Interest Rate Swap Derivatives

Nia Griffith Excerpts

Thursday 24th October 2013 Commons Chamber

[Nia Griffith (Llanelli) (Lab)]

Thank you, Madam Deputy Speaker, for allowing me the opportunity to speak in this very important debate. I congratulate the hon. Member for Aberconwy (Guto Bebb) on the work he has done over the years and on bringing the matter to the House’s attention through this debate.

This issue affected successful businesses that were trying to expand and help create more jobs in the local economy. Some of the businesses that have visited me were successful and had excellent plans for expansion. The really sad thing is that during their negotiations to change or expand their loans, it was often the case, as my hon. Friend the Member for Alyn and Deeside (Mark Tami) has said, that they were told right at the very last minute that, unless they accepted this clause, the whole thing would be shelved and they would lose all the transactions and work they were about to undertake. That was significant for them, because it meant having to say yes or no to a very important loan.

I think that such businesses are intrinsically fearful of going to the banks, which is a real problem. The terms and conditions for small businesses have changed so much over the past few years that they are fearful that, if they explain their difficulties to a bank, they will suddenly be told that their terms and conditions for a loan will be changed again. That is a real disincentive. The key thing to remember is that these are people who genuinely are trying to do the right thing, but who are fearful—perhaps ashamed—because they did not know exactly what was going on in the first place, even though, as my right hon. Friend the Member for Wolverhampton South East (Mr McFadden) has said, the people who sold them the scheme were incentivised to do so in an underhand way. Often they would not make it at all clear to the businesses exactly what they were entering into. We need to redouble our efforts and look in particular at why there are so many delays, because every delay means businesses raking up yet more debt.

[Mr McFadden]

On the sales culture, what does my hon. Friend have to say about the evidence that the Parliamentary Commission on Banking Standards received from the trade unions representing bank staff that said that, sometimes, if branch staff did not meet their sales targets, they would be taken aside, given special management and pressurised to sell more products over the next month or two in order to meet the targets on which their bonuses were based?

[Nia Griffith]

My right hon. Friend makes a valid point. I have met people who were put in that situation and who ended up leaving the bank because they found it so difficult and uncomfortable working in that sort of culture. That does not help small businesses, which want a decent banking system from which they can get decent advice and the loans they need.

The worry is that the Financial Conduct Authority and the banks are not doing things as speedily as they might and that there will be a distinct delay. We are all aware that the agreement was that an independent reviewer would look at each case and that that process would be overseen by the FSA. My hon. Friends the Members for Nottingham East (Chris Leslie) and for Chesterfield (Toby Perkins) wrote to the Chancellor over a year ago outlining what we wanted to happen. When the Financial Secretary sums up, will he tell us what progress has been made?

We want a clear message that there will be no adverse effect for people if they tell their bank that they think they may have been victims of this particular mis-selling. We also want a moratorium on the foreclosure of affected businesses by their banks. People are really worried that, if they start looking at the issue in detail and open the box, they might be forced to reschedule their loans in an unmanageable way and that they eventually might be foreclosed on by their banks. The Chancellor and the Business Secretary need to send a much stronger message to the FCA about how we want the banks to work.

As many Members have said, we want the quickest resolution possible, but time limits also need to be looked at. The problem is that businesses that signed up to these agreements back in 2006 and 2007 are now reaching the six-year limit, and they will find themselves in considerable difficulties if they do not get redress through the scheme and end up going to court. We need to look at the way in which complaints are handled and the time limit that is being allowed. Perhaps there could be movement on that issue.

In summary, this issue needs urgent attention. We need a much speedier resolution and people need to be treated properly and courteously by their banks. They should not have to be fearful of loans being rescheduled or of being thrown out of the frying pan into the fire, which is their real worry. Speed is of the essence, because these businesses provide jobs in our communities and if they go under, it could mean not one lost job, but many job losses. I urge the Financial Secretary to say what more the Government can do to put pressure on the FCA and the banks to ensure a speedy resolution.

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[Mr Mark Williams]

We need to knock that on the head immediately, because there has been a concerted effort by the banks to target certain businesses. There is no need for people to be ashamed, and my hon. Friend is right that many more cases are coming to light.

Huw and Jackie Roberts of Minhafan Estates, a property development business in Aberystwyth, are in the midst of the review. They went through the “fact find” interview stage of the review six months ago and are still waiting to hear from the bank or the FCA.

I want to talk about the inadequacy and even dishonesty of the subject access requests. A sheep farmer who came to see me obtained his subject access request from Barclays, but it included presentation documents that he was alleged to have been shown at the time of sale, which he had never seen before. History can be rewritten. The fear is that, in some of these cases, history is being rewritten by the banks.

Why is the FCA advising customers that the scheme

“can deliver fair and reasonable redress without them needing to hire lawyers”?

Many of my constituents are on the brink and cannot afford to hire a lawyer, but why is the FCA saying that?

Like my hon. Friend the Member for Aberconwy, I want to talk about alternative products. What is wrong with this form of so-called redress is that the banks get to propose what would have happened if they had behaved better. Despite the banks admitting that they have breached regulatory requirements, they are being given a second chance through the promotion of alternative products, so they have a second bite of the proverbial cherry.

Yesterday, my hon. Friend the Member for Aberconwy said that the cost of the review was £200 million, and he then told us that it had gone up to £450 million. Despite it costing £450 million to set up the review, only £2 million has been paid out in redress.

[Nia Griffith]

Does the hon. Gentleman agree that, in certain agricultural communities, there is a huge capital intensive cost, which takes a long time to repay? That is a particular problem for some of our constituents.

[Mr Williams]

That is a particular problem. The hon. Lady does not need to be reminded how perilous the farming industry is these days; some businesses barely have the capacity to survive.

People who have been sold tailored business loans have no protection because of a mere technicality. They have no guarantee of fair treatment from the banks. Most of my constituents who have been affected by hedge mis-selling have been sold TBLs, although I hesitate to say that they were sold them, because some of them were not aware that they were being sold them. Most of my constituents who are affected are out in the cold, so I return to the question that I have asked Treasury Ministers and the FCA, although I have received inadequate responses. I question how the FCA decides to interpret its principle-based regulation. I am talking specifically about TBLs from the Clydesdale and Yorkshire banks.

Protecting Older People from Fraud (Wales)

Nia Griffith Excerpts

Tuesday 15th October 2013 Westminster Hall

[Nia Griffith (Llanelli) (Lab)]

Does my right hon. Friend agree that in many instances such companies come up with ideas that are totally inappropriate for the householders they meet. I know of people living in terraced houses who use coal to heat their homes but are being told all sorts of nonsense about new gas boilers when they are not on mains gas? Much of the scammers’ advice is hot air, and we must ensure that we get rid of them.

[Paul Murphy]

My hon. Friend makes a valid point. The companies often confuse older people by offering opportunities that may never occur. They may refer to loans as grants, and confuse the people they are talking to.

This is not the Minister’s direct responsibility, but will he liaise on this matter particularly—I will come to other recommendations—with his counterpart in the Welsh Assembly Government and Welsh local authorities to publicise as much as possible the activities that we have all condemned today, so that our constituents are aware of them and can report them to the proper authorities? The Torfaen newspaper, which goes through every letter box in the valley, has highlighted the issue, so that people are made aware of it. That is the sort of thing that we must do.

I turn to more general points, which are important and on which the Government could help. First, will the Minister liaise with Royal Mail so that protocols are changed to allow staff to offer advice and to report suspicious mail? Postal companies should be empowered to refuse to deliver misleading, dishonest or scam mail in which promises and guarantees of large sums of money to the recipients are visible on the envelope. That might require the law to be amended, but it is worth considering. Age Cymru has heard of older people receiving up to 70 letters a day from companies encouraging them to take part in various scams. Secondly, will he work with the telephone companies to offer more protection against phone calls, especially from abroad, and to close down offenders’ lines? Thirdly, will he work with internet providers to increase protection by blocking access to known offenders?

My hon. Friend the Member for Islwyn (Chris Evans) referred to increasing the number of “no cold calling” zones throughout Wales. There are 14 in my constituency, and they are located specifically in areas where people are more elderly and vulnerable. They have been particularly successful in Torfaen, but they exist in other constituencies, and they should be encouraged. I hope that the Minister will liaise with Welsh local government to ensure that the matter is taken up.

It is the collective job of the United Kingdom Government, the Welsh Assembly Government and councils in Wales to protect the most vulnerable people in society from the activities of the unscrupulous rogues who plague us and prey on older people.

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[Stephen Crabb]

I thank my hon. Friend for raising that case. Without more detail, I cannot comment further, but I would be very disappointed if Dyfed-Powys police or the Serious Fraud Office were not able to investigate. Let us see the detail, and hopefully we can raise that issue and get some progress on it.

We know that more than 3.2 million people—nearly 7% of the entire UK population—fall victim to scams each year, and that fraud and scams generate more than £9 billion of individual losses each year. That figure is truly staggering. We can all say that we are in complete agreement in this room this afternoon about the need to protect all sections of society, and especially the elderly, against the harm caused by scams.

I take on board the point made by the right hon. Gentleman about the level of prosecutions concerning reported scams. It is important to recognise and put on record that it is notoriously difficult to investigate phone and e-mail scams and to pursue the culprits behind them, because so often the scams originate overseas. The solution, therefore, cannot just be one of enforcement, and that is where prevention comes in, as the right hon. Gentleman mentioned.

In Cardiff, for example, the trading standards team recognise that prevention is key to reducing such crimes. Last year, they set up monthly victim support meetings with South Wales police and other partners, such as Age UK, Age Cymru, Victim Support, and Care & Repair. They work to identify victims of scams and doorstep crime and provide further support, advice and education. As a result, they report that they are seeing the number of cases raised at meetings decline. Through making people aware of how to spot and avoid scams and by utilising telephone and mailing preference services, we can reduce exposure to scams and the likelihood that someone will be taken in.

The Government provide for advice on scams through various agencies—particularly through the citizens advice service, which provides clear and practical guidance to consumers over the phone and on websites. As a Government, we are also taking steps to ensure that people are aware of scams and know what to do if they suspect a scam.

[Nia Griffith]

The Minister will be aware that the hon. Member for Romsey and Southampton North (Caroline Nokes) proposed a ten-minute rule Bill. Will he comment on whether the Government have any plans to implement the meat of that Bill, which was to allow, with safeguards, postal workers to intervene when they saw a huge number of envelopes with those fancy prizes on the front going to one address?

[Stephen Crabb]

I thank the hon. Lady for raising that point. I shall come to Royal Mail a bit later and hopefully the information that I shall provide will suffice. If not, I can follow that up in writing.

The “Think Jessica” campaign and representative bodies such as Age UK and citizens advice bureaux work to raise awareness of the devastating impact that scams and fraud can have on those who fall victim—especially the elderly—and on victims’ families. The National Trading Standards Board has also provided funding to trading standards in Wales for a national doorstep crime project. That project has a number of actions to undertake and that includes working alongside the Older People’s Commissioner for Wales, the Welsh Assembly and other Government Departments.

The Consumer Protection Partnership, which is made up of partners from the enforcement community, as well as Citizens Advice and other Government bodies, has teamed up with fraud and scam experts, such as the Serious Organised Crime Agency and Action Fraud, to implement a more holistic and joined-up approach to tackling scammers. As part of that, the citizens advice service and the Trading Standards Institute launched a scam awareness campaign in May this year, which was endorsed by the Under-Secretary of State for Business, Innovation and Skills, my hon. Friend the Member for East Dunbartonshire (Jo Swinson)—the consumer Minister—to raise awareness and to help empower consumers to take firm action against scams. Through a renewed focus on prevention, there is an opportunity to try to protect some of the most vulnerable members of society from falling victim to unscrupulous people.

I will now mention some ways in which consumers can report scams and fraud. The Government have established Action Fraud to allow for the reporting of scams. Scams can be reported to Action Fraud by phone or by completing an online fraud report. It is a simple and quick process, and most importantly, it alerts the most appropriate authority to a potential scam. If someone believes that they have been the victim of a scam, or if they need help about how to advise someone whom they believe is the victim, they can also contact the Citizens Advice consumer helpline, which provides clear, practical help for consumers on what they should do.

Where Citizens Advice identifies a breach of consumer protection law, it can alert local authority trading standards enforcement. I encourage anyone who wishes to do so to make use of schemes such as the telephone preference service and the mailing preference service, which will stop addressed mail, and the “Your Choice” preference service, which will stop unaddressed mailings.

Over the past two years, the Government have better equipped trading standards to hit scammers hard by transferring responsibility for cross-cutting leadership and co-ordination of enforcement activity from the Office of Fair Trading to the National Trading Standards Board. The NTSB funds and directs specialist scambuster teams in England and Wales to enable trading standards to take a cross-regional approach to tackling scams and rogue-trading practices. Scambusters currently have five ongoing serious investigations into scams targeting older people in Wales, and I will highlight a couple of their successes shortly.

On the green deal, I strongly share the concerns of the right hon. Gentleman about rogue traders claiming to be associated with the green deal. We have seen that previously with double-glazing salesmen, with households being targeted for inappropriate investments in conservatories, and a few years ago, with the boom in solar panels.

As constituency MPs, we have all had experience of people coming to our surgeries reporting bad practice. The green deal is just another opportunity for some of these hardcore scammers and fraudsters to target vulnerable households. In April this year, I visited the British Gas training academy in Tredegar, where proper qualified green deal assessors received their training and qualifications. Those are the people whom households should trust for green deal assessments, and not the rogue companies that the right hon. Gentleman mentioned.

The Consumer Protection Partnership is collating emerging consumer issues around the green deal and has held discussions with the Department of Energy and Climate Change. The CPP aims to ensure that initiatives from all Government Departments—but especially on the green deal—take account of potential real harm to consumers through fraud and misrepresentation.

Both trading standards and the Green Deal Oversight and Registration Body naturally take a very serious view of rogue traders and will pursue them with the full force of the law. While instances of abuse under the green deal are only just starting to emerge, it is worth putting on record that scambusters have notched up a couple of impressive wins against other vultures who prey on the vulnerable in Wales. That serves as an example of what fraudsters operating under the green deal banner can expect to receive.

For example, one criminal was a cold-calling rogue trader builder, operating in the local authorities of south-west and mid-Wales. A scambuster investigation identified 21 victims of the man; they had paid more than £150,000 to him. The scambusters team was able to contact and offer support to a number of victims through dedicated specialists. The investigation resulted in the man being sentenced to 12 months’ imprisonment, suspended for two years, for using aggressive commercial practices against vulnerable people. I could point to other examples as well, but time is against us. In order to build further on successes such as that, and to continue to limit the real damage caused by rogue traders in Wales, the NTSB has allocated a budget of £325,000 for its Welsh scambuster team this year.

In summary, the fraudsters’ goal is a simple one: to cheat as many people as possible out of their money by making false promises. Fraud and scams hit the elderly particularly hard; on becoming victims of a scam, they often lose a disproportionate amount of money in relation to other victims. I hope that I have been able to demonstrate this afternoon how, as a UK Government, we are taking action to combat the issues—particularly in Wales, where we are working alongside local authorities and the Welsh Government. We will keep that in sight, and if the right hon. Gentleman wants to follow up in the weeks and months ahead, I will be very happy to continue the discussion.

I come back to a couple of specific questions that have been raised by hon. Members. We were asked about cold doorstep-calling and whether we would welcome a ban, or an increased number of cold-calling “notspots”, where people are prevented from doing so. As a Government, we are certainly not against such initiatives when they are genuinely community-led. When specific communities are being targeted by fraudsters and there is a demand in the community for such an arrangement, we certainly do not wish to do anything against that. However, it is worth putting on the record that neither do we want to harm genuine entrepreneurs, who make a living legitimately, providing a legitimate service and business to households on their doorsteps. There is a balance to be struck, but where there are vulnerable communities who have suffered repeated targeting, perhaps that is one of the solutions that can be community led.

The hon. Member for Llanelli asked about Royal Mail, which currently takes steps to raise awareness of the problem of scam mail among its staff. It has put in place an internal reporting facility that allows customers, including relatives or friends of suspected victims, to report concerns to postal workers or directly to a Royal Mail helpline, which allows advice to be issued and information to be passed on to an appropriate body—the police, trading standards or a support body—for action. The company has been working with the police on identifying possible victims and postage accounts suspected of being used to send scam mail. Again, I am happy to follow up with the hon. Lady if she wants further information about what Royal Mail is doing to prevent scam mail.

The right hon. Gentleman described the people who perpetrate such crimes as crooks and gangsters. That is probably some of the more polite language that we could use to describe such people. We absolutely want to prevent them from operating. They are at times notoriously difficult to investigate and track down, but we as a Government take the issue extremely seriously. We want to provide resources to local trading standards departments and to the cross-cutting partnerships to ensure that there is enforcement and action at the local and Welsh national levels, right across the UK and internationally where possible.

Question put and agreed to.

Women in Wales

Nia Griffith Excerpts

Tuesday 16th July 2013 Westminster Hall

[Jessica Morden]

In terms of public sector employment and cuts to it, my hon. Friend is right. I will mention that later.

Let us look for instance at tax and benefit changes. The coalition Government and Ministers at the Department for Work and Pensions have consistently described their welfare cuts as fair. Clearly, they are unaware of or are ignoring the disproportionate impact they are having on women in Wales. A recent Office for National Statistics study on the effect that benefit and tax changes have had on incomes by household types demonstrates the negative financial consequences for women and families. That study, which covered the financial years 2010 to 2012, shows that a lone parent household with dependent children is £2,248 worse off. We have already established that the vast majority—95%—of lone parents in Wales are women. For other families, the situation does not get any better. A household with two adults and two children is nearly £5,000 worse off. The stress on parents who are trying to accommodate such an income fall, bearing in mind the huge hike in living costs, adds a great deal of pressure for people who are already working hard to keep their heads above water.

A recent report by the TUC showed that most jobs created since the recession have been in low-paid industries such as retail, the service sector and residential care. That was borne out by the ongoing inquiry by the Welsh Affairs Committee into the Work programme. Nearly 8% of the 587,000 net new jobs since June 2010 have been in sectors where the average pay is £7.95 an hour or less. Figures from the Office for National Statistics show that long-term unemployment has increased by nearly 100,000 since May 2010, and a shocking 86% of that increase is among women. Young Welsh women are particularly struggling in the labour market, with one in five out of work. In the figures released in June, the overall unemployment rate in Wales remained unchanged at 8.4% but the number of unemployed women rose again.

[Nia Griffith (Llanelli) (Lab)]

Does my hon. Friend recognise that there is a particular problem for young mums in Wales? According to the House of Commons Library, a couple with a joint income of around £24,000 will lose £1,300 in benefits as a result of the changes to child trust funds and tax credits, particularly the baby element. An awful lot of people in Wales, including many of my constituents, come from households with a joint income of around £24,000. Young mums will be particularly vulnerable and will have very little money to spare for their children.

[Jessica Morden]

My hon. Friend makes a valid point. Young families, in particular, will be hit by the cumulative impact of the loss of the child care element of tax credits, the child trust fund and maternity grants.

In Wales, most part-time jobs are undertaken by women; 27% of public sector employees work part time and 85% of those are women. Although it is true that many women want to work part time, many others have no choice.

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[The Parliamentary Under-Secretary of State for Wales (Stephen Crabb)]

It is a pleasure to serve again under your chairmanship, Mr Benton.

I thank the hon. Member for Newport East (Jessica Morden) for securing this short debate on the important subject of women in Wales and the situation under this Government, or any Government. I thought I was coming in here to listen to a debate in the round on women in Wales, but—I hope she forgives me for saying this—in fact we were treated to a speech that was pretty similar to those we have heard in Westminster Hall and on the Floor of the House numerous times in the past three years: a general attack on cuts and welfare reform, dressed up as a debate about women in Wales. We could have been discussing the role of women in public life, higher education or the legal sector in Wales, or the efforts that we as a Government are making to help women in Wales smash through the glass ceiling and take their place on boards, running companies and being leaders in all spheres of life in Wales. What we actually had was a crude attack, if I may say so, on our welfare reform proposals and our approach to deficit reduction.

[Nia Griffith]

Does the Minister not accept that the full title of the debate is “Effect of Government policies on women in Wales” and that my hon. Friend the Member for Newport East (Jessica Morden) has cited specific statistics about the situation as it affects women and women in Wales? She made that point a number of times. It is about the actual effect on women in Wales and the lack of an impact assessment or, if there is an impact assessment, the lack of sufficient attention to it, because there has been a disproportionate effect on women.

[Stephen Crabb]

The danger when looking through any particular demographic lens—we could have been debating the impact of policies on young people, older people, disabled people or people from ethnic minorities—is that we are lured into making generalisations and over-simplifications. We have had a bit of that this afternoon, so hopefully I will inject some balance into the debate.

The starting point, of course, is the economic context and the enormous financial crisis that still faces this country. It is worth putting on record again—I know that Opposition Members will roll their eyeballs at this—that the reason why we are having to take very difficult decisions about public expenditure, and the reason why we are having to restore discipline to our national finances, is the financial mess that the Labour party left after 13 years in government. I will go further: future generations of women and girls would not thank us if we shirked our responsibility now and did not address the deficit and the debt. They would not thank us for the burden of debt that we might hand on to them if we did not take the difficult decisions that we are taking.

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[Stephen Crabb]

I do not have the specific statistics to hand, but as I said to the hon. Member for Swansea East (Mrs James), there are certainly communities in which the trends are not as positive as the broader Welsh trend that I have presented here. We need to be more ambitious and redouble our efforts to see unemployment fall across all categories of women in Wales. I hope Members of all parties can agree on that.

Beyond just the positive signs we are seeing in the employment market, we as a Government absolutely recognise that many, many families face real financial pressure at this time. Many of those families, as the hon. Member for Newport East rightly says, are headed by single women, which is one reason why we are absolutely committed to assisting with the cost of living. We have seen some significant increases in the cost of living, which have placed huge burdens on families in recent years. That is one reason why we are doing one of the most effective things that can be done to put cash back in families’ pockets, which is to take the lowest-paid workers out of income tax altogether. We have now cut income tax for more than 1.1 million working people in Wales by increasing the tax-free personal allowance. By increasing it to £10,000 in 2014, we will lift 130,000 of the lowest-paid workers in Wales out of income tax altogether. Let no one be in any doubt: the majority of those 130,000 people lifted out of income tax—57%—will be women.

The hon. Member for Newport East spoke in great detail about some of our welfare reform measures. The introduction of universal credit is central to our welfare plans. Why are we reforming welfare? First, we cannot begin to think about cutting the deficit and the debt burden unless we are serious about welfare reform. Also, we all have communities in our constituencies where there are people who have not worked a day in their life—we have 200,000 such people in Wales, and worklessness is still a huge problem in many of our communities. If we care about those communities and are bothered by that, we must be serious about welfare reform. We as a Government are certainly bothered by it, which is why we are putting so much energy and focus on welfare reform.

[Nia Griffith]

As my hon. Friend the Member for Newport East said, we support the idea of making work pay, but it seems to us from the figures presented by professional organisations that universal credit may actually provide a disincentive for the second earner in a household to go out to work or take on more hours. Can the Minister take that back as a serious message to his colleagues in the Department for Work and Pensions and ask them to consider it, so that the introduction of universal credit does not create a disincentive for people to go out to work?

[Stephen Crabb]

If that is a real concern and there is evidence to back it up, I will certainly take it to my noble Friend Lord Freud, the Minister responsible for welfare reform, and discuss it with him. I sit with him and discuss the impact of welfare reform in Wales, because I am concerned about it. The whole purpose of introducing universal credit is a more simplified system, which we want to incentivise more work. We hope that more women will choose to re-enter the labour market, partly on the back of the introduction of universal credit. Some of them will be in work already, but we want them to take on more hours if they choose to do so. We want people to be able to make the right choices for them in their circumstances at that point in time, and we want a welfare system that supports those choices rather than creating negative incentives that work against the interests of the families and individual women that we are discussing.

Households with single women and couple households will be better off on average after the introduction of universal credit. We are clear that that is what the modelling shows. Single women will receive an average increase in benefits of about £13 a month, and the figure for couple households will be £16 a month.

The impact of child care costs has been mentioned. We recognise that, and I am grateful to my hon. Friend the Member for Ceredigion (Mr Williams) for putting on record some of the measures that we as a Government have taken to assist with child care costs, most notably the introduction of the tax-free child care scheme, which makes child care simpler and more affordable for parents to access. From autumn 2015, working families will be able to claim 20% of child care costs, up to £1,200 per child under 12. We believe that that will contribute significantly to helping women who want to go out to work in Wales by encouraging those who want to do so to get back into the labour market and take the jobs that are being created.

To respond to the point made by Opposition Members, I absolutely agree that more women than men have been affected by public sector job losses, due to the proportion of men and women who work in public services. Nevertheless, it is true—even in Wales, where Opposition critics said that it could not happen, because we were led to believe that the private sector was too weak—that more private sector jobs have been created in Wales to offset public sector job losses. Women are taking up those new jobs. Some of them will need extra skills training, and we are committed to helping provide that, but I genuinely believe that the employment situation is not nearly as grim as Opposition Members say.

Legal Aid (Rural Wales)

Nia Griffith Excerpts

Wednesday 26th June 2013 Westminster Hall

[Mr Williams]

I concur with much of what the hon. Lady says. This is about process, and what her constituents will find more difficult when they are faced, I think, with nine solicitors’ practices in the whole of Gwent is physically accessing legal aid, if it is available to them.

On the proposals themselves, the model is inappropriate for rural areas. The geography of our country is such that defendants will be allocated a solicitor whom they will find it extremely difficult, physically, to meet sometimes. The proposals do not take into account the vast distances and travel challenges across my area of Ceredigion and the rest of rural Wales. If a defendant from Newtown was allocated a duty solicitor in Llanelli, a meeting would require the defendant or solicitor to make a round trip of more than five hours—not to mention, of course, the challenges with transport links that we face in rural areas.

The reduction in firms that are able to bid for contracts will lead to huge delays in solicitors attending courts, or possibly a police station, and that has serious implications for the defendant. I understand from a local solicitor that, just before Christmas, GEOAmey—one of the private companies—transported a constituent of mine from Manchester to Aberystwyth but was unable to take the constituent off the prison van. It had to take him back, as it had brought only two members of staff, and at least three are needed to escort a prisoner. That vast journey, at huge expense, was a wasted opportunity. A future with a criminal defence system providing that level of service is a worrying one.

[Nia Griffith (Llanelli) (Lab)]

Will the hon. Gentleman give way?

[Mr Williams]

I give way for the last time—[Interruption.] Sorry, nearly the last time.

[Nia Griffith]

Does the hon. Gentleman agree that affording that transport is virtually impossible for many clients and that, if they were allocated different people on different occasions, which can happen with repeat offences, they could end up with several different firms representing them at one court hearing? Again, that would be massively wasteful.

[Mr Williams]

The hon. Lady pre-empts another of my later remarks. The relationship between solicitors and those repeat offenders is critical, and we risk losing that.

It is asserted that there would be four providers across the whole of Dyfed Powys. There would be real access issues, and are the proposed consortia feasible? As we have heard from hon. Members, the proposals plan to have four providers across the whole of Dyfed Powys, four across the whole of north Wales—sorry, I correct myself—and four in Gwent and nine across the whole of south Wales. By contrast, 37 contracts are planned for Greater Manchester, which has a similar population to south Wales. Again, will the Ministry of Justice, and the Whip speaking for the Ministry today, outline how that was calculated? How was rurality factored in? Although my hon. Friends from south Wales and the M4 corridor will have strong feelings about the provision of access there, for those of us who work, live and function in mid-Wales and north Wales, the picture is disastrous. We lose out yet again, and we are put at a real disadvantage compared with other people across the country.

My next concern is that competitive tendering at 17.5% less will drive solicitors out of business. The competitive tendering proposed for contracts remains a major cause for concern. It will simply drive solicitors out of business. Those remaining will be firms that are willing to cut costs, possibly to unworkable levels. That would lead to tenders being awarded to less able and potentially less experienced firms, which may find themselves unable to deliver on the prices promised to secure the tender. I am clear in my mind where I would like to go if I needed legal advice. However, there is the spectacle of Eddie Stobart or Tesco providing the service. The Co-op has been mentioned recently, and I am a great supporter of the Co-op. It is an admirable place to go to buy food and it has a fine record of burying people—the Co-op funeral service is very good—but we should not be using such examples to justify changes to the legal system.

I am greatly concerned about the capacity of companies such as Capita, GEOAmey, Serco and G4S—and whether they are best placed to represent my constituents. My colleague in another place, Lord Thomas of Gresford alerted us in a Queen’s Speech contribution to Stobart Barristers—an offshoot of Eddie Stobart trucks. Lord Thomas noted that the Stobart Barristers legal director, Trevor Howarth, had confirmed that the firm would bid for the new criminal defence contracts and had said:

“We can deliver the service at a cost that’s palatable for the taxpayer… Our business model was developed with this in mind. We at Stobart are well known for taking out the waste and the waste here is the duplication of solicitors going to the courtroom. At the moment there are 1,600 legal aid firms; in future there will be 400. At Stobart, we wouldn’t use 10 trucks to deliver one product”.

As my noble Friend concluded, the problem with that is that criminal law is not a unit and justice is not a product that can be delivered like a load of bricks. That is the contrast in terms of what we are facing. There is a real fear that many of our high street solicitors will be lost; many will go out of business. The firms with the most cut-throat prices and cut-throat tactics will be the most successful, but I believe that liberty should be in the hands of the best, not the cheapest.

I come now to the loss of specialisms.

--- Later in debate ---

[Mr Evennett]

And yet we are talking about a phenomenal amount of taxpayers’ money.

The Government’s latest reforms, published in the “Transforming Legal Aid” consultation in April this year, tackle the cost of criminal legal aid, as well as finding further savings from the civil legal aid scheme. In particular, the proposal to introduce price-competitive tendering into the market for criminal litigation services has attracted a number of comments, such as those made by my hon. Friend the Member for Ceredigion and others this afternoon. If our proposals are implemented, the number of contracts tendered by the Legal Aid Agency will reduce from about 1,600 to about 400.

For the record, I would like to dispel a few myths, which have been highlighted this afternoon, about the model on which we consulted. The 400 figure relates to the number of contracts the Legal Aid Agency would tender, not the number of firms in the market or the volume of work available. The proposals on which we consulted do not prescribe how many lawyers would be available or how those who have the contracts can divide the work allocated to them. The proposed model would result in a consolidation of the market, but that does not mean that smaller firms of solicitors will go out of business. Some may choose to join together to bid for contracts. Others may decide to act as agents.

[Nia Griffith]

rose—

[Mr Mark Williams]

rose—

Spending Review

Nia Griffith Excerpts

Wednesday 26th June 2013 Commons Chamber

[Nia Griffith (Llanelli) (Lab)]

Confidence to invest long term in industry has been severely damaged by the Government’s creation of uncertainty over the EU, their failure to set 2030 decarbonisation targets, and their failure to control excessively high energy prices. The steel industry faces a crisis in demand. How many of the Chancellor’s mythical lists of infrastructure projects will actually begin this year?

[Mr Osborne]

As I said, we are spending more as a percentage of national income on infrastructure in this decade than in the previous decade. What I would say to the hon. Lady about energy-intensive industries such as steel is that there is support, which the Department for Business, Innovation and Skills is going to extend as a result of the statement to help them to cope with their high energy costs.

Finance (No. 2) Bill

Nia Griffith Excerpts

Thursday 18th April 2013 Commons Chamber

[The Temporary Chair (Mr Jim Hood)]

Order. Before I call the next speaker, I should say that I am mindful to call the Minister at 1.15 pm. Hon. Members should therefore bear that in mind when they make their contributions.

[Nia Griffith (Llanelli) (Lab)]

I rise to support the proposals in the names of my hon. Friends.

On the one hand, Government Members accuse Labour Members of always wanting to clobber the rich, but on the other they accuse us of not introducing the 50p rate early enough. We had a vibrant economy, but everything changed with the enormous banking crisis in 2008. In response, we had to introduce a deficit reduction plan, part of which was the perfectly logical introduction of the 50p tax rate.

I make no apology for Labour’s firm commitment to the redistribution of wealth through the taxation system. The majority of citizens in western European democracies share that view. The taxation system is not the only redistribution mechanism. Other mechanisms include the minimum wage, which the Labour Government introduced. I hope the Government retain the minimum wage and increase it year on year in line with inflation. It worries me that it is going up by only 1.9% this year, while inflation races ahead. It is important that we have such mechanisms, but taxation is an important mechanism in the redistribution of wealth. The vast majority of people in this country recognise the need for all to contribute to the many public services we enjoy, and the need for some redistribution through the taxation system.

The economic argument that my hon. Friend the Member for Wrexham (Ian Lucas) advanced about money going back into local economies is extremely strong. People on the lowest incomes tend to spend money immediately, so it goes immediately back into the local economy and helps the local high street. Local businesses are going bust because people simply do not have the money to spend. They are struggling. They are turning to food banks—they are unable to buy food, never mind Christmas presents, clothes and the rest of it.

Local economies are struggling enormously. We have heard from many wise sources that the Chancellor needs to get his act together on stimulating the economy, and putting the money in the pockets of people who have the lowest incomes, who will then use it immediately in the local economy, is one way of doing so. That is not happening, which is why the Opposition are so angry about the cut in tax from 50% to 45% when there is an enormous squeeze on those on lower incomes.

One of the most insidious changes is the change to tax credits. They are difficult to explain because they have been designed to suit each individual household, which makes it more difficult to speak about them in a more general sense. Nevertheless, let us look at the changes. First, there has been an increase in the tax credit clawback. The whole point of tax credits is that they are an incentive for people to work if they can find it. Many who are on low incomes cannot get more hours, and the maximum amount that many can be paid for the hours they work in a full-time week still qualifies them for tax credit. Any reduction in that tax credit is therefore counter-productive—it does not help people at all.

The child care tax credit has also been reduced. That is another seemingly mad policy. The money is desperately needed to help people to work. The family element of tax credit has been abolished, as has the 50-plus element, and the working tax credit has been frozen. Given current inflation, the proposed cap of 1% on increases in working tax credit and child tax credit is effectively another cut—it is a cut in what lower-income families can buy with the money they have, with the catastrophic effect that all hon. Members see in our local economies and high streets.

In Wales alone, the tax credit measures will suck some £794 million—much-needed money for lower-income families—out of the economy. The whole point of tax credits was that they were calculated on what it was reasonable for a family to live on, which helped those whose earnings did not meet that rate to keep going.

[Mr Kevan Jones (North Durham) (Lab)]

In communities such as mine and that of my hon. Friend, the poor spend money—they have no saving capability. Does she agree that the measures therefore have a double impact on local shops and economies?

[Nia Griffith]

My hon. Friend makes a good point. That is the iniquity of the cut from 50% to 45%. Effectively, a cut in one place unfortunately means that people suffer in other places. Those on the highest incomes can afford to cushion themselves and do not need to spend money straight away. Even someone who earns just £10,000 above the £150,000 mark will benefit significantly. Instead of paying £5,000 in tax, they will pay £4,500. They will have a gain after tax of £500. Most people do not see anything like that increase in their income—incomes are frozen. If someone earning £50,000 has even a 1% increase, they will not get that £500 because it would be taxed. With all the different changes that are being imposed on them, families are losing far more—they are losing, on average, £895 per year.

[Geraint Davies]

My hon. Friend will know that the Government’s alleged strategy is that the private sector will move in and generate growth as the public sector is pulled back. In Wales, there is a higher proportion of public sector employment and, as she has said, £790 million will be taken out of demand, and savings rates among people in work are increasing because of insecurity. The whole concoction is pushing Wales and similar regions into negative growth. Does she agree that we should stimulate growth by giving more money to people who are poor, because they spend it?

[Nia Griffith]

I absolutely agree with my hon. Friend. We should get more stimulus into the economy and get more people into work doing useful things, such as through infrastructure projects, which he has championed in our local area. It certainly does not help to have more people thrown out of work. It will obviously lower their incomes immediately, but it will also have a direct effect on the local economy.

Oral Answers to Questions

Nia Griffith Excerpts

Tuesday 12th March 2013 Commons Chamber

[The Financial Secretary to the Treasury (Greg Clark)]

I am delighted to answer my hon. Friend’s question. We are looking carefully at the provisions of the treaty and at every aspect of the proposals. We think that this country has a particularly rigorous set of arrangements, and we do not want to see them diluted.

[Nia Griffith (Llanelli) (Lab)]

T4. Companies are telling me that with demand at rock bottom and infrastructure projects failing to get away from the starting blocks, they see little incentive for investment in UK industry. When drawing up the Budget, will the Chancellor consider expanding the scope of enhanced capital allowances to cover a broader range of investment, and therefore encourage companies to invest in the UK rather than take their money elsewhere?

[The Exchequer Secretary to the Treasury (Mr David Gauke)]

I shall take that as a Budget representation, but it is worth pointing out that at the last autumn statement the annual investment allowance was increased tenfold.

Food Banks (Wales)

Nia Griffith Excerpts

Tuesday 12th February 2013 Westminster Hall

[Nia Griffith (Llanelli) (Lab)]

We have had a wide-ranging debate in which many extremely important points were made. I start by congratulating my hon. Friend the Member for Cardiff West (Kevin Brennan) on securing the debate. He reminded us of the strong tradition in Wales of translating our concern for the well-being of each and every member of our communities into reforms in society that enshrine the dignity of the individual by organising our collective wealth for the good of all, whether through the pension reforms of Lloyd George, the creation of the NHS by Aneurin Bevan or the far-reaching reforms of my predecessor, Jim Griffiths. Those things were done precisely so that people would not have to rely on handouts such as those given by food banks.

My hon. Friend the Member for Newport East (Jessica Morden) paid tribute to FareShare Cymru and to the King’s church in her constituency, and made the point that food banks are well run, with proper systems of referral for those in genuine need. My hon. Friend the Member for Swansea East (Mrs James) spoke of her personal experience helping people who are in distressing circumstances. The hon. Member for Arfon (Hywel Williams) raised the issue of rural poverty and the widespread nature of deprivation. He contrasted the wealth of food produced with the abject failure to distribute wealth and food equitably.

The hon. Member for Monmouth (David T. C. Davies) focused on the formula used to distribute money—the rate support grant—to local councils in Wales. My hon. Friend the Member for Islwyn (Chris Evans) emphasised the dire need that many people find themselves in, and the hon. Member for Aberconwy (Guto Bebb) did not come up with a solution to the question of how to eliminate the need for people to rely on food banks. That is a matter I would like to return to later.

The dire statistic is that the number of people relying on food banks in Wales has trebled over the past year, rising from just over 10,000 to just under 30,000, with forecasts of 40,000 next year. Across the UK, food bank usage has doubled in the past year from around 125,000 to around 250,000. The growth of food bank usage in Wales is therefore twice that of the UK average.

The Trussell Trust operates 23 food banks across Wales, nine of which have opened in the past year. Four more food banks will open in Wales by Easter this year. In 2011, a total of 11,000 people—7,000 adults and 4,000 children—used a food bank, but in 2012 it was 18,000 adults and 10,000 children. That is a very grim message indeed.

I would like to pay tribute to the excellent work of volunteers who run food banks up and down Wales. Nothing I say in my remarks is intended to criticise their immediate response to a growing need. In my constituency, the Antioch centre and the Elim Church do amazing work. I was with them a couple of weeks before Christmas at the entrance to the Tesco superstore in my constituency, and the response from the public was tremendous from people of all walks of life. The members of Elim Church had lists of items that were suitable for people to purchase for the food bank and to include in their shopping. As they came out the store, people willingly gave the food they had purchased especially for the food bank.

We have to ask why we are seeing this increase in the number of families in need and what the Government can do about it. I want to see us tackle the causes of poverty and hunger, to look at what is wrong with the structure of our society. When it comes to giving aid to developing countries, we have long since learned that it is no good just giving people handouts. That is the whole point of the Fairtrade movement: the customer pays a fair price for goods so that the people who grow or make those goods can receive a wage that enables them to make ends meet, so that they do not have to rely on charity. How much better to have the dignity of being in charge of their own lives and budgets, not having to beg.

The same is true for people in the UK. I want to see the Government take measures that will tackle the causes of poverty. Why has there been an increase in the number of people turning to food banks? Quite simply it is because more and more people are suffering financial hardship. Let us see what can be done about that. We need policies that determine income distribution in this country, and those are very much a matter for the UK Government. While the Welsh Government can try to provide services to mitigate the effects of lack of income, they do not have control over some of the main factors that affect income.

As specialists in the House of Commons Library have pointed out, there has never been an absolute correlation between the amount of money that someone can receive on a benefit and their actual needs. It has always been a bit of a compromise—a bit of political expediency as to what was acceptable. What they are clear about is that there has never been a time when those benefits have not been uprated in line with inflation, whatever the colour of the Government in office. It is has been a tremendous sadness this year that the Welfare Benefits Up-rating Bill will effectively bring real cuts in people’s income. That is on top of the many additional costs that they have already had to face. We have already discussed the fact that while benefit increases have been limited, there has been rampant inflation, particularly on essential food items, ranging from 17% to 36%, depending on which food items are considered, over the past five years.

There has also been the increase in VAT. VAT is charged on a range of items, including toilet paper and bathroom products that are not luxuries but items that every family needs. While VAT is not put on food, it is on many essential items. That was a valid comment made by colleagues.

People often face the difficulty of delays in receiving benefit, or have it cut off. We have unfortunately seen some disastrous behaviour by Atos and the problems that has caused. When 40% of its decisions go to appeal, there is something very wrong. I ask the Minister to pass on to his colleagues in the Department for Work and Pensions our very real concerns about that. Benefit changes are one of the key reasons why people end up at a food bank; they account for 40% of the people who go there.

The other major concern is low income. Many people on low incomes are claiming working tax credit. There have been horrendous changes to the working tax credit by the Government, which have left people with much less money. The point of those credits was to top people up so that work would pay. I was shocked to hear the Minister of State, Department for Work and Pensions, the hon. Member for Thornbury and Yate (Steve Webb), say not only that people could do a few hours’ extra work, when we know how difficult it is to find extra work, but that he thought that would compensate for the changes in housing benefit. He did not realise, of course, that for every extra pound earned, a person would lose 65p in entitlement. It is not a matter of equating three hours’ work at the minimum wage to £15 extra in housing benefit. I again ask the Minister for Wales to speak with his DWP colleagues about the worrying effects that those changes in housing benefit will have on many of our constituents.

We have already seen the cutting of the pension credit and the savings credit, cuts in the health in pregnancy grant, and the change from the retail prices index to the consumer prices index. We are asking the Minister to prevail on his colleagues to not simply accept the situation as it is, but look at ways of putting it right. For example, they should rethink the welfare benefits uprating legislation to restore the link between benefits and inflation. As I have said, the bedroom tax and the cuts planned to the working tax credit are both areas we would like him to look into.

We would also like the Government to get a grip on energy companies. We understand that some energy price rises are due to the worldwide energy market. We also know that there are a number of measures that could be taken. There could be a lot of tightening up with the regulator, and the Minister could look at what can be done about energy prices for low-income households. What we want from the Minister now is not simply, “Oh well, it cannot be changed. Nothing else can be done. That is how society is. Prices just go up.” We want an interventionist Government who can devise a redistribution plan that will ensure that we do not have an increase in the number of people going to food banks. In fact, we want a fall in the number doing so in Wales. The Government could then be proud of bringing about a situation in which there was no need for any more food banks in Wales.

--- Later in debate ---

[Stephen Crabb]

That is exactly what it is about. I did some research before the debate this afternoon and looked at the parliamentary record, because I wanted to know what kinds of questions and issues were being raised on food banks by Members of different parties—not only from Wales, but from right across the UK. It might not surprise my hon. Friends to know that I could not find a single reference by a Labour Member of Parliament, before 2010, to food banks.

[Nia Griffith]

Will the Minister give way?

[Stephen Crabb]

No, I will not. I may not have been doing my research as fully as I should, but I could not find a single Labour MP who raised food banks as an issue on the Floor of the House of Commons before the coalition Government came into office. [Interruption.] The hon. Member for Cardiff West says from a sedentary position that it was not an issue. Well, questions were being asked by my hon. Friends the Members for Lichfield (Michael Fabricant) and for South West Bedfordshire (Andrew Selous), as well as a certain individual called Dai Davies, representing the south Wales seat of Blaenau Gwent. He asked a question about food banks during the previous Government, and some Labour Members will recall how viciously that individual was treated by members of the Welsh Labour party in recent years.

Food banks were very much an issue under the previous Government. However, the conspiracy of silence that existed around food banks extended beyond this place to Jobcentre Plus, because one thing that Labour Ministers refused to do was allow Jobcentre Plus advisers to signpost people facing particular financial need to use food banks. That is something that we changed. In 2011, we altered the guidance to allow Jobcentre Plus advisers to refer people and advertise the services of food banks. Among the underlying causes and reasons for the expansion in the use of food banks in recent years, one reason is that, in contrast to the previous Labour Government, we see them, up front and unashamedly, as a good thing, and we encourage people who are facing points of financial crisis in their lives to use them.

The hon. Member for Cardiff West mentioned a “cost of living crisis”. He used that phrase several times, and it was picked up by other hon. Members as the reason for the expansion in the use of food banks. Of course, that is true. People use food banks because they face a financial crisis at that time. I have met people who use them for a whole variety of reasons: some are young, homeless people; some are struggling with addictions, and they are spending money as a result of addictive behaviours that they are seeking to address; and some are victims of domestic violence who find that they have to flee their family home—they are fleeing an abusive relationship and need that extra support. People use the resources for a variety of different reasons.

I do not want to spend too much time picking holes in the remarks made by the hon. Member for Cardiff West, but he did say, slightly patronisingly, that he suspected that the Minister would stand up and say that he has visited a food bank. Well, I have actually. In fact, I served as a trustee on a charity that ran food banks. The charity set up its food bank in 2008, and its services have expanded. It now provides not only food but a basic bank of clothing, because as hon. Members have rightly said, people face a whole range of financial needs. As well as that, it runs an annual toy appeal to ensure that the poorest families in Pembrokeshire, in my constituency, are able to have a Christmas for their children.

The charity was founded by some of the Churches, and I know that the hon. Members for Newport East (Jessica Morden) and for Llanelli (Nia Griffith), among others, have mentioned different Churches and faith-based organisations that are behind the creation of food banks in their constituencies. I would like to pay my own tribute on the record to the volunteers and people who work in those organisations, because they are doing a fantastic job. When I speak to them, the last thing they want is to be dragged into a party political football match. This issue is bigger and more important than that. We could have had a sensible debate this afternoon about the social needs in Wales, and the role that charities and third sector organisations can play. It is really disappointing that the debate was reduced to a party political argument, when it could have been so different.

[Stephen Crabb]

My hon. Friend expresses himself extremely well, as ever.

Let us look at the context for Wales. The hon. Member for Arfon (Hywel Williams) mentioned the underlying economic context for Wales. It is true that Wales has suffered from low wages, but it is not true that wages continue to decline relative to the rest of the UK. If we look at the most recent wage data for Wales, the increase is sharper than for the UK average. That is only a small set of data, but it gives us reason for optimism that we can, over time, close the wage gap and see more families in Wales taking home more real-terms pay from their jobs.

[Nia Griffith]

Will the Minister explain how his policies will raise incomes in Wales? What will he do to ensure that the poorest people in Wales have better job opportunities and better pay for what they do?

[Stephen Crabb]

Every single day of the week at the Wales Office, we focus on the economic challenges facing Wales. Every week in the Wales Office we are thinking about how we work with the Welsh Government to bring in new investment in infrastructure and new inward investors, and see better, higher-quality jobs created in Wales that will provide higher real-terms wages.

Household debt was only mentioned briefly in the debate, but it is one of the key reasons why, in recent years, the number of people using food banks has increased. Over the past 10 years, and perhaps going back even further than that, there was an explosion of personal indebtedness, fuelled by the consumer credit boom, which was encouraged—egged on—by the policies of previous Labour Governments. Household indebtedness has started to fall in the past two years, but there is still a long way to go to see people with sustainable debt levels in their lives. That is one reason why some of the organisations that are at the forefront of setting up food banks are also at the forefront of tackling the debt culture. Some of the same organisations run debt advice counselling services alongside their food banks. The Government take seriously the challenge of payday loans and doorstep lenders, and we are taking real action to change the regulatory framework in which such people operate.

Fuel poverty has been mentioned by more than one colleague as a real challenge for Wales, and I absolutely recognise that point. We continue to support people in Wales through the winter fuel payments. The hon. Member for Arfon asked me to follow up on a specific request to see whether there is a way of facilitating, earlier in the season, cold weather and winter fuel payments, because that is when people have the opportunity to buy fuel at a cheaper rate. I shall certainly follow that up with my hon. Friends in the relevant Department.

To close the debate, I am sure that we will come back to this issue as MPs in Wales, and I hope, on that occasion, that we can have a more rounded, more thorough debate on some of the real issues affecting society in Wales.

Oral Answers to Questions

Nia Griffith Excerpts

Tuesday 11th December 2012 Commons Chamber

[Greg Clark]

I certainly commend John Kay for the clarity of his review, and we are taking steps, both in Europe and domestically, to implement his recommendations.

[Nia Griffith (Llanelli) (Lab)]

14. What the level of public sector net borrowing was in (a) the first seven months of 2012-13 and (b) the equivalent period in 2011-12.

[The Economic Secretary to the Treasury (Sajid Javid)]

According to the Office for National Statistics, public sector net borrowing for the first seven months of 2012-13 was £73.3 billion, excluding the transfer of the Royal Mail pension assets. Public sector net borrowing for the equivalent period in 2011-12 was £68.3 billion.

[Nia Griffith]

Will the Minister explain to the many families in my constituency, who are very angry at an autumn statement that has left them with less money to spend in the local economy, why borrowing has been revised up by more than £200 billion compared with the Chancellor’s plans two years ago? What will it take for him to realise that we need jobs and growth before we can get the deficit down?

[Sajid Javid]

I think that the hon. Lady submitted that question before the autumn statement, not expecting the Office for Budget Responsibility to confirm that the deficit is going to keep on falling. She risks becoming, like her friend the shadow Chancellor, an economic arsonist. He has created an economic inferno but is more interested in throwing stones at the firefighters. What her constituents want to know is that the deficit is coming down, and it is down by a quarter. That is creating jobs and confidence, and that is what this country needs.

UK and Welsh Governments (Finance)

Nia Griffith Excerpts

Tuesday 11th September 2012 Westminster Hall

[Stephen Crabb]

Tempted though I might be to be drawn into discussing what might be in the final statement, I will not do so. On what the Holtham report said about the financial position of Wales, the hon. Gentleman mentioned his party’s belief. There are a lot of beliefs about the position. Big assumptions are made in the report about Wales’s funding situation. Not all of those beliefs and assumptions are shared by the UK Government.

Over the past 12 months the two Governments have together been exploring the issues in detail. The hon. Member for Arfon went into a little detail about the Barnett formula, and its weakness. I caution him about claiming that the current system always delivers an unfair outcome for Wales. The spending settlement for Wales in the 2010 spending review was fair in a difficult economic climate. It represented a 7.5% reduction in the Welsh Government’s resource budget—an average cut of less than 2% a year. We recognise that there are challenges in that, but it is significantly less than the 3% a year cut that the Welsh Government had previously planned for. In addition, the Government have provided almost an additional £500 million since the spending review for the Welsh Government to use in any way they want.

In our programme for government we recognised the concerns expressed by the Holtham commission, but our priority was and is to stabilise the public finances. Plaid Cymru’s perspective may differ from the Government’s, in not recognising the necessity of the UK fiscal framework, but that is the context in which we are operating. Reform of the Barnett formula cannot take place in the current environment. It should be borne in mind that comprehensive reform, as my hon. Friend the Member for Montgomeryshire (Glyn Davies) so eloquently said, would have huge implications not just for Wales but for all parts of the United Kingdom. That is why the intergovernmental talks between the UK and Welsh Governments have not looked at replacing the Barnett formula, or at the pros and cons of alternative systems.

[Nia Griffith (Llanelli) (Lab)]

Will the Minister explain something to me? The economic forecast given to us in 2010 does not seem to be holding up. We seem to be in a no-growth situation. Is there therefore a case for revising the view of when the Barnett formula should be reconsidered, given that we now face perhaps another five years of double-dip recession?

[Stephen Crabb]

I have yet to see any economist forecasting five years of double-dip recession. I always enjoy listening to the hon. Lady, but given the zero progress that her party’s Government made on the issues, I am not sure we should take guidance from her on this subject.