UNCORRECTED TRANSCRIPT OF ORAL EVIDENCE
To be published as HC 832-i

House of COMMONS

Oral EVIDENCE

TAKEN BEFORE the

Welsh Affairs Committee

RESPONSIBILITIES OF THE SECRETARY OF STATE FOR WALES

Tuesday 1 March 2011

RT HON CHERYL GILLAN MP, GLYNNE JONES and TIM HEMMINGS

Evidence heard in Public Questions 1 - 37

USE OF THE TRANSCRIPT

Oral Evidence

Taken before the Welsh Affairs Committee

on Tuesday 1 March 2011

Members present:

David T.C. Davies (Chair)

Stuart Andrew

Guto Bebb

Alun Cairns

Geraint Davies

Siân James

Susan Elan Jones

Karen Lumley

Jessica Morden

Owen Smith

Mr Mark Williams

________________

Examination of Witnesses

Witnesses: Rt Hon Cheryl Gillan MP, Secretary of State for Wales, Glynne Jones, Deputy Director Legislation and Deputy Head of Wales Office, and Tim Hemmings, Deputy Director Policy, Wales Office, gave evidence.

Q1 Chair: Good afternoon, Secretary of State. Thank you very much for coming in and for re-arranging things so that we can all go to the statement. I understand that you want to speak for a minute before we start, which is fine.

Mrs Gillan: Good afternoon. Can I wish you a very happy St. David’s day? Thank you very much for accommodating the time of this evidence session.

I have just come straight from Gwydyr House where we have had the LATCH kids who come to bring daffodils to Gwydyr House with Tony Curtis and some of our Guards as well. They do fantastic work. They are on their way to Downing Street to present the Prime Minister with daffodils and a teddy bear, which is really good. I thought that that was a really nice way to celebrate St. David’s day, among all the other things that are happening.

I am very pleased to have the opportunity to update you. It is a great privilege to do it on St. David’s day as well. I thought I would outline a couple of things very briefly because I know you have lots of questions.

Chair: We thought you might speak for a minute.

Mrs Gillan: That’s fine, Chairman, if that’s all right with you. What we have been trying to do is secure Wales’s interests right across the work of the Wales Office. I am very pleased that Glynne Jones and Tim Hemmings have joined me, and if I can’t answer the questions I will ask them to dip in.

I made it very clear when I took up the appointment that I was going to take the referendum forward, and you will be pleased to note that, later this week, we have the referendum-on 3 March. That was a key priority for the National Assembly and the National Assembly Government. We have continued to work well, I think, with the Welsh Assembly Government in a spirit of mutual respect and that has certainly underpinned a lot of the work the Department has been doing.

I am working on one of our key priorities which has been to examine what is happening in the economy and see how we can move forward and improve the Welsh economy because, of course, it is still the poorest region in the UK and has a GVA less than 75% of the UK average. One of the things that we have done is to start a Business Advisory Group which represents many sectors right across Wales in order to keep up to date with what is happening in the business sector and to feed into the Prime Minister’s Group, and we have been working on various matters which are of interest to Wales and Welsh business. I hope that will come out in the course of questions.

Chair: Thank you very much indeed.

Q2 Alun Cairns: Secretary of State, the latter part of your comments is what I really want to focus on. Since you last gave evidence to the Committee, there has been some pretty damning economic data published in relation to Wales-GDP, as you have rightly highlighted, for the whole of Wales, but even last week Eurostat published data that, in spite of billions of pounds’ worth of European money spent in West Wales and the Valleys, the relative prosperity there has declined even further. I think that is a pretty damning indictment of the way the Welsh Assembly Government has used the resources made available, particularly in that the economic conditions are pretty uniform throughout the UK in terms of fiscal policy, public expenditure and other policies. What is your analysis of the economic situation? What is the Welsh Assembly Government doing, right or wrong? But more importantly, probably, what can the Westminster Government do to try and help the Welsh Assembly Government out, bearing in mind their performance in recent years?

Mrs Gillan: Thank you very much for that, Mr Cairns. Obviously, something which has concerned all of us, both the previous Government and this Government, is the state of the Welsh economy. Certainly there has been some interesting news as far as unemployment is concerned and as far as getting people back into work is concerned because the unemployment statistics have been steadily improving bit by bit over the last few months. As I said in my opening remarks, we continue to have this lowest GVA of all the UK regions and I continue to be particularly worried about that. However, this Government has been working very hard to try and create the economic environment in which business can grow and that has included, of course, reducing the rate of corporation tax and announcing that that will reduce steadily over the next four years. It has resulted in the Chancellor announcing that there would be a special incentive in terms of national insurance and breaks for businesses that are small start-up businesses for their first few employees, outside that hothouse of the south-east. And, of course, I have been working very steadily with other Departments looking at those areas where we can improve the infrastructure which, of course, will send the right signals to business and potential inward investors who will create the jobs.

I was very pleased that, a couple of weeks ago, the Chancellor came to Wales and we were able to announce a £10 million worth investment in a Broadband project which will show our commitment towards improving that part of the infrastructure in Wales which is, of course, so key to modern businesses. I am always optimistic about other announcements that may be made in due course which will show that we are considering what is needed as far as the infrastructure is concerned. However, we can’t be complacent about this and in the Wales Office we are trying to work much more closely, Chairman, with the Welsh Assembly Government. To this end I have had several meetings now with the Deputy First Minister, Ieuan Wyn Jones, and we have been working together right across the board in terms of looking at inward investment-how the Welsh Assembly Government is going to interface with UKTI. Chairman, my answer is probably too long, but I am fairly enthusiastic about this, as you can tell. What I have been doing is making sure that our new Minister, Lord Green, is fully aware of what is happening in terms of Wales. Indeed, he is going to come to Wales to look at the situation.

Q3 Alun Cairns: The proposals in relation to foreign direct investment are extremely important. It is a place where the role of the Secretary of State for Wales can play a significant part. But is the Welsh Assembly Government playing its part? Only last week, I was in contact with a businessman who had to call the Welsh Assembly Government offices tens of times-literally, tens of times-in order to get some sort of response when he wanted to create 80 new jobs in Wales in the manufacturing sector. Is that good enough? Do you think the Welsh Assembly Government is playing its part in terms of the foreign direct investment that the UK Government is trying to attract to the UK to ensure that Wales is getting its fair share?

Mrs Gillan: Mr Cairns, all I can say is I am very sad to hear that. That is not how any Government Department or any Government should interface with a citizen or with business. But I don’t want to sit here and take an easy pot shot. What I would much rather do is have the information to hand, know exactly what the business was and make sure that we try and make that link. It is not in anybody’s interests for us not to work together. Indeed, I think it is in everybody’s interests, including the businesses and the inward investment we require in Wales to help grow our private sector, that we actually get to the bottom of that sort of problem straight away.

Chair: Thank you very much indeed. I believe Owen Smith has a very brief point, and then Siân James.

Q4 Owen Smith: Good afternoon, Secretary of State. It is a very specific question. You said a moment ago you thought that the employment picture in Wales was improving. You said the employment numbers had been steadily increasing, and that is right, of course, in overall terms. However, you will know that youth unemployment in Wales is now at a cataclysmic all-time high. We are the highest out of the whole of the UK. I know that that was something, before the election last May, you pledged to address specifically at a big event in Cardiff. I was wondering if you could tell the Committee what you had been doing in the last 10 months to address improving youth unemployment.

Mrs Gillan: Yes. I have to say that I remain concerned about youth unemployment and the needs of those that are not in education, employment and training. One of the things I think is so important, wherever I have been going to visit businesses or higher education establishments, is looking at what is on offer for young people. Let me give you an example. I went to the Deeside Hub and had a look at the apprenticeships that are there, particularly Airbus and Toyota. What I was very impressed with-and this is where I think the college is ahead of the curve, in many ways-is to see the people that were working from Toyota and from Airbus alongside tutors and alongside the apprentices. I thought that this was an excellent programme and something that could be spun out elsewhere.

Having said that, just looking at an unskilled area, I also went to one of our Jobcentre Plus centres, and they have a marvellous pre-employment training scheme. It only operates for two weeks, but it operates with some of the local retailers and with a company that has care homes for the elderly. It was taking young people and people who had not been in the world of work for a very long time and putting them through pre-employment training. The problem was that if they put 10 people through the pre-employment training for two weeks and they had seven jobs, they could offer those seven jobs but there were three people they would have loved to offer a job but were unable to. I am looking into how we can evidence it and hand a certificate to these people to show that they have gone through this pre-employment qualification which would be so useful to them. Otherwise, that two weeks does not register in the workplace or in the market when they are going to look for other jobs.

Q5 Mrs James: Secretary of State, I am going to come now to my favourite subject in the world, rail electrification. You mentioned in your introduction that infrastructure improvement was key to some of the work that you have done. There is a great way of improving the economy of Swansea and West Wales-if we have the rail infrastructure, the electrification to Swansea. I know there is going to be an announcement today, but what have you done, on our behalf, about getting this important infrastructural improvement to Swansea?

Mrs Gillan: Mrs James, thank you very much for your question. As I have said on many occasions before, rail electrification has been one of those items on the top of my agenda. There is no doubt that, after 13 years of the last Government, not a single inch, not a single centimetre of railway line was electrified. It was always hot air and no action. So it is one of the things that I have been looking at very carefully, but I am not going to pre-empt any announcements or anything that might be said on any other occasions. However, I know it is important, at a time when we have faced stringent cutbacks in terms of public sector spend in order to pay down this debt, that we carry out any improvements against that background.

Q6 Mrs James: I appreciate the Secretary of State’s words but we had had a commitment from the previous Government that rail electrification to Swansea was on the cards and was there as an option. It had certainly recognised that going to Swansea was the best option, that it made economic sense and that also, with the pattern of the trains and so on, most trains would go down to Swansea anyway and turn around there. I am very concerned about what is happening in Swansea at the moment, given that we have had the Centre for Cities report which says that Swansea is going to be slower coming out of recession than many other cities in Britain. You can understand the concern of businesses, individuals and organisations in Swansea and in West Wales about being left behind. I appreciate that you can’t pre-empt anything, but what words of comfort do we have for those businesses and individuals who know how important this is?

Mrs Gillan: Mrs James, I presume that you were the first person to bring the good news to all your businesses in Swansea when the electrification to Didcot was announced, because of course it takes time off the total journey, i.e. from London to Swansea.

Mrs James: I agree.

Mrs Gillan: I am sure you were bringing that good news into the economy in telling people that Swansea is a very good place to do business, and already this Government has taken time off that journey, which is so important.

Can I say it is very important that we start talking the Welsh economy up? I have been to Swansea myself. I think the last time I gave evidence to this Committee I talked about the ILS buildings at the university. They continue to go from strength to strength. The message to business is that when you also have academic institutions doing the sort of work that is being carried out in your higher education institution down in Swansea, that Swansea is a very attractive place to go. Also, of course, you have had some good news announcements of businesses investing in Swansea recently, including call centres which is very good news.

Q7 Mrs James: Yes, I agree.

Just another little one, a problem that we are picking up recently when talking about opportunities for young people in training, disabled employment, the Remploy issue-Remploy Swansea. I am very concerned about what is happening on a national basis with Remploy and to hear that there is work ready to come in to Swansea Remploy but they can’t land these contracts because they don’t have the sales teams and so on. How involved have you been and what has been drawn to your attention about Remploy in Wales?

Mrs Gillan: First of all, Swansea’s focus, I understand, in Remploy is accommodation furniture that ranges from hotel rooms to student bedrooms and MOD barracks. I understand they produce large, flat panel-based products such as wardrobes and worktops.

You should know that the coalition Government has been absolutely committed to Remploy, so much so that we confirmed, as part of the spending review, that the budget and status of Remploy remain unchanged. That has meant that despite, as I just alluded to, the very testing fiscal conditions, we have guaranteed from Government the Remploy operational budget for the current five-year modernisation period at £550 million. That has been a protected budget. But Remploy does operate independently and it is Remploy’s management that must be responsible for that. If there is anything I can do to assist you, Mrs James, I would be very willing to do so. If you think it would be good to visit the Remploy factory in Swansea I would be delighted to come and talk.

Mrs James: Yes, please. Thank you.

Q8 Geraint Davies: On that specific point, if I may, Chair, are you aware, Secretary of State, that next Monday is the deadline for all employees of Remploy factories to say whether they will subscribe to voluntary redundancy whereby they will get a year’s pay and £5,000? And are you aware that in such factories as Aberdare, 17 of the 21 workers are subscribing to that, which means this is really a recipe for the closure of many of the factories. Did you know that?

Mrs Gillan: Yes. I don’t know whether you are aware, Mr Davies, that the voluntary redundancy scheme was actually a decision made by Remploy management themselves. This is not a Government decision. Ministers-not me as a Minister, but the Ministers responsible-set the overall direction of the company but do not get involved in decisions to affect the operation of Remploy.

Q9 Geraint Davies: Yes, but would you accept that offering everybody voluntary redundancy, which is relatively attractive in an uncertain world, is really a recipe for many of the factories closing down? Given you have given your support to Remploy, don’t you think at this strategic level you should intervene to ensure that the factories remain viable?

Mrs Gillan: Mr Davies, I gather Remploy announced, on 18 January 2011, a consultation with the trade unions on voluntary redundancy for around 3,000 staff in the 54 factories. I understand that is not a scheme open to all Remploy employees because it is not open to Remploy CCTV Management Services or Employment Services, which are performing well.

Geraint Davies: Yes. I do know the factories.

Mrs Gillan: There are formal consultations going on with the unions which started on 24 January and I think it is important that that formal consultation between Remploy and the unions is allowed to continue.

However, please can I just say to you that my door is always open? If you have any further information-

Q10 Geraint Davies: May I make one suggestion?

Mrs Gillan: If you have-

Geraint Davies: If I may, because you offered to give your support and I raised it with the Leader of the House and he was reasonably sympathetic. Would you consider at least suggesting to public sector organisations that they actively consider Remploy in their procurement policy? That is not to say they should always buy from Remploy, but at least have it on the radar. Siân James mentioned the fact that some of them, like Swansea, have only got one sales person who is 67 years old and is required to do all the selling for three factories. In Baglan they have seven people to do one factory, and the management who made these decisions you mentioned earlier do not seem to be the most competent of all managers. What would be helpful is a signal from Government to say that the public sector should actively consider Remploy in their procurement. Would that be something that you would positively consider?

Mrs Gillan: Mr Davies, what I will do is ensure that the Minister responsible for this area has his attention drawn to your remarks and the concerns that you have validly raised today. I will ensure that that Minister will come back to you.

Q11 Geraint Davies: On the separate issue, now, of jobs and inward investment, the Committee went to Germany recently and saw UK Trade & Investment who, as you know, market Britain and attract inward investors. Have you had any involvement with them, because there seemed to be very little involvement from the Wales Office there? I am also aware that they arranged a trade delegation from China that went to London and Scotland but not Wales. Why was that? Would you give an undertaking to get more involved to attract inward investment to Wales?

Mrs Gillan: Mr Davies, I don’t know how familiar you are with the devolution settlement, but the trade and economics brief actually lies with the Deputy First Minister in the Welsh Assembly Government. I don’t know whether you have a criticism of what the Welsh Assembly Government or the ministry is doing there but you really need to put-

Geraint Davies: No, but they think of it in Scotland.

Mrs Gillan: One of my early meetings, of course, was with Leon Brittan after his appointment. I had a long talk with him. We had been waiting for the appointment of Stephen Green. I immediately met with Stephen Green, straight after he was appointed, and had UKTI separately in to the Wales Office to discuss the interface between Welsh business and the opportunities in Wales and the Deputy First Minister with UKTI prior to Lord Green’s appointment. Post Lord Green’s appointment I have had yet another ministerial meeting with the First Minister, the Deputy First Minister, Lord Green and UKTI which I constituted immediately. We have discussed all sorts of things with the First Minister and the Deputy First Minister, particularly whether UKTI may or may not consider opening a presence in Wales. We have discussed the fact that the Welsh Assembly Government has presences abroad in other countries and how they interface with UKTI. I am doing my best to facilitate what I hope will be a joined-up effort which will result in Wales being at the forefront of the minds of everybody in UKTI and everybody in the Department of Business.

Can I just say this, on the delegation to China? I believe at the last session you heard me say I had 61 officials. I think that number is now down in the 50s. The Welsh Assembly Government has thousands of people, many of whom are devoted-many more than my entire Department-to trade and industry. I think it is a matter for the Welsh Assembly Government to make sure that they are familiar with trade delegations. But, because there was an issue, I have already addressed that, and I am making sure that that sort of thing has less likelihood of happening again.

Q12 Guto Bebb: Good afternoon. I have two quick-fire questions to start off with. First of all, how is the Respect agenda developing between the Wales Office and the Welsh Assembly? Secondly, should the Respect agenda extend to the relationship between Members of Parliament for Wales and Departments of the Welsh Assembly?

Mrs Gillan: Mr Bebb, you have to remember that the Respect agenda needs to work both ways. This is a novel idea, in so far as we are only 10 months into this Government, and I think it represents a different way of working. Of course, we are working across a political divide in the run-up to a referendum on primary law-making powers on the areas that are already devolved passing to the Welsh Assembly and against an Assembly set of elections.

When you set the relationship against that background, I would say it was working much better than many commentators would have expected. I really do approach this with a completely open mind. I think the electorate and the voters and the businesses and the people in Wales do not always want to see two Government institutions at each other’s throats. They would far rather have constructive engagement. That doesn’t mean to say I say yes to everything or no to everything, or we agree on everything. Quite the reverse. I hope we are going to have some healthy discussions, because if our Government here is putting in good things in England and they are not being adopted in Wales, I am sure questions will be asked, and vice versa. But I would have said that we have made a very good start. I hope that that would be reflected in the comments recently from the First Minister and the Deputy First Minister. We are certainly trying to make sure that that agenda moves forward.

Your last question, on whether that should extend to Members of Parliament, is a matter for you, Mr Bebb, and other Members.

Q13 Guto Bebb: Specifically, then, I will follow up. You have seen already, from the Committee’s questions, that there is a real concern and some big questions about the way in which certain Departments of the Welsh Assembly are actually working-in particular, I feel, the Department of Economy and Transport. I find it extremely frustrating that when I was trying to act on behalf of businesses in my constituency-businesses, for example, who want to benefit from the huge investments into Gwynt y Môr, the offshore wind farm, and businesses who found themselves in the situation where they had free approval for a single investment fund application for funding from the Welsh Assembly and then that was pulled-and when I am trying to interact with a Department where the offices are based in my constituency, I am told that the only way I can get a response is by going through the Minister in Cardiff. I find that to be unacceptable. It is very difficult to explain to a constituent that in order to get an answer to an issue arising in North Wales I have to deal with the Minister down in Cardiff rather than dealing with officers whom I know and recognise and who are based in an office less than 200 yards from my home.

Mrs Gillan: You have identified a problem I have heard several times from other Members of Parliament. It probably goes back to the way in which devolution was set up. I certainly think that we will need to meet with the new Welsh Assembly Government to see whether we can improve the way in which we operate across those boundaries because that must be deeply frustrating, not just for you but also for your constituents.

Let me also say, in all honesty and fairness, I have had requests from Assembly Members who find it deeply frustrating that, sometimes the other way, on matters that are not devolved, they have problems as well. The way forward would probably be for me to reflect on your remarks. If any Member of this Committee has any instances of this, right across the political divide, please let me know. Let us see if we can find some modus operandi for working better. Again, in the final analysis, our constituents, wherever they may be, are just wanting results from politicians as opposed to prevarication or turf wars, which can be particularly bad in some instances.

I would like to take that on board, Chair, and if this Committee would consider providing some advice as to some solutions to these problems, it may be-

Chair: We look forward to giving you advice, Secretary of State, and you following it as well, if possible. Did you want to come back with a final question?

Guto Bebb: Just a final question.

Chair: Very, very briefly.

Q14 Guto Bebb: In view of the fact that there might have been interesting announcements made today in relation to some railway services in Wales, can the Secretary of State give me any assurances that she will carry on lobbying hard for upgrades to the North Wales line in order to ensure that we also have a fast service on the railways of Wales?

Mrs Gillan: Mr Bebb, I hear what you say.

Q15 Mr Williams: Secretary of State, we had a very interesting Back-Bench debate yesterday in the Chamber on the Big Society. I think, after 39 Back-Bench speeches, I am a bit clearer in my mind what Big Society means. What do you see the Big Society as meaning for Wales? In particular-I know that we were both at a very important launch last night in terms of the Foundation for Wales, which is a very positive move-how do you see the interface between a Big Society agenda being promoted in London and the Big Society in Wales? Obviously, there is an important role there for the National Assembly. What discussions has your Department had with Assembly Ministers on pursuing the Big Society agenda?

Mrs Gillan: Thank you for that question, Mr Williams. Can I say that, last night, the announcement of the Foundation for Wales, I thought, was a marvellous initiative? Chairman, you should know that not only is His Royal Highness the Prince of Wales going to be patron of the Foundation for Wales but we have started off with £200,000 already that we were able to announce. It really was a very good occasion. These community foundations have already been working with three institutions in Wales which have been yielding results for three organisations.

One of the most important things on the Big Society is that it is something in which everyone needs to be involved. To that end, I have asked my Parliamentary Under-Secretary of State, David Jones, to discuss it with the Minister in the Welsh Assembly Government. The Minister in question is Carl Sargeant. They have already had several meetings. Indeed, I have asked the Under-Secretary to hold a forum, hopefully with the Minister from the Welsh Assembly Government, or with representatives of the Welsh Assembly Government, so that we can examine how we can take the concept further.

I have to say that we know in Wales we do a lot of Big Society things anyway. It is about community, it is about empowering the community and communities taking responsibility for themselves. Certainly in the Wales I grew up with there was always a tremendous community and local spirit where people did help each other. I think it is a continuation of that, but I am sure there are going to be some complementary programmes and initiatives, both from the Welsh Assembly Government and from Government, that the Minister in the Welsh Assembly and the Parliamentary Under-Secretary of State will work on.

Q16 Mr Williams: You have acknowledged that it is not simply a debate about charities and voluntarism. There is a much bigger debate than that. But I want to focus, for a moment or two, on that. There is concern, obviously, in certain areas of the third sector at the implications of cuts in core funding. I want to refer, particularly, to the work of citizens advice bureaux and the volunteers on the ground. I think of two bureaux in the Ceredigion constituency who were very concerned about core funding for training courses that is being slashed by CAB and the implications on the services that can be delivered in a difficult rural context. What news do you have and what representations can the Wales Office make to BIS, in particular, on CAB budgets? I know they are independent bureaux and there is a central CAB organisation, but there is concern there.

Mrs Gillan: I was just talking to my officials on either side. If there are specific problems about CAB funding, again I would want to look at that individually and exactly what the problem is rather than making some general and broad-brush point on it. But it is important. I know we have made some money available for financial counselling recently and there have been issues surrounding this, but once again I would like the specifics on that, Mr Williams, so that I don’t give you some general answer which doesn’t apply to your particular citizens advice bureaux.

Q17 Mr Williams: I will get back to you. Just to reiterate what you said about that financial inclusion fund money which has now come back, that is the difference between two advisers or not having any advisers at all in one of my bureaux. That is very welcome.

Very quickly-it’s a big issue, but very quickly- on the Public Bodies Bill as it affects Wales, do you understand, Secretary of State, the anxiety of two organisations, S4C and broadcasting, obviously, and also Consumer Focus, that are affected by the Bill? There has been a spirited debate in the House of Lords. It is still going on. There no doubt will be in the House of Commons as well. How much involvement did your Department have in the formulation of the Public Bodies Bill and inclusion of those two organisations, Consumer Focus Wales and S4C, before that Bill was published?

Mrs Gillan: As you know, the Public Bodies Bill is being taken forward by the Cabinet Office and the Cabinet Office Ministers. Indeed, right from the beginning my colleagues and officials in the Cabinet Office have been working closely with the devolved Administrations. Certainly, nothing was taken forward in that Bill that had not been discussed with the devolved Administrations and, of course, during the Committee stage we indicated that we are going to remove Schedule 7 from the Public Bodies Bill which, of course, was the schedule causing so many problems.

You are quite right. There are going to be, still, a number of changes that will affect Wales, but, again, the Welsh Assembly Government has been involved in discussions throughout the entire process. The opportunity for them to have feedback and to reach agreement with Ministers on the content of that Bill has, I think, worked very well throughout. I am just asking the officials because the officials either side have been working on this particularly.

Chair: This is a very big issue, but I know you want to get away at four o’clock, Secretary of State. We are happy to keep you here a bit longer, if you are happy to stay.

Mr Williams: You have answered my question. Thank you.

Q18 Karen Lumley: Secretary of State, obviously, there having been a big No campaign many years ago from the anti Welsh Assembly, do you think the public of Wales have been informed sufficiently to judge whether to vote yes or no on Thursday?

Mrs Gillan: I had a role under the 2006 legislation, if I so wished, to facilitate the referendum. However, I have not only facilitated it but I had to make a judgment on the question that was asked and the date. I have maintained neutrality throughout this process. In fact, I used the wording that was produced by the Electoral Commission, which was tested for 10 weeks, and I offered the First Minister the choice of a date. The date of 3 March was his choice.

I have not seen all the information that has been put before the electorate, because I think it has varied widely throughout north and south Wales. There is no official campaign-no official Yes campaign and no official No campaign. So it is for the Electoral Commission to examine all material that is put out. Of course, there have been some good debates on television, some of which I have seen, and I believe there are even adverts in newspapers now which have been taken out by various parties. I hope that that, together with the work that was done by the Welsh Assembly in spending very large sums taking information around Wales so people could know more about the Welsh Assembly itself, would mean there has been a lot of impartial and partial information put into the public domain.

Q19 Karen Lumley: Do you expect many people to go and vote?

Mrs Gillan: I have looked at some of the polling and I have looked at some of the predictions, but, Mrs Lumley, you should know that I don’t come equipped with a crystal ball.

Q20 Chair: Thank you, Secretary of State. If I may, one of the adverts is using the Conservative party’s logo. I know you can’t speak for the Conservative party, but as Secretary of State you will be aware of which parties have expressed a view on this. I believe that the Conservative party has decided to remain neutral on this matter. Will you be taking an interest in whether or not this is reported to the Electoral Commission, this use of a Conservative party logo on Yes campaign material?

Geraint Davies: A privatised tree logo.

Mrs Gillan: What was that?

Chair: Don’t worry. Order.

Mrs Gillan: I’m sorry, Mr Davies, I missed that.

Chair: Order. No. If I may, I am asking the question.

Mrs Gillan: I missed what Mr Davies said.

Chair: It was quite funny, but I’m not amused-

Mrs Gillan: Then I’m really sad I missed it.

Chair: -at the use of a Conservative logo on Yes campaign material.

Mrs Gillan: My role as Secretary of State does not involve looking after the use of political parties’ logos. However, certain matters have been brought to my attention. Therefore, I have passed them to officials to ask for advice. I have yet to receive that advice. When I do, I will see whether there is a correct and proper role for the Secretary of State. Until that time, I can’t say anything on the matter.

Chair: I welcome that because you will know, as well as I do, that the Conservative party is not united in supporting it, and in my view a very large part of its membership is totally opposed and would be outraged that their logo is being used in this fashion.

Mrs Gillan: Mr Davies, can I say that, right from the beginning, as Secretary of State, I remain impartial, but I had noted that the party that I am a member of had said that it was honourable to be on either side of the campaign, recognising that there are people in all parties that are supporting a yes vote and supporting a no vote. I think there is a difference of opinion across the political divides.

Q21 Jessica Morden: Moving on to the Passport Office, I know you ran into a little bit of a demonstration last week and met some of the passport workers-

Mrs Gillan: I missed you, Ms Morden.

Jessica Morden: I was there.

Mrs Gillan: You weren’t there when I was there.

Jessica Morden: I thought I would let you go ahead.

Mrs Gillan: I didn’t see you at all, and I’m so sorry, because if I had seen you I would have spoken to you.

Jessica Morden: I know you reassured them that you were making the case with the Home Office, but you didn’t have time to go into it there, obviously. Could you now elaborate on the case that you are making to the Home Office?

Mrs Gillan: First of all, can I acknowledge that you, like me, have been concerned about this, and I understand that you are representing the interests of your constituency extremely well? I can really give you not much more information than you are fully aware of already. As you know, when this was broken in the press I immediately saw the Minister for Immigration, Damian Green, with officials. We were able to establish at that first meeting that we would keep the front-of-house counter service in Newport. Those are the key words, if you don’t mind me saying so, because people are saying, "Oh, it was going to stay anyway", but it need not necessarily have remained in Newport, and I’m very pleased about that.

Since then, I have had extensive meetings, including further meetings with the Minister for Immigration, and I continue to make very strong representations. One of the reasons that the consultation period has now been extended again is because I was looking very closely at the development of the business case within the IPS. I wanted further work to be carried out on that business case and that is currently being conducted.

Q22 Jessica Morden: Have you seen the economic impact assessment that we have been waiting for for a long time, and if you have, could you share with us what is in it?

Mrs Gillan: I have seen one that was not yet fully completed. I don’t know whether the officials have any more up-to-date information than I have particularly on this.

Tim Hemmings: No. There is a version but it is not a completed version.

Mrs Gillan: To be brutally honest, I thought it was work in progress. I sent it back for further and better particulars. There is no sinister reason. I think more work is being carried out. Of course, you heard what the Prime Minister said on this in Prime Minister’s Questions a couple of weeks ago as well.

Q23 Jessica Morden: Are you concerned, like me, that the initial projection of how much the saving would be if you closed the Newport office by IPS was £2 million and yet the landlord has now come out and said that just getting out of the office contract is going to cost £3 million? Quite frankly, 250 people might be losing their jobs, it would be devastating for Newport and it is actually going to cost the Government money, not save the Government money. Is that a point that you could please get across?

Mrs Gillan: Ms Morden, you make your point very well. We need to wait and consider the responses to the consultation and when we have a chance to see the full economic impact assessment. All I can say, to you and your constituents, is that I really did make every effort to ensure that no stone is left unturned in considering this proposed closure and consultation. I hope we may yet-

Q24 Jessica Morden: One final question. Obviously, there are two days to go to the referendum. Go on, tell us how you would vote if you had a vote.

Mrs Gillan: And answer came there none.

Q25 Stuart Andrew: Secretary of State, as someone else who was a campaigner for the no vote at the last referendum, I was glad to see that the Assembly didn’t destroy the Union-something that those of us on that campaign were quite frightened of. But looking at it now, the Localism Bill that is going through Parliament offers a real opportunity, to devolve greater powers down to local communities. Are you confident that those powers will be devolved from the Welsh Assembly to local councils, and from local councils in Wales to local communities around the country?

Mrs Gillan: No, Mr Andrew, I’m not. The very nature of devolution is that the devolved Administration is able to make those decisions for itself. I can’t read the minds of Welsh Assembly Government Ministers. I know how I think Government should be operating and I am sure we will share similar views. I think to get as many powers as close to the people as possible is a good thing when it comes to local government and that is, indeed, what we are doing from Westminster, but in England only. Those powers are devolved to the Welsh Assembly Government, and of course the electorate has to decide which of the manifestos it will prefer when it comes to the next Assembly elections. The Conservative party has always put itself firmly and squarely behind making sure that those powers do reach down to local government so that local decisions are made much closer to local people, if it is possible.

Q26 Owen Smith: Secretary of State, can I take you back to the issue of youth unemployment in Wales? I think it is such a hugely important issue right now. Obviously, one of the areas where there has been a lot of controversy has been the cancelling of the Future Jobs Fund, and we have heard from successive Ministers in different Departments that the evidence, they contend, was that it wasn’t working. That is now being significantly challenged by evidence from all of our constituencies, where many different groups that took part in the Future Jobs Fund, such as the CAB in Pontypridd and RCT Homes, are reporting between 60% and even 95% of those people taken on going into full-time employment. Do you worry that the evidence about the Future Jobs Fund was insufficient to axe it as it was axed, do you worry that that has led to further problems in youth employment, and do you welcome that the current Government in the Welsh Assembly is, therefore, proposing to replicate it with a Welsh Jobs Fund?

Mrs Gillan: First of all, Mr Smith, I seem to recall the Prime Minister answering questions on this very point during Prime Minister’s Questions. I believe he said that the Future Jobs Fund had resulted in people not having the permanent jobs that were anticipated would be delivered through the fund, but that, once the period of time was up, a large number of people came out of employment, plus an awful lot of those jobs were in the public sector and not in the private sector.

The key thing and the important thing is to ensure that people enter into permanent jobs. That is why I have been very supportive of what my colleague is doing with the Work programme, particularly, and looking at ways in which help can be targeted directly at individuals to try and sustain them into work. Right at the beginning I made reference to this pre-employment training. I thought this was a particularly innovative idea by the Job Centre. It has resulted in people going into work, particularly with these employers-the supermarkets-because they sent representatives along to my meeting with them, which was also impressive in itself. They were able to confirm to me that having entered into and joined this pre-employment training with people that were unemployed and getting them to a certain standard has resulted in them being offered jobs and then sustaining those jobs long term. That is the key to it.

Can I also say, Mr Smith, that any initiative taken by any Government or any council or any institution that will result in people being sustained in long term jobs will be very, very welcome?

Q27 Owen Smith: If I may, Secretary of State, that is precisely the point I was trying to make. I think the evidence is increasingly emerging that the Future Jobs Fund, perhaps particularly in Wales, was working. In stark contrast to the claims that the Prime Minister and the Chancellor have made, the evidence seems to show that it was getting people into permanent jobs, and not just in the public sector but in the private sector. Therefore, I ask again: given that you said all initiatives of that nature are welcome, do you not feel that it was abandoned far too hastily and the result is Wales being number one across the UK, for the first time, in youth unemployment?

Mrs Gillan: Mr Smith, first of all, can I say that the Future Jobs Fund would not have been abandoned if it was a success? Indeed, those commitments that were entered into and those people that were within the programme with those commitments were kept and are being kept until there is a substitute that we believe will deliver better results.

I have to say that if you look at the recent figures, employment levels are going up in Wales. One of the messages we should be sending out from this Committee, and definitely I am sending out from my Office, is that there is a very willing workforce in Wales. There is a workforce that is waiting for employers to provide jobs for them and, in many instances, I hope that some of the news that will be coming from this Government will encourage people to invest in Wales to provide the jobs that people in Wales so dearly want to have.

Q28 Owen Smith: But you don’t contest, do you, Secretary of State, that youth unemployment in Wales is rising? You don’t contest that, I take it.

Mrs Gillan: Mr Smith, I don’t know what figures you are working on. If you would like me to provide you with all the detailed employment figures and the unemployment figures, I would be very willing to provide them to you.

Owen Smith: The ONS figures which show it is rising.

Mrs Gillan: That issue is one that we are addressing. I have told you particularly how concerned I am with the apprenticeship programme and ensuring that education is fit and fully fit for purpose to bring our young people on. I am reliably informed that this is not a phenomenon that has happened just in the last 10 months. Rather, it has been a phenomenon in Wales over the last 10 years.

Q29 Chair: Thank you very much, Secretary of State. Can I take you back to last July when you said that you were going to try and ensure that every Government Department had a Minister who understood devolution and what its impacts were going to be on Wales? I wondered how much progress has been made on that.

Mrs Gillan: We have made quite a lot of progress as far as that is concerned. Although I don’t want to pre-empt anything that is done in the future, this has been something I have been looking at, both in opposition, as you know, and in government. It is fair to say, and I can tell you, Chairman, that we are in the process of finalising the devolution Ministers’ roles and hope to be in a position to announce the nominated Ministers shortly. Once this happens, it will enable each Department to consider their approach to devolution as a whole and it will enhance the existing interaction that takes place as between Government Departments and the Welsh Assembly.

There was a system, under the last Government, of so-called "devolution champions". I have still yet to meet a devolution champion from any Department.

Chair: It won’t be me, that’s for sure.

Mrs Gillan: But one of the important things is that this is something I have also been discussing with my colleagues in the other devolved Administrations’ Offices, the Scotland Office and the Northern Ireland Office, and with the Deputy Prime Minister. I hope there will be some good news on that shortly.

Chair: Excellent. Thank you.

Mrs Gillan: The last point is, very importantly, we hope that that will also be being underpinned with the civil service structure as well.

Q30 Chair: May I ask why the Welsh Office isn’t producing a business plan as other Government Departments do?

Mrs Gillan: We have produced a business plan but we have been part of the Ministry of Justice and we are now part of the Cabinet Office. I don’t know, unless Mr Jones wants to add anything further.

Glynne Jones: No. We will be producing, in the very near future, a 2011 to 2015 business plan. Clearly the Welsh referendum has quite an important impact on the work of the Department so that is important.

Chair: It is in progress. That’s great.

We have now got nine minutes left. I am going to look round the room and allow any Members who wish to to catch my eye, to ask, if I may suggest, very, very short questions with very short answers.

Q31 Geraint Davies: Inward investors in Germany that we met acknowledged the importance of electrification of the railways, in particular to Swansea. You mentioned, Secretary of State, that you have been fighting hard for electrification to Swansea. Was there a conflict of interest between that and you arguing with the Secretary of State for Transport that electrification shouldn’t go through your own home constituency? Don’t you think there was a problem there in you getting across the case for Wales?

Mrs Gillan: I’m sorry, Mr Davies, I wasn’t aware electrification was going through my own constituency. I believe the proposal is for high-speed rail, HS2. As you are probably fully aware, both the Prime Minister and the Secretary of State for Transport are under no illusions as to the views of my constituents on the proposals as they currently stand. It is a route that was put forward by the Labour Government and the last Administration.

Q32 Geraint Davies: But what I am getting at is, when you were speaking with the Secretary of State for Transport on the one hand you were saying, "We don’t want high-speed rail in our area but we do want electrification in the other area," didn’t that cause a conflict of interest in terms of your role as Secretary of State?

Chair: Conflict of interest, Secretary of State?

Mrs Gillan: Mr Davies, no conflict of interest. I think you fail to understand the basic premise of the consultation period and the opportunity that the Government is giving to everyone to make their case during the five-month consultation on HS2 which will involve looking at the business case for HS2 as well as any alternative and preferred route.

Geraint Davies: The business case-

Chair: No. Order. Guto Bebb.

Mrs Gillan: I think you are trying to make a rather-

Chair: No. Order, Secretary of State. I’m trying to get everyone in, please.

Mrs Gillan: I think you are trying to make a rather shallow political point which doesn’t work because there is no conflict of interest, Mr Davies.

Q33 Guto Bebb: Excellent though the Conwy Valley railway line is, I don’t think the three-hourly service that we enjoy would keep many people in my rural constituency in a position where they could travel to work or travel to shop even. The price of fuel is a huge issue in my constituency-it is a very rural constituency-and I’m sure the same is true for many rural constituencies in Wales.

In view of the fact that we are coming up to the budget, would the Secretary of State confirm that she is lobbying hard to ensure there is some relief provided to motorists at distances in Wales and certainly lobbying hard in the context of the fact that we have been reading in the papers that there might be some relief to the Highlands and Islands. I hope that the proposed relief to the Highlands and Islands is not a reflection of the fact the Chief Secretary to the Treasury happens to have an interest in that part of the world.

Mrs Gillan: I couldn’t possibly comment on the latter point.

This is extremely serious. We are very, very well aware of the impact of rising fuel prices. Of course, rising fuel prices are a reflection of what is happening in the wider international world of politics, as we know, at the moment. Right at the beginning we tried in the Wales Office, with our very small resources and our small size, to engage ourselves on those areas which we think are particularly of significance. The Parliamentary Under- Secretary of State, almost immediately, started to engage with the rural community and look at rural affairs. This is something we are keeping under review. Of course, I will be encouraging the Chancellor, although I can’t predict or write his budget for him, to look kindly on the fair fuel stabiliser that is being proposed because I think that would be of interest.

May I also say, Chairman, which you might be interested to know, that I hope, shortly, to be able to lay the motion for another Welsh Grand Committee? The Chief Secretary to the Treasury has said he will come and answer questions at the Welsh Grand Committee following the Budget.

Chair: He always gets a warm welcome from the Welsh Grand. Thank you.

Q34 Mr Williams: Wales has a very proud history of attracting overseas students to our universities. Concerns have been expressed to me, certainly from the Vice-Chancellors in the two universities in my constituency, about the effects of those tier two immigration regulations. I was wondering whether your Department had had representations from universities across Wales and what are you able to do to advance the case they are making?

Mrs Gillan: Mr Williams, absolutely. Despite the fact that university education is devolved, I have had this raised with me on several occasions, and Cardiff university has certainly written to me about it. I was in Aberystwyth on Friday, and it was raised with me there. I am very conscious of the great asset value of foreign students coming to study in our universities in Wales, and indeed across the United Kingdom. It is something which is exceedingly important in terms of future trade and the future economic environment, as well as to stimulate the intellectual and the academic sector. It is something that I am discussing with DBIS and will continue to do so to try and make sure that the Welsh universities are considered with all the other universities when we are looking at our immigration rules.

Q35 Mr Williams: It is about building those partnerships, isn’t it, between those different countries from which there is a huge potential from the higher education sector?

Mrs Gillan: You couldn’t be more right. You are absolutely right on that.

Chair: Thank you very much. Mark Williams is often right.

Q36 Owen Smith: Secretary of State, you have been at pains to point out that you are neutral on the issue of the devolution referendum. Can I ask you what message you think that sends out, that a Conservative Secretary of State is neutral on devolution, to potential Tory voters in May’s Assembly election?

Mrs Gillan: Mr Smith, I don’t know why you add the "Conservative Secretary of State for Wales".

Owen Smith: Because you are.

Mrs Gillan: As Secretary of State for Wales, I’m carrying out-but you say it in a pejorative fashion, might I say?

Owen Smith: It is a statement of fact.

Mrs Gillan: As a statement of fact, under the legislation I had certain roles to carry out and one of them was to decide on the wording. I wouldn’t want anybody to think that I was partial in any way, shape or form. Therefore, I have remained neutral and will continue to do so.

Q37 Owen Smith: What does that say to Tory voters?

Mrs Gillan: You must ask the Tory voters, Mr Smith.

Chair: As one, I wish you were a bit more partial, Secretary of State. But there we are.

Mrs Gillan: We can’t always have everything you want, Chairman.

Chair: We look forward very much to the statement on rail electrification, and we have managed to finish 90 seconds ahead of time. Thank you all for your relatively brief questions and answers. Thank you.