Spending Review and Autumn Statement: Wales

Debate between Alun Cairns and Huw Irranca-Davies

Tuesday 15th December 2015 Westminster Hall

[Alun Cairns]

The surveyor and architect of fair funding for Wales, Gerry Holtham, analysed the position and came up with a range of solutions. After the autumn statement, he said that it was a fair settlement. That is the fundamental point. There will be political commentary from all around, but the person commissioned by the Welsh Government to provide the assessment and establish the financial relationship between the UK Government and the Welsh Government has said that it is a fair settlement, and that is testament to the strength of the Administration in Westminster, which has delivered on something that has been talked about, but never delivered, by the Opposition.

[Huw Irranca-Davies (Ogmore) (Lab)]

My apologies, Mr Hollobone, for arriving a minute into the debate. On the 115% Barnett floor, why is it only for the term of the Parliament? What is the Government’s thinking behind that? The Minister will be aware of the worry that there is no long-term commitment. I am sure he will say, “Governments can only bind one Parliament”, but what is his thinking, long term?

--- Later in debate ---

[Alun Cairns]

Having been a Minister, the hon. Gentleman will know that no Government can bind another Government, though I would largely welcome a Government that could bind a Labour Administration, hopefully in the long-term future, to prevent them from pursuing the sorts of policies that they would want to introduce. Clearly, that is not how democracy works. It is obvious that this Administration can only plan for this Administration, and it would be wholly wrong and inappropriate to come up with commitments that bind any future Administration. The hon. Gentleman tried hard to draw something from me, but I hope he will respect the argument that he would be making, were he standing in my position.

I hope that Opposition Members recognise the commitment. The surveyor and architect of fair funding said that this was a “very reasonable” and fair settlement. Any political rhetoric on the issue needs to recognise the comments of that independent commentator.

Another element of the autumn statement enabled the Welsh Government to alter Welsh rates of income tax without a referendum. That offers exciting opportunities to attract new investors, and tax powers to reform the Welsh economy. The Welsh Government can take on more responsibility for how they raise money, as well as how they spend it. The National Assembly will finally take its place alongside other mature legislatures by being accountable to the people it serves. The new tax-raising powers put important fiscal levers in the hands of the Welsh Government, which they can use to grow the Welsh economy, to deliver new opportunities and to attract new investment.

Silk estimated that a 1p cut in the higher rate of tax would equate to a drop in revenue of £12 million. That is only a little more than the Welsh Government reportedly lost selling land in Monmouthshire, for example. Think of the opportunities that the cut of one penny could create: tens of millions of pounds might be spent on business support, or other discrete areas of the Welsh Government. People can now make a comparison: should they pursue one policy, given its cost to the taxpayer, or another, such as reducing the rate of income tax to attract investors and entrepreneurs to Wales?

[Huw Irranca-Davies]

The leader of the Conservative party in Wales has opened up the front on this matter by proposing a 5p drop in the top rate of income tax. That would equate to £40 million or £50 million, which is not a drop in the ocean in terms of the Welsh budget. It is curious that the leader of the Conservative party in Wales thinks that that is the best way to incentivise entrepreneurship, rather than investment in infrastructure, the innovation funds and everything else. Why does it have to be a cut in the top rate of tax? How many people on the frontline of our public services, including nurses and the police, have already been cut? Have the Conservatives made those calculations when committing to a 5p cut in the top rate of income tax?

[Alun Cairns]

The hon. Gentleman is demonstrating his misunderstanding, because he compares capital projects with revenue projects. The rate of income tax would affect revenue projects only. These are the sorts of policies that could be presented in a manifesto. People can choose whether they want to see money spent on pet projects of the Welsh Government or a cut in income tax. People will make their choices according to their objectives, but it is up to each political party to make its case. The whole point about the autumn statement is that it empowers the Welsh Government to make the case on whether it should be spending more or less.

Barnett Floor (Wales)

Debate between Alun Cairns and Huw Irranca-Davies

Tuesday 10th November 2015 Westminster Hall

[Alun Cairns]

The specifics on that point will be outlined in the comprehensive spending review by my right hon. Friend the Chancellor.

[Huw Irranca-Davies]

Will the Minister give way?

[Alun Cairns]

With the greatest respect, I need to make some progress in the limited time remaining.

Last month, we published the draft Wales Bill, a key part of providing a clearer devolution settlement. We all want a funding floor for Wales, and it is right that that is accompanied by the devolution of income tax powers, because, by raising more of the money they spend, the Assembly Government will be more accountable to the people of Wales. Since 2010, Wales has recorded the fastest growth per head in the UK outside London, demonstrating the dynamism of the funding and spending position. Wales had the joint fastest growth of all the regions and devolved nations in 2013, with gross value added growing by 3.4%, well ahead of the figure for the UK. It is now time to move the debate forward and encourage the Welsh Government to use both the powers they already have and the new ones they are gaining to drive further growth in the Welsh economy.

Some specific points were raised on funding for local authorities. That is a matter for the Welsh Government—they decide how much money should be distributed to local authorities. I know that many in my constituency complain about how the cake is sliced in Wales, but that is the responsibility of the Welsh Government and it would be improper were this Government to intervene in those sorts of issues.

I underline that this Government are absolutely committed to introducing the funding floor as stated in the St David’s day agreement. We will introduce it as part of and alongside the comprehensive spending review.

Question put and agreed to.

Oral Answers to Questions

Debate between Alun Cairns and Huw Irranca-Davies

Wednesday 16th September 2015 Commons Chamber

[Alun Cairns]

There has been great success in encouraging people to learn Welsh in Wales. Of course, that should not come at the cost of any other language. It is important that we champion that success: bilingual education can work and does work. We will encourage as many people as possible to learn not only Welsh, but modern foreign languages in Wales and across the UK.

[Huw Irranca-Davies (Ogmore) (Lab)]

I know that the Minister, who has a coterminous boundary with me, will want to congratulate the pupils and teachers in schools in his constituency and mine who this year produced record summer results for A-level students and an improved performance at A* to C in GCSEs in English language, Welsh, maths and science. Rather than talk them down, will he congratulate those students and schools?

[Alun Cairns]

The hon. Gentleman either ignored the answer I gave earlier or prepared his script before he came to Question Time. I did congratulate the students who succeeded. My point was that we need more students in Wales to succeed because there is a worrying gap between the success in England and the success in Wales.