Oral Answers to Questions

David T C Davies Excerpts

Tuesday 21st July 2015 Commons Chamber

[Damian Hinds]

The hon. Lady highlights an important point and agrees, I think, with the analysis of Alistair Darling who said that an unintended consequence of the tax credit system was that it would end up making that subsidy in this way. We are introducing the national living wage. For someone working full-time, that will be worth £5,200 more in cash terms by the end of the Parliament.

[David T. C. Davies (Monmouth) (Con)]

Does my hon. Friend agree that the number of people losing out will be vastly outweighed by that of those who will benefit from the higher minimum wage, the higher tax threshold, and the incentive to be out there looking for work?

[Damian Hinds]

I can confirm that, when we take the fiscal measures of the summer Budget altogether, eight out of 10 families will be better off.

Budget Resolutions and Economic Situation

David T C Davies Excerpts

Tuesday 14th July 2015 Commons Chamber

[Mr Michael Meacher (Oldham West and Royton) (Lab)]

It falls to me to comment on the excellent maiden speeches that we have just listened to. The hon. Member for Kensington (Victoria Borwick) made a lovely, warm and engaging speech, with some generous recollections of her predecessor. She need not feel trepidation in following him. We will all remember the emotional and feeling way in which she talked about carers and the disabled. She will make a clear contribution to the House in that regard.

The hon. Member for Paisley and Renfrewshire South (Mhairi Black) made a remarkably confident, relaxed, witty and effective speech. It is not often that a maiden speech in this House makes a strong political case, but she certainly got away with it. I liked her distinction between weathercocks and signposts, with which I wholeheartedly agreed. I think that we will hear a great deal more from the hon. Lady in future debates in this House.

I congratulate the hon. Member for Brecon and Radnorshire (Chris Davies), who again made a warm and generous speech about his first recollections in this place. I am not sure whether his speeches will remain so generous, not least given his early contact with the Whip. It is nice that in some ways, this place reminds him of Wales, his constituency and his roots. I very much hope that he will continue to reflect those things, and I wish him well.

Turning to the debate, all the hoo-hah about the Budget has centred on the £9 so-called living wage in 2020, even though the living wage in London is already £9.35. It is therefore not a living wage at all, but a slightly revamped minimum wage. Nevertheless, it is the macroeconomics of the Budget that really matter—and they are unreservedly depressing. If this is such a wonderful economic recovery, as we are constantly being told, why are average wages still 6% below their pre-crash level seven years ago? Why was the growth rate in the last quarter—the first of this year—just 0.4%, with an annual rate of just 1.5%? Why has productivity been flat for the past five years?

[David T. C. Davies (Monmouth) (Con)]

Clearly we would all like to see even higher growth rates, but does the right hon. Gentleman not acknowledge that we currently have the highest growth rate in the G7 and that that is a good thing?

[Mr Meacher]

I would like to ask the hon. Gentleman—although I am not inviting him to come back in—how he would explain the fact that in the latest quarter the growth rate was 0.4%, up from 0.3%. In the last three quarters it has gone down from 0.9% to 0.6%, and then to 0.3% or 0.4%. It was clearly a short-term growth surge, which is now fading.

We all regard productivity as crucial, but the UK’s investment as a percentage of GDP is now among the lowest in the world at barely 14%. By the time depreciation is netted off the growth figure, we are actually down at just 2.5%, which hardly even keeps up with our rising population.

Why does the OBR’s Budget report forecast a never-ending decline in Britain’s share of world exports, even compared with 2014, when this country experienced the biggest proportionate balance of payments current account decline since 1830? Why have the Government squeezed the economy so hard that they are now looking to a steep rise in household borrowing as the main source of future demand? Dangerously, the borrowing level already exceeds £2 trillion and may well be the source of the next economic crisis.

For all those reasons, the Chancellor’s boasts about the state of the economy do not bear even superficial scrutiny. Nor is his explanation of the cause of the economic crisis any more truthful. He continually lambasts the last Labour Government for overspending, but their economic record actually shows the opposite. The largest budget deficit under the Blair and Brown Governments in the 11 years from 1997 to 2008, before the crash, was 3.3% of GDP. The Thatcher and Major Governments ratcheted up budget deficits in excess of that in 10 of their 18 years. Who were the profligate ones? It was not Labour.

Then there is the question of which party has handled better the enormous rise in the deficit, caused by the bankers and the international recession. Again, it is valuable to look at the economic record. Alistair Darling, the last Labour Chancellor, gave the economy a big fiscal stimulus worth nearly 5% of GDP, allowing the automatic stabilisers to work and bringing forward public investment projects worth more than £30 billion.

Greece

David T C Davies Excerpts

Monday 29th June 2015 Commons Chamber

[Mr Osborne]

I think that the European Union in general has not taken sufficient trouble to make the European economy more competitive, less regulatory and a place where enterprise can flourish and private sector jobs can be created. That is one of the principal arguments we are having at the moment in European Councils.

[David T. C. Davies (Monmouth) (Con)]

Does not this unfolding catastrophe demonstrate very clearly what happens to nations when they cannot balance their own books and rely on borrowed cash? Does my right hon. Friend agree that we need to learn the lesson from this, pay down our deficit and not take any notice of Opposition Members who have done their best to put us in the same situation that Greece is in now?

[Mr Osborne]

I agree with my hon. Friend that countries need to pay their way in the world. Britain had a budget deficit of more than 10% when the Conservative Prime Minister came to office five years ago. As a result of the action we have taken—universally opposed by the forces opposite—we have made the UK much more secure to deal with these sorts of shocks, but the job is not finished and I am sure my hon. Friend will be in his place on Budget day as we set out the steps we are going to take to finish it.

Oral Answers to Questions

David T C Davies Excerpts

Tuesday 16th June 2015 Commons Chamber

[Greg Hands]

The right hon. Gentleman, as a Treasury Minister in the last Labour Government, will know that the size of the deficit we inherited—which, at more than 10%, was one of the highest—made our job difficult in the first couple of years. However, the UK is now growing faster in 2014 and 2015 than any other EU or G7 country.

[David T. C. Davies (Monmouth) (Con)]

6. What steps he is taking to reduce the tax gap.

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

Since 2010, the percentage tax gap has stayed lower than at any point under the previous Labour Government, saving the country £4 billion. One way in which the Government will address the tax gap is by tackling tax avoidance and evasion. We have committed to raising at least £5 billion more from measures to tackle evasion, avoidance and aggressive planning within the tax system, and we will announce further details at the Budget.

[David T. C. Davies]

Last year, Caffé Nero managed to make £20 million of profit and pay not one single penny in corporation tax, unlike many hard-pressed local businesses, such as dairy farmers. Does my hon. Friend agree that we might need to look at the rules on tax deductable interest payments and, in the meantime, support coffee chains that pay into the system and support their local businesses?

[Mr Gauke]

As my hon. Friend will be aware, Treasury Ministers do not discuss individual cases, but I can say that the Government are determined to ensure we have a competitive tax regime in which everyone plays by the rules and pays their fair share. We have been involved in a number of crackdowns on tax avoidance, both domestically and internationally, with the OECD base erosion and profit shifting projects, and we continue to work hard on that.

Oral Answers to Questions

David T C Davies Excerpts

Tuesday 10th March 2015 Commons Chamber

[Danny Alexander]

Let me gently say to the hon. Gentleman that he ought to be a wee bit cautious about believing too many of his Front Benchers’ spending plans. They say that they want to deal with the deficit but have set out no plans to do so, and they have made multiple spending commitments without any sense of how those commitments will accord with their fiscal strategy.

The hon. Gentleman is, of course, right to suggest that going too far and reducing the deficit reduction by more than is necessary in the next Parliament would have a damaging effect on public services. I would say that his party has got it wrong and the Conservative party has got it wrong, but the Liberal Democrats have got it right.

[David T. C. Davies (Monmouth) (Con)]

23. Despite the economic chaos that was inherited by the coalition Government, spending on the NHS in England has been protected and increased. Does that not compare very favourably with the position in Wales, where a Labour Government have slashed NHS spending by 8%? Should we not judge these people by their deeds rather than their words?

[Danny Alexander]

My hon. Friend has made a very fair point. Comparing the NHS performance of different Administrations is an important activity, in which I am sure he will engage very fruitfully over the next few weeks. Let me add that if we are to judge a Labour Government by their actions, we should look at the mess that the Labour party made of the economy when it was last in power. If we found ourselves with problems of that kind again, money for our NHS would be one of the resources that would suffer.

Bankers’ Bonuses and the Banking Industry

David T C Davies Excerpts

Wednesday 25th February 2015 Commons Chamber

15:58

Division 163

Ayes: 234

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Labour: 215
Scottish National Party: 6
Democratic Unionist Party: 5
Social Democratic & Labour Party: 3
Independent: 3
Plaid Cymru: 2
Alliance: 1
Green Party: 1

Noes: 308

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Conservative: 264
Liberal Democrat: 42
Independent: 1

[David T. C. Davies (Monmouth) (Con)]

On a point of order, Mr Speaker. On 3 February, during the debate on mitochondrial DNA, I deliberately abstained from the vote because I did not feel that I fully understood all the arguments, yet I was recorded as having been in the Aye Lobby. I took the matter up afterwards with the officials, and received a full apology and explanation. I said that I was quite happy to let the matter rest there, despite the fact that some of my constituents had contacted me and questioned the veracity of what I had said to them.

I was therefore perturbed when on Monday, in an equally controversial and free vote on abortion during the Serious Crime Bill, I acted as one of the Tellers for the Ayes, being a strong supporter of the amendment, yet I was recorded as having voted in the No Lobby on Division 157. I took the matter up again and have been furnished with an explanation that I have forwarded to you, Mr Speaker, since it is a slightly more complicated scenario. As constituents have contacted me, I first wish to put on the record the way that I voted. Secondly, with the greatest of respect, I wish to say that it is very important that every single vote by Members in this House is recorded correctly.

[Mr Speaker]

I am grateful to the hon. Gentleman for his point of order and for his characteristic courtesy in giving me advance notice of its likely content. I understand his frustration. He has placed the facts on the record and I am informed that the Hansard record has also now been corrected. He correctly pointed out that he has received a comprehensive explanation, which he understands—also correctly—has been copied to me. That explanation, very properly, is comprehensive, and occupies a page and a half of A4. The House will be relieved to know that I do not intend to read it out, but suffice it to say that I believe confidence can be placed in it. Officials of this place put great importance on recording and publishing Divisions accurately, and I am informed that they will redouble their efforts to minimise such errors. The hon. Gentleman has properly drawn attention to this matter. He is also a reasonable man and I hope that he will accept that explanation. We will leave it there for now.

Energy-intensive Industries

David T C Davies Excerpts

Thursday 11th September 2014 Commons Chamber

[Alex Cunningham]

My hon. Friend gives a comprehensive summary of where I think we should be, and I hope to develop some of the points she made later in my speech. This is not just about the short term; it is about planning for the future as well.

Of course, the situation with regard to these energy costs is set to get much worse over the next decade. As I have said, the Department for Business, Innovation and Skills forecasts that UK energy and climate change policies will add around £30 to every megawatt of electricity for energy-intensive industries by 2020—substantially more than for any other country in the world.

[David T. C. Davies (Monmouth) (Con)]

I have a great deal of sympathy with what the hon. Gentleman is saying. Does he agree that it is now time to scrap these ludicrous carbon taxes?

[Alex Cunningham]

Carbon taxes have been imposed by consecutive Governments for very good reason, but if our industries are to be competitive, the time has come to examine them carefully and to determine how we go forward. This is not just about taxation, however; we must also take into account the issues that my hon. Friend the Member for Stoke-on-Trent North (Joan Walley) raised a moment ago.

Needless to say, the rise in energy costs is a huge threat to the energy-intensive sector, and it is one that the next Government must address. That brings me back to the trilemma that I mentioned. The present Government have designed policies that focus on reducing carbon emissions from industry, but those policies, influenced by regulatory activities in the EU, rely heavily on measures that seek to enhance energy efficiency while putting a price on industry’s carbon emissions. A cap-and-trade market for carbon was created through the EU’s emissions trading system, introduced in 2005. That market spans the EU and aims to reduce emissions at the lowest possible cost while incentivising low-carbon investment by making emitters financially liable for their emissions. It is intended that, from 2013 onwards, the capping level will fall by 1.74% a year for power stations and industry, so that total emissions are 21% lower in 2020 than they were in 2005.

The Government responded to industry concerns with a compensation package of £250 million announced in Budget 2011 for the period 2013-15, boosted by a further £150 million and extended to 2016 in Budget 2013. But, by December 2013, the emissions trading system compensation scheme had paid out only £18 million to 29 companies in the energy-intensive industries sector. Part of the problem is that although member states are permitted to compensate those at risk of carbon leakage arising from the emissions trading system, there is no obligation to do so. This results in energy-intensive industries being burdened with additional costs, be it through burning fossil fuels and buying allowances to match their emissions, or indirectly through the higher electricity prices that result from generators burning fossil fuels. As we know, the costs are passed on to consumers.

However, because the weak carbon price in the emissions trading system was deemed too low to incentivise lower-carbon investment, the Government then added a further policy cost to the price of energy by introducing a UK carbon price floor to top up the carbon price to an acceptable target rate. This undoubtedly limits the competitiveness of EIIs, many of which are unable to pass those costs through to their customers.

In my role as a member of the all-party group—not to mention as an MP representing an industrial centre—I have regular contact with those in the energy-intensive sector and frequently listen to the issues that they find themselves contending with. Through those conversations, I understand that no other country has imposed a policy similar to the carbon price floor here in the UK, nor are there plans to do so. It has been widely acknowledged that the carbon price floor does not, in fact, reduce emissions from power generation; those are capped at EU level. Instead, the carbon price floor significantly increases the proportion of decarbonisation costs that is borne by UK electricity users. Those are costs that drive investment decisions and can lead to companies relocating overseas rather than developing their businesses in the UK.

To be sure, the EIIs that I have spoken to strongly support the drive for greater energy efficiency. In many cases, energy efficiency is more cost-effective than subsidising low-carbon generation. For instance, GrowHow tells me that, since 2010, it has reduced carbon emissions associated with its main fertiliser product by 40%. By reducing nitrous oxide emissions, it has made savings equivalent to more than 4 million tonnes of CO_2, which means that, relative to its competitors, it is very efficient, and as much as three times as efficient as Russian producers.

Despite the fact that industry has delivered substantial energy and carbon savings over recent decades through investment and innovation, the cumulative impact of energy and climate policies is now putting extraordinary pressure on EIIs, necessitating continuous improvements in energy efficiency to remain competitive—although that is not to suggest that they are not doing that anyway.

Indeed, as industries approach the limits of what is realistically achievable with current technologies, the capacity of businesses to invest in the UK is ultimately undercut and the sustainability of the entire sector in the UK placed under threat. That, of course, brings with it the simultaneous possibility of the loss of jobs and investment to other countries with less vigorous climate change policies. That is disheartening, not just because of the obvious negative impacts for local economies and for the national economy more broadly, but because it overlooks the necessity to safeguard our existing industries and the employment they provide in order to make that all-important transition towards a low-carbon economy. Only through the continued provision of support to these industries can we hope to attract new investment.

We need look no further than Air Products in my constituency for an example of the types of investment in low-carbon industries that successful industrial clusters can attract. Shortly after committing to invest in building one of the world’s largest renewable energy plants on Teesside, the company announced investment in a second similar plant, influenced no doubt by the favourable business conditions that will see the wide availability of feedstock while allowing for local knowledge, skills and infrastructure to be used constructively and competitively. It speaks volumes that Sembcorp is developing with SITA a similar 35 MW plant on Teesside also to provide electricity from waste, further highlighting the potential for investment in the low-carbon economy that can result from the development of strong industrial clusters.

There can be no doubt that the Tees valley’s successful process industry cluster is central to the region’s position at the centre of the UK’s move towards a high-value, low-carbon economy, attracting significant investment over recent years and developing a reputation for green excellence. The area continues to work with government on a low-carbon action plan, on industrial carbon capture and storage, and on industrial heat networks as part of the city deal agreement, leading the way on bio-industries and energy from waste while increasingly being seen as a destination for green investment.

Such examples confirm the UK’s potential competitiveness on the international stage, but EIIs need access to secure internationally competitive energy supplies if they are to continue locating in the UK and investing in areas such as the Tees valley. That means having a level playing field for EIIs within the single EU market, taking account of the cumulative burden of climate policies on industrial energy prices. We cannot mistake the fact that the Chancellor deserves credit for capping the carbon price floor at £18 per tonne of CO₂ from 2016 to 2020 instead of allowing a linear rise to £30 per tonne by 2020, as was originally planned. Calculations indicate that such a move could save UK EIIs in the region of £4 billion over three years, but that cannot disguise the fact that industries are still exposed to an expensive unilateral tax and received no form of compensation for the first year of its operation. With the compensation being announced a few years at a time, there is no long-term certainty about business costs, which deters investment in the sector in the UK.

Estimates suggest that the carbon price floor has already added 5% to EIIs’ energy prices and budget reforms will cap the impact at 8% from 2016 to 2020. Although that is certainly an improvement on the original trajectory, which would have added 14% by 2020 and 26% by 2030, we must recognise that even after this modest reform UK industrial electricity users still face four times the carbon cost borne by EU competitors, let alone competitors outside the EU, which do not face carbon costs at all.

Similarly, EU energy and environmental state aid guidelines published earlier this year limit compensation for the impact of the Government’s carbon price floor on electricity prices, so it can be paid only to EIIs in sectors already eligible for emissions trading system compensation. The Government therefore have no legal means of compensating EIIs for the impact of the carbon price floor in sectors such as cement, glass and ceramics, even where clear evidence exists of energy intensity and risk of carbon leakage. So despite the fact that indirect emissions trading system costs to the cement sector during the period 2014 to 2020 are estimated at £82.7 million, and the cost of carbon price support over the same period is estimated at £104 million, the European Commission’s guidelines conflict with UK domestic policy to allow support against the carbon price support tax for the cement industry.

Incidentally, representatives from that industry have pointed out that cement did not make it on to annex II of the EU ETS indirect CO₂ aid guidelines because the tests that were applied were based on trade intensity of cement, which is currently only moderately traded, rather than the raw product before grinding—cement clinker—which is traded much more intensely. That leads to the conclusion that unless every EII sector is deemed eligible at the EU level for emissions trading system compensation, the only equitable solutions available to address this industrial competitiveness problem are withdrawal of the carbon price floor or efforts to reform the emissions trading system itself to encourage a stronger, more robust carbon price signal.

There can be no doubt that the UK must strive to avoid meeting its carbon targets by offshoring state-of-the-art energy-efficient EIIs. The objective must be sensible and economically sustainable decarbonisation, not de-industrialisation. In that respect, the UK’s status as the least energy-intensive economy in the G7 should perhaps be treated with caution rather than celebration.

We must think outside the box and look beyond punitive taxation schemes for alternative means to decarbonise, sending a signal to the rest of the world that it is possible to retain industry and decarbonise simultaneously and leading by example. A report last year by the American Chemistry Council found that 97 chemical industry projects worth a staggering $71.7 billion have been announced as a result of the US’s shale gas boom.

As a result of shale gas extraction, the price of energy and petrochemical raw materials in the US has plummeted, allowing a boom in the chemicals industry—so much so that INEOS tells me that the majority of its profit now comes from one-third of its business sales in the US. Although I am under no illusion that the UK will be able to replicate the US’s experiences entirely, extracting shale gas is likely to reduce energy and petrochemical raw material costs significantly. I also appreciate that fracking for shale gas is a controversial process and recognise the potential risks that it brings. But the appropriate response to concerns about the safety and environmental impact of shale gas extraction is to ensure that we have the right regulatory and monitoring framework in place. Any questions are best answered on the basis of evidence gathered from carefully regulated and comprehensively monitored exploration.

Although there is little prospect of fracking in north-east England, the abundant offshore coal reserves and potential for gasification present an opportunity to secure the future of EIIs—both in the Tees valley and the wider UK—while safeguarding thousands of jobs and helping to drive a much-needed economic recovery in the area. A failure to explore such options further would be an opportunity wasted.

Similarly, with the Tees valley already producing around 50% of the UK’s hydrogen and having an established hydrogen pipe network, the application of carbon capture and storage, as detailed in the region’s city deal, along with investments such as Air Products and the potential extraction of hydrogen from industrial sources mean that there is a significant opportunity to produce green hydrogen in Tees valley, which is capable of supplying the increasing demand for hydrogen fuel cells.

Our EIIs need support through this place, with a re-examination of taxes, carbon capture development and new energy sources. As recommended in the Environmental Audit Committee report, we need to set that path for maximum feasible decarbonisation, and I hope that we will do that soon.

--- Later in debate ---

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

I welcome this debate on energy-intensive industries, and I thank my hon. Friend the Member for Stockton North (Alex Cunningham) and the hon. Member for Redcar (Ian Swales), as well as the Backbench Business Committee, for securing it.

I also thank you, Mr Speaker, for your flexibility in enabling me to contribute. Unfortunately, constituency engagements mean that I might not be able to stay for the winding-up speeches. I apologise to the Minister and to my hon. Friend the Member for Newcastle upon Tyne North (Catherine McKinnell) for that. I will read Hansard with increased interest.

I am keen to contribute to this debate because energy-intensive industries are such an important part of our economy, as my hon. Friend the Member for Stockton North said in his excellent opening remarks. They employ about 200,000 people directly in the UK and support 800,000 jobs throughout their supply chain. They are an important part of the real economy, particularly, I might say, outside the south-east. My constituency is home to several energy-intensive businesses, such as Michell Bearings, which has been in Newcastle since 1920. There are many more throughout the north-east.

If we can look back that far, 160 years ago the north-east—one of the most innovative regions in the world—was leading the UK into the first, carbon-based industrial revolution. Sir Charles Parsons established his engineering works in Newcastle and he invented the multi-stage steam turbine, which was the iPhone of its day and helped to power Britain into a new era. Mosley street in my constituency was the first street in the world to be lit with electric light—something to which we have become all too accustomed.

Newcastle university, also in my constituency, was founded on local strengths such as marine, electrical, civil and chemical engineering, as well as agriculture and medicine, and they remain key strengths of the city and the university today: global reach and local roots. Today, the region remains a global base for manufacturing innovation. It is the only English region with a positive balance of trade. As well as the industries and companies that my hon. Friend the Member for Stockton North spoke of, we have fantastic facilities such as the National Renewable Energy Centre in Blyth and the Centre for Process Innovation on Teesside, which were both set up with the help of One NorthEast—regrettably abolished by this Government. In Newcastle, we have recently opened the Institute for Sustainability.

Energy-intensive industries and carbon reduction are crucial to the north-east economy. There is not, and should not be, any contradiction between the two. The transition to a low-carbon economy is a huge opportunity for the UK, with the potential to be a major source of jobs and growth. However, that transition is being put at risk as a direct result of this Government’s failure to develop a long-term, sustainable energy policy. They have failed to get behind green businesses. The UK is falling behind with investment in green growth, meaning that jobs and industry that should be coming to this country are now going overseas. I have spoken to the senior management at companies that would prefer not to be named who have said that the lack of a clear long-term energy strategy is putting off investment that could create jobs tomorrow, next month and next year. That is clearly detrimental to our economy overall.

The lack of an overall energy strategy and an integrated strategy for supporting energy-intensive industries is putting jobs and investment at risk. Conflicting signals from this Government about support for green energy versus terminology such as “green crap”—I think that was it—has seen the UK’s attractiveness to renewables investors slide down international tables. If we want to support the real economy and to build a long-term, sustainable economic environment, businesses need to know what they can expect from Government. They need long-term regulatory and policy certainty, and they are not getting that from this Government.

As my hon. Friend said, the carbon price floor was intended to create a floor underneath the EU emissions trading scheme, but since the collapse of the ETS price, energy-intensive British firms have been faced with far higher energy bills than European competitors. We need to know how Government are going to support these vital industries over the next five, 10 and 20 years, because that is the kind of life cycle they have for building plant and investing in countries. We need a long-term energy policy that supports and drives green growth and creates jobs in a low-carbon economy—a policy that gives investors the certainty and confidence they need to invest by committing to decarbonising the power sector by 2030. Yet as a direct result of this Government’s mixed messages, we are falling behind.

I have always considered myself a champion of new technologies in this House and elsewhere. When energy-intensive industry representatives first spoke to me of their concerns about some of the Government’s energy policy, I asked them what they were doing to improve their energy efficiency. Were they, for example, asking the Government and policy makers to subsidise obsolete industrial processes? Following further investigation, I was made to understand that many of the processes related to reducing energy consumption and improving energy efficiency are reaching the limits of the laws of physics. I am sure we are not all as familiar as we perhaps should be with the periodic table and the chemistry education we received, but I think we can all understand that a certain amount of energy is needed to change the state of molecules and to change gas to liquid. We have made so much progress in the efficiency of many such processes that it is not possible to go further. Given that so many of the processes are essential to our manufacturing base and a balanced economy, it is unarguable that they need to be supported during this transition.

The energy costs of energy-intensive industries can be more than three quarters of their addressable costs, and they are often already operating in highly competitive markets. There is also already a considerable incentive for them to innovate and become more energy efficient.

The industries need support from Government and a clear, long-term direction of travel. They need action in a number of areas, including fixing the broken energy market, as Labour has promised to do; exploring new sources of green energy, such as clean coal; and specific and long-term support so that they can continue to compete internationally.

In government, the Labour party was more courageous in this area than many others. The Climate Change Act 2008 made us the first country in the world to introduce a legally binding framework to tackle climate change.

[David T. C. Davies]

I am listening with interest to the hon. Lady, but does she not agree that the Climate Change Act is actually one of the reasons why we got ourselves into this awful situation in the first place? We are taxing industries in order to try to solve a problem that I am not even sure exists.

[Chi Onwurah]

I thank the hon. Gentleman for his intervention, but his final comment gave away his position. He said that we are taxing a problem he is not even sure exists, but the consensus on the need to address climate change is global and we certainly owe it to our children and our children’s children—[Interruption.] The hon. Gentleman is chuntering, but I am afraid I cannot follow him. The Climate Change Act is not responsible for climate change; it is a response to climate change and one that is necessary for the long-term sustainability of our economy and the global economy.

--- Later in debate ---

[Angela Smith]

My hon. Friend the Member for Stockton North made the point about shale gas, which gives us the potential to supply a good, domestic feedstock for the chemical industry. It would be more efficient and better for us all round for that feedstock to be delivered throughout the UK, rather than having borders between Scotland and England. That is an obvious point, but it is important to put it on the record.

The definition of “foundation industry” varies, but broadly we mean steel, cement and lime manufacturing, chemicals, ceramics, glass and paper. The contribution those industries make to key economic activities such as transport and construction is fairly obvious, but their importance in other ways is often overlooked. For instance, the chemicals industry has contributed to the growth of food manufacturing in this country, and chemicals will continue to be important for agricultural use and in ensuring that we maintain a healthy food production capacity in this country. We thus realise how apt the term “foundation industry” is, as they are key industrial sectors.

At a conservative estimate, those industries make a contribution of roughly £15 billion to UK GDP per annum. Depending on the definition of “foundation industries”, their combined turnover varies between £70 billion and £95 billion per annum. They provide 11% of the UK’s gross value added. Their contribution to UK export capacity is very significant: they contribute at least 30% of our export capacity, but I have read somewhere that it could be as high as 54%. Again, that depends on the definition of “foundation industry”.

The foundation industries have a strong research and development profile, which is often underestimated and overlooked in terms of their importance to the UK. The future of the sectors is dependent on high-quality research and development profiles, on significant investment, and on ensuring that we stay ahead of the game in manufacturing capacity and at the high-value-added end of the manufacturing spectrum.

I pay tribute to the first of the catapult centres developed in the UK—in south Yorkshire, at the advanced manufacturing park at Catcliffe—more than 10 years ago by Yorkshire Forward and others in Sheffield and Rotherham. The park is focused on engineering, particularly steel engineering, and is going from strength to strength. A partnership in Sheffield between Boeing, Rolls-Royce, the university of Sheffield and Sheffield Hallam university is building a brand new factory, Factory 2050, alongside the original buildings, and is now investing heavily in research into nuclear capacity. It is a highly successful venture that provided the blueprint for the Government’s catapult centre strategy.

As a Sheffield and Barnsley MP, I am incredibly proud of the innovative work done in south Yorkshire in using the concept of catapult centres to promote the collaboration between academic institutions and our manufacturing centre to make us world class in innovation and the development of new technologies. Our foundation industries are also at the forefront of work force investment. They have a good record on paying their work force well—these are good jobs—and investing heavily in apprenticeships and ongoing professional development training. The country needs more of that. In many cases, our foundation industries provide a good example of best practice.

My constituency has many foundation industries within its borders. Fox Wire produces world-class cabling for the oil industry and many other applications. Tata Speciality Steels provides steel for the aerospace industry and is at the top end of steel manufacturing in this country. In fact, one reason it is headquartered in my area is that it cannot find elsewhere the skill sets it needs to maintain its position as the best in steel manufacturing. We are very proud of that. In addition to those industries, British Glass is headquartered in my constituency, and I also have cement, paper and ceramic interests, so I represent a range of manufacturing interests.

One of the ceramics companies in my constituency, Naylor, is a family company, not foreign-owned, and has been in existence for more than 100 years. Only this week, it secured six-figure funding towards a £2.5 million project to increase capacity, while reducing energy consumption, at its Cawthorne factory in my constituency, through a combination of smart metering and an in-house plastics reprocessing plant to make use of its own waste on site. There are limits to what can be done to reduce energy consumption, but these are practical, innovative ways of continuing to reduce energy use. In addition to energy efficient lighting, a new energy efficient kiln and dryer has created extra capacity, while reducing energy costs, and led to 30 new jobs. I am proud of Naylor. This superb company is increasing its exports profile and winning awards all over the place, while being dedicated to reducing its carbon footprint—because it makes financial sense. I think the hon. Member for Redcar made this point. The industry is already incentivised to reduce its carbon footprint because it will make business more efficient and cost-effective.

Briefly, Sheffield city region provided some of the funding for that project, which is a tribute to an important element in the ongoing constitutional debate—local decision making. We need some devolutionary thinking on getting investment in manufacturing in the rest of England, never mind the other constituent parts of the UK.

Industry is committed to reducing energy use. For example, Celsa, a recycled steel plant in Cardiff, is one of the most energy and labour efficient plants in Europe, and we have seen significant reductions in electricity consumption by the steel industry in the past 30 years. The figures are startling. I do not have them to hand, but the electricity consumption of steel making in my city has gone down significantly in the past 30 years. On that point, will the Minister respond to the request by steel makers across the UK that the Government reconsider the advanced capital allowances for energy efficiency? The scheme is based on generic lists of technologies and excludes the more specific but often large energy efficiency opportunities that our foundation industries want to engage with. I would be interested to hear whether the Treasury is prepared to reconsider that scheme and take the common-sense approach of applying it to these large-scale energy efficiency projects.

The role of foundation industries in developing a green economy should not be overlooked, as I said in an earlier intervention. I was not saying that we should move faster than the rest of Europe; in some ways, I was making the reverse point. We must be careful not to damage the competitiveness of the foundation industries in this country, precisely because they are critical to delivering the green economy we need, not just in the UK but across European and globally. We know that the foundation industries have an important role to play in developing renewable energies, such as carbon capture and storage, and we know that they play a valuable role in the production of energy-efficient construction materials, particularly in respect of chemicals. The chemicals sector is doing a good job of developing wonderful new materials for use in construction projects, not just for commercial but for domestic building, as I saw when I visited a research project at Nottingham university involving several chemical companies, including BASF. That project is doing impressive work to cut the carbon footprint of domestic building projects and to cut energy costs across the board, especially for home owners.

British Glass is developing new trading standards and is keen to see glass play its part in developing a green economy, and new glass technologies are being developed all the time. Let us not forget either that wind turbines require a lot of steel in order to help reduce our carbon footprint and produce green energy. The steel industry also points out that the development of the lightweight vehicles we increasingly see on our roads is largely down to work by the steel industry to reduce the weight of construction materials. The foundation sectors are doing a great deal of work to develop the green economy, but the costs being incurred by our industries as a result of our carbon-intensive industrial past must not be forgotten.

We are now paying the clean-up costs of an industrial legacy that has left many of our environments badly degraded. As an example, the water industry in Yorkshire has to pay out millions of pounds a year to clean up the water collected from a catchment that is badly degraded—by peat degradation. The water must go through multiple processes to remove the peat before it can be put into our catchment and our networks. A great deal of work is involved, and we have to recognise that the industry is paying the costs of carbon pollution in the past. That should not be overlooked when we reflect on the arguments in favour of transitioning to a green economy. It is very short-sighted to argue that the green economy is not important to our future; it quite clearly is.

Let me move on directly to the impact of carbon taxes and levies on our foundation industries. My hon. Friend the Member for Stockton North made the point, which should be reiterated, that Tata Steel, for instance, has estimated that year-ahead wholesale electricity prices are 70% and 45% higher than in Germany and France respectively. That is driven in large part by policy-driven taxes and levies for the most intensive users; those were 2.5 and 6.5 times higher than in Germany and France respectively in 2011.

The British Ceramic Confederation has pointed out that DECC’s own analysis shows that climate-related charges are already 19% of the industry’s base load price, which will rise to 47% in 2020. The manufacturers’ association EEF has stated that the Government’s own estimates indicate that industrial electricity prices will increase by 50% by 2020 and 70% by 2030. Moreover, Tata Steel is clear that the levies with the greatest impact today are the renewables obligation and the carbon price floor. The company also points out that many of its steel competitors in Europe will either be completely exempt from many of the levies or have their charges capped.

As far as I am concerned, the Government’s recognition of the damage inflicted on our manufacturing sector by the carbon price floor is most welcome, but why on earth they introduced the floor price in the first place remains a mystery. As I say, we welcome their acknowledgment in this year’s Budget of the mistake made. The proposals laid on the table represent something of a step forward in resolving the issues, but they do not resolve all the issues related to the imposition of the carbon price floor in particular on our sectors.

The 2014 Budget announced that the carbon price floor would be frozen at £18.08 from 2016-17 to 2019-20, saving all UK business an estimated £4 billion over three years. The Government will review the carbon price floor beyond 2020, once the impact of the reform of the EU emissions trading scheme is clear. They are extending existing compensation for CPF and ETS for 2019-20 and we of course have the compensation package in place.

It is my understanding, however, that the compensation package is underspending, so the Minister, who until a moment ago was busy on her mobile phone, might like to concentrate on providing an explanation of why the Government are underspending on their compensation package to industries that desperately need to see it delivered. She needs to explain, too, why it continues to be the case that the UK does not appear to be punching at its weight when it comes to making the case to Europe that more of our foundation industry sectors should be included in state aid guidelines. [Interruption.] I am sorry, but the Minister should realise that this is not a laughing matter.

We need to know why the Government are not working harder to make the case to Europe that more of the sectors affected by the carbon floor price should be included in European state aid schemes. That is at the heart of this debate. Sectors such as ceramics make intensive use of electricity—use of the electric arc furnace is not confined to the steel industry; it is used in ceramics, too—yet the ceramics sector has been almost entirely excluded from the compensation on the table at the moment. The Government should explain that, or at least make a commitment to ensure that that unfairness in the compensation schemes on the table is removed as soon as possible.

We need to see a commitment to introduce the announced mitigation measures for the renewables obligation as soon as state aid approval has been granted by Brussels. As I said, we also need to see a commitment to ensuring that the sectors included in state aid are extended as soon as possible. We need an approach that gives specific consideration to premier league energy-efficiency projects, or incentive schemes such as the enhanced capital allowances that I mentioned. We need to see UK support at the October European Council meeting for including the principle of the continuance of robustly protecting the competitiveness of the sectors most at risk at the level of best performance. We need to see, too, a commitment from the Government to support the industrial strategies developed by the foundation industries, such as the chemistry growth partnership and the developing UK metals strategy.

Finally, I want to hear the Minister’s response to the argument that a consolidation of the taxes and levies on the table at the moment would be a sensible way forward. A significant number of taxes and levies are being placed as a burden on our foundation industries. Indeed, one company in my constituency has to employ a highly skilled individual full time just to deal with compliance with the range of levies and taxes that need to be delivered year on year. The Government need to think again about the impact on industry of having to work through so many different schemes and so many different levies year on year. Nobody is arguing against the principle of carbon taxation—

[David T. C. Davies]

indicated dissent.

[Angela Smith]

That might not quite be comprehensive, but most Members in the Chamber today agree with the principle of carbon taxation. What we want is sensible carbon taxation, delivered efficiently but at the same time ensuring that we have a level playing field with the rest of the European Union. That is not the case at the moment. I hope that the Minister has listened carefully to what has been said, and that she will come up with some constructive responses in her speech.

[David T. C. Davies (Monmouth) (Con)]

The hon. Member for Penistone and Stocksbridge (Angela Smith) has just said that nobody will argue against the principle of carbon taxation. First of all, I am going to argue absolutely against the principle of carbon taxation, and I shall briefly set out why. It is interesting to note that while not many people will argue against that principle, everyone in the Chamber has been arguing about the practical consequences of carbon taxation.

It was wonderful to listen to the speech made by the hon. Member for Stockton North (Alex Cunningham). If I had shut my eyes, I might have believed that I was at a meeting of the Global Warming Policy Foundation, as he delivered a damning critique of the effect of the taxes that have been levied. He set them out far better than I could, but the point is that levying unilateral taxes on our manufacturing industries is absolutely crazy. It simply means that business goes elsewhere, to other countries, and the same amount of carbon dioxide gets pumped out into the atmosphere, so there is no particular benefit, if indeed there would be any benefit from reducing carbon dioxide; that companies are far less willing to come into the UK, because they do not know what our energy policy is; and as the hon. Member for Penistone and Stocksbridge has just pointed out, that many companies are having to employ people in order just to comply with all the taxes that are being introduced.

I look forward to hearing the speech of my hon. Friend—indeed, my friend in all senses of the word—the Member for Witham (Priti Patel). She certainly cannot take the blame for any of this, because she has only recently become the Minister. I am sure that she will take a very sensible view, and I am confident of her desire to support the UK manufacturing industry. However, I have no doubt that she will point out to us, as others have already, that the Chancellor has taken steps to cap the carbon price floor at £18, and that the compensation scheme will be extended.

We have all got our knickers in a twist. Having levied all sorts of taxes on our manufacturing industries, we are now going around saying “Hang on a minute, these taxes will damage these industries, so we will provide some compensation, but not for all of them, just for some.” So steel gets a bit of compensation, and cement and pottery do not. It is all done in a random fashion.

Surely there is a basic, fundamental question that we should be asking. If we all agree that these taxes are bad—and I think we do all agree that they are bad, or we would not be providing compensation in some instances—why bother with them in the first place? It does not make any rational sense to levy a load of taxes on carbon-producing industries and then give some of those industries some of the money back, but not quite enough. That, to my mind, is completely and utterly irrational.

The elephant in the room, however, is global warming. No one wanted to talk about that, but the whole rationale for these taxes is that we are going to stop runaway global warming. Why does no one mention it, given that it is the root cause of all these carbon taxes? We need to start thinking about the rationale for them, because there has been no increase in temperature since 1998. No one disputes the fact that carbon dioxide is a global warming gas—it is a scientific fact—and no one disputes the fact that there has been an increase in temperatures over the last 200 years, although the increase is less than 1° C; in fact, it is about 0.8° C. It is reasonable to assume that some of that increase is a result of the carbon dioxide that has gone into the atmosphere. However. it is equally reasonable to assume that not all of it is, and even that not much of it is.

At the time when we were becoming industrialised, we were coming out of a very cool period, the “little ice age”. We have always experienced fluctuations in temperatures. It was warmer in Roman times, it got cooler in the dark ages, it got warmer again during the mediaeval period, and then it got cooler again during the little ice age. Some of the very small increase in temperatures that we have seen is no doubt due to perfectly natural fluctuations, and that is borne out by the fact that there has not been a straightforward increase in carbon dioxide and temperatures. Between 1940 and 1970 it was getting colder, despite the increase in carbon dioxide going into the atmosphere, and since 1997 there has been no increase in temperatures. I asked the Met Office and environmentalists, who thoroughly support these green taxes, “How long must we have no increase in temperatures before you start to think again about the taxes that you want us, the Government, to levy?” The answer from the Met Office was “Another 50 years”, but it will be too late for all these industries in 50 years’ time.

[Angela Smith]

The hon. Gentleman clearly did not listen to my illustration of how careful we must be about swallowing that kind of argument. The water industry in my constituency is paying the cost of having to clean up pollution in the local water supply, which is a result of almost 200 years of unregulated industrial activity that badly polluted the catchment area from which we take our water. Does that not indicate to us that we must be careful about how we look at the future of industrial and energy activity in the UK?

[David T. C. Davies]

It indicates to me that we have got our priorities wrong. We certainly should be looking at water, and we should be looking at chemicals, but the hon. Lady is making the mistake of thinking that carbon dioxide is some sort of poison which should be equated with whatever chemicals were put into the water supply. Carbon dioxide is a perfectly natural gas, and it is vital to growth. Without carbon dioxide, we would not be able to grow anything at all, and it is far from certain that carbon dioxide is responsible for the 0.8° rise in temperature. We can only say that it is responsible for a small amount.

Let us be honest. We have a sort of pseudo-religion of global warming—no one can even begin to question it—and the Intergovernmental Panel on Climate Change publishes the bible of that pseudo-religion in the form of the report that it produces every couple of years. In its latest report, the IPCC itself says that it can only state with certainty that half the temperature increase in the second half of the 20th century is due to man-made carbon emissions. Well, in the second half of the 20th century the actual increase in temperature was 0.5°, so what the IPCC is saying is that it can only state with certainty that man is responsible for a 0.25° increase, which is about a quarter of the figure that we are constantly given. So what is the problem that we are trying to address with all these taxes on our industries?

I have the greatest respect for the Minister, and, as I have said, I am absolutely confident in her ability and her desire to support manufacturing industries. I suspect that she may share some of my concern, shall we say, although I will not embarrass her by putting her on the spot with comments like that. But I hope that she is taking note of something here. The reality is that Members in all parts of the House want to distance themselves from the consequences of policies that they themselves have called for.

A few years ago, no one was more enthusiastic about green policies than Opposition Members. What about that Liberal Democrat Member? I have forgotten his constituency now, but he is not in the Chamber. He was the most enthusiastic of all, constantly championing green policies, yet it was he who drew our attention to the fact that manufacturing companies in this country were paying twice as much as the Germans for their energy. Perhaps he is another one who should be invited to the Global Warming Policy Foundation some time. I think that if the hon. Member for Brighton, Pavilion (Caroline Lucas) had a steel factory in her constituency, even she would probably be whingeing and whining about the taxes that she herself had enthusiastically called for. None of these people will support the Front Bench when it comes down to it. They call for green taxes, but they do not want the consequences. The level of hypocrisy that comes out of the green movement is absolutely astounding.

[Catherine McKinnell (Newcastle upon Tyne North) (Lab)]

I fear that the hon. Gentleman has misunderstood the subject of the debate, which is, specifically, carbon taxes on energy-intensive industries. Those taxes have not been supported by Greenpeace, and are not considered to be green taxes at all.

[David T. C. Davies]

Greenpeace does not support anything as far as industry is concerned. None of the environmental groups do. They call for us to decarbonise completely, but whenever we offer them some handy solutions—such as nuclear power, which generates large amounts of electricity without carbon dioxide—they do not want to know. And what about shale gas? I was interested to hear the hon. Member for Penistone and Stocksbridge call for us to export it, as well as mentioning a company in her constituency that supports nuclear. Exporting shale gas is a good idea. It produces half the amount of carbon dioxide that is produced by coal, and it is vital for the wind industry that we have gas to back it up. However, the greens do not want to know about that. What about the Severn barrage, which was proposed in my constituency? I would have some concerns about the cost, but I believe that it would generate 20% of the UK’s electricity supply without any carbon dioxide. The greens are more worried about the fact that some wader birds would be inconvenienced. They have wings—they could fly somewhere else—but the greens do not want to know about it.

My point to the hon. Member for Newcastle upon Tyne North (Catherine McKinnell) is this. She will never, ever satisfy the green movement. Let us forget about pandering to the green movement. Let us forget about pandering to all those who call for carbon taxes and who are a little more sensible, such as Opposition Members, because they will not support the consequences either. Let us remember that, at this moment in time, it is not the meteorological climate that we need to worry about, because that has not changed for about 18 years. It is the economic climate that we should be concerned about.

I hope, and I am sure, that the hon. Lady will champion Britain as a great place in which to do business, and a great place to which to come and make things, and will do something about these ridiculous green taxes, which do not just need to be scaled back—I will not use quite the words that were used by the Prime Minister, although I welcomed them greatly—but need to be completely scrapped.

Oral Answers to Questions

David T C Davies Excerpts

Tuesday 2nd September 2014 Commons Chamber

[Mr Gauke]

Much of that £21 billion figure is based on the Labour party’s own announcements. I do not know why the hon. Gentleman is complaining about that. If the Labour party wants to have credibility on fiscal policy, perhaps it should stop making so many announcements of spending splurges. Our view is that the OBR is in its infancy. We want the organisation to succeed and therefore do not want to draw it into party political matters.

[David T. C. Davies (Monmouth) (Con)]

If the OBR ever does decide to look at the Labour party’s figures, perhaps it will be able to explain how it is possible for the Labour party to be able to call for reductions in borrowing and in the deficit while making all sorts of promises to spend billions of pounds that it simply does not have. Does it not show that the Labour Members are as incoherent on economics as they were when they lost the last general election?

[Mr Gauke]

My hon. Friend is absolutely right. The OBR is a very successful organisation that has achieved a lot, but trying to explain the fiscal policy of the Labour party is something that would currently be beyond it.

Wales Bill

David T C Davies Excerpts

Tuesday 6th May 2014 Commons Chamber

[Mr Harper]

No. That would create pressure on the Chancellor to make sure that tax rates were lowered. I am grateful to note that the hon. Gentleman appears to have become a convert to lower taxes and that will lead to an interesting conversation with members of his shadow team, who appear to be wedded to higher taxes. Creating an incentive to put downward pressure on taxation not just in Wales but across the United Kingdom would be welcome. There are many pressures from interest groups and from individuals campaigning for Government to spend more money. We all know that there is no such thing as Government money; there is only money belonging to taxpayers. It is either money belonging to taxpayers today that we relieve them of or, if we borrow money, we relieve future taxpayers of money. Lower taxes mean that people keep more of their own money. I am very content with that. I just want to make sure that it works properly.

On the point about higher rate tax, I had an entire debate in Westminster Hall on this to make it clear that I thought the priority for the Treasury when cutting taxes was to focus on those on median incomes—those in the middle. That is why I welcomed the changes to the personal allowance in the Budget, which in the context of the changes that we have made over the past four years deliver more of the benefit to those on middle and lower incomes than those at the higher end. My priority is focusing on those on middle incomes.

[David T. C. Davies (Monmouth) (Con)]

My hon. Friend is making a logical case to give the Assembly powers over taxes, but is not the reality that the Assembly will not behave in a logical fashion? Rather than cutting taxes, as he presumes and as even the hon. Member for Pontypridd (Owen Smith) seems to be suggesting, the Assembly will ratchet up taxes at all levels, and my hon. Friend will benefit enormously because many talented and wealthy people in Wales will cross the border, go and live in his constituency and pay their taxes there, leaving us bereft of the money that we could be spending on public services.

[Mr Harper]

I am grateful for the intervention from my hon. Friend, who chairs the Welsh Affairs Committee. He has put me in two minds. I am not sure whether to welcome his pessimism about the way he thinks the Welsh Assembly Government and the Welsh Assembly will behave, and look forward to the incredible opportunities that he sets out. If the Welsh Government do not learn from history and if they think it sensible to raise taxes, whether landfill taxes, stamp duty land tax or income tax, the flipside of the proposal from the hon. Member for Pontypridd (Owen Smith) is that rather than attracting people to go and work and live in Wales, the effect may be the one that my hon. Friend suggests.

If any businesses currently located in Wales want to relocate to the Forest of Dean, they will be made incredibly welcome. I will personally talk to the local council to smooth their way, and if residents want to come and live in the Forest of Dean, they will find a very good quality of life. If they want to pay their taxes in England, I certainly will not stop them. It seems that I can have it both ways. If the Welsh Assembly behaves in the way my hon. Friend fears, it will be good for my constituency. But to be serious for a moment, he puts his finger on it: he worries about the impact on Wales. I trust to some extent the good sense of voters in Wales.

By not devolving the tax powers that are set out clearly in the clauses that we are debating today, one of the problems is that the Welsh Assembly Government have to worry only about spending money, not about raising it, which leads to the consequences that my hon. Friend sets out. The Welsh Assembly Government do not have to think carefully about the price to be paid. If politicians’ minds are focused on the price to be paid, whether it is individuals choosing to leave Wales or entrepreneurs choosing either not to set up their businesses in Wales or to move existing businesses to more hospitable parts of the United Kingdom, that will concentrate minds well, even if the Government there are not of that mind to start off with. It may also create political opportunities for parties that do behave in such a way to make inroads in the Welsh Assembly elections and in parliamentary elections to this House.

--- Later in debate ---

[David T. C. Davies]

I beg to move amendment 12, page 23, line 4, at end insert—

‘(1A) In Part 1, in paragraph 9 (Health and health services), after “national health service” insert—

“Organisation and funding (expenditure and income) of the provision of health services in England to people registered with a GP in Wales and the provision of such services in Wales to people registered with a GP in England.”.’.

[The Temporary Chairman (Sir Roger Gale)]

With this it will be convenient to discuss amendment 13, page 23, line 17, at end insert—

‘(d) the scrutiny of reductions of, and additions to, the block grant to reflect expenditure and income arising from the provision of certain services in England to people resident or otherwise eligible for such services in Wales and the provision of such services in Wales to people resident or otherwise eligible in England.’.

Amendment 14, page 23, line 24, at end insert—

‘(g) a Welsh Minister responsible for a service falling under section 13(d) (definition of budgetary procedures)’.

Government amendment 29.

Clause 21 stand part.

Amendment 17, in clause 22, page 24, line 46, leave out ‘and’.

Amendment 18, in clause 22, page 24, line 46, at end insert—

‘(ae) an estimate of the costs of providing services in Wales to people resident in England; an estimate of the monies received from HM Treasury to fund such provision; and an assessment of the effectiveness of any relevant agreements in place governing cross-border service provision, and’.

This amendment and amendment 17 to Clause 22 are intended to make the operation of agreements that govern cross-border services, such as the NHS protocol, more transparent to residents of both England and Wales.

Clause 22 stand part.

New clause 1—Review of options for Barnett formula reform—

‘(1) The Secretary of State shall make arrangements for a review of options for reforming the Barnett formula in order to meet the objective of calculating the block grant funding for Wales on the basis of need.

(2) The Secretary of State shall lay a copy of the report of the review mentioned in subsection (1) before each House of Parliament within six months of this Act receiving Royal Assent.’.

New clause 3—Cross-border health care—

‘After section 1 of the National Health Service (Wales) Act 2006, insert—

“1A Duty to have regard to impact on services in certain areas

In exercising functions relating to the health service, the Welsh Ministers must have regard to the likely impact of those decisions on the provision of health services to persons who reside in an area of England that is close to the border with Wales.”.’.

This New Clause places a duty on Welsh Ministers to consider the impact of their decisions on the provision of health services to people who reside in England, analogous to a duty already placed on the NHS Commissioning Board in England to consider the impact of its decisions on people residing in Wales and Scotland.

New clause 10—Welsh Government Finance Department—

‘The Welsh Government may, by resolution of the National Assembly for Wales, rename its finance department and this shall be recognised as its official title in all dealings with the Treasury.’.

[David T. C. Davies]

I am grateful for the opportunity to speak to this amendment because I believe in the national health service. I know that I speak for all members of my political party in saying that we believe in having a truly national health service. The changes I am attempting to insert into the Bill would bring back the national health service that we once had but no longer have. At the moment, contrary to what people think, we have a regionalised health service with different systems in Wales, in Scotland, in England, and in Northern Ireland. It is a sad fact that in Wales, under the leadership of members of the Labour party, the Welsh national health service has been failing patients and letting people down. I care about that.

I also care about the patients who come to see in my surgery. They include Mariana Robinson, who has been speaking out in national newspapers over the past few weeks. I did not ask her to go the press; she came to see me to ask how she could tell the story of the scandalous treatment that she has been receiving. She was treated very well in a nearby hospital in England but then told that she could no longer have that treatment because funding was not available and she would have to be treated in Wales.

Only a few weeks ago, I spoke to a patient who had been suffering from cancer. She had been told that she was terminally ill and would not last more than a few months. She believes that she was, in effect, written off by the national health service in Wales. She found out about experimental treatment in England and accessed it. She is still alive. Her cancer appears to be in remission at the moment, and I wish her all the best. She obviously wants to continue to receive this experimental treatment in the same area, Newcastle, yet she too has been told that there will be no further funding for her.

There has always been a problem in getting cross-border funding, but it seems to have got a lot worse in the past 12 months, when a decision was taken somewhere along the line that meant that virtually anyone with an illness in Wales would have to be treated in Wales. I believe that this is part of the whole National Assembly mindset about doing everything in Wales because it feels that it can do it better.

[Mr Mark Williams]

Does my hon. Friend agree that we should not characterise this as an issue that affects only the borders of England and Wales? I can think of examples of constituents in Ceredigion who have been unable to access services in Gobowen and Frenchay hospitals for exactly the reasons he suggests.

[David T. C. Davies]

The hon. Gentleman is absolutely right. He will have to forgive me; I have been looking at this more from the perspective of a Member of Parliament in a border area where many patients find it much easier and quicker to access hospitals in Hereford—as they have for rheumatology, for example—or in Bristol, but it affects the whole of Wales because health care is becoming a more specialised matter. In an area of 3 million people, we will not have all the specialists we would like, and that means that there will always be those who need to travel in order to get access to the best on offer.

[Albert Owen (Ynys Môn) (Lab)]

In his opening remarks, the hon. Gentleman talked about regional differences. Has he carried out in-depth research on the situation in England, where there are issues with different health boards not being able to fund certain operations and services? Many of my constituents get good access to some of the best specialist treatments in the Liverpool and Manchester areas; Gobowen is a third good example of this. I am not quite clear about how he arrived at his earlier conclusions.

--- Later in debate ---

[David T. C. Davies]

I do not know whether this will surprise the hon. Gentleman, but I have not carried out in-depth research into every single health board in the whole of England. [Interruption.] No sir, I have not. I do not have the time because I am seeing so many constituents who are trying to get these treatments in England, having looked over the border and seen much higher standards of service.

In Wales, 42% of patients wait over six weeks for diagnostic tests; in England, only 1.8% of patients do so. One in seven people in Wales is on a waiting list. People wait three months longer for hip or knee replacements in Wales than they do in England. People are twice as likely to die of a hospital infection in Wales as they are in England. That is an absolutely shocking set of statistics. No cancer drug programme is available in Wales, unlike in England. People have to wait longer for ambulances in Wales than they do in England. I do not need to go and research the details of every single health board in England because I already know that the standard of service is far higher in England. It is not just me saying that: it has come out in reports such as those by the National Audit Office and, recently, the Nuffield Trust.

[Owen Smith]

The hon. Gentleman is giving an interesting though not entirely factual speech. Does he accept that in respect of cancer waiting times, for example, in his area of Monmouthshire there is a more stringent target for patients starting treatment within 62 days, and a higher proportion of patients meet that target than in England? Further, given that he speaks of information in reports, would he care to reflect on the 10-year study by the Nuffield Trust that concluded only a few weeks ago that everything he has said is untrue—that no one country in Britain is steaming ahead and no one country is lagging behind?

[David T. C. Davies]

The hon. Gentleman ought to be aware that I was citing the Nuffield Trust when I gave the statistics saying, for example, that 42% of patients in Wales have to wait more than six weeks for diagnostic tests as opposed to 1.8% in England. Of course, diagnostic tests are very important in treating cancer.

When it comes to allocating the blame for this, I do not blame doctors and nurses, and it is something of a fallacy to suggest that any Government Member has done so. I blame the leadership of the NHS in Wales and the decisions that have been taken over a period of years by Ministers in the National Assembly for Wales. If we are going to offer some praise to Labour, I will offer it to the previous Labour Government, who pioneered in England some of the reforms that this coalition Government have built on. That Government were happy to bring the private sector into the health service in England.

I recently spoke to a doctor down in Newport who specialises in conducting tests for bowel cancer. He gets a lot of patients coming to him from England whose treatment is being paid for by the NHS. I suppose that it comes down to specialisation. This is what he does, he is good at it, and it is what he specialises in. He gets people in and out quickly and deals with them efficiently and at a cheaper rate than the NHS would be able to. He gets a lot of patients coming in from England, but none from Wales, because of the dogmatic resistance to any use whatsoever of the private sector.

I am often characterised as being a right-wing Conservative—I suppose I am, and I am quite happy with that—but I do not want a privatised NHS or people having to pay to use the NHS. However, as somebody who has had to use it myself on quite a few occasions, I have no problem whatsoever with whether my treatment comes from somebody employed by the state or by the private sector, as long as I am getting the highest possible standard of treatment. That is a common-sense view that most people would adopt.

[Owen Smith]

Does the hon. Gentleman think that his constituents should have a lesser standard of cancer care and a lower target, as they do over the border in the neighbouring English constituency, or does he think it is good that in Wales we have a higher standard and a higher set of targets?

[David T. C. Davies]

I absolutely think that my constituents deserve the highest standard of care possible. There is a very easy way for them to get that, and that is for them to be able to choose it.

[Alun Cairns]

Does my hon. Friend agree that the shadow Welsh Secretary is being somewhat selective in focusing on one element of cancer care? Once the patient has seen the consultant, there is a regular need for medication, and accessing cancer drugs in Wales is much more difficult than in England because Wales does not have the cancer drugs fund. When we are considering cancer care, we need to look at the whole package rather than just one small element.

[David T. C. Davies]

My hon. Friend is absolutely right. Labour Members, or at least their colleagues in the National Assembly for Wales, are incredibly reluctant to deal with the issues and go into the detail in the same way as my hon. Friend. We have seen that in the decision of the Assembly’s Health and Social Care Committee to start taking votes on which witnesses they are prepared to listen to and which they are not. As somebody who has chaired a Select Committee for a number of years, I have heard witnesses give all sorts of evidence. I have often sat through whole inquiries in which I have disagreed with virtually every single word of evidence I have heard, but I never try to prevent people from coming in, because I believe that if people have something to say, we should welcome them, and that if I happen to have a different view, I can put it to them and challenge them on the facts. I have never heard of anything as outrageous as a Select Committee, which is supposed to operate in a non-political fashion, taking votes to bar people from giving evidence. That is absolutely disgraceful behaviour.

That is also reflected in the behaviour of some Assembly Ministers, who, rather than make the arguments the hon. Member for Pontypridd (Owen Smith) is trying to make, decry anyone who criticises the NHS as being anti-Welsh. There is nothing anti-Welsh about Members of Parliament for Welsh constituencies trying to demand the best possible health care for their constituents. I also thoroughly welcome the support I have received from the Prime Minister and the Health Secretary, who have rightly spoken out about this issue because they believe it is wrong and disgraceful that people in one part of the United Kingdom receive health care that is so much worse than that received by people in another part of the United Kingdom.

[Owen Smith]

I am grateful to the hon. Gentleman for giving way; he is being very generous with his time. Would he care to dissociate himself from the Prime Minister’s recent ludicrous description of Offa’s Dyke as a

“line between life and death”?

In the light of the Nuffield Trust report, which suggested that that is absolute nonsense, will the hon. Gentleman dissociate himself from those remarks or will he continue to scaremonger, just as the Prime Minister has done?

[David T. C. Davies]

When people are twice as likely to die of a hospital infection in Wales than they are in England, I am very happy to associate myself with every single word the Prime Minister says and I hope he will continue to draw attention to the shambolic level of health care we are putting up with in Wales.

[Owen Smith]

rose—

[David T. C. Davies]

I will give way one more time, because I am not afraid to have the debate, unlike members of the Health and Social Care Committee in the Welsh Assembly.

[Owen Smith]

Excellent. I am grateful that the hon. Gentleman wants to trade facts. Would he like to commend the National Assembly for Wales for the fact that, on cancer and all the major tumour types, the rate of improvement for one and five-year survival times in Wales has been better than that in England?

[David T. C. Davies]

If the shadow Secretary of State is so confident that things are good in Wales, he will have no problem backing my amendment, because it is very simple. It would mean that any patient in Wales would have the right to seek treatment in England, with the cost of their treatment being deducted from the block grant of the National Assembly for Wales. Similarly, any patient from England who fancied waiting twice as long as their neighbours could seek treatment in Wales and the money could be added to the block grant. This is not about taking powers away from the Welsh Assembly; it is about giving the Welsh Assembly an opportunity to show how confident it really is in the standards of national health care it is delivering. If the hon. Gentleman is so convinced that his colleagues in the Assembly are doing a good job, he will have no problem at all supporting my amendment. It would not result in a problem, would it? There would be no cut in the block grant, because in the hon. Gentleman’s world nobody would try to leave Wales in order to seek treatment in England.

We all know that the reality is that hundreds, even thousands, of people who are currently patients in Wales want to be treated in England. Is it not a disgrace that Mark Drakeford, the Health Minister, is trying to skew the facts by saying, “Well, there are hundreds of people in England receiving treatment in Wales”? There are, but they do not want to have their treatment in Wales. They have set up an action group to demand the right to be repatriated to England, and I am sure my hon. Friend the Member for Forest of Dean (Mr Harper) will address that.

[Owen Smith]

rose—

[David T. C. Davies]

I have given way enough times. I look forward to my amendment receiving the support of Labour Members. It is about creating competition between health services and I do not think there is anything wrong with that. It is about delivering patient choice and, most importantly, it is about recreating a national health service. The Conservative and Unionist party will also be the party of the national health service—the truly national British health service—at the next election, and I look forward to the support of Labour Members.

[Mr Llwyd]

I wish to speak to my new clauses 1 and 10, which are in this group. I was discomfited by what the hon. Member for Monmouth (David T. C. Davies) said, because, to be honest, he was running Wales down. Thousands and thousands of people who work in the NHS in Wales are doing their best at every single level, from the orthopaedic surgeons to those who clean the wards. There are problems, but there are problems in England as well. I was treated in Gobowen recently, not because I was given preferential treatment, but because the Bala practice happens to refer people to Gobowen for certain orthopaedic problems. I was dealt with promptly and well, and I have nothing but respect for those on that side of the border, as well as for those on our side of the border, which is the point on which the hon. Gentleman is lacking.

[David T. C. Davies]

I made it very clear in my speech that my criticisms are directed entirely at the leadership of the NHS in Wales and the National Assembly for Wales, not at the doctors and nurses who operate that service. I am happy to put that on record again. With all due respect, the right hon. Gentleman’s party has been very critical of the way in which the NHS has been run in Wales. I hope he is not going to fall into the trap—this is, frankly, the attitude of tyrants—of suggesting that any criticism of something is actually an attack on one’s nation. That is not the case at all and it is a dangerous criticism for him to make.

[Mr Llwyd]

I have not been uncritical; it is just that I was taken aback by the vehemence of the hon. Gentleman’s speech. I thought he was talking Wales down—that is my point. Everything is not perfect and I do not pretend it is—only a fool would say as much—but it is not half as bad as the hon. Gentleman alleges.

--- Later in debate ---

[Guto Bebb]

The right hon. Gentleman makes an important point. When somebody tells me a good news story about the NHS in Wales at a public meeting or an event in my constituency, I am the first to applaud. It is important that we highlight success and great performance when it happens in the NHS in Wales. Unfortunately, I get complaints about the service that people have received in Wales far too regularly. Only three weeks ago, I heard from an individual who suffered from prostate cancer. He had an assessment in Wales that said that he did not have cancer. He was suspicious and booked a private appointment in London. Within 12 hours, he was operated on. He is of the view that the decision to go private saved his life. Is it not disgraceful that a patient in Wales has to have the means to go private to ensure that they get the correct diagnosis?

[David T. C. Davies]

I thank my hon. Friend for giving way and allowing me to put it on the record for the third time that I am criticising not the doctors and nurses in Wales, but the policies of the Labour-run Welsh Assembly Government that are making it difficult for people to see those doctors and nurses quickly enough. That is the problem.

[Guto Bebb]

I accept that point.

I will conclude my remarks because I wanted to be brief and my hon. Friend the Member for Monmouth has highlighted the main issues. The key issue is that our amendments in no way threaten the Welsh NHS if it is a beacon of success, as is claimed by the Opposition parties. If the good practice that I see on a regular basis in the health service in north Wales is replicated across Wales, the amendments should not strike fear into anybody.

I come back to the individual I saw on Saturday morning while I was out canvassing. As the right hon. Member for Dwyfor Meirionnydd will be aware, a significant portion of my constituents have retired to north Wales to live. They often have family members in the north-west of England. Is it not unfortunate that somebody who is facing a significant operation cannot choose to be treated at a hospital near their family? Medical records show clearly that being in close proximity to one’s family, having the support of one’s family and having a daily visit are often the difference between a quick recovery and a long, drawn-out recovery. However, that choice is not available to patients in Wales simply because they live in Wales.

The amendments are a vote of confidence in a national health service. All parties who claim to support the national health service should support them.

--- Later in debate ---

[Paul Flynn]

What is entirely novel in the debate on health, which I have never experienced in my 28 years in this House, is for Wales and the Welsh health service to be used as a political football to kick around to save the skins of Tory MPs and fulfil the ambitions of Lynton Crosby. He is the one who is using the issue not to make legitimate complaints—it is right that hon. Members raise legitimate complaints, as they always have—but for something entirely fresh. At every Prime Minister’s questions, when the attention of the whole nation is on this place, questions are distributed to Welsh Tory MPs, and to non-Welsh MPs who do not know the places they are talking about, that criticise the Welsh health service and create the impression that it is a poor, second-class service. This is a malicious deception: it is not true.

There is a lot wrong with the health service in every part of these islands. There are weaknesses and everyone can provide examples of particular cases, but what is the effect when the impression is given, week after week, example after example, that the Welsh health service is rubbish? What does that do to someone waiting for an operation or treatment to be told, again and again, that the service they are getting is second class? A big part of the healing process is confidence. If confidence is destroyed, that damages the health of the nation on a very deep level. What happens to the people working in the health service who do marvellous but thankless jobs—the jobs we turn up our noses at—when they come home and watch the television at night? There is a hallelujah chorus of Tory MPs saying that the service is bad, not good.

[David T. C. Davies]

Will the hon. Gentleman give way?

[Paul Flynn]

I will not give way. I will speak for only a very short time.

At the Conservative party conference in Wales, the Secretary of State for Wales, Assembly Members, the Secretary of State for Health and the Prime Minister lined up to talk about one subject: undermining the Welsh health service. It is, rightly, called the war on Wales. The damage that that does is enormous, and it is done to the whole reputation of Wales. That is not just happening in Wales; it is happening throughout the United Kingdom. This is how the Tories believe they are going to claw their way back to power, but I have news for them. There are now two Tory parties in Wales: the Joneses and the Farageists. The people will have a choice of which bit of bigotry they want to vote for next time. That will cut the reactionary vote in Wales in half and very few Welsh Tory MPs will be back here. When the Prime Minister says, from his lofty position, that there is a line between life and death at Offa’s Dyke, it will not be forgotten and it will never be forgiven.

--- Later in debate ---

[Mr Jones]

No, I will not. The hon. Gentleman can listen.

Crucially, it is also both alarming and worrying for people in Wales who need to use those services.

The Welsh Labour Government in Cardiff are not only failing thousands of patients in Wales, but failing hard-working professionals who are every bit as competent and dedicated as those in any other part of the country. It is in that context that we are debating the amendments tabled by my hon. Friends the Member for Monmouth and for Aberconwy.

[David T. C. Davies]

I entirely support what my right hon. Friend has just said. I have just received a long e-mail. I shall forward it to my right hon. Friend, but one sentence says it all:

“I run a local veterinary hospital and I am ashamed to admit that the animals under my care are treated more promptly and effectively than the people in Monmouthshire.”

The lady who sent that e-mail made it quite clear that she was criticising not the doctors or nurses, but the system created by Labour Members.

[Mr Jones]

I am grateful to my hon. Friend for that intervention.

Amendments 12, 13 and 14 seek to shine a light on the organisation and funding of cross-border health services—services provided in England to patients living in Wales and vice versa. I shall not dwell on the intended legislative effects of these amendments, but rather on the intentions behind them. I know this is an issue of real importance to many Members who have spoken this evening, and I would like to reassure the Committee that I share the concerns about the operation of the current system.

My hon. Friend the Member for Forest of Dean has also spoken to his amendments 17 and 18, which would require both the Secretary of State and the Welsh Ministers to include in their annual reports on the implementation of the Bill’s financial provisions details on the costs and effectiveness of cross-border services. His proposed new clause 3, which reflects concerns he has expressed over many months to me and my right hon. Friend the Secretary of State for Health, would require the Welsh Ministers to consider the impact of their decisions on the provision of health services to people who live in England but who are registered with Welsh GPs.

Current funding arrangements are set out in the protocol for cross-border health care. I entirely agree that there is concern about the practicality and deliverability of these arrangements as they operate on the ground. Everyone should receive the best possible health care regardless of where they live or where their GP is registered. As we have heard, health services in Wales are falling short in many respects of the standards we expect. That is a matter for the Assembly, and in particular the Welsh Government, urgently to address.

The Welsh Government’s policy of referring patients registered with Welsh GPs for treatment in Wales only created more difficulties for English patients, such as the constituents of my hon. Friend, who are registered with Welsh GPs. I am pleased, however, that following discussions between the Wales Office and the Welsh Government some local health boards in Wales have reviewed this policy and have exempted English residents. I know this falls short of patient choice, but it is at least a step in the right direction.

Improving the cross-border protocol is the responsibility of both the Welsh and the United Kingdom Governments and I can assure the House that this Government are determined to tackle the protocol shortcomings and ensure better cross-border health services. It is only right that we ensure that the health care of people living close to the border does not suffer merely because of where they happen to live. It is in this mechanism that the greatest potential for real change lies, and that is why we are reviewing it to ensure it really does meet the needs of people on both sides of the border. Work is under way, led by the—

[The Temporary Chair (Mr David Crausby)]

The Minister is addressing the clauses. It is up to him what he says in his speech.

[David T. C. Davies]

Further to that point of order, Mr Crausby. Given that Labour Members of the National Assembly for Wales’s health Committee are refusing to hear this evidence and are refusing to hear from important witnesses, is it not absolutely right that my right hon. Friend the Secretary of State should continue to raise the issue of the scandalous standards of care in the NHS in Wales?

[The Temporary Chair]

As long as—[Interruption.] Order. As long as the Minister is talking to the amendments, he can say what he likes.

--- Later in debate ---

[Mr Jones]

Well, I can only reiterate the point which I thought the right hon. Gentleman had accepted: that our priority is to address the deficit we inherited from the Labour party at the last election. Nevertheless, the next review is expected to take place in advance of a spending review in 2015 and it is likely to be around the time when this new clause suggests the report should be published. These arrangements ensure that we have a shared understanding of funding levels in Wales, and a process is in place to consider options should further convergence be forecast to resume. It therefore provides a firm basis for proceeding with the new financial powers in the Wales Bill, and I hope that the Plaid Cymru Members will therefore not press new clause 1 to a vote. I also ask hon. Members to support clauses 21 and 22 standing part of the Bill and to support amendment 29.

[David T. C. Davies]

Given what I have heard today, I am perfectly happy for now to withdraw the amendment. I look forward to working with the Secretary of State for Wales and the relevant Welsh Assembly Minister in drawing further attention to this issue in Wales and to returning to it on Report. I therefore beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Amendment made: 29, in clause 21, page 23, line 32, at end insert—

‘() in sub-paragraph (2), after paragraph (a) insert—

“(aa) section 119 in so far as it relates to estimated payments for a financial year into the Welsh Consolidated Fund or to the Welsh Ministers, the First Minister or the Counsel General;”;’.—(Mr David Jones.)

This amendment ensures that the Assembly is not prevented from modifying section 119 of GOWA 2006 (statement of estimated payments) provided such modification relates to the estimated payments described in the amendment and not to the Secretary of State’s duty in subsection (3) of that section.

Clause 21, as amended, ordered to stand part of the Bill.

Clause 22 ordered to stand part of the Bill.

New Clause 1

Review of options for Barnett formula reform

‘(1) The Secretary of State shall make arrangements for a review of options for reforming the Barnett formula in order to meet the objective of calculating the block grant funding for Wales on the basis of need.

(2) The Secretary of State shall lay a copy of the report of the review mentioned in subsection (1) before each House of Parliament within six months of this Act receiving Royal Assent.’.—(Mr Llwyd.)

Brought up, and read the First time.

Question put, That the clause be read a Second time.

Wales Bill

David T C Davies Excerpts

Wednesday 30th April 2014 Commons Chamber

[David T. C. Davies (Monmouth) (Con)]

The hon. Gentleman just said that this change would benefit the smaller parties. Does he therefore think that not changing it would be beneficial to the largest party, and is he not also conflicted by an interest in this issue?

[Owen Smith]

I am merely quoting from the Government’s own impact assessment, which clearly states that this is for the benefit of the smaller parties in Wales, among which we count the Conservative party.

Public attitudes to this issue are relatively clear and there have been several reports. Most importantly, the Bevan Foundation—which is non-aligned although splendidly named after my great hero—conducted an analysis and a large survey to consider all these issues. It found that

“dual candidacy was unfair compared with those who felt candidates should be free to stand in both.”

As a reference to the detail included in that survey, I quote a respondent from Llanelli who asked:

“How can it be right that you vote one way and then the person who loses can still find a way to get elected?”

Someone from Swansea East said:

“I think it is unfair … It’s like people can sneak in the back door.”

and another said:

“It does seem unfair in a way, surely if they weren’t popular enough they shouldn’t be able to get in.”

Another respondent said:

“I don’t think some should have the added advantage of standing in both—it seems unfair really.”

and someone else from Llanelli said:

“You don’t have two bites of the cherry.”

--- Later in debate ---

[Albert Owen]

I thank my hon. Friend the Member for Rhondda (Chris Bryant) for his intervention. The hon. Member for Cardiff North (Jonathan Evans) is shouting across the Floor that that is our system. We have changed the system. He was not here in that Parliament, but we changed it, and we changed it on the basis—this is important and has not been mentioned thus far—that in our 2005 manifesto we said we would bring in the restriction. We won the most seats in that election in Wales, and we had the biggest share of the vote in that election in Wales. I do not see many people knocking on the doors of constituency Members of Parliament saying they want to reverse that ban.

[David T. C. Davies]

Does the hon. Gentleman accept that if his amendment stands tonight, his party will benefit electorally from it? How does he ensure that that is not the reason that he is making these points today?

[Albert Owen]

I do not believe there is an amendment, but we shall oppose clause stand part. The hon. Gentleman made the same point in an earlier intervention. As things stand, there will be no electoral benefit for the Labour party. The results and the evidence, and the psephology that comes with them, show that there has been no benefit to Labour since we introduced the restriction.

The question that the hon. Gentleman should be asking is why are we having this debate now? The Silk commission itself—we are having government by commissions—did not make this proposal. I am ready to be corrected by Ministers, but I do not think it was in their manifesto to reverse the ban. If I am wrong, I will take an intervention, but I do not think I am. [Interruption.] Someone says it was, but I do not know. Does the Secretary of State want to intervene to clarify the position? Was it in his party manifesto in 2010 to reverse the ban: yes or no?

[David T. C. Davies]

I will intervene. First, I apologise: obviously it is not an amendment, but the hon. Gentleman will take the point.

Secondly, no, it probably was not in our manifesto, but the point is that no one would have noticed whether it was or was not. The hon. Gentleman’s party has won a few elections and lost a few over the past 15 years, but nobody voted for or against the Labour party or any other on the basis of what they were going to do about the voting system for the Welsh Assembly.

[Albert Owen]

There is a serious point to make about manifestos. In 1999, we introduced a scheme that has seen some abuse by candidates who, when they faced the electorate, were rejected—comprehensively in many cases, coming third or fourth for the seat—but got in on the list. That is why we put the measure in our 2005 manifesto and implemented it. It was this Parliament—the hon. Gentleman might mock manifestos, but I am sure he does he does not mock the will of this Parliament—that said we should bring in the restriction, and there is no mandate to reverse that. That is my point: none of the parties put it in its manifesto, and when the Government went out to consultation on the question, the majority of those who bothered to respond wanted the ban to remain. There is absolutely no mandate for the clause at this time. The Committee should consider that point.

--- Later in debate ---

[Susan Elan Jones]

It is a pleasure to serve under your chairmanship, Mr Chope, and to follow my right hon. Friend the Member for Torfaen (Paul Murphy) and other Members in this important debate. My mind is going back to the early hours of 2 May 1997, when a new day had dawned. There were not too many of us who had noticed that new day, because I am not talking about Labour gaining Monmouth, or Enfield, Southgate or Hove; I am talking about Surrey Heath, where the local party wanted a keen and—as was then the case—relatively young Labour candidate to fly the flag. It found one—me.

A new day really had dawned, because we had gained 11,511 votes, which was 21% of the vote. Never had that been achieved before, I thought. I felt an immense sense of victory. The campaign had had a few strange moments. There was the time I told people how important it was to have a new and reforming Labour Government who would bring in devolution. People looked at me and said, “Your campaign doesn’t belong in Surrey.” There was the time I told people that a new Labour Government would ban handguns, and they showed me their membership cards for Bisley gun club. Then there was the time I said that the Labour Government would introduce a national minimum wage. They used a few expletives and explained that they certainly did not intend to pay it to their employees.

It was not the greatest of campaigns. More to the point, after I had realised that I had won 21% of the vote, I realised that I had lost 79%. Let us, though, imagine the scenario if things had been different. Let us imagine that there had been a regional list on which I could have stood, and lo and behold, on that great heyday of the Labour party, much to the annoyance of the 79% of people who had not voted for me, suddenly, miraculously, I reappeared as No. 1 on the list in Surrey. I could have been the Member for Bisley or the Member for Chobham. The right hon. Member for Surrey Heath (Michael Gove) would no doubt have been quaking in his boots at the concept of this Welsh misfit down in the suburbs. That shows how ridiculous dual candidacy is.

[David T. C. Davies]

The hon. Lady is making a good point, which is basically that PR is not a good electoral system, and I agree. However, it was her and her colleagues who agreed to a PR system for the Welsh Assembly so that they could get the thing through with the support of the Liberal Democrats and Plaid Cymru, who would not have supported it if it was first past the post. They created this system and they are going to have to live with it. They cannot start wanting changes just because it does not suit them 10 or 15 years later.

[Susan Elan Jones]

If the hon. Gentleman looked back at the history, he would find that many people in the Labour party, including me, my hon. Friend the Member for Newport West (Paul Flynn) and many others, supported that pluralistic system, and I still do. People talk about this in terms of partisan analysis, but we have to remember that we too, as a party, have list Members in Mid Wales and West Wales.

I am pleased that people in constituencies who feel that every time they go out to vote in a Westminster election or a constituency election for the Assembly, their candidate is not going to get in, can now feel that, yes, their vote is going to matter. I appreciate that there has to be a balance in terms of constituency representation in a region, but this remains important. We could have put, say, the candidates who stood and lost in the Pembrokeshire seats on a list. There is no partisan advantage for us, but there is a basic issue of fairness. This cannot be a two-way bet.