Eluned Morgan challenged over extra funding for Cardiff Airport

Martin Shipton

First Minister Eluned Morgan has been challenged to explain why her government seems committed to a budget-busting increase in funding for Cardiff Airport - which it owns - while apparently planning for cuts in core public services.

On July 20, the then Economy Minister Ken Skates issued a written statement in which he revealed that the Welsh Government intended to invest £206m over a 10-year period in securing new routes for the airport in parts of the world considered important for improved trade links like the Middle East and South Asia, the EU and North America.

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Tourism

Mr Skates stated: “This greater connectivity will provide an excellent opportunity to grow tourism into Wales and make it significantly easier for potential investors to get to and from the country. It is anticipated that the totality of these route developments could see the Airport’s annual passenger numbers increase to just over two million within the next decade.

“To complement the air service development there are planned investments in the Airport’s existing terminal building and other infrastructure to ensure it can accommodate more comfortably the higher number of passengers whilst also reducing the carbon footprint of its ground operations.

“The measures put in place by the Welsh Government during and after the pandemic to protect the Airport have done their job but have left the business in a position where it does not have the financial resources necessary to kick-start these economic developments. To ensure that the South Wales region can make the most of these opportunities, the Welsh Government is planning to provide the Airport with long-term additional investment funding and will be seeking regulatory approval for a package up to a maximum of £206m across a ten-year period.

“Analysis commissioned by the Welsh Government has indicated that by 2034, this funding could lead to the Airport supporting a significantly higher number of jobs across the region and generating a significant increase in annual GVA contribution. As the economic returns would extend far beyond the ten years, this investment should benefit the workers of today and those of the next generation.”

Commercial confidentiality

Details of how the £206m will be spent have not been released for reasons of commercial confidentiality.

In a letter to Baroness Morgan, Plaid Cymru MS Delyth Jewell, who chairs the Senedd committee responsible for scrutinising the Welsh Government’s international strategy, asked a series of questions arising from Mr Skates’ statement:

"You will be aware that there are two references to Cardiff Airport in the International Strategy, published in 2020. These references are in the context of describing Wales’ connectivity to the rest of the world and, separately, in relation to sustainable adventure tourism and the ambition for the airport to become a UK centre for low-carbon aviation. Can you clarify the timeframe for the investment decision?

"Also, can you confirm which routes are being considered for development and how each route will support the delivery of the International Strategy? * The International Strategy sets out three core aims which are to: 1. raise Wales’ global profile; 2. grow the economy by increasing exports and inward investment; and 3. for Wales to be a globally responsible nation. I would welcome detailed information on how this investment contributes to each of the three core aims, as outlined; and what consideration was given to balancing the core aims, particularly with regards to sustainability?

“I would also be grateful if you could clarify whether the investment will be used to action the Airport’s plans to commit to net zero targets (which was not met by March 2023), such as for a solar farm at the airport or for the purchase of electric or hybrid vehicles? To what extent the failure to meet this target undermines the International Strategy’s aim for the airport to become a UK centre for low-carbon aviation? how the resumption of Qatar Airways services, if it is secured, will support the delivery of the International Strategy?

“Could you explain what involvement the Welsh Government’s overseas offices have had in the investment decision as it relates to Wales’ connectivity to the rest of the world? In addition, will the overseas offices have a role in the delivery of the airport’s future plans that are linked to the International Strategy?

“The scale of the investment is significant, and it does highlight budgetary implications. While the investment package is subject to regulatory approval, it could total a maximum of £206m across a 10-year period. This is substantially more than the allocated international relations budget of £8.093m for this financial year.

“You note in the statement that this investment is, in part, linked to improving connections with parts of the world identified in the International Strategy as being important for economic growth. In that regard, can you explain:

* How will the investment relate to the International Relations budget?

* The Welsh Government has repeatedly told us that it faces a challenging financial situation and cannot plan beyond annual cycles, particularly in relation to other areas of our committee’s remit such as the culture sector. How has the Welsh Government made these funds available?

* On what basis was the airport investment prioritised over other financial pressures such as the financial crisis in the arts, culture and sport?

“Finally, I would like to note how disappointing it was to learn of this information by written statement on the first Monday of the summer recess. There were ample opportunities to update Members during term time. For example, the former First Minister attended our scrutiny session on international relations on June 19 2024, just four weeks before this statement was issued.

“During the session, the airport was not raised despite specific discussions on the Welsh Government’s future international priorities, delivery of the International Strategy and activity in the regions earmarked for new flight routes.”

Ms Jewell asked Baroness Morgan for a response to her letter by September 17, but one has not been received.