PARLIAMENTARY DEBATE
Economic Growth - 4 March 2026 (Commons/Commons Chamber)

I have regular discussions with Cabinet colleagues on a wide range of issues, including economic growth and increasing economic growth in Wales. We are creating thousands of jobs across Wales, supported by our investment in nuclear power in Wylfa, two artificial intelligence growth zones, two freeports, two investment zones, rail enhancements across the country and a defence growth deal, to name a few.

At the announcement of the £50 million Wales defence growth deal that the Secretary of State and the Defence Secretary made a few weeks ago, they visited Space Forge, which, at the request of my air cadets from 12F Walthamstow and Leighton Squadron, I am meeting at the Space Expo in east London tomorrow. Space Force is one of the small and medium-sized enterprises at the forefront of semiconductor and spacecraft technology development in a sector that is supporting economic growth and creating high-quality jobs here in the UK and in Wales. What steps are the Government taking to support space SMEs in accessing finance, and in continuing to grow here, where they can create jobs for my air cadets, rather than relocating to the United States, where space regulations can be more flexible?

Our £50 million defence growth deal will harness Wales’s unique strengths in autonomy. It is focused on supporting the growth of dual-use industry right across Wales, so that the benefits will be felt beyond the defence sector. This deal is another example of the choice facing Wales at the Senedd election in May. We have Plaid Cymru, who would rather reject defence investment and pull us out of NATO at this critical moment of global instability, and we have Reform, whose foreign policy will probably be determined by its friend, President Putin. Only Labour can be trusted to invest in our national security and our economy.

One challenge faced by young people from Bracknell to Bangor is a lack of affordable housing, and not building enough homes affects our economy, too. I was pleased that the Secretary of State recently announced that our UK Government would be devolving powers to create a vacant land tax to the Welsh Government. Does she agree that this move will prevent land banking, and will lead to more houses being built in Wales, which would be good for the economy and good for our young people?

I was pleased to announce last month that this Government plan to devolve powers to the Welsh Government to introduce a vacant land tax, subject to consultation. This will help the Welsh Government to encourage even more house building, fuelling construction jobs and economic growth, and it is a perfect example of how this Labour Government approach enhancing devolution. We will never miss an opportunity to enhance devolution in ways that make a practical and positive difference to the people and economy of Wales.

I did indeed have the privilege of opening the London stock exchange this morning to mark St David’s day and Wales Week. It gave me the opportunity to recognise Wales’s thriving financial services and fintech sectors, which are benefiting from this Government’s modern industrial strategy. We are also building small modular reactors in Wylfa, wind farms in the Celtic sea, new train stations in north and south Wales, and a stronger Welsh economy through our AI growth zones, investment zones and freeports—but most of all, we are building Wales’s future by investing in our economy, creating jobs and tackling the cost of living.

This Government’s decision to invest over £2 billion in creating Britain’s first fleet of small modular reactors in Anglesey will create thousands of jobs, and bring significant economic benefits to the whole region. Does the Secretary of State agree that the Scottish Government should join the Welsh Government in welcoming the thousands of jobs and significant economic growth that nuclear developments can bring?

My hon. Friend makes an important point. When we made the £2.5 billion nuclear investment announcement at Coleg Menai, I saw the difference it will make to people in the area. I met students who will be able to learn and earn, and will not have to leave their family and community to get on in life, because, with one of the biggest public investments in Welsh history, we are creating 3,000 good, direct jobs, and many thousands more in the supply chain. It is for SNP Members to explain to their constituents exactly why the SNP stands in the way of game-changing investments like that for Scotland.

The best place in our kingdom, Newcastle-under-Lyme, is 30 miles or so from the Welsh border, so the recent rail announcement from this Labour Government will benefit my people, too, as the upgrade to the Marches line will deliver quicker services to south Wales. Can the Secretary of State reassure me that this investment will deliver real economic benefits for Staffordshire, England and Wales?

I thank my hon. Friend for recognising the scale of our Welsh rail announcement, and its benefits for cross-border travel. Our two Labour Governments have agreed a long-term plan for Welsh rail that we are committed to delivering as quickly as possible. It will unlock 12,000 jobs and connect people to the tens of thousands of jobs that we are creating across Wales. The pipeline of 43 projects, worth up to £14 billion, in north, south, mid and west Wales will deliver the rail network that Wales deserves, and right years of underfunding at the hands of the Conservatives. That shows the impact of two Labour Governments working together, and our sheer determination to deliver for the people of Wales.

Drinks producers warn that, because of the UK Government’s decision to allow Wales to include glass in a deposit return scheme, there is the threat of up to 90% of products being removed from shelves. Why have the Government taken the decision to allow a United Kingdom Internal Market Act 2020 exclusion that threatens jobs and consumer choice, and that will require unique Welsh labelling—all at a time when Wales already recycles 92% of glass at the kerbside?

We have worked closely with the devolved Governments on a UK-wide DRS, and now have alignment across the UK on including polyethylene terephthalate plastics and metals in a DRS with the launch date of October 2027, which is good news for business. We considered the Welsh Government’s exclusion proposal, in line with our commitments under the 2025 review of the UK Internal Market Act, and in doing so engaged with businesses and environmental stakeholders across the UK. We believe that the Act exclusion that we have agreed, in response to the Welsh Government, is the most pragmatic way that we can protect trade and support growth in the UK.

I thank the Minister for her answer. She and I know that when it comes to economic growth in Wales, or indeed in Northern Ireland, Scotland or England, we are better together. We are also better together historically and culturally. My Gaelic cousins on the Benches in front of me are my friends—I want them to stay in the United Kingdom. What can the Minister do to persuade people who are as yet undecided about what to do that it is better to be within the United Kingdom of Great Britain and Northern Ireland? We are always better together. [Hon. Members: “More!”]

The hon. Member has united a lot of us across the House. His Plaid friends sitting in front of him want separatism. They want to inflict an independence that will cost every single person in Wales—adults and children—£7,000 every single year. They want to build walls between us at a time when we should be standing together.

I call the shadow Secretary of State.

Let us try this again: one of the UK’s greatest strengths is the ability of all four nations to trade freely in a strong internal market. This Labour Government’s choice to permit their colleagues in Cardiff Bay to include glass in their deposit return scheme risks sectors, livelihoods and market withdrawal. The UK Spirits Alliance and the wider food and drink sector warn that this will disrupt supply chains, deter future investment and hamper growth. Will the Secretary of State accept that the scheme is unworkable and unenforceable, and will she act to protect the United Kingdom from this separatism?

I do not recognise what the hon. Lady sets out, and refer her to my previous answer. We believe that the UKIM Act exclusion, which we have agreed in response to the Welsh Government, is the most pragmatic way for us to protect trade and support growth in the UK.

Or the Government could just not do it, as we Conservatives say. Wales has the highest unemployment and economic inactivity rates in the UK. Following the spring forecast, the Office for Budget Responsibility confirmed that the Chancellor’s welfare spending will increase by a staggering £18 billion to £333 billion this year alone, up 5.8%. In the light of those figures, what measure is the Secretary of State taking to jump-start confidence and boost economic growth in Wales, so that work pays, and people see that the Government are not just about welfare dependence and bankrupting the country?

The Conservatives strangled the Welsh economy with over a decade of austerity and neglect. Labour’s economic plan is working: wages are rising, inflation is falling and the economy is growing. The Conservatives presided over stagnant wages, insecure employment and a broken welfare system. We are investing in our infrastructure, creating jobs, growing wages and building an economy that works for the people of Wales.

I call the Liberal Democrat spokesperson.

Tourism is one of our key economic sectors in mid Wales. Last year, I visited Fforest Fields in Radnorshire, a beautiful campsite and family business that has been built up over generations. However, Bute Energy plans on building a wind farm on the other side of the hill from the site, with turbines that will be nearly as big as the Shard. Have the Government, or their colleagues in Cardiff, conducted any economic impact assessment on the damage that that will do to the economy in Powys?

I think we have this discussion at every single Wales oral questions. We need to bring energy bills down, and we do that by investing in renewable infrastructure. In the process, we create jobs and secure Wales and the UK’s energy independence. Bearing in mind the situation across the world at the moment, that is absolutely the right plan.

The spring forecast, which revised economic growth downwards, was produced before the outbreak of war in Iran. Now, the price of energy has spiked, with gas up almost 100%. If the war continues for even a few weeks, those costs will directly hit the pockets of people and businesses in Wales. Is the Secretary of State not astounded that Reform Members are cheerleaders for prolonging Trump’s aggression in the Gulf, and does she agree that Wales cannot afford the cost of Reform?

Wales certainly cannot afford the cost of Reform; nor can it afford the cost of Plaid Cymru.

I expected something a little more thoughtful from the Secretary of State, especially when we consider the Welsh economy. The Industrial Communities Alliance warns that the Government’s 70:30 capital-to-revenue split for the local growth fund will have dire consequences. It will pull the rug out from under business support, training and employability services, and it will cost hundreds, if not thousands, of jobs across Wales, including at the fantastic Porthi Dre in Caernarfon, which tackles hunger, food waste and loneliness, but faces the loss of key staff members because of the Labour Government. Will the Secretary of State therefore commit to allowing greater spending flexibility, to safeguard the very jobs that we need to boost employment?

The UK Government are investing more than half a billion pounds in Wales, through the new local growth fund, to help create jobs, growth and opportunity in communities right across Wales. That targeted long-term investment will drive economic growth, create jobs and put more money in people’s pockets. I am proud that we have delivered our manifesto commitment to restore the Welsh Government’s decision-making role over those funds.