. The bonuses were provided that the devolution settlement did not comprehend by the paying Department, which is the Ministry of these particular issues and it is absolutely essential Justice. that the commission should be looking at routes such as the A55, the M4 and the A483 and deciding what Q75 Jessica Morden: What were they for? arrangements should be put in place. In the meantime, Mr David Jones: Good performance. I can confirm that I am speaking to the Department for Transport about that route, but it would be so much Q76 Jessica Morden: Do you not think that people better if there were formal arrangements for upgrading might think it a bit strange at a time of pay restraint and maintaining that route. to see people being given bonuses of between £2,000 and £7,500? Q70 Glyn Davies: The A458 is a key part, as well. Mr David Jones: It is a question of how good the Mr David Jones: Will you remind me which road performance is. For example, in the private sector, if that is? there was outstanding performance, people would recognise that those payments were justified. Q71 Glyn Davies: That is the road from Shrewsbury to Welshpool. That gives access to Birmingham. The Q77 Jessica Morden: So you are not embarrassed A483 gives access to Manchester, but probably the about it? most significant one is the A458. The contribution Mr David Jones: As I say, the Wales Office is not from the Department for Transport is a very small actually the paying Department. proportion of total investment, but there is no capacity for the Welsh Government to spend money on the Q78 Jessica Morden: It is still public money. English side. Mr David Jones: Of course it is public money. Mr David Jones: You are right. I must confess that I had thought more about the A483 because it is a Q79 Jessica Morden: There is much in the annual strategic Welsh route from north to south. report about co-operative working with the Welsh Government. How is that going? Q72 Guto Bebb: I have a quick question. Obviously, Mr David Jones: I believe that it goes pretty well. I as a result of the 2011 Welsh language Measure in the think that our Office has a good business-like Assembly, the Wales Office has significant relationship with the Welsh Government. I have responsibilities for providing Welsh language services regular meetings with the First Minister, and other through the non-devolved Departments. I do not think Ministers in the Wales Office meet other Ministers in that anybody doubts the commitment of the Wales the Welsh Government. Given that we have Office in this respect. Governments in Whitehall and in Cardiff of different Mr David Jones: Indeed, we were at pains to appoint political stamps, the relationship is as good as could an adviser on an unpaid basis. be expected. It is a business-like relationship. cobber Pack: U PL: COE1 [E] Processed: [04-12-2013 14:54] Job: 034876 Unit: PG01 Source: /MILES/PKU/INPUT/034876/034876_o001_MP Corrected transcript -FINAL - SoS - WAC 10 July 2013.xml

Ev 10 Welsh Affairs Committee: Evidence

10 July 2013 Rt Hon David Jones MP and Glynne Jones

Q80 Jessica Morden: How did your butterfly public sector. Across the country these have been collector speech go down in terms of your relations significantly outweighed, almost three to one, by an with the Welsh Government? increased number of jobs in the private sector. Indeed, Mr David Jones: That was a speech that I made at your colleague Peter Hain has already acknowledged the invitation of Cardiff university. The speech was that Wales is too dependent on the public sector and I certainly a personal speech and I was at pains to say am sure that you, as he would, will appreciate the it was a personal speech. Similarly, of course, the First increase in private sector jobs that the Government Minister made a speech to the London School of have presided over. Economics, which I am sure he would acknowledge also was his personal view as to the future of Q85 Geraint Davies: May I ask whether you are devolution. actively engaged in helping Welsh companies get contracts for some of these massive procurement Q81 Jessica Morden: I have a last question on opportunities emerging particularly in England from welfare reform overall. Obviously, Wales is hit the Government? I know that in the case of the particularly hard by welfare reforms with some of the Olympics, Wales had a very poor showing in terms of changes for disabled people in Wales—the bedroom procurement. For the future, on things that are rolling tax hitting 25,000 people, the cuts to DLA hitting forward that you are aware of, is there any way that 40,000 people and 50,000 having their benefits you can help facilitate jobs in Wales being supported? reduced. Do you agree with Disability Wales that we Mr David Jones: By far the biggest piece of should have a cumulative assessment of all these infrastructure that is planned in Wales— changes for disabled people and that that is the very least that we could do just to see what is really Q86 Geraint Davies: I am thinking about outside happening on the ground? Wales. Mr David Jones: This is something that I know Mr David Jones: Let us deal with Wales for a start. colleagues in the Department for Work and Pensions At Wylfa we will have a £10 billion investment. The keep under constant review. I am sure that they will Wales Office has already been heavily engaged with take fully into account any representations that are both the Department for Business, Innovation and made by groups such as Disability Wales. Skills and the Department of Energy and Climate Change in helping to put together a contact point for Q82 Jessica Morden: Would you, as the Wales Welsh businesses to take advantage of that huge Office, be willing to pull together and present to us infrastructure investment. some of that Welsh information? In terms of public procurement, we have seen Lord Mr David Jones: I think that Disability Wales is well Young’s recent recommendations, which will capable of doing that work. In fact, it has done that significantly ease the burden of Welsh SMEs that are work for itself. seeking to tender for large-scale public contracts in England. For example, we are abolishing the pre- Q83 Jessica Morden: But you will not do that qualification questionnaire for any project up to yourself? €200,000. I would like to see the Welsh Government Mr David Jones: Ultimately, the responsible do that, because one of the complaints that I get from Department is firmly the Department for Work and my constituents is that the Welsh Government’s Pensions. procurement process is heavily weighted against SMEs and in favour of large companies. The Q84 Geraint Davies: Secretary of State, you know consequence is frequently that, in Wales, large English that the cuts are being targeted at the number of public companies get the contracts. The Welsh Assembly sector jobs, public sector pay and welfare and also Government have to play their part in the process. that Wales has a disproportionate number of people in the public services—in Swansea it is 40%—and a Q87 Geraint Davies: I think that you will find, disproportionate number of people with disabilities Secretary of State, that 65% of procurement in Wales who are being hit by the cuts that Jessica Morden has is from SMEs, half of which are in Wales, and that mentioned. It has a disproportionate share of the cuts, just 6% of procurement is from SMEs in England. but it does not have a proportionate share of benefits May I ask you again, in terms of the new in terms of investment in infrastructure. Is there opportunities, will you now actively engage in trying anything that you can do to redress that imbalance, or to get Welsh companies to get jobs through English are you just fighting for an unfair share of cuts and procurement, which tends to be concentrated in big not a fair share of investment? companies, contrary to what you said? Mr David Jones: I totally reject that proposition. In Mr David Jones: I think that Lord Young’s terms of infrastructure, I have amply answered that recommendations will go a long way to making life a point by saying that Wales has had a very good deal lot easier for SMEs, Welsh SMEs included. in terms of infrastructure investment. In terms of job Chair: Thank you very much indeed, Secretary of losses, yes, there have been job reductions in the State. That brings the session to a close, so I thank you all for taking part today.

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