Examination of Witnesses (Questions 1-51)
RT HON
CHERYL GILLAN
MP, MS FIONA
ADAMS-JONES
AND MR
GETH WILLIAMS
20 JULY 2010
Q1 Chair: Good morning, Secretary of
State, and everyone else.
Mrs Gillan: Good
morning, Chairman.
Q2 Chair: It is wonderful to see
so many people coming into the Welsh Affairs Select Committee
and I look forward to it being as busy as this every single week
that we meet. You have very kindly agreed to give evidence to
us for an hour. We have quite a lot of questions, and I know members
are keen to get through them as quickly as they can, but I understand
that you would like to make a five-minute statement first, which
we are happy to hear. Secretary of State for Wales, the floor
is yours.
Mrs Gillan: Chairman, thank you
very much indeed, and can I say I really want to start by thanking
the Committee for inviting me here to give evidence today. It
is quite fair of me to say that I recognise the valuable contribution
that this Committee has made. While I was in opposition, I was
often sitting behind here to listen to evidence in the public
sessions, and I can assure you that I will continue to recognise
this Committee's importance while I am Secretary of State for
Wales. Can I just also start by introducing the two officials
from the Wales Office who are accompanying me: Fiona Adams-Jones,
who is of course the Director of the Wales Office; and Geth Williams,
who is the Head of Legislative Policy. I am very pleased that
they are here today as well if there is any detail we need to
get across with the Committee. I am grateful for the opportunity
to briefly set out at the beginning of this session my priorities
as Secretary of State for Wales, and the progress that I have
already made on some of them. The coalition Government has set
out its support for devolution and it has a great role, I believe,
where appropriate, in developing local solutions to local problems,
if you like, Welsh solutions to Welsh issues. However, the Government
is also committed to the Union and believes that together, as
members of the United Kingdom, the four countries of the Union
stand far stronger together than they ever could alone. To this
end, the co-ordination, I believe, between Whitehall, Parliament,
the Welsh Assembly Government and the Welsh Assembly is of great
importance and I think that that is a view that the Committee
will share, following their inquiry into it in the last Parliament,
and I know that there are two members of this Committee in continuance
from the last Select Committee, so they will appreciate that.
You have also now got the Government's response to that last Report,
and I appreciate you may not have had time to go through it yet,
but I hope that you will find that that response is very positive
and forward-looking and gives us that continuity between the last
Select Committee and the current one. The Wales Office, I think,
has a very important function to be a bridge between Whitehall
and Cardiff Bay, and I am certainly working very hard to establish
the foundations of collaborative working to ensure that the people
of Wales get the best possible service from both administrations.
In addition, on the priorities for the Wales Office, I think that
that involves raising our game across Whitehall on the knowledge
of Wales and getting policy right in relation to Wales. I have
asked the Prime Minister to ensure that each Whitehall department
has a nominated minister, or ministers, that understand Wales
and devolution and can, and I have used the expression myself,
`devolution-proof' announcements that we make and proposals that
come forward so that devolution is actually at the heart of policy-making.
This Committee found in the past that that performance was really
patchy across Whitehall and I hope that some of the steps that
I have taken will address this because I certainly found that
when I was in opposition, but it is a two-way process and I have
to reiterate that we need reciprocity from the Welsh Assembly
and the Welsh Assembly Government and, to that end, I have worked
very hard with the First Minister, we have regular monthly meetings,
and I have already met with the Welsh Assembly Cabinet as well.
I have always said, and I think it is honest to say, that we may
all come from different political sides of the equation, but I
do not see that that should stand in the way of joint working
for Wales because some of the issues are just simply too important,
in my book. Just for the Committee's information, I thought I
would cover a couple of topics as well very briefly and I thought
I would do, Chairman, if it is all right with you, a bit on the
referendum and a bit on funding.
Q3 Chair: We are actually going to
ask questions on that, so, if it is all right with you, maybe
we could just start by asking you a few questions.
Mrs Gillan: If you would want
to, but can I just conclude that I have a very small Department
which has to do, with my view for Wales, a very big job, and I
work within the coalition Government obviously and I am working
with the coalition Government of two different political parties,
so I think that we have a duty to find better ways of working
together and that is what I shall be doing in the best interests
of Wales.
Q4 Chair: Thank you very much indeed.
Can I just ask you to begin by setting the scene for us and tell
us how many people actually work in the Wales Office and what
the budget is, very briefly.
Mrs Gillan: Yes, the Wales Office
has a budget of approximately £6 million and we have around
61 people working in the Department. We have some officials that
are on secondment from the Welsh Assembly and we do have officials
that come across to us for a period of time, but remain under
the terms and conditions of the Welsh Assembly as well as, from
time to time, officials that come in from other departments across
Whitehall, but it is a small, but very determined, Department,
Chairman.
Q5 Chair: What would you say is the
long-term priority for the Wales Office and how are you going
to achieve that? How do we judge whether you, as the Secretary
of State, have achieved what you set out to achieve?
Mrs Gillan: Well, first of all,
my priority has to accord with that of the coalition Government
because of course our priority is to reduce the deficit and to
make sure that we get the finances of the United Kingdom back
on track, and that has to be the first priority and that has been
set quite clearly by the Coalition Agreement and by the coalition
Government right across the board, but for Wales, I think, following
very much on from the last Select Committee's report, I see, first
of all, getting the way of working between Whitehall and my Department
and the Welsh Assembly as a matter of great priority. I have explained
to you that I have got regular meetings now with the First Minister,
and you may be interested to know that I have also had bilaterals
with Jane Hutt, the Economics and Finance Minister, and I have
been working on ensuring that there is a lot of contact and a
lot of co-ordination with everything we do. Whitehall seems to
have not taken on board fully, as was criticised in the last Select
Committee report, the implications of devolution, so we are having
named ministers or, in some cases, all ministers in a department
responsible for looking at devolution and we have devolution champions
in each of the departments, and that existed before the election,
but by making sure that they are up to speed. We are holding a
series of educative sessions for officials and civil servants
and we are trying to make sure that every single department, every
single piece of legislation, everything that is done in all the
other departments looks at the implications for devolution.
Q6 Chair: Yes, we saw the report
this morning, your response to Wales and Whitehall, and
I personally thought that was very positive, so we are looking
forward to seeing more of that in the future.
Mrs Gillan: Well, can I say that
that took a lot of work by officials and we have had a lot of
work co-ordinating with other departments on that, so you can
see the energy, enthusiasm and determination of this Department.
Q7 Jessica Morden: In your working
with other departments, what has been your role in determining
what funding for Wales we will get in the Spending Review?
Mrs Gillan: Well, I have already
met with the Chief Secretary to the Treasury and talked about
the implications for Wales, and obviously, as has been admitted
right across the board by politicians of all political persuasions,
there are going to have to be cuts right across the board. However,
because the Barnett Formula also includes health and because we
are protected in the health budget, I am very much hoping, as
with the £6.2 billion cuts that were announced earlier in
this Parliament, that the implications will not be so great for
the Wales DEL (Departmental Expenditure Limits). Interestingly
enough, I looked at what happened with the £6.2 billion because
I thought it was quite important, and the average effect was a
1.2% cut across the board UK-wide and in Wales it was 1.1, so
I was quite pleased about that.
Q8 Jessica Morden: So have you met
with the Secretary of State for Health, and would you elaborate
on what reassurances he gave you about protecting health?
Mrs Gillan: No, I met with the
Chief Secretary to the Treasury, and of course I cannot determine
what is going to happen in the Comprehensive Spending Review,
but we all know that that is being looked at and it is going to
be announced on October 22, and I think it is fair to say that
I have certainly gone in to bat on financial matters as far as
Wales is concerned. You may be interested to know that I attended
the quadrilateral with the Chief Secretary to the Treasury, which
was Northern Ireland, Wales and Scotland with the Chief Secretary,
looking at financing, and then I had an additional bilateral,
Jane Hutt and myself, with the Chief Secretary to the Treasury
and we put out a joint press release afterwards because we discussed
with the Chief Secretary to the Treasury certain matters that
are of great interest to the Welsh economy.
Q9 Jessica Morden: With 30% of the
workforce in Wales in the public sector, Wales is obviously particularly
vulnerable to public service cuts. What evidence have you got
that the private sector in Wales is willing to step in and fill
that gap?
Mrs Gillan: Well, I think you
are absolutely right on that. I think we are all aware that Wales
has one of the highest proportions of people in public sector
employment, and it has been acknowledged right across the board,
if you like, that the private sector is too small in Wales, so
we will need to build it, and I recognise that we need high-quality
and stable jobs coming to Wales. I think one of the announcements,
you may have noticed, which we made a few days ago was the General
Dynamics' announcement of £500 million for the approving
of the Scout test build, and I was particularly pleased because
I talked to General Dynamics about this and it will protect, and
create, jobs in Wales and of course, if that project does go ahead
and there are substantial orders for Scout ultimately, the estimate
from General Dynamics was that it could be up to 10,600 jobs,
although not just in Wales, I have to say, but across the United
Kingdom in other places, so I was particularly pleased about that.
I have already had meetings with the CBI and others and I am certainly
looking at how we promote the private sector in Wales, and I think
particularly important was the announcement that came from the
Welsh Assembly Government. The Deputy First Minister made the
announcement of the six areas on which he wants to concentrate
for economic growth. Now, that was only a few days ago and I do
meet with him regularly as well and I am looking forward to having
discussions to see how we can complement and how we can work together
because I think it is really extremely important.
Chair: That will be of great interest
to everyone, I think.
Q10 Jonathan Edwards: Will you give
an indication of the sort of percentage cut you will be willing
to accept in the CSR for the Welsh budget?
Mrs Gillan: Mr Edwards, I am not
in a position to be able to do that, as you know. The Comprehensive
Spending Review is in the hands of the Treasury and I cannot at
this stage reflect on that in any way that would be meaningful
for the Committee.
Q11 Alun Cairns: Secretary of State,
you obviously mentioned the Barnett Formula and that is a mathematical,
theoretical formula that can be applied to the changes in spending
in the English spending departments, but there are some grey areas
from time to time where the Welsh Assembly Government may have
a difference with the Treasury about the interpretation of some
figures, so in such a situation what role will you play, as Secretary
of State? Will it be in defence of the Treasury, or will it be
in support of seeking to get a larger slice of the cake for the
Welsh Assembly Government?
Mrs Gillan: Mr Cairns, let me
make it very clear to you that I am here to bat for Wales and
I am quite prepared to do battle with the Treasury, as, I think,
is every Secretary of State and every Department. However, I am
a member of the Government, and we do have methods of dispute
resolution from to time to time, but what I think is really good
is that the Prime Minister has put himself at the head of the
JMC, the Joint Ministerial Committee, and for the first time for
a long time the Prime Minister and the Deputy Prime Minister hosted
that for the First Ministers in the Cabinet Office. I think that
level of co-ordination and contact will continue and I certainly
would always stand ready. Can I just say, Chairman, on matters
of finance that I have been able to ring the First Minister this
morning because we were discussing the financing of the referendum
and the First Minister had asked me to look at, with the Treasury,
the financing not only of the referendum, but the Electoral Commission's
costs. I wrote to the Chief Secretary to the Treasury and I said
that I thought it was reasonable and we should meet the Electoral
Commission's costs for the referendum and I was able to ring the
First Minister, Chairman, this morning and give him that good
news, that the Chief Secretary to the Treasury has agreed to my
request.
Q12 Chair: But do you have any estimates?
Mrs Gillan: I do not have any
estimates of that at the moment, but I think it is millions as
opposed to thousands.
Q13 Owen Smith: Secretary of State,
I wonder if I could return to the issue of the Government's economic
strategy and how it might impact in Wales and, in particular,
get your view on the probability, it would seem when we look at
the experts' economic reports we have seen over recent days, that
Wales is unlikely to see the sort of growth in private sector
jobs that is being anticipated for other areas of the country.
Are you not worried that on your watch we are going to see Wales
suffer disproportionately?
Mrs Gillan: Can I say, I am worried
on my watch by the economic situation that we have inherited and
there is an £890 billion national debt which is the last
Government's legacy to this country. If we put that into proportion,
that means that £22,000 for every person in the UK, if we
take no action on the debt, would be what every person would owe,
so this Government's priorities must be to reduce that debt, but
I think that we also have to make sure that we show that Wales
is open for business. Can I say, one of the first things I did
when I came into the Department, because we are looking at savings
and cuts across all departments and because we have had successful
decentralisation of some government departments, I wrote round
all my colleagues in the Cabinet and said that, if they were thinking
of moving any of their offices to Wales, we would be very pleased
to have them, and I have had some very good replies from other
Cabinet members, saying, "Thank you very much for pointing
that out to us", so we need to start with putting our own
house in order. One of the things that has been really heartening
to me, Chairman, is the way in which the Welsh Assembly Government
has effectively established a focus on six areas.
Chair: Well, I do not think we can go
through all of those at the moment.
Q14 Owen Smith: Clearly, we can all
agree that growth is going to be the real key to reducing the
deficit, so could you give us some indication as to how many jobs
you think are going to be created in Wales over the next five
years? What proportion of the 2.5 million that the Government
thinks will be created across Britain will be in Wales?
Mrs Gillan: Mr Smith, after eight
or nine weeks in office, I think, giving you a hard-and-fast figure
on how many jobs are going to be created in Wales would not be
the sensible course of action. What I can assure you is that I
will be looking for every opportunity to attract inward investment
into Wales, and we will be working with the Welsh Assembly Government,
with Whitehall and with private business and industry to ensure
that we make the best possible circumstances for businesses to
come in. I think the announcement by the Treasury that new business
start-ups outside the South East and the East will have the break
on national insurance is already showing an indication of how
we do want to make sure that there are good conditions for business
to start up, and I think the announcements on corporation tax,
reducing it from 28p each year down to 24p, gives the sort of
stability to businesses that shows that they can come and do business
in this country and, I hope, in Wales as well.
Q15 Owen Smith: So what did you make,
in that case, of the Oxford Economics' report which came out on
Friday which predicted that just 4,000 jobs will be created in
Wales versus 65,000 in Scotland or 100,000 in the North West?
Do you think that is plausible, that 4,000 figure?
Mrs Gillan: I have had a brief
look at that report and I have asked for further work to be done
on that and, if you like, I will write to you when I have had
some further work done on that, but I think that at a stage like
this there is only so much ground we can cover in our Department,
and we are covering an awful lot of ground, so I will come back
to you, if you like, with a letter and give you an evaluation
of where we have got on that.[1]
Q16 Owen Smith: I am very interested
to hear you talking, Secretary of State, about the sectoral approach
that the Welsh Assembly Government is applying right now, and
obviously in stark contrast to the more laissez-faire approach
that we are seeing in Westminster. Which sectors of the economy
do you think, or do you hope, we are going to see grow over that
five-year period? Which industrial sectors do you think we will
see creating jobs?
Mrs Gillan: Well, I have been
very excited about what has been happening in the life sciences.
I went down to Swansea and I looked at ILS1 and they are building
an ILS2, and I was very, very pleased to see how we are taking
our research and development and moving it forward to market so
quickly, and I am very optimistic there. I also went up to the
Technium and had a look at the fantastic optics work which is
being done up there in North Wales. Of course, we are hoping to
grind the lenses for the largest telescope in the world and that
would be terrific. I have been to look at the site for the media
village for the BBC and I have been to ITV Wales already, and
I think the creative industries really can come alive; we have
got tremendous expertise in Wales on this. It is not just Doctor
Who, but we have got the largest amount of drama productions
in production at the moment in Wales. I went on the set, for example,
of Upstairs, Downstairs and I think the creative industries
will be really good. Energy and the environment, I could go on,
Chairman, again—
Q17 Owen Smith: Are we doing enough
to support these though? I think that is the point I am making,
that, in stark contrast to Wales where we are now actively, as
we were doing when we were in Government, supporting specific
sectors, in Westminster you have chosen to withdraw all of that
sector-specific support.
Mrs Gillan: I think actually what
was quite interesting was that in the Economic Renewal Programme
announced by the Welsh Assembly Government they have withdrawn
business grants, as such, giving direct grants to businesses,
and what they are looking at is a focus on that, and I hope that
I will be able to work with the Deputy First Minister to look
at how we can complement and how we can move these areas forward
together.
Q18 Guto Bebb: Secretary of State,
in relation to the sectoral views of the Welsh Assembly in terms
of targeting six sectors of the economy, are you in a position
to raise concerns with the Assembly in relation to the fact that
tourism, which is a crucial sector of the economy in Wales, is
not part of that targeted six sectors?
Mrs Gillan: That is a matter for
the Welsh Assembly, that is how devolution works, but I agree
with you, Mr Bebb, entirely. I think tourism is a huge potential
growth area, particularly when you consider some of the stunning
countryside we have and the stunning coastlines; it really does
take your breath away. I was up at the Royal Welsh, Chairman,
yesterday which again is a fantastic show.
Q19 Chair: Lucky you! I did not get
to see it!
Mrs Gillan: The Royal Welsh is
fantastic. They were expecting over 200,000 visitors to that alone,
many of whom are coming into Wales to see what we do in the agricultural
sector and it is a great show, and I think we have got some fantastic
opportunities. I am going to the Eisteddfod as well which looks
to be a fantastic event in Blaenau Gwent.
Q20 Chair: I am sure I will be able
to get to that one as we are in recess then.
Mrs Gillan: I shall look forward
to seeing you there, Chairman.
Q21 Geraint Davies: Secretary of
State, given that Wales will be disproportionately hit by the
budget in terms of its profile for public sector jobs, a growth
in added value, would you accept, as it is going to be disproportionately
hit, that there is a case for you to make for extra grant, and
will you make that case?
Mrs Gillan: Can I say once again,
the Coalition Agreement and the coalition Government looked very
carefully at this matter and the wording in the Agreement recognises
the concerns that were raised by Gerry Holtham in his report.
Q22 Geraint Davies: I am not talking
about the Holtham Report, I agree with that, but I am talking
about the budget, which is separate from the Holtham Report. I
am saying that the budget will disproportionately hit Wales, and
all the independent analysts agree with that. Will you now, as
our representative in Government, try to get extra grant for Wales
to basically ensure that there is a level playing field of the
impact across the UK?
Mrs Gillan: I am afraid, the funding
of Wales is not quite as simple as that and that is why I was
trying to approach it by saying that we have looked at the Holtham
Report and I am looking at the second Holtham Report on funding,
which of course has been made to the Welsh Assembly Government,
and we have said that we think that the Barnett Formula is coming
to the end of its life and we want to look eventually at fair
funding for Wales, but we have also said that our priority is
always to reduce the deficit. However, can I just say, there is
an acceptance across Government that there could be a disproportionate
effect on Wales and, therefore, in budget discussions and in discussions
that we are having we are looking at the impact on the Welsh budget
and, if necessary, as I did with the referendum and the costs
associated with the Electoral Commission, I will enter into discussions
on it, but the funding is an extremely complex area and we need
to make sure that Wales does get the best deal. Can I just add
on this, where we have, for example, the lowest-paid, we have
been trying in the public sector, for example, to protect the
lowest-paid by the announcements we have made for those in the
public sector who earn under £21,000, for example, that they
will have pay increases in each of the two years where there is
a pay freeze, for example, so we are trying to protect those in
our society who could be disproportionately affected.
Q23 Geraint Davies: Obviously, the
focus of the budget is to hit the public sector in terms of bringing
down the debt and a lot of it is to hit lower-paid workers, and
we have got a lot of those in Wales. We have already heard from
my colleagues that the forecasts have shown that growth is going
to be less. The start point is that the economic value of the
people in Wales is something like 30% per head less. Therefore,
Secretary of State, what we are asking, I think, in this Committee
is that you will fly the flag for Wales in these difficult times
when the axe is coming forward that we are not hit disproportionately,
and will you undertake to do that and try and get extra money
outside the sort of analytical, academic `wonk' conversations
about Holtham? We are talking about the impact of the budget now
as opposed to the long-term funding formula which is a separate
discussion.
Mrs Gillan: Well, Mr Davies, I
think we ought to talk about that after the Comprehensive Spending
Review when we know what the impacts are. You do not expect me
to preempt that, but can you just rest assured that, in the same
way as I went in to bat with the Treasury on the costs of the
referendum, I will always be looking for, what I consider to be,
the best deal for Wales.
Q24 Geraint Davies: What specifically
are you doing about getting Whitehall jobs into Wales where it
will be more cost-effective, in particular, with the Internet,
et cetera, to help support jobs in Wales?
Mrs Gillan: Well, I would be very
interested to see if you have got the information that shows me
the cost-effectiveness of the Internet, et cetera, because
that would be very useful to me, but, as have I said to you, I
have written round all my Cabinet colleagues, I think within a
matter of a couple of weeks of literally being in office, to suggest
that they could successfully relocate to Wales, and I am sure
you will support me in that as well.
Q25 Geraint Davies: On the point
about the Internet, presumably the Internet allows mobility and
obviously the unit costs for land, property and wages are less
in Wales and, therefore, there is a good argument to make, so
are you making that argument? Will you report back your success,
particularly broken down by department, about what they are saying
to you about moving departments to Wales?
Mrs Gillan: Mr Davies, this early
on in a Parliament, I can only ask, and you know that we have
many agencies in Wales which have been devolved down to Wales
which are operating successfully, and I think that that evidence
shows, so I will continue to make that case if there are appropriate
areas of departments that could be devolved to Wales, you can
rest assured on that, but I think it would be very presumptuous
of me at this stage to make any predictions and I cannot bind
my colleagues, but I can assure you that they will receive the
letter.
Q26 Alun Cairns: Secretary of State,
do you recognise that Wales is in an extremely difficult position
because over the last decade it has become the poorest part of
the United Kingdom and that many of the levers are in the hands
of the Welsh Assembly Government in terms of attracting inward
investment, yet, in spite of that, would you accept, as Holtham
also underlined, that the Barnett Formula, at a time of spending
cuts, offers greater protection as well as the health budget being
protected, which is the greatest part of the Barnett block, so
can you look optimistically at the Welsh situation, providing
the Welsh Assembly Government are prepared to play their part,
that we will be in a much stronger financial position on a relative
basis, but there is the opportunity for economic growth if those
resources are used properly by the Welsh Assembly Government?
Mrs Gillan: Mr Cairns, I do not
disagree with what you have said at all. I think what is interesting
is that as we are in straitened times and there are going to have
to be cuts right across the board, and there is no doubt there
will be cuts coming through the Barnett Formula to the Departmental
Expenditure Limits that will go down to Wales, we will have to
try and do more for less. One of the reasons that I am so keen
on collaborative working and us pulling together and co-ordinating
where we can is because I think that is in the best interests
of Wales. We are not in opposition to each other. We are two administrations
that have a responsibility towards Wales and therefore if we can
find areas of joint working where we can complement each other,
I think that is the positive message and the way forward that
we should look for.
Chair: Thank you very much, Minister.
I am sure we all agree with that. Mr Edwards?
Q27 Jonathan Edwards: Will plans
to upgrade the Swansea-London rail line go ahead or be a victim
of cuts by the Department of Transport? What discussions have
you had with the Secretary of State for Transport on this issue
of electrifying the line between London and Swansea?
Mrs Gillan: Can I just say that
the Coalition Government is very clear in its support for electrification
of the rail network, but I have to be aware that we have got the
Comprehensive Spending Review coming in line. I think that infrastructure
improvements such as rail electrification are exceedingly important
to Wales and you will be pleased to know that I have already made
representations to the Secretary of State for Transport and I
am going to be following that up with a bilateral ahead of the
Comprehensive Spending Review so that I can reinforce that message.
Once again may I just reinforce that we have been left with unprecedented
debt and we have to deal with that debt first and therefore I
cannot prejudge anything that is going to be in the Comprehensive
Spending Review.
Q28 Jonathan Edwards: You should
be aware that this is a major issue for the people of Wales. We
are the only country along with Moldova and Belarus in Europe
(I think it is Belarus; I may be talking them down) without a
single mile of public electrified railway, and you will be aware
of the Railfutures Wales report which recommended the electrification
not only of the Swansea Mainline but also the Valleys Lines and
also the North Wales Coast Line. This is a very major issue for
us in Wales and I would be very grateful for some stern words
from you that you will definitely work to fight our corner on
this.
Mrs Gillan: I will definitely
work to fight our corner on this. Also I think what is important
is that I make your views known to the First Minister and to the
Welsh Assembly Government. Chairman, with permission, I will make
sure that your impassioned plea is also passed on to the First
Minister.
Q29 Guto Bebb: Just a quick supplementary
on that. I do not want to sound parochial but obviously the North
Wales coast railway service is also very important for the economic
situation in Wales. We are not really expecting to see the line
become electrified over the next few years but one of the concerns
that we do have is that there is basic work required on the North
Wales coast line. Having had discussions with some stakeholders,
including companies who run services on the line in question,
my understanding is that the companies which are presently providing
services on the North Wales line would be willing to take on board
some of the costs associated with infrastructure changes if the
franchise period could be extended. As Secretary of State for
Wales will you be taking the issue up with the Department for
Transport in terms of the length of the franchise period?
Mrs Gillan: Mr Bebb, that is an
excellent question and I think again that is entirely in line
with Coalition Government policy. We have mentioned specifically
in the Coalition programme matters concerning the franchises and
we think that longer franchises could allow operators to offer
investment in improvements to trains and services. I understand
that my colleague the Minister Theresa Villiers is going to publish
a written ministerial statement launching a consultation on the
future of rail franchising policy and that will give both you
and other people and industry partners the opportunity to comment
on this, so I hope that you will take that opportunity Mr Bebb.
Q30 Alun Cairns: Can I ask the Secretary
of State about the latest position in relation to Metris in St
Athan and the additional spend that this could provide to Wales.
If we are to win this project it needs to be on military issues
and being the best project for our forces. The context is the
spending cuts of course and the SDSR (Strategic Defence and Security
Review) but will the Secretary of State recognise that, and what
discussions have you had with the Secretary of State for Defence
about the Metris project that would use existing money in a much
more efficient way and in a way that does not call for additional
spend and potentially could release resources by the sale of other
sites across the UK?
Mrs Gillan: I remain a strong
supporter of this project and have been since the beginning. When
I was first appointed shadow Secretary of State I signed up with
a Welsh Assembly Government minister on the same board over in
Portcullis House my support for the project, and that has been
unswerving. Having gone down there and had a look at the project
site myself, I think this is an excellent project, not least because
of the wasted money that went into the Red Dragon hanger and that
helps recoup what the taxpayer has put in and makes use of a fantastic
facility. I remain a strong supporter of the project and, in fact,
at the request of Chris Bryant and yourself, I am having a cross-party
meeting to which I have invited a minister from the Ministry of
Defence. We did have a date in the diary for that and the only
reason I moved it was because the other minister could not make
it. There is a diary change there and I fully intend to put that
together so that there is a continuing dialogue at first hand.
Can I just say that once again all future spending such as that
on the DTC (Defence Technical College) at St Athan is subject,
as you know, not only to the SDSR but the financial conditions
that prevail. We are absolutely committed to ensuring best value
for money. I have always maintained that a solution which involves
St Athan would be good both for Wales and for our economy and
also good for our MoD and for the future training of our forces,
which is of course so important to us. I was very pleased that
it was the Conservative council that gave the planning permission
for the project to go ahead way back last year now, so we wait
with bated breath.
Q31 Alun Cairns: Could the Secretary
of State share any information that she is aware of in terms of
the timing of any ultimate announcement in relation to the project
because it will come to a point soon that the costs will start
stacking up for any further delays that may well be introduced
into the programme?
Mrs Gillan: Mr Cairns, I do not
have that information to hand but if it would be all right with
the Chairman, if I have any information on timing or timetable
before we have the meeting with the Minister from the MoD and
the cross-party meeting, then I will write to the Committee.
Chair: Thank you very much indeed, Secretary
of State. Could I call Ms Jones to ask about the situation with
the courts.
Q32 Susan Elan Jones: Secretary of
State, the Ministry of Justice has recently announced a consultation
on the proposed closure of magistrates' and county courts in England
and Wales. Could I ask what assessment you have made of the potential
impact on rural communities in Wales?
Mrs Gillan: Ms Jones, thank you
very much for that. There are currently some 530 courthouses across
England and Wales and the number and location of these courthouses
does not always reflect the changes in the population, the workload,
transportation and communication links right across the board,
and that applies to Wales as well as to England. We are consulting,
and I do have a list here, I am sure you are well aware of them,
on a list of courts in Wales and that consultation process does
not end until 15 September. I think it is very important that
people feed into that consultation with their views. I was talking
to colleagues about this particularly and one of the things that
was being mentioned was that some of the court premises are not
DDA compliant, which obviously has to be something that is taken
into consideration as well because we must have them fully accessible
for disabled court users. In other cases they do not have secure
facilities for prisoners. All of these issues have to be taken
into consideration. However, it is not a closed case, if I can
put it in that way. It is open for consultation and I am sure,
Ms Jones, that if you wanted to feed your own views into it, they
would be very welcome because, as I say, it is a consultation
process and I know that they are going to listen to your views.
Q33 Susan Elan Jones: Does the Secretary
of State foresee a situation where we could have net job losses
in Wales as a result of this?
Mrs Gillan: I do not have a crystal
ball and I do not know what the final position will be and what
courts will close. It is a consultation process so it would be
very rash of me to make any prediction on any level. I would encourage
the hon lady to make her representations on it and of course they
will be taken into account.
Q34 Chair: If I may just ask a quick
question myself, Secretary of State. I would not want to get too
parochial about it, but for example in Abergavenny the court is
possibly going to close despite the fact that between £300,000
and £500,000 has been spent refurbishing it. I am not sure
which because I have been given two different figures. Would you
agree that this ought to be taken into account and if we are go
to spend up to half a million pounds refurbishing a court one
year and just shut it down the next that might be seen as a bit
of a waste of money?
Mrs Gillan: Chairman, I think
you make a very valid point and that is exactly the sort of point
that you need to make in this consultation period. It is a genuine
open consultation and I think that you should make your own representations
about your local court in Abergavenny, which is the magistrates'
court as I understand it, and I think it will be well-received.
Chair: While we are on the subject of
justice I think a few people now want to ask a couple of quick
questions on the matter of prisons.
Q35 Geraint Davies: Given that the
Government has signalled that they do not want more prisoners
and they want fewer people sent to prison, is there not a danger
that at a time when we are seeing cuts in services, whether education
or job cuts, and less use of DNA, less use of CCTV anonymity for
people accused of rape, et cetera, there will be a growth
in the amount of crime and fewer people sent to prison and fewer
prisoners and therefore we will see across Wales more and more
offenders on the loose?
Mrs Gillan: I think that the position
on prisons is well-known. I was shadow Prisons Minister for two
years and I have some very personal views on the matter myself.
There is no doubt that we are locking up more and more people,
including locking up an awful lot more women in prison, and of
course we have no women's prison in Wales, as you will know, which
means that when women who live in Wales are put into prison they
usually have to be held a long way away from their family home
which does not help with the rehabilitation process.
Q36 Geraint Davies: Do you think
there should be more prisons then because the Government is saying
fewer and I am interested in your view.
Mrs Gillan: I am sure you are.
I am saying that in Wales we do not have a prison to house women
and we do not have a prison in North Wales either and I have always
been concerned about that because, as I was getting on to say,
I have always thought, and this Government believes, that rehabilitation
is a very important part of the process of criminal justice and
there is certainly quite a lot of evidence that shows that rehabilitation
is facilitated in some instances by being much closer to the family
environment and having that continuity and those visits. I have
already had a bilateral with the Prisons Minister in fact on the
potential for a prison in North Wales which the hon gentleman
may not know but is something that I have supported for a long
time. Whether we will have a net gain or a net loss over time
in the number of prisons I cannot say, it is not my brief, but
what I can look at is the prison population and the needs of the
population in Wales for secure accommodation for prisoners but
also to allow for proper rehabilitation, and I have recommended
that a prison in North Wales would be a good thing.
Chair: I think we could spend a long
time on this. As Chairman I could certainly spend an hour or two
on it but Mr Edwards would like to ask some questions about the
Barnett Formula.
Q37 Jonathan Edwards: What representations
have you made to the Treasury in relation to the second and final
Holtham report with particular relation to the immediate need
for a floor to protect Wales from convergence, the need for transition
mechanisms to a needs-based formula and a place for the Welsh
Government on the table when discussing Scottish fiscal autonomy?
Mrs Gillan: That covers a large
number of areas, Chairman. I met with Gerry Holtham both as shadow
Secretary of State and I have met with him subsequently since
my appointment. However, I met with him before the publication
of part two of the Holtham report. I have looked at that. It is
a report of course to the Welsh Assembly Government and I think
out of respect and the respect agenda I need to wait until the
Welsh Assembly Government responds to that report. However, you
know in the Coalition Agreement the statements that we have made
about the Barnett Formula. Once again, however, we have said that
our priority has to be reducing the deficit and getting confidence
in the British economy. We have said on many occasions that we
think, as does Lord Barnett, that the Barnett Formula is coming
to the end of its life. When it comes to the end of its life has
not been determined yet. Can I just say on the floor, on convergence,
Gerry Holtham did not update his views on the funding gap, which
I think in part one of the Holtham report he estimated was around
£300 million. He did not update that in part two and we do
know that as the money from Barnett reduces, which it will do
under the cuts, convergence is less likely. However, I am very
aware of this problem myself and I will continue to have discussions
and when the time is right will make the cases as I see fit. Just
to take you back, I think the Welsh Assembly Government needs
to respond to Holtham before I make any comments.
Q38 Jonathan Edwards: Secretary of
State, if I can press you slightly. My understanding of the UK
Government's position is that it will re-look at Barnett after
a successful referendum on primary powers, I was wondering what
is the link between legislative competence and funding for Wales?
Mrs Gillan: Mr Edwards, I think
you have misinterpreted the Coalition Agreement. The words in
the Coalition Agreement are that we will look at a Calman-like
process following the referendum on further powers.
Q39 Jessica Morden: You are on one
Cabinet committee and a sub-committee on public health and of
course health is devolved to Wales. Do you think you have enough
clout at Cabinet level to push Wales' interests?
Mrs Gillan: Ms Morden, that is
not something I can judge myself. I would just say that we have
11 Cabinet committees. We have returned to Cabinet government
now under the Coalition Agreement. As I said before, it is not
the number of committees that you sit upon, it is how often they
meet and the depth of the work that they carry out. We have already
met several times, as I say, with full Cabinet collective responsibility.
We certainly work together as a team in government.
Q40 Jessica Morden: Should you for
instance be on the Business and Legislation Cabinet Committee
given that that is where the requests for transfers of power to
the National Assembly are taken?
Mrs Gillan: Interestingly enough,
that is a committee that I attend where necessary, so I do not
see there is any problem with that, but we do discuss matters
right across the board at Cabinet.
Q41 Guto Bebb: I have two questions
which are not linked. The first one is in relation to the announcement
by the Deputy Prime Minister that the AV referendum will be held
on the same day as the Assembly elections in Wales. Did you make
any representations in relation to the situation to the Deputy
Prime Minister before the announcement was made?
Mrs Gillan: Mr Bebb, I made an
awful lot of representations to the Deputy Prime Minister, but
can I just say that that matter is still under resolution.
Q42 Guto Bebb: Are you personally
in favour of having the referendum on the same day?
Mrs Gillan: Mr Bebb, I will wait
until the outcome and the deliberation on the legislation.
Guto Bebb: That is fine. My second question
sounds very local but I think the implications are national. As
you are well aware, there is a very large wind farm development
off the coast of North Wales which is Gwynt y Môr which
has recently secured funding of £2.2 billion to go ahead.
As you are aware, there was a lot of local opposition in the past
to this development but during the planning process the consortium
responsible for the development made numerous promises to the
local authority and to the local business community about compensation
that would be made available in terms of a community benefit package,
and in particular there were discussions between the consortium
and local authorities about a very large contribution towards
the tourist situation in Llandudno and the county of Conwy. In
addition, there were promises of around £1 million a year
to be made available to local authorities along the North Wales
coast. My concern in relation to this is the fact that since the
announcement was made that they have actually secured the funding,
the compensation package for the tourism sector in the county
of Conwy is now being looked at in the context of the counties
of Conwy and Denbighshire, and this is completely in contrast
with the Memorandum of Understanding which stated quite clearly
that the funding would be for the county of Conwy. Secondly, due
to the fact that detailed planning has resulted in the size of
the wind farm being reduced, the community compensation package
for the whole of North Wales is dropping from around the £1
million a year for 20 years as promised to around £750,000
a year. The concern I have is that these promises were made during
the planning process and they seem to have been backed off once
the decision was made that the funding was in place. Having looked
at the situation it would appear to me that there is an issue
in terms of the fact that there is no recommendation from government
nationally as to the size of compensation when a large infrastructure
project such as this is developed in the local community. Would
you be willing to take up with the consortium the specific issues
in relation to Gwynt y Môr? Secondly, is there a need for
the Coalition Government to look at the type of compensation package
that should be made available when this type of large-scale infrastructure
project is planted on a local community?
Q43 Chair: We appreciate that is
a complicated situation and quite a long question so I would beg
for a shorter answer.
Mrs Gillan: Absolutely, Chairman.
I have listened very carefully to what Mr Bebb has had to say
on this subject matter and I think this is an area that obviously
needs further examination. I would be delighted to refer to the
transcript of this session and take it up with my colleagues that
speak for energy and in any other way that would seem appropriate,
and I would certainly take that on board and look into it. The
point is well made.
Q44 Owen Smith: Secretary of State,
I wonder if I could turn your attention to the important constitutional
issues that we face. In particular, I heard with interest you
say earlier on that you were going to bat for Wales when it comes
to economic issues. Can I ask you to do the same in respect of
the political gerrymandering that we are anticipating with regard
to the boundaries in Wales? Do you agree with me that there are
particular issues to do with rurality and identity in our Valleys
seats, in our rural seats, in Wales that must be reflected in
any new constitutional boundary settlement in Wales? Will you
be reflecting that to the Deputy Prime Minister and not agreeing
with him that it needs to be simply an arithmetic basis on which
any changes are made?
Mrs Gillan: May I say that the
first thing that the Coalition Government are agreed on—and
I think the wider audience outside this Committee would realise
this—is that reducing the number of MPs is the right thing
to do and, as I understand it, we will be going down to 600 MPs
across the United Kingdom. We have made plenty of other constitutional
changes and promises including the power to recall MPs, fixed-term
parliaments and the AV referendum that we referred to earlier
on, but we are going to reduce the number of constituencies and
that will result in fewer MPs representing all parts of the United
Kingdom right across the board. I looked at the figures for this
and I think it is fair to say that the current average electoral
quota in each of the four parts of the United Kingdom are: in
England the average constituency is just over 71,500 electors;
in Scotland it is just over 65,500 electors; in Northern Ireland
it is just under 64,500 electors; and in Wales the average seat
is 56,500 and some odd figure, just over, so there is no doubt
about it, there will be an equalisation.
Q45 Owen Smith: But do you not agree,
Secretary of State, that that differential is reflective of the
specific cultural and geographic make-up and nature of Wales and
that must still be reflected and respected in any new dispensation;
it cannot simply be equalisation on a mathematical formula?
Mrs Gillan: I think it is fair
to say that everybody's vote should count equally and if you look
at the disparities in the sizes of the seats, I think it is fair
to say that the electorate and everybody right across the United
Kingdom would expect each vote to have the same weight. Therefore
we will be adjusting down to 600 seats and then it will be the
work of the Boundary Commission to look at the situation in Wales.
Once again it would not be right for me to prejudge the work of
the Boundary Commission and certainly we should look at that work
when it is forthcoming.
Q46 Chair: Secretary of State, I
think what Mr Smith might be asking, and I would be interested
to know the answer, is whether any account whatsoever will be
taken of geographic obstacles. For example, it is not easy if
you are in one valley to chop a bit off another valley and add
it on to a constituency some might suggest. Does the Minister
think the Boundary Commission will be asked to take account of
this?
Mrs Gillan: I think there will
be plenty of opportunities when the legislation is going through
to make these points and to discuss it with the minister responsible
for this area. At the moment the most that I can say is that we
will be equalising the situation and we will be going down to
600 seats, and I am sure that there will be some different shapes
and forms of constituencies right across the United Kingdom, not
just in Wales but also in other parts of the United Kingdom as
it is. However, I am not going to prejudge it at this stage.
Q47 Jonathan Edwards: My understanding
of the Government of Wales Act 2006 is that parliamentary and
National Assembly boundaries have to be coterminous so what discussions
have you had with the Deputy Prime Minister at UK level about
that coterminosity and how these proposals would affect the boundaries
for the National Assembly elections?
Mrs Gillan: Mr Edwards, I have
had discussions with both the First Minister and the Deputy Prime
Minister and with the minister responsible for this legislation
and I have established that we will be decoupling the parliamentary
constituencies from the Assembly boundary constituencies so that
there is no effect on the seats for the Assembly as such.
Q48 Susan Elan Jones: Secretary of
State, I have to say I do find it rather bizarre that on this
issue you seem to be proposing batting for Wales by reducing the
amount of Welsh representation here in Westminster. You mentioned
earlier when you were speaking on tourism about the beautiful
scenery of Wales and so forth. Would you not accept that this
means of course that many of our constituencies in Wales are geographically
extremely large, in the case of Clwyd South 240 square miles.
That probably pales into insignificance in terms of land mass
if you compare that to seats like Brecon & Radnorshire, Montgomery,
Ceredigion and the Meirionnydd seats (none of which has Labour
representation). Will there be no reference made to these vast
geographical areas?
Mrs Gillan: Ms Jones, geography
is something we cannot move and there will be large seats, there
is no doubt about it. Again, I do not want to pre-judge the Boundary
Commission and the work that it will do. Can I just correct you
on one thing. I am certainly not diminishing Wales' voice at Westminster.
I am ensuring that Wales is represented equally as is every other
part of the United Kingdom at Westminster. I think that is the
right thing to do. We do not want to have disproportionate over-representation
of any one part of the United Kingdom and we believe as a Government
that it is fair that all parts of the United Kingdom should be
represented equally.
Q49 Susan Elan Jones: So if according
to your argument you are making the cut in representation proportionate,
am I right in thinking that there will be a reduction in the number
of ministers also?
Mrs Gillan: Ms Jones, I think
you ought probably to address that to the Deputy Prime Minister
and other colleagues. Certainly if you wish me to take that up
with my colleagues I would be very willing to do so, but can I
just stress that we are not diminishing the representation of
Wales; we are making sure that all parts of the United Kingdom
are represented equally.
Geraint Davies: On this question it appears,
Secretary of State, that your position is one of a Minister for
England as opposed to batting for Wales.
Alun Cairns: That is not fair!
Q50 Geraint Davies: Surely it is
the case the reason we are where we are is that the particular
geography, community and effective democracy of Wales has evolved
over a period of years to where it is and what you are proposing
now is to take no account of that, even though those are the terms
of reference of the Boundary Commission itself, and have a parallel
system whereby the Assembly has a coherent approach to this and
the parliamentary boundaries have a completely incoherent approach
to this, and therefore a disfigured and lowered voice in Parliament
alongside the worst budget deal in the United Kingdom. How can
you defend yourself on that as Secretary of State for Wales?
Mrs Gillan: I can assure you that
I am certainly batting for Wales on this and I will continue to
bat, but it is fair to say, I believe, that representations of
all parts of the United Kingdom should be the same. I have just
been looking at the numbers of the electorate in the seats and,
Mr Davies, in Swansea West I think your electorate is 61,005 and
then I look down perhaps to the Cynon Valley where the electorate
is 50,747. When you can see that there are huge disparities in
the amount of votes in each of those seats across Wales and then
across the rest of the United Kingdom you can see that there is
great merit in saying that all parts of the United Kingdom will
be represented equally and all parts of the United Kingdom will
be facing a reduction.
Q51 Guto Bebb: Just a quick point
about the comment about equalising the number of MPs. The concern
I have is if we end up with same number of MPs as Scotland pro
rata for example there is a big difference between the powers
of the Scottish Parliament as compared to the Welsh Assembly.
You could argue that we are forgetting completely about England
in that argument, but there is an issue there in terms of if it
is an equal number of seats on the basis of population then the
question does arise in terms of the powers of the Scottish Parliament
compared to the Welsh Assembly.
Mrs Gillan: Mr Bebb, I was not
the architect of devolution but we have embraced devolution and
the very nature of devolution is that there are asymmetrical settlements
and there is a different settlement for Northern Ireland and for
Scotland and for Wales. However, I think it is correct that all
parts of the United Kingdom should have an equal voice here and
that is what we are doing by equalising the numbers in our constituencies
to the best of our ability
Chair: Secretary of State for Wales,
thank you very much indeed for coming along and answering all
the questions. You promised us an hour and you have given us an
hour. We are very grateful and we look forward to seeing much
more of you in the new year and after the recess.
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