Good afternoon and welcome to the Secretary of State for Wales, Jo Stevens, and the Under-Secretary of State, Dame Nia Griffith. It is lovely to see you both. Thank you so much for taking the time to come here this afternoon. Welcome to all those interested members in the public gallery. It is good to see you all. My name is Ruth Jones. I am the Chair of the Welsh Affairs Select Committee. We are joined today, as I said, by Jo Stevens and Dame Nia Griffith from the Wales Office, and it is great to have them here. It is the first time that they have appeared in front of the new Committee in their very official, established roles now, so thank you very much for that. As a member of the previous Committee, we did enjoy a very positive relationship with the previous Secretary of State, and we do hope that this is going to continue into this Parliament as well. I am sure that it will. We have a great deal to get through and a lot of keen people on the Committee, and we know that we have only an hour, so I am going to make a request for very succinct questions and answers, if that is okay. Members will now declare any interests that they may have that are relevant to today’s session.

Thank you very much. I should also declare that my husband is an employee of Arcadis, which is a civil engineering structural firm that works for HS2.

I will just declare that I am the chair of the newly formed Growth Track 360 group.

We have all bared our souls now. Secretary of State, I know that you would like to make a short statement at the beginning, so it would be great if you could go ahead now, please.

Thank you very much, Chair, and good afternoon, everyone. Congratulations to everyone on your membership of this Committee, and thank you for the invitation to appear today. I echo your sentiments, Chair, about hoping to have a very constructive relationship with the Committee while we are in office. Thank you for letting me set out my priorities for the Wales Office by way of a statement at the beginning. It is a real honour to be the first female Labour Secretary of State for Wales and to begin delivering the change that people in Wales voted for six months ago. A lot has been done, but there is still a lot more to do. My priorities include but are not restricted to—and these are the three most important—economic growth, bringing inward investment and infrastructure investment such as rail, for example, and creating well-paid, secure jobs so that we can raise people’s living standards. The second is protecting and defending our steel communities, and unleashing what I consider to be Wales’s huge potential in the green industries of the future. The third is resetting the relationship with Welsh Government, so that we have a true working partnership based on mutual trust and respect that benefits everyone across Wales. Those three priorities are all grounded in the Government’s No. 1 mission: to deliver economic growth through our plan for change. The last six months have seen more than £1 billion of investment committed to Wales, and hundreds of jobs at Eren Holding in Shotton Mill, and Kellogg’s in Wrexham. The ground has also been laid for thousands more jobs in advanced manufacturing, clean industries and growth sectors. Going forward, I am working with Welsh Government, the Crown Estate and other partners to ensure that we maximise those opportunities that I mentioned in the Celtic Sea from floating offshore wind, which will deliver those well-paid jobs and a brand new, thriving green industry in Wales. I am working with Cabinet colleagues, Welsh Government, businesses, trade unions and universities to ensure that we have a powerful Welsh story right at the heart of the UK modern industrial strategy and the forthcoming steel strategy. I want to see those new investments, jobs and businesses, with the benefits passed on and felt by people across Wales. I would mention—and I am sure we will talk about it—the situation in Port Talbot. That has been a very big focus of mine since our first day in Government, taking the transition board from discussion through to delivery in just six months, with £80 million of support that had previously been promised but was unfunded by the previous Government. Just over £42 million has been announced to support workers and the supply chain, allowing businesses to pivot, diversify and adapt as part of the transition from the way that we have made steel in the past to the way that we are going to make steel in the future. The Government’s first Budget delivered the biggest real-terms settlement for Wales since the dawn of devolution, with £1.7 billion more to invest in public services in Wales. Going into the spending review this year, my main focus is to ensure that Wales receives its fair share of funding, so that we tackle the historic underinvestment in rail infrastructure that has been the hallmark of the last 14 years. Finally, Chair, since the election, Nia and I have led the charge across Government to fundamentally reset the relationship between UK Government and Welsh Government. Working together, we can finally get on with delivering for the people of Wales.

Thank you very much, Secretary of State. You mentioned resetting the relationship with Welsh Government. Given that you have also said that you wanted to go further and faster in strengthening the voice and the impact of the Wales Office across Government, has the reduction in the number of MPs—we have gone from 40 MPs to 32—impacted on the ability of Wales to have a voice? Are you sufficiently resourced to deliver?

On the reduction of Welsh MPs, I would say something that my mum always used to say to me, which is, “It is quality, not quantity”. We have a large intake of very enthusiastic and talented MPs in Wales, as well as more seasoned ones, including some of us around this room. I know that every single colleague in this room will be powerful advocates for their constituents. I have absolutely no doubt about that. In terms of the voice of Wales in Parliament and in Government, 27 of the 32 Welsh MPs are in the governing party. 30% of our MPs are Ministers in Government, so that is a big, powerful voice right across Government. It not only demonstrates the talent across all parties in Wales, but creates a powerful and effective voice inside Government for the people of Wales. Around the Cabinet table, I hope and think that I have been a strong voice for Wales, if I look at what we have delivered as a team since July. In terms of resourcing, we have the spending review coming up. I hope that the Committee will forgive me for not having a conversation that I should probably first have with the Chancellor ahead of that. What I would say is that I ran a business before I was elected as a Member of Parliament, so I have come at it from a perspective and experience of looking at efficiencies and how you run an organisation. The Wales Office director and the team in the Wales Office run a very efficient Department. During peaks of work, it can get quite stressful, I am sure, but, like any organisation, you have peaks and then you have downturns. Everything that I have asked of the Wales Office to date has been delivered well, so I am very happy with it, but we will be having conversations as part of the spending review. Our relationship with Welsh Government has been very close and very productive, and we have seen that in terms of what has been delivered over the last six months.

Welcome to the Committee. I want to ask a little bit more about resetting this relationship with Welsh Government. I was really pleased to hear that that was one of your three key priorities at the beginning of the session. We have heard you say, when you were appointed, that you wanted to reset that relationship. There are two parts to my question, really. What did you find the relationship was like when you took office in terms of the baseline, if you like? How will resetting that relationship and the onward journey look in practice, in your opinion?

We are a small nation. In terms of the political groupings within Wales, pretty much everybody knows each other, both within their own parties and cross-party. The good thing is that you have relationships in place already. We had done a lot of preparation for Government as part of the run-up into the general election campaign, and I think and hope that we did it thoroughly, because, other than the black hole that was discovered in Treasury, nothing has come as a surprise going into the role. I have been very proactive, as have colleagues right across Welsh Government, and as has Nia, in terms of liaison, discussion and working in partnership with colleagues in Welsh Government. I have seen that across Cabinet colleagues as well, so there is a real drive to make sure that things work in a better way. We know that, under previous Governments, it has been a difficult relationship, and we wanted to reset that. The Prime Minister has led from the front. He came to Wales within 72 hours of us winning the election. He has been to Wales three times. We have had the Council of Nations and Regions meeting. There is a real reset. If you listen to what Welsh Government Ministers and the First Minister say, they consider the relationship to have been transformed. That is good enough for me.

You have already touched on the Council of Nations and Regions. I wanted to ask about the three-tier system of intergovernmental relationships that was set up in 2022. It is a two-part question again. Do you feel that that is sufficient to ensure the effective working that we need in this new era? What role do you see the Council of Nations and Regions playing in policymaking in Wales, and how can it be improved?

On the intergovernmental relations structures and those three tiers that you mentioned, we have clearly not seen, in the past few years, the engagement and activity that one would have expected between the two Governments through all levels of that structure. It differed from level to level. Certainly, we did not have the engagement between Prime Ministers and First Ministers of devolved Governments that has been put in place since we came into Government. You can have all the structures that you want, but, if you do not have the will to deliver that engagement and to approach it in a way that is a true collaboration, there is no point having the structures. I am very happy with the way in which they are working. On the Council of Nations and Regions, I think that your question was about policymaking.

With that in existence, what improvements will it make to those intergovernmental relationships and the fact that we are all pulling in the same direction?

The role of the council, which the Prime Minister chairs, is to facilitate that partnership working between UK Government, devolved Governments and the various categories of mayors in England. It will not make policy directly for Wales, but it does provide a really important vehicle for Governments and authorities with devolved responsibilities to work together on sharing good practice and delivering on people’s priorities across all parts of the United Kingdom. If we look around the UK, there are shared challenges. In order to find solutions, it is helpful to look at shared solutions as well, and the council is a good vehicle for that. In the October meeting, the council talked about the modern industrial strategy and opportunities for attracting inward investment. The members of the council have committed to working together in order to leverage the maximum investment that we can into all of our nations and regions, because we want to see support across the whole of the UK for economic growth.

In September, the Welsh Secretary announced plans for Welsh patients to receive treatment across England in an effort to drive down waiting lists in Wales, which are now the highest on record. Those plans were, seemingly, then walked back by Welsh Government Ministers. In Powys, the health board has been forced into a position by the Welsh Government where Welsh patients could wait longer than English patients when being treated at the same hospital. This is in direct contradiction to what the Department has previously outlined. Will this Government allow Welsh patients to receive treatment in England to drive down waiting lists? If so, when can we expect to see any movement on this issue? Dame Nia Griffith: David, the point is that we want to work very closely with Welsh Government on this issue. Initially, it is very much about looking at best practice on both sides of the border and what the lessons are that we can learn. In practical terms on the ground, you will know that there are already agreements in existence, whereby, because of the geography of a place, it is more appropriate for patients to go to a GP on one side or the other. Where there are specialist provisions, cross-border working has been common. As you quite rightly point out, there is absolutely a case for exploring this further and for ensuring that there are no discrepancies, as you describe, between what can be accessed on one side of the border and on the other side of the border by patients who are attending the same GP surgery. Q7                Steve Witherden: Following on from that question, my constituency straddles two health boards—Betsi Cadwaladr and Powys Teaching Health Board. Some border health boards have their own large hospitals, but Powys Teaching Health Board does not, and patients are totally dependent on Shropshire hospitals for multiple procedures. With that in mind, will you work with Senedd colleagues to look at extra support for Powys Teaching Health Board? Dame Nia Griffith: As I have just outlined, that very close working is absolutely crucial to all of this. We will need to look at specific cases that you raise, but, in terms of the principle of being much more open to working collaboratively, looking at what works and what is not working, and being prepared to make changes, there are two very important factors here. One is that, in the Budget in October 2024, we absolutely ensured that there was money available to be used for health, which clearly, in England, is already going ahead. As far as Wales is concerned, it has enabled us to give that £1.7 billion uplift to Welsh Government—the best settlement ever since devolution. You will have heard the First Minister’s priorities over the summer. The Welsh Government have already allocated huge tranches of money to the health service, and money is being put aside in the Welsh Government’s budget, which I hope that all members will encourage their colleagues in the Senedd to support, in order to facilitate improving the services for all, which will include Powys and Betsi Cadwaladr.

I just wondered if you could expand a bit more on the engagement that you expect to see between both Governments, following on from the announcement in September, in terms of those partnerships between Welsh and UK Government, and that interaction between the health boards and the trust, and what that engagement looks like. Dame Nia Griffith: Are you talking about engagement between specific health boards and trusts in England?

I mean in terms of a cross-border perspective. We have talked about it in terms of the agreement within the new partnership. The Secretary of State announced in September that the ambition for this new partnership will be to drive down NHS waiting lists on both sides of the border. I wanted to ask what that looked like in terms of the engagement with the trusts in respect of England, and then also on the health boards. Dame Nia Griffith: The important thing here is to remember that ultimate responsibility for the health service in Wales lies with Welsh Government Ministers. In terms of day-to-day operational matters, Ministers do not micromanage. Clearly, what we want is to have the best possible treatment nearest to home, whether that is by having more services available in GP and community services, and more services available locally or, where that is not possible, having those agreements that are already in place in Wales for specialist treatment in different health board areas, with the mechanism that there is for requesting that specialist treatment be carried out in England.

What I am trying to get at is that the responsibility for implementation lies with the health board or the trust. For instance, Welsh Government invested £3.4 million in training more radiologists, in terms of driving down those waiting times, but there has been a report by Audit Wales that found that some NHS bodies have been unable to create the jobs needed or to take on these newly qualified specialists. How will this new innovative partnership improve the scrutiny and delivery of these health boards and NHS trusts? Dame Nia Griffith: There are two parts to that. The first part is, clearly, Welsh Government and Welsh Government Ministers’ responsibility. Do not forget that we have also now set up this ministerial advisory group, which is there specifically to look at the ways that we can progress. As I have just mentioned, what we are very open to is what is best practice everywhere, and what reforms are needed and work, as well as the funding. We recognise, both in the UK Government and in Welsh Government, that it is about not just funding, but also about reform and looking at what works in terms of delivery.

My heart always sinks when I hear about a ministerial advisory group. It is a bit like a royal commission. It often takes a lot of time and does not achieve anything. The Secretary of State set out in her priorities the growth of high-quality jobs and a dynamic economy. Are you convinced and persuaded that Welsh Government Ministers make the link between a healthy workforce, growing Wales plc, and the dynamic that that plays in the economy, when they set their health strategies? I remain to be convinced that that is necessarily fully grasped. Dame Nia Griffith: To be fair, Simon, you do quite surprise me on this, because Wales has been in the lead in terms of preventive medicine and looking at things such as early years in education and at preventive matters in medicine. Of course, we do have a legacy, as you will know, from the industrial past that we have, but look at the investment that there has been, first of all, in getting the Swansea medical school and now the Bangor medical school up and running, looking very carefully at how we can encourage more trainees to come over to Wales and maintaining the nurses’ bursary when it was cut in England. These are all ways in which we are looking at, globally and in the round, trying to make things better in terms of health in Wales. It is very much about looking at the strategy and that it is not just about what happens in the health service, as you say.

I take that. The data sometimes points to a destination not intended by those strategies in many respects. Notwithstanding all that you have said, Wales has incredibly long and, arguably, unsustainable waiting lists in too many areas of legitimate health demand from people who live there. What is this ministerial advisory group going to do to get a grip on that and sort it out in a timeframe that means a general election promising change would meet the aspirations of those who voted for it?

Could I perhaps suggest that the Under-Secretary might like to follow up in writing on this? I am conscious that health is a devolved matter, and we do need to move on. I am conscious of time, so I am going to come back to David Chadwick.

What are your priorities for the Port Talbot Tata Steel transition board in 2025? What is your assessment of the short and medium-term economic impact on businesses in Port Talbot as a consequence of the job losses at the Tata plant? My grandfather worked at the steelworks and the blast furnaces in the 1960s and, when he did so, he had 20,000 colleagues, which is a sign of how many jobs have been lost in that area over the past 50 years.

As we know, we have a proud steel-making history in Wales, like we had a proud coal-mining history in Wales. At one point, we had 250,000 miners just across the South Wales pits. You will know, David, that, when the election was called—in fact, on polling day, on 4 July—both blast furnaces in Port Talbot were due to shut, with the loss of every job associated with it. Within 10 weeks of coming into office, we had, through Jonathan Reynolds, the Secretary of State for Business and Trade, negotiated an improved deal with Tata Steel, which not only secured the future of steel-making at Port Talbot, but secured talks about future investment to increase the amount of steel-making methods other than the electric arc furnace, which we agreed on. We safeguarded 5,000 jobs and made sure that, as part of that agreement, if Tata does not stick to 5,000 jobs, there will be £40,000 per job returned under the deal. We released 385 acres of land for development within the area for regeneration. We achieved, working with the trade unions, the best ever voluntary redundancy terms that Tata has ever offered in the United Kingdom to their workforce. We had a very short period of time in which to do some critical work, and I believe that we delivered the best deal that we could in that period. Since then, as you know, I chair the transition board, which is made up of local politicians from all parties, with representatives from the council and senior management from Tata. That board had been in existence for nine months at the time of the election, and no money had gone out to support workers either directly at Tata or in the supply chain. I moved that board from discussion to delivery and, in the summer, got £13.5 million announced specifically to help the supply chain, because we could see that, because of the uncertainty, there were jobs already being lost in the supply chain. The £80 million that had been promised by the previous Government turned out to be unfunded. The money was not there. The three pots that it could have come from had all been spent. That was why I fought tooth and nail leading up to the Budget in October to secure that £80 million that had been promised to people in Port Talbot. So far, we have announced £42 million through three specific tranches of funding, and there will be more coming up in order to help individuals, businesses, direct employees and people in the supply chain. That is to help people find new jobs and to retrain and reskill, businesses to diversify and adapt, and people to set up their own businesses. We have seen people who have left the steelworks already setting up their own businesses. As we come into this critical peak period now at the start of this year, when the voluntary redundancies will take effect, we will see more and more demand on those funds. What I would say is that, if any of you are in Port Talbot at all over the next few months, the community union has established a hub in Aberafan shopping centre, where we have all the support services available from Welsh Government, Business Wales, the local authority and third-sector organisations. Since they set up only eight or 10 weeks ago, they have had over 1,400 people through the door to provide support and advice to. I look at it as us wrapping our arms around Port Talbot and our steel communities, and I am determined that we are going to get through this very difficult period and then build on the opportunities for Port Talbot in the future, particularly around the freeport and floating offshore wind.

Thank you, Secretary of State, for joining us. You rightly set out in your opening statement the importance of economic growth and that being the number one priority for this Government. In terms of the two freeports—the Celtic Freeport and the Holyhead freeport in north Wales—could you just talk a little bit about and explain to us how you will evaluate what they are delivering in terms of the economic growth that we want to see?

We confirmed the freeport programme in the autumn statement. I am very pleased that the Celtic Freeport is now open for investment, following tax site activation last November, and we are working at pace with MHCLG and the Welsh Government to progress the Anglesey Freeport tax sites, which I am hoping will activate next week, on 23 January, subject to parliamentary and Senedd approval. Once the full business case approval is reached, the £26 million in UK Government funding will be released. In terms of the measures to determine the success of the freeports, they are designed and we are implementing them in order to deliver economic growth, so there will be a monitoring and evaluation process once they are up and established in all the Welsh locations. That evaluation process will be for MHCLG and Welsh Government to determine, but, from my point of view, boosting economic growth and creating jobs are the key measurements of success. That is the rationale behind the freeports. That is what the prospectus sets out for them to do. We want to see them promoting regeneration, creating high-quality jobs, being a national hub for our global trade and investment across the economy, and fostering an innovative environment. We know that, in Wales, innovative businesses grow successfully, and the freeports are going to be the catalyst for more of that.

You mentioned the role universities that play in your opening statement as well, so that is something for us to take on board.

It definitely is, and the siting of Bangor University in north Wales, and Cardiff University, Swansea University and others, have played a part in the Celtic Freeport. We have great universities with great talent in them, and we need to foster that talent and innovation even more.

I have a quick supplementary. The university is part of the freeport board, because the M-SParc site is part of the freeport site. Just for clarity, the freeport in Ynys Môn is skills-driven as well. Moving on to Holyhead, the closure of the port of Holyhead has had a dramatic impact, not just on the town of Holyhead, but on Ynys Môn, north Wales and much wider. We have been trying to promote the strategic importance of the port of Holyhead in the flow of goods and growing the economy. We have had a direct impact on the local supply chain, and what we have learned through this is that there is no mitigation to support those businesses that have been dramatically affected. One business has lost 70% of its footfall. Another hotel has lost 147 nights, which, at £100 a head, is £14,700, in addition to the storm damage. My ask is that we work together here to make sure that there is a pot of money and a hardship fund put in place, because, with climate change, we are going to see more storm damage and more impact on the economy. We should learn lessons to support our supply chain, which is the backbone of the rural economy, especially in places that we all represent. We know that small businesses make up the majority of the economy in Wales, and we can support these businesses to withstand. I met with one company. She had just opened only last February, and did not think that she could withstand. I am aware that the port is, hopefully, reopening tomorrow, but only partially, and so we need to make sure that there is a support package in place. This could be for the Government to use in future examples, where the economy is disturbed in this way.

First of all, thank you for your correspondence, Llinos. You have had a reply from me. I obviously share the frustrations and the worries of all those who were affected by the closure. As you say, it is very good news that one of the berths will reopen tomorrow. That has been confirmed literally as I was walking into this Committee. That will mean that services can start again for people wanting to travel, and for businesses transporting goods, and will have a positive impact on the island in terms of supply chain businesses. I do want to thank everybody who has been involved in getting the port partially back up and running. They have done a tremendous job. It has been a really good piece of cross-government working, because Welsh Government are primarily responsible for the port. You have had Welsh Government and UK Government involved, as well as Stena Line as the owners of the port. It has reinforced the importance of Holyhead, as you say, and the UK Government’s £20 million investment in improving the breakwater will mean that the port is better protected in future. Welsh Government have also put £20 million in by way of a loan to help Holyhead in the future. I met with the Transport Secretary and with the Welsh Government Cabinet Secretary for Transport in north Wales just prior to Christmas, when we were discussing the impact and how we were going to deal with the reopening of the port once it was safe, because the safety of passengers, freight and workers is absolutely critical to this. It cannot reopen unless it is safe. I do know that Ynys Môn Council is currently conducting a survey across businesses to gather evidence about the impact. I am sure that you are encouraging all the businesses to which you have referred to contribute to that survey and to provide direct evidence about what the impact has been, so that we have a basis of evidence to look at in terms of economic impact. I would also say that I hope that all the businesses are checking their insurance policies, because it may be that there is insurance cover in the event of business interruption. I do not know, because each policy will be individually issued to businesses, but that might also be something else to be advising constituents about.

I will just come back quickly, with your permission, Chair. The breakwater funding is welcome, but that was announced a few years back and is more to do with safeguarding the port from flooding. It will not have an impact on the port itself, and the funding that I am asking for is to support those businesses. I want it to be recognised that the supply chain is the backbone of the port of Holyhead. I want to thank the county council as well for opening the portal, which businesses are involved in, but there are some businesses, such as the start-up, that have no evidence for this time last year, because she did not open until February. There are challenges that those businesses face, but I hope that we can keep this dialogue going. I also want to congratulate the Irish Government for putting in a hardship fund to support businesses there as well.

Thank you both for being here. It is great to see you here. I wanted to ask about rail infrastructure. Secretary of State, in your opening statement, I noted that you mentioned the historical underfunding of rail infrastructure in Wales and the complex structures around that in terms of separation of track and rolling stock. It is fair to say that people in Wales have been underserved in terms of rail for a long time. Linked to what you also said about economic development and investment across the whole of Wales, that rail infrastructure is going to be key to help deliver that, both within Wales but also cross-border, linking the likes of Holyhead all the way across into Manchester and Cheshire in terms of my area, but also in the south and the middle of the country. Could you tell me what your assessment of the state of the rail network is in Wales, and what the Government’s priorities are for the enhancement of the Wales infrastructure?

I will be perfectly frank on the first part of your question, which is that it is not good enough. That is a direct consequence, I am afraid, of the last 14 years of underfunding by prior Governments, and that is why I am determined to change that. I cannot change the past, but I hope that we can change the future. In my opening statement, I mentioned that the top priority this year, as we go into the spending review, is to seek to reverse the years of historic underfunding in infrastructure. I have been working very closely with the Welsh Government Cabinet Secretary for Transport in north Wales, Ken Skates; with Louise Haigh, the prior Secretary of State for Transport; and with Heidi Alexander, now the current Secretary of State for Transport. We have agreed a direction of travel, if I can put it like that, which I hope will deliver new rail investment for Wales. We are, essentially, aligned on three key points. The first is the recognition by both Governments that Wales has not received its fair share of rail funding in the past. Secondly, the north Wales and the south-east Wales transport commissions, which we all know as the Burns commissions, and the union connectivity review are able to provide us with a really good blueprint for investment, because it is based on evidence and on the criteria for rail reform, which is part of the Government’s programme. The third point is that Welsh Government and UK Government want to work together to ensure that we begin to remedy this through this year’s spending review. I want to be very clear that we cannot fix this overnight. It has gone on for a long time, and the legacy of underinvestment is going to take time to resolve, but I and both Governments are clear that we have to break this cycle of underinvestment that had been a political strategy. I just want to pay tribute to this Committee as an institution, because it was this Committee that, in 2021, recommended the establishment of the Wales Rail Board. Chair, you will have seen the correspondence between the two Governments, which has possibly been shared with the Committee today. In it, we have been pleased to see the work of the board and the progress that it has made, and we want to see a permanent and enhanced role for that board in the future. In fact, we have asked the Wales Rail Board to give advice to the Department for Transport about longer-term arrangements, and about how we might look at the transfer of some rail network enhancement pipeline governance functions from the Department for Transport to the Wales Rail Board in future. The Wales Rail Board has put together priority projects as a result of the work that it has been doing and that collaboration in the areas that I have talked about in terms of the Burns commissions. What I still call the Liverpool-Bidston line, but I know is called the Borderlands line now, is going to inform the DfT work with the Treasury in the run-up to the spending review. What I want to see is a realistic start to a sustainable pot of rail infrastructure funding for Wales. That is what we need. That is what I am going to fight for. I am pleased to say that we have agreement across the Department for Transport, the Wales Office and Welsh Government on that submission to go into the discussions on the spending review.

Thank you. That is really good to hear. I have been really pleased with some of the discussions that I have been having. Particularly in north-east Wales, north-west England and north Wales, there is some fantastic co-operation already going on, and what you have said will, hopefully, build on that and bring that more together, because it is absolutely vital. It is really pleasing to see that co-operation that is happening, because, as I said, those links are vital for the whole of the north Wales economy. It was good news as well about the north Wales main line in terms of getting the extra capacity and extra speed on there, which, again, is much needed, as well as the talk about the metros in both south and north Wales. To add to that, while you might not be able to answer this in terms of the spending review, do you think that we have adequate funding for rail in Wales?

We have not had. I want us to. I cannot pre-empt the spending review, but I am going into it with rail as the number one priority for Wales. We all know that building rail infrastructure drives economic growth, job creation, house building, employment and improved social cohesion, because people have public transport to be able to get to the jobs, and employers can find people to come and work in their businesses. It is a no-brainer, really. Subject to business cases being completed, that pipeline of investment that is set out in the board’s list of priorities is what we will go forward with into our discussions in the spending review.

You are absolutely right. In Wrexham, we have the enterprise zone and the town fund, and we need to be able to spread those benefits down the coast, as well as the visitor economy linked into Manchester and Liverpool and places like that, to get those people into Wales and link it up much better.

I know how important that line is in south Wales, cross-border, as well as in north Wales, in terms of people living, working and socialising right across the border, all day, every day. It is a huge channel for economic growth on both sides of the border at both the bottom and the top of Wales.

Into Ireland as well.

Can I begin by just welcoming the Secretary of State’s acknowledgement of the historic underfunding? As she rightly referred to, it is a topic that our predecessor Committee has looked into, and it is refreshing to have that acknowledgement now that there has been that historic underfunding. Another thing that the Secretary of State will know this Committee has looked at in the past is the whole matter of HS2 classification. Given what you just said about ensuring that there is more funding for rail in Wales, would she not agree that reclassifying HS2 as an England-only project would unlock a lot of that extra funding that could help progress some of the schemes that she mentioned and, indeed, go further?

As I said earlier, I want us to have a sustainable pot of rail infrastructure funding for Wales. We need to stop deriving the future of rail in Wales from HS2 alone. I cannot change what has gone on in the past, but I can change what happens in the future. We need sustainable funding of our own. That is what I am aiming for, and that is what both Governments are working towards with that list of priority investments from the Wales Rail Board. I want to see investment into rail in Wales. That is what I am going to fight for, that is what I want to get, and it is what people in Wales want. They want to look to the future. They want to see stations being built. They want improvements in services. They want to be able to get to see family. They want to get to jobs. I want to see that pot of sustainable, long-term funding in Wales, so that we can start to deliver for passengers right across the country in a way that we have not been able to in previous years.

I take what the Secretary of State is saying. Of course, the classification of HS2 as an England and Wales project does have long-term consequences. As far as the statement of funding policy and the Treasury is concerned, it does have an added weighting, and the comparability factor for DfT spending now, including rail for Wales, does have an impact—and, sadly, a negative one—because of HS2’s classification. Looking to the future, does she think that there is a case for, very nicely, requesting the Treasury to look again at this, even if it is the case that they apply it only to future spending on HS2? At the moment, estimates are up to £80 billion for HS2, and there is a real risk that, because of its classification, it will squeeze Wales’s ability to get rail funding in the future.

At the risk of repeating myself, we should not derive our future based solely on what has happened with HS2 in the past.

I appreciate that, and that is not what I am trying to say. Forgive me.

Phase 1 is being completed. The latest Welsh Government estimate of the money that has been spent would have, had it been classified differently, attracted a consequential of £350 million. There are lots of figures that have been talked about over previous years, but what we do know is that only phase 1 of HS2 is being built. Phase 2 has been abandoned by the last Government. It is not going to happen. What I can say to you, Ben, is that what we do agree on is that there has been historic underfunding of rail infrastructure in Wales, and that is very clear in what I have said today and in the exchange of letters between the Transport Secretary and myself with Welsh Government. That is why I am going to do something about it. As I say, I cannot change the past. I will absolutely be trying to change the future.

Thank you very much for that, and we do thank you for sight of the correspondence between yourself, Heidi Alexander and Ken Skates from the Welsh Government. It is really helpful. We will publish that later on this week. You have talked about the ambition for the future. What is done is done, and the agreement on the way forward is there in principle. We know that the Burns commission was established in 2019, and the Hendy review established shortly after that. We know where we have been. Can you give us any indication in terms of timeline and funding in order for the people of Wales to know that the Secretary of State is on their side?

The Secretary of State is definitely on their side. I hope that that is evident from what I have said today and from the exchange of letters. I cannot pre-empt what the spending review will do, but I have indicated and we have set out what the priority projects are. We are committed to the current projects. There are a number of projects already under way, and they will continue. As soon as we are in a position to say, we will do. I just want the Committee to be reassured that this is top on my shopping list for the spending review, and I will work and have been working across Government and with Welsh Government to make sure that we get what we need and what is a fair pot of sustainable funding for the future.

Thank you very much. We wait to see the results of the fight over Cabinet.

Secretary of State, it is lovely to see you. It is good news, of course, that the UK shared prosperity fund for the additional year 2025-26 has been confirmed by the Government. What is your view of the purpose of the shared prosperity fund and its future?

It has been very important in Wales, and very significant, and it is important for the future too. In terms of what will happen, as you say, we have sorted out what is going to happen for 2025-26. That was as a result of discussions between MHCLG, the Wales Office and colleagues in Welsh Government, and we were able to protect the percentage share of those funds for Wales. In terms of what is going to happen in the future, we are in discussions at the moment about how that will work and the mechanisms around that, but what I would like to see is streamlining, so that we have less bureaucracy involved. I would like us to learn lessons from the funds in the past and what has worked well, as well as what might not have worked, so that we do not replicate that in the future. In terms of what it means for Wales, it is very significant and very important. If you go into any community in Wales, you will see what it has delivered, so we want to see more of that in the future.

Thank you for that. When you set out your priorities in your opening remarks earlier this afternoon, the one thing that you did not mention—whether by accident or by design, I am not going to comment upon—was your view about the role of the Secretary of State as the voice of strengthening the Union of the United Kingdom. As a unionist, that is an important element of the role of Secretary of State, so I would welcome your observation on that. Given the fact that it is currently called the UK shared prosperity fund, the whole underpinning of that is that it is the prosperity of the four nations of the United Kingdom adding to the prosperity of each other. Going forward, do you see it as being important that your office, effectively, runs the show when it comes to the fund, and that it should be used and seen as a very tangible advert for the benefit of maintaining and strengthening the Union of the United Kingdom?

To deal with your first point, it was not a deliberate omission from my opening statement, because I did say, “My priorities include”. It was not a definitive list of priorities. I strongly believe that Wales benefits from being part of the Union, and that the Union benefits from having Wales in it. That has always been my view, and I do not think that I will ever change my view on that. What I want to see is that money is being spent in Wales and that we have a collaborative approach to how decision-making happens. For example, in our manifesto, we confirmed that decisions around future structural funds would be made by the elected representatives of Wales. There is a role for the three tiers of elected representatives in Wales in that—UK Government, Welsh Government and local authorities. We make better decisions when we work together, and those better decisions have better outcomes for the people of Wales. Ultimately, it is money that comes from UK Government into Wales. In terms of how it is badged, people will have different views about that, but I want the money to come in. I want it to be spent effectively, properly and efficiently, based on value for money, so that we are not wasting taxpayers’ money and are seeing direct benefits in every community in Wales.

My final question is on the same theme. I can understand why the Senedd would not want allocations of the fund made for things that either are going to undermine or are different from priorities that they have, but what is your view towards devolving this funding to the Welsh Government? You and I probably share a view of the importance of it as a rather quiet way of underpinning the strength and importance of the Union, and devolving the funding would possibly undermine that.

As I said, we said in our manifesto that decision-making on structural funds will be made by elected representatives of Wales. There was a change under the previous Government, where Welsh Government were completely cut out of it. Welsh Government have a key role to play in the delivery of new funds, alongside other partners, including local authorities, but with a role for the UK Government to play. That is the approach that I will look at. I would anticipate that arrangements in the future will look similar to those under previous structural funds, but, as I say, anybody who has had any experience of this knows that there are efficiencies that can be made and bureaucracy that can be removed, so that we can streamline that funding and it has the maximum impact possible.

Thank you very much. I am going to bring this session to a close now. I want to thank the Secretary of State for Wales and the Under-Secretary of State for coming along this afternoon and giving us their time. Hopefully, they realise that, as a Committee, we do take our job of scrutinising and holding the Wales Office to account very seriously. With that in mind, I wonder if you would be able to give us a commitment that you will come back on a yearly basis to exchange views with the Committee.

I am very happy to do that, Chair. Thank you for the invitation today. Thank you, all, on behalf of Nia and me, for the questions. We would be delighted to come back in 12 months’ time.

Thank you very much.