EU Withdrawal Agreement: Welsh Economy

2. What recent assessment he has made of the potential effect on the Welsh economy of the withdrawal agreement on the future relationship between the UK and the EU.

The Government are clear that the best outcome for Wales and the Welsh economy is that the UK leaves the European Union in an orderly manner with a deal. That is why I voted for one on three separate occasions.

The Secretary of State knows that, if we stay within the EU, British people will get a 20% uplift in structural funding to £440 per person. Will he ensure that, in the event of our leaving with a deal, that money is sustained completely with a new UK prosperity fund? If we have a no-deal outcome, there will, quite simply, be no structural funding and we will hit a cliff edge, and more firms like Tata, Airbus and Ford will leave on his watch.

I do not recognise any of the hon. Gentleman’s comments. Let me ask him this one question: does he recognise that Swansea voted to leave the European Union in higher numbers than the national average, and, if so, why does he reject the will of his constituents?

Many Welsh businesses will be able to cope with a no-deal Brexit, but one sector that the Secretary of State and I know will not be able to cope is sheep farming. Will he confirm whether he has had any discussions with the Secretary of State for Environment, Food and Rural Affairs about an income protection measure or a compensation package for hill farmers when their industry gets decimated under a no-deal Brexit?

My right hon. Friend makes an extremely important point and highlights the importance of the agriculture sector, specifically sheep farming, to the Welsh economy. Clearly, it is our will to protect that sector in every possible way that we can, but the best way to protect it is to get a deal with the European Union. I have voted on three separate occasions for the deal. I think that Opposition Members need to explain why they have voted against a deal, because, by definition, that creates a higher chance of our leaving the European Union without a deal. They would need to explain that to their constituents.

12. Yesterday, I met a managing director of a local manufacturing company who imports most of his goods through ports. He is stockpiling raw material at the moment, which is affecting his cash flow and his future plans. The Secretary of State went to Holyhead in April and spoke about the importance of ports, saying that we needed a deal. Now he has said recently that we need to prepare for no deal. I must tell him that his comments have deeply concerned that chief executive officer. If we do end up with a no deal, what would he say to him?

I want a deal with the European Union. I have voted for a deal with the European Union on three separate occasions. I suspect that the employer to whom the hon. Gentleman has spoken would have supported a deal with the European Union. Perhaps he should have explained why he voted against that, because that has clearly increased the uncertainty, which is not good for anyone. He needs to look at himself and his colleagues and consider why they voted to block the deal.

Along with the Secretary of State, I supported the withdrawal agreement the three times it came before Parliament because of the impact that it will have on my constituency, and particularly on the sheep farming industry. Will the Secretary of State go to the Royal Welsh show and explain to the farming unions that he, I and both of the candidates who might be Prime Minister are very supportive of reaching a deal with the European Union that will protect the future of my constituency and the sheep farming industry in particular?

I pay tribute to my hon. Friend for his strong record in this area. Yes, I am looking forward to my visit to the Royal Welsh show. That will give me an opportunity to continue my ongoing proactive dialogue with the agriculture sector and with the farming unions in particular. I have spoken to both leadership candidates, and both recognise the importance of agriculture to the UK economy and the significance of the agriculture sector in Wales. They believe that it is best to leave the European Union with a deal, but will take positive steps to protect those industries in the absence of a deal.

14. Brexit has serious implications for Welsh farmers, with an average of 80% of a farmer’s income in Wales coming from direct payments received through the EU’s common agricultural policy. The Secretary of State is backing a contender for Prime Minister who, during the referendum campaign, promised farmers that their subsidies would remain as they are after Brexit. Can the Secretary of State give a guarantee that the right hon. Member for Uxbridge and South Ruislip (Boris Johnson) will not pursue any Brexit policy that harms the lives and the livelihoods of farmers and that impacts on agriculture?

I am excited about our prospects outside the European Union—clearly having had the privilege of travelling internationally. A deal on beef exports was agreed last week between China and the UK, and we continue our dialogues in relation to other products and foodstuffs. That demonstrates the markets that are available. The hon. Gentleman is absolutely right that it is better to get a deal with the European Union, because that would give us a smooth and orderly exit, but if he will continually vote against the deal with the European Union, by definition he will increase the chances of a no deal.

The Secretary of State is easy about a no-deal Brexit, which threatens to create a perfect storm for sheep farmers in Wales—and his Government are going to have to own it. Tariffs of 46% are set to kick in on 31 October, to coincide exactly with the season when mountain lambs come to market for export. There is a mart in Bala on 31 October. Will he join me there and tell farmers to their face why the value of their lambs has gone through the floor?

I remind the right hon. Lady that farming unions in Wales strongly supported the deal agreed by the Prime Minister and the European Commission. Would she stand at their mart, look them in the eye and tell them that she voted against their wishes and for a no-deal position? That is exactly what she did on three separate occasions.

So that is the Secretary of State failing to take responsibility, then. He talks up the threadbare benefits of his insular Union while denigrating the real rewards of the European Union. The majority of Tory party members would sacrifice the United Kingdom for Brexit. Will he therefore tell me which is closest to his heart—his beloved Brexit, on which his career depends, or his precious Union?

There is no doubt that Wales prospers fantastically through being part of the United Kingdom, and there are great opportunities for the United Kingdom outside the European Union. I want to maintain a very close trading relationship with the European Union, which is why I would strongly prefer to have a deal. As a passionate Welsh lady, the right hon. Lady will recognise that Wales voted to leave the European Union. We are trying to honour the outcome of the referendum and maintain a close trading relationship so that farmers, manufacturers and service providers in Wales can continue to trade with the European Union and globally.