Wales Bill
Nia Griffith Excerpts(12 years ago)
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Mr Harper
As I thought, we have competing anecdotes. I suspect that my right hon. Friend, particularly as she describes the more modest circumstances in which she travelled across Wales, was rather closer to the people, so I put more weight on what she says.
Before that constitutional interlude, I was referring to the fact that my right hon. Friend the Secretary of State has taken a lot of care with this Bill. I want to put on the record my appreciation for the Welsh Affairs Committee’s excellent pre-legislative scrutiny report. The Government have obviously taken the trouble to respond to it and, as the Secretary of State said in his written ministerial statement, have accepted most of its recommendations. I think that was an excellent job. Doing pre-legislative scrutiny on a constitutional Bill is very sensible and likely to lead to a more accurate position.
Nia Griffith (Llanelli) (Lab)
I wonder whether the hon. Gentleman, who is so keen to praise the Committee’s report, agrees with its statement that
“as a point of principle, we consider it unadvisable for electoral systems to be changed frequently. Successive changes to electoral systems risk being perceived as partisan by the public.”
That is precisely on the point of dual candidacy. In other words, the Committee is saying, “Let’s keep the status quo.” Does he agree with that?
Mr Harper
No. I read the Committee’s report very carefully, and it did not say that we should keep the status quo at all; it said what the hon. Lady just read out. All that the Secretary of State’s proposals will do is return the system to the position that existed before the Labour party changed it in the Government of Wales Act 2006. All that we are doing is reversing it and putting it back to the original position. I read the report carefully and I am sure, knowing how Select Committees work—its Chair confirmed that it was quite hard to get agreement—that those words were chosen very carefully, and it absolutely did not say that we should stick with the status quo. My guess is that if someone had suggested that it said that, it would not have received cross-party agreement.
Nia Griffith (Llanelli) (Lab)
We have had a good discussion on the Wales Bill, and a wide range of views have been expressed. We will broadly support the Bill, although we will table amendments in Committee. I put on the record straight off that we disagree with the clause on dual candidacy.
We heard from the right hon. Member for Chesham and Amersham (Mrs Gillan), a former Secretary of State for Wales. She welcomed the Bill and the cross-party participation on the Silk commission. However, she was the only person who regretted that the Bill did not include a clause to reduce the number of MPs in Wales and she felt strongly that there should be no reform of the Barnett formula until the deficit had been brought down—quite what she meant by that, we are not absolutely sure.
The hon. Member for Monmouth (David T. C. Davies), in characteristic form, told us that he saw the Bill as part of a relentless devolution of powers to Wales and likened it to sleepwalking to independence. However, he expressed his support for a federal system. He told us that he would vote and campaign for no in any referendum, although he did rather like the idea of borrowing powers, especially if they led to a relief road for the M4.
We then heard from the hon. Member for Forest of Dean (Mr Harper), who, when he had finished smearing Labour in Wales, got down to the point—
Mr Harper
I am sorry, but the only comment I made about the NHS in Wales was about mortality statistics, and I was quoting exactly the right hon. Member for Cynon Valley (Ann Clwyd). If quoting her is smearing, I plead guilty, but I do not think I was doing that; I was raising legitimate concerns on behalf of my constituents.
Nia Griffith
Indeed. Perhaps I will move on then. The hon. Gentleman also said that he wanted road bridges to be built with money raised from the Severn road bridge; again, we wonder quite where he is going with that one.
Returning to the Bill, the hon. Gentleman raised valid points about the devolution of stamp duty and land being divided, and referred to confusion between people with certain postcodes whereby, for example, somebody with a Newport postcode ends up, in effect, being put in Wales when in fact they are in England. He also mentioned the complexities of payroll for small businesses in the event of devolution of income tax. I think he is really saying that there needs to be a very thorough impact assessment on all these issues, and we would certainly call for that.
The hon. Member for Brecon and Radnorshire (Roger Williams) emphasised the benefits of holding elections on separate days to avoid confusion, although not all Members agreed. He reiterated his support for the reserved powers model of devolution whereby the assumption should be that the National Assembly for Wales has powers in the devolved areas of responsibility unless otherwise specified.
The hon. Member for Carmarthen West and South Pembrokeshire (Simon Hart) said that it is difficult to find anybody in his patch who is interested in more devolution, so perhaps he spends more time in South Pembrokeshire than in west Carmarthenshire. He agreed with the hon. Member for Monmouth about devolution creep. He also noted his disagreement with the academics who are calling for more Assembly Members.
The hon. Member for Aberconwy (Guto Bebb) found himself agreeing with my hon. Friend the Member for Rhondda (Chris Bryant)—that must be a first—on the idea that if anyone changes the term of a Government, it is always to increase it rather than decrease it, and he was sceptical about the need for an increase to five years.
The hon. Member for Arfon (Hywel Williams), speaking on behalf of Plaid Cymru, expressed severe disappointment that the Bill did not fully reflect the Silk commission recommendations. He described the thorough scrutiny of the draft Bill by the Welsh Affairs Committee and explained the potential difficulties in enthusing the electorate about a referendum on tax. He mentioned the Barnett formula and the need for funding reform and told us that Plaid Cymru would table an amendment to allow for devolution of income tax without a referendum.
The hon. Member for Ceredigion (Mr Williams) reminded us that he is a strong supporter of localism and firmly believes that decisions made should be linked with any money raised. He wants to see a positive impact in terms of working together for a referendum. He compared the very thorough scrutiny of the draft Bill with the complete lack of scrutiny of the transparency of lobbying Bill before it came to this House.
My hon. Friend the Member for Swansea East (Mrs James) talked about borrowing and expressed concern about the unfairness to Wales in contrast with Scotland, where it is calculated as 10% of capital budget rather than being contingent on the devolution of taxes.
My right hon. Friend the Member for Neath (Mr Hain) spoke very eloquently about banning dual candidacy, quoting Lord Richard’s evidence to the Welsh Affairs Committee. He reminded the House of the very considerable, bare-faced abuse of the list system and quoted the leaked memorandum from Leanne Wood, the leader of Plaid Cymru, in which she gives explicit instructions to her party’s list Assembly Members to direct their time and resources—paid for by the taxpayer, Mr Deputy Speaker—to Plaid Cymru’s target seats. He also emphasised the need for shared risk on taxation and making sure that Wales does not in any way miss out if income tax powers are devolved.
My hon. Friend the Member for Caerphilly (Wayne David) expressed disappointment that the Bill falls short of fully reflecting what was in the Silk commission report. He also gave contemporary examples of how the list system is being abused, with list Members neglecting much of their area in order to focus almost exclusively on one part of it, with a view to standing for that constituency—exactly following the advice of the Plaid Cymru leader, Leanne Wood, to ignore constituents’ problems and focus solely on what will bring electoral advantage.
My hon. Friend the Member for Islwyn (Chris Evans) reminded us that people have a lot of concerns, and do not have only constitutional issues on their minds. Again, he was concerned about the large number of people living within easy commuting distance of the border and the effects that any change in tax rates could have on either side of the border. He called for a thorough impact assessment.
My hon. Friend the Member for Ynys Môn (Albert Owen), who is a fervent devolutionist but is not for devolution as a route to independence, said it was vital to work with people and to have a referendum on all important decisions.
My hon. Friend the Member for Swansea West (Geraint Davies) referred to the current dispute about railway funding, saying that it was a good example of his worries that weasel words might mean giving with one hand but taking away with the other. He also said that we should look carefully at what exactly the intentions behind the Bill are.
I turn now to some of the more mundane issues dealt with by the Bill. We very much welcome the devolution of the land taxes—stamp duty and landfill tax. They will provide an independent income stream against which the Welsh Government can borrow. We hope that the devolution of those taxes can take place as soon as possible and that the process will not be subject to any unnecessary delays. We understand the logic of the time scale but we urge that it should not be allowed to slip.
We welcome the borrowing powers that the Bill will legislate for, not least because this Tory-led Government have cut the Welsh budget by 10% over the course of this Parliament and have reduced the Welsh Government’s capital budget by nearly a third. Borrowing powers will enable the Welsh Government to invest in vital infrastructure projects to help boost economic development.
Jonathan Edwards
The Labour party continually attack the UK Government—and rightly so—for their huge cuts to capital expenditure in Wales, but the Government are following the exact budget lines set by the previous Chancellor of the Exchequer before the 2010 election. The Labour party set a path to cut capital budgets in Wales by 40%. That is what the UK Government have delivered.
Nia Griffith
The hon. Gentleman knows full well that the Opposition have very different priorities from the Government in the way that we deal with budgets and decide what our priorities are. Quite frankly, I think that he needs to do a bit more homework before he begins to make these suggestions.
I turn now to income tax. The Opposition do not accept that there is no accountability without the devolution of income tax. The National Assembly for Wales and the Welsh Government are accountable through elections, and Welsh Ministers are subject to the usual scrutiny procedures. Let us look at councils: more of a council’s budget comes through the block grant than from council tax, but nobody says that councils cannot borrow and that council borrowing has to be contingent on further devolution of some income tax powers.
None the less, we accept that the Welsh Government are slightly anomalous in not having the power to raise revenue. The devolution of a number of minor taxes will rectify that anomaly. It should be noted that in their evidence to the Silk commission the Welsh Labour Government did not actually seek the power to vary income tax. However, since the publication of the Silk commission report we have said that we support the recommendation to give Wales the power partially to vary income tax, contingent on a triple lock. That consists of fair funding, agreed by the Welsh and UK Governments; the power being subject to a referendum; and the power being in the long-term interests of Wales—that is to say that it should tested during a period of assignment.
We would like the Secretary of State to give further details on the period of assignment and to provide reassurances about the ability of HMRC to monitor a Welsh rate of income tax. We believe that further examination is needed of the impact of tax competition arising from different rates of income tax on either side of the border. We want to ensure that that looks at the behavioural aspects of what might happen if income tax rates vary on either side of the border.
Turning to the constitutional issues, we believe that the question of five-year terms is a matter for the Assembly. It may not be practical to table an amendment to that effect, but we want to put on record our belief that it should be something for the Assembly to decide.
On double-jobbing, we are very clear that we do not think that an individual should be an MP and an AM at the same time. It is not practical or fair to the electorate and we certainly support the ban in the Bill.
A number of my hon. Friends have referred to dual candidacy and I want to focus on one aspect of it, namely that the impact assessment notes that more people find it confusing and dislike it than those who favour it, and that smaller parties need the system because they are struggling to find candidates. It is pathetic that some of the smaller parties are finding it difficult to find candidates of the right quality. They should be asking themselves why it is that they cannot find anyone. Is the Liberal Democrats’ problem that no young person wants to knock on doors and explain why the Liberal Democrats propped up the Tories to put up student fees to £9,000 in England while in Wales the Labour Welsh Government pegged fees at £3,500? I cannot see any young person wanting to stand for the Lib Dems. Will young people want to stand for Plaid Cymru when they are worried that they might be told, “If you haven’t got two parents who were born in Wales, you can’t represent Wales”?
Nia Griffith
Well, that is the sort of thing we have heard Plaid Cymru say about whether the captain of the Welsh rugby team should be captain or not. [Interruption.] Plaid Cymru Members can shout and protest all they like, but that is what they said only three weeks ago.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. I think the hon. Members for Arfon (Hywel Williams) and for Carmarthen East and Dinefwr (Jonathan Edwards) need to calm down a little. In fairness, everybody has been able to put their point of view. I am sorry they do not accept what the shadow Minister is saying, but they cannot shout from the Benches in that way.
Nia Griffith
I am not sure how the Conservative party will find people to stand for it when many of its Members are simply rubbishing Wales in order to further their electoral interests in England. It may be very difficult for the Conservatives to find people, but if they can they should not try to overturn the ban on the dual candidacy. That is the whole point, is it not?
Mr Deputy Speaker
Don’t bring me into this! I certainly did not say that. It is up to the shadow Minister whether she wishes to give way, not the advice from the Chair.
Nia Griffith
In that case, Plaid Cymru Members have had one intervention already and I think that is enough, especially as they have had a long time today to raise different issues.
We in Llanelli felt let down by the abuse of the dual candidacy system. It was like having a massive cuckoo sitting in a nest in which it did not belong, neglecting all the other constituencies and focusing solely on one, whereas the proper role of a list Assembly Member is to look at broader issues, as Joyce Watson is doing with human trafficking and Rebecca Evans with disability.
We are strongly opposed to clause 2, which would reverse the ban on dual candidacy. Apart from that, we are generally in favour of the Bill and welcome it. I will table amendments in Committee and we will oppose dual candidacy, but all in all we are in favour of the Bill.
Oral Answers to Questions
Nia Griffith Excerpts(13 years, 9 months ago)
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Mrs Gillan
There is huge concern among the businesses that I have talked to about any prospect of changes in the corporation tax rate across the border between England and Wales. As my hon. Friend will know, that relates to the purpose of the Silk commission, which I established and which is looking particularly at the areas of taxation and accountability. I hope that it will report later this year and we will be able to see its recommendations.
Nia Griffith (Llanelli) (Lab)
Hard-pressed households across Wales will certainly welcome the Chancellor’s latest U-turn on the proposed August increase in fuel duty, but with Office for National Statistics figures today showing that borrowing is rocketing because this Government have created a double-dip recession, will the Secretary of State speak up for struggling businesses in Wales and the 130,000 people still looking for work, and ask the Chancellor to do a U-turn on his economic plans?
Mrs Gillan
I welcome the new Opposition Front-Bench team. I also pay tribute to the right hon. Member for Neath (Mr Hain), who stepped down from the Front Bench last month and will be greatly missed. I welcomed the hon. Member for Pontypridd (Owen Smith), the shadow Secretary of State, during the Welsh Grand Committee, but I would like to do so again.
I say to the hon. Member for Llanelli (Nia Griffith) that, in addition to the support we have already announced, the decision that has been made to cut the fuel duty and scrap the previous Government’s fuel duty escalator, thus ensuring that fuel duty is frozen for 21 months, will help businesses and families in Wales. I am very surprised that she did not rise to the Dispatch Box to welcome that.
Oral Answers to Questions
Nia Griffith Excerpts(13 years, 11 months ago)
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Mrs Gillan
As the right hon. Lady knows, I have constant discussions with the First Minister and the Welsh Government, as does the Under-Secretary. We have certainly discussed the links and there has been some discussion of Cardiff airport. I am pleased to say that I have invited the owners of the airport to meet me shortly, because I have been concerned about some of the reports I have heard in the press. We should be trying to talk Cardiff airport up, not down.
Nia Griffith (Llanelli) (Lab)
I certainly welcome the announcement by the Labour Welsh Government that Tata Steel will invest £800 million in Wales, but as the Secretary of State will know Tata bosses have repeatedly said that the prices they have to pay for energy in the UK are simply not competitive when compared with what industry pays elsewhere. What discussions has she had with the Energy Secretary and energy companies to secure a better deal on energy prices for heavy industry to provide an incentive for companies such as Tata to invest in Wales?
Mrs Gillan
One of the first things I did when I was appointed was visit Tata Steel, and I took the Business Secretary, Vince Cable, with me to discuss energy prices. The hon. Lady should know that all the Departments have been focused on the energy-intensive industries because we want to ensure that there are good manufacturing jobs in the future, not just in Wales but elsewhere in the UK. I have read the press release from the Welsh Government and the First Minister and he says that he was told at a meeting in India that £800 million has been approved over the next five years for investment in Tata Steel in Wales. I look forward to seeing the detail, because it seems to be a general announcement at this stage without too much detail attached to it.
Welsh Affairs
Nia Griffith Excerpts(14 years, 1 month ago)
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Mr Llwyd
No; quite the opposite. The whole point of the Development Board for Rural Wales was to assist existing businesses as much as to set up new ones. I remember going to help people and being told, “The bank says I have to borrow a minimum of £20,000, but I only need £10,000 to expand my business.” The board stepped in, and a solution was found in a matter of days. It was an excellent way of dealing with those things. That example related to an indigenous company that was hoping to expand, so no, I do not agree with the hon. Gentleman.
There is some truth in what the hon. Member for Monmouth said about university courses. At one stage, I was rather taken by a course in brewing at Strathclyde, but my father thought that a course in law at Aberystwyth would be preferable and he had the last word, so there we are. The brewing industry has probably lost someone who could have worked wonders. But I shall return to the serious matters.
The commission on devolution is chaired by Paul Silk, and it will report shortly. Everyone knows that it is to examine in two stages what further devolutionary steps could be taken. The first stage relates to fiscal powers. I note with great disappointment that the Labour party has apparently not submitted anything on fiscal powers to the Silk commission. I really cannot understand that. As I have said, I have the highest regard for the right hon. Member for Torfaen. He made the point about a very small minority being in favour of independence in the recent poll, but he did not mention the fact that 60% of those polled were in favour of fiscal powers being devolved to Wales. That is quite a large percentage, given the circumstances.
Nia Griffith (Llanelli) (Lab)
Sue Essex is the Labour party representative on that matter. Would the right hon. Gentleman accept that not making written submissions in advance gives her greater flexibility in the negotiations? Might not that be the way forward when trying to get four very different people to agree on something?
Nia Griffith (Llanelli) (Lab)
What a pleasure it is to see you here chairing the debate today, Mr Deputy Speaker, and sporting your daffodil. That is absolutely splendid. Before I begin, I should like to put on record the sincere apologies of the shadow Secretary of State, my right hon. Friend the Member for Neath (Mr Hain), who has constituency commitments today.
I should like to thank my right hon. Friend the Member for Torfaen (Paul Murphy), as well as the right hon. Member for Dwyfor Meirionnydd (Mr Llwyd) and the hon. Members for Montgomeryshire (Glyn Davies) and for Brecon and Radnorshire (Roger Williams) for making the case for a St David’s day debate to the Backbench Business Committee. I thank the Committee for agreeing to their request.
My right hon. Friend the Member for Torfaen opened the debate by emphasising the importance of Welsh MPs in Westminster, and the complexity of disentangling what constitutes an English matter. He also pointed out the fact that the UK Government’s Health and Social Care Bill could have major implications for the Barnett formula calculations and considerably reduce the Welsh budget. He referred to the importance of everyone, whatever their views, engaging in the discussion ensuing from the Scottish debate on independence.
The Chair of the Welsh Affairs Committee, the hon. Member for Monmouth (David T. C. Davies), focused on the Committee’s recent report on inward investment in Wales. The right hon. Member for Dwyfor Meirionnydd made the case for devolving taxation powers to the Welsh Government. The hon. Member for Cardiff North (Jonathan Evans) spoke of Wales’s sporting prowess and mentioned football governance. He managed to mention a school from his constituency—Whitchurch—as did the hon. Member for Carmarthen West and South Pembrokeshire (Simon Hart), who mentioned Whitland. My hon. Friend the Member for Ynys Môn (Albert Owen) then mentioned ysgol Bodedern. We certainly have something to be proud of in our schools in Wales.
My hon. Friend the Member for Swansea East (Mrs James) reminded us of the reality of everyday life for the many less well-off people across Wales who are being badly hit by changes to tax credits and welfare reform. I should like to place on record the fact that my right hon. Friend the Member for East Ham (Stephen Timms) has made the Labour position clear on these matters. It is that there have always been different levels for housing benefit according to regional factors, and it is that part that would vary regionally, not the disability element or any other part of the welfare reforms. My right hon. Friend made that quite clear in the media and at the Dispatch Box during the debate on those issues.
Nia Griffith
I will not give way.
The hon. Member for Brecon and Radnorshire spoke of the importance of small businesses in Wales, and my hon. Friend the Member for Vale of Clwyd (Chris Ruane) praised the benefits of mindfulness. The hon. Member for Carmarthen West and South Pembrokeshire reminded us of the beauty of Pembrokeshire, only to be upstaged immediately by my hon. Friend the Member for Ynys Môn. The hon. Gentleman also mentioned the contribution of local companies to the UK economy, which is extremely important.
My hon. Friend the Member for Ynys Môn referred to the need for clear policies on energy, and I shall return to that matter shortly. The hon. Member for Ceredigion (Mr Williams) made the case for devolving Welsh language broadcasting. Sadly, the hon. Member for Aberconwy (Guto Bebb) spent a great deal of time criticising a report, when his constituents would probably have been more interested if he had taken up the very real issue of rocketing prices at the petrol pump, particularly in rural Wales.
If we are to see the economy in Wales flourish, we need economic policies from the UK Government that will stimulate growth. We need fiscal policies that will strike the right balance between paying down the deficit and getting the economy going. We need taxation policies that do not squeeze lower and middle income households so hard that they have no money to put back into the Welsh economy and struggle even to pay the most essential household bills.
I was dismayed to hear the Secretary of State reiterate at Welsh questions yesterday that she was in favour of sticking to plan A. I am sorry to have to point out to her that her Government’s plan A is hurting but not working. Sometimes I wonder what planet she is living on. She only has to walk down any high street in Wales to see shops closing and the economy on its knees. The latest high-profile victim is Peacocks. We certainly welcome its takeover by the Edinburgh Woollen Mill and the jobs that that has secured, but 3,000 jobs will still be lost and more than 200 shops will close, including both the Peacocks stores in Llanelli.
No matter what initiatives the Welsh Government undertake—I point out two in particular: the excellent Jobs Growth Wales programme aimed at creating 4,000 jobs a year, with an emphasis on the private sector; and help for business in the form of some £55 million in grants and loans—UK economic policy is enormously important in helping or hindering the success of those initiatives. When it comes to inward investment to Wales from overseas, I certainly agree that there should be the closest possible collaboration between the Welsh Government and other relevant bodies such as UK Trade & Investment to avoid duplication and increase Wales’s outreach overseas.
We are not going to get anywhere, however, unless we have a UK Government providing the right economic and business climate to make the UK a preferred destination for investment in business and manufacturing. When Labour was in government, an additional 1.1 million new businesses were created. By the time we left office in 2010, the World Bank ranked the UK as the best country in Europe for ease of doing business and fourth best in the world, ahead of the US. While there is always room for improvement and we should seek to streamline wasteful bureaucracy, time-consuming duplication and form filling, to use cutting red tape as the main strategy for driving economic recovery, as this Government seem to be trying to do—and, indeed, as the Under-Secretary for Wales said yesterday at Welsh questions—is addressing the wrong problem. That is to avoid the two very real issues of creating the right economic conditions to foster growth and creating the right political climate—that is, the certainty about policy that is needed to encourage long-term investment in manufacturing and jobs.
The Government’s attitude to business and industry matters—it matters very much to Wales. What business and industry need more than anything are certainty and confidence that the UK Government will not move the goalposts. It is extremely disturbing that this Conservative-Lib Dem Government have created so much uncertainty about their commitment to green policies that the UK has slipped from third to 13th in the world for investment in green growth.
The Secretary of State and her Cabinet colleagues need to restore business confidence and create a climate of certainty before they damage any more industries or frighten off any more potential investors. We have seen how the UK Government’s catastrophic imposition of sudden changes to the feed-in tariffs for solar panels is already putting hundreds of jobs at risk in Wales. Here was a scheme that gave a real boost to private industry in Wales—a scheme that was unlocking capital and attracting people to use their savings or borrow money to invest in solar panels. By investing that £10,000 or £20,000, they were providing private sector jobs in the Welsh economy. What other scheme do the Government have to unlock capital in that way and use it to stimulate growth in the local economy?
As my hon. Friend the Member for Ynys Môn mentioned, before the election Labour set up a £60 million fund to attract investment in offshore wind power. In 2010, the current Prime Minister promised to continue the policy, but nearly two years later just £1.2 million has been awarded and many companies are looking elsewhere to invest. Indeed, big investors in wind energy, such as General Electric, Vestas, Gamesa and Mitsubishi, are threatening to take millions of pounds worth of green jobs abroad because they are losing patience with this Government. They do not know where they stand, and they now seriously doubt the Tory Government’s commitment to renewables.
The UK has some of the best wind resource in the world. Indeed, the UK is the windiest country in the EU, and we have our fair share of it in Wales, but the signals coming from the UK Government are confused, hesitant and lukewarm. When companies are making big decisions about where to build energy installations or set up factories to manufacture the components, they need to know what Government policies are, what returns they can expect and what the financial incentives are—they need a climate of certainty. I urge the Secretary of State and her Cabinet colleagues to provide clear policies to attract green investment.
Moving on to UK Government policy that affects Wales, only a fortnight ago we heard the very worrying news that Britain could lose its treasured triple A rating—the very justification the Chancellor has used for his crippling austerity measures. Why would the UK lose its triple A status? Because this Government have forgotten that in order to pay back the deficit, they also have to think of stimulating growth in the economy to make the money to pay back the deficit. That is where this Government are failing. This Government inherited a growing economy, so it is no wonder that people are asking why we have seen almost no growth for a year and why the Government have had to revise their borrowing up by £158 billion.
We are seeing just what Labour has been warning of since 2010: the Chancellor is cutting too fast and too deep, and by hitting lower and middle income households the hardest, he is hitting the very people who spend their money most immediately back into the Welsh economy just to keep themselves clothed and fed. His policy is not only deeply unfair; it is economic madness. It is already having a direct effect on the Welsh economy, and we have only seen the beginning of the cuts. Let us make no mistake: over the next three years, the Government will—according to House of Commons figures—take £6 billion out of the pockets of people in Wales, and that will include £800 million in tax credits. Tax credits are money that families who are working hard and trying to do the right thing are given to top up their incomes, and they need to spend that money straight away in order to keep their homes warm and their children fed and clothed.
What else is the Chancellor cutting? He is cutting £7 million from health in pregnancy grants, and £113 million from child trust funds, and the freezing of child benefit is equivalent to a cut of £249 million. He is cutting £209 million from disability living allowance, and £43 million from lone parent benefits. All that is coming out of the Welsh economy, as is the £1.5 billion cut that will result from the use of CPI rather than RPI to uprate benefits, and all that is happening against the background of pay freezes—not to mention the more than £2 billion cut represented by the rise in VAT.
What we need now is a real economic stimulus from the UK Government to back up the Welsh Government’s initiatives on jobs and help for industry, and that is what I ask the Secretary of State to provide. I ask her to look at Labour’s five-point plan for stimulating the economy, and to cut VAT, boost jobs and stand up for Wales by doing something that will really help to get the Welsh economy going. People cannot see any help at all coming from the Secretary of State to us. They cannot see the Secretary of State standing up for Wales, and that is what they would like to see.
Oral Answers to Questions
Nia Griffith Excerpts(14 years, 1 month ago)
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Nia Griffith (Llanelli) (Lab)
Given the feed-in tariffs fiasco and this week’s news that big investors in wind energy are threatening to take millions of pounds worth of green jobs abroad because they are losing patience over the Government’s shilly-shallying about renewables policy, how will the Under-Secretary convince companies to invest in the installation and manufacture of renewable energy equipment in Wales, securing much-needed jobs and reducing our dependence on ever costlier imported gas and oil?
Oral Answers to Questions
Nia Griffith Excerpts(14 years, 2 months ago)
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Mr Jones
The hon. Gentleman will know that the Sayce review made the commitment that existing employees in Remploy should be offered the opportunity of expert entrepreneurial and business support over a decent period of time to develop businesses, so the Sayce report shows commitment to Remploy. I hear what the hon. Gentleman says about his communications with my hon. Friend the Under-Secretary and if he would care to write to me, I will certainly pursue the matter.
Nia Griffith (Llanelli) (Lab)
The way in which the Government propose to abolish disability living allowance will take £105 million a year away from disabled people in Wales, money they desperately need to help them cope with the extra costs of living with a disability, as the Secretary of State of all people should know. What meetings has she or the Minister had with disabled people in Wales on the Welfare Reform Bill, and how do they intend to address people’s very real fears about it?
Mr Jones
The Government remain committed to supporting disabled people and determined that that support should be targeted at those most impacted by their health condition or disability. As the hon. Lady will know, the new personal independence payment will be objective, fair and strongly evidence-based and will enable accurate and consistent assessments of individuals to determine who will benefit most from additional support.
Oral Answers to Questions
Nia Griffith Excerpts(14 years, 4 months ago)
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Nia Griffith (Llanelli) (Lab)
The Government’s feed-in tariff fiasco risks shattering all investor confidence in manufacturing in Wales. What will the Minister do to influence ministerial colleagues to prevent imminent job losses in the Welsh solar industry and ensure that any change to the feed-in tariff is given a long lead-in time and is set at a rate that will encourage investment and not increase unemployment?
Mr Jones
We fully understand the difficulties that companies involved in this sector of the economy face as a consequence, but if things had been left as they were, the feed-in tariff budget would have been eaten up. There is a consultation and I have no doubt that the hon. Lady will participate in it.
Commission on Devolution in Wales
Nia Griffith Excerpts(14 years, 4 months ago)
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Nia Griffith (Llanelli) (Lab)
We have had a long and full debate, and we have wandered over many subjects. We heard the hon. Member for Monmouth (David T. C. Davies) ensure that we heard a plurality of views. In his own completely inimitable style he told us that the Silk commission should have a remit to consider clawing back powers from the devolved Administration. That view must be unique to him.
Mrs Gillan
The Silk commission can look at the boundaries, and that means adjustments in either direction.
Nia Griffith
I thank the Secretary of State for that clarification.
My right hon. Friend the Member for Torfaen (Paul Murphy), a former Secretary of State for Wales, spoke with passion and conviction, standing up firmly for Wales and pointing out the deep mistrust of the current Government’s attitude to Wales, which is exemplified by the roughshod way in which Ministers are cutting the number of Welsh constituencies from 40 to 30. That fuels deep suspicions about what the Government’s motives are for setting up the Silk commission.
My hon. Friend the Member for Caerphilly (Mr David) stressed the need for a pragmatic approach that brings power nearer to the people but which does the best for the people of Wales. The hon. Member for Arfon (Hywel Williams) referred the Silk commission to his private Member’s Bills, the Bilingual Juries (Wales) Bill and the Jobcentre Plus (Wales) Bill. The hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards), who had very little time, unfortunately, urged the Lib Dems to rebel on the constituency boundary issue.
My hon. Friend the Member for Ogmore (Huw Irranca-Davies) stressed the importance of this Parliament in taking decisions for the whole UK and urged that we move forward wisely, cautiously and with careful consideration of the issues. The hon. Member for Brecon and Radnorshire (Roger Williams) pointed out the importance of the Calman commission and stressed the excellent credentials of its members, and his words have been echoed by many hon. Members.
The hon. Member for Aberconwy (Guto Bebb)—I am not sure whether he is listening—stressed the importance of accountability and talked about practicalities. He spoke of the importance of treating businesses across the whole UK equally, but he then talked about different national insurance rates, so I am not sure quite where he was coming from.
The hon. Member for Vale of Glamorgan (Alun Cairns) talked about the need for stability and there being no further changes for a generation. He stressed the need for the Silk commission to consult effectively and to reach out to those who have not been effectively engaged before, pointing out concerns about the volatility of some taxes. The hon. Member for Epping Forest (Mrs Laing) reaffirmed her strong Unionist credentials and welcomed the commission, which she sees as an important step towards accountability.
My hon. Friend the Member for Pontypridd (Owen Smith) referred to the difficulties of having continual change and to the need to take a long-term view. He also stressed the need for economic stimulus, as set out in Labour’s five-point plan, and pointed out the measures that the Assembly Government are taking to implement elements of that in the areas for which they have responsibility, such as with the successor to the future jobs fund—the jobs growth fund—and with some investment in infrastructure, where they are able to do so.
The Opposition very much welcome the establishment of the Silk commission and the important tasks it has to do. Its first task is to review the case for the devolution of fiscal powers and to recommend ways in which the financial accountability of the Welsh Assembly could be improved. It will no doubt refer to the work done by the Holtham commission in its analysis of some of the possible ways of transferring revenue-raising mechanisms to Wales. It can examine the practicalities and the likely consequences of implementing any such measures. We should not underestimate the complexity of this issue or the dangers of people being, quite naturally, tempted to play the system by switching from one side of the border to the other. That issue has been mentioned by several hon. Members, particularly my right hon. Friend the Member for Delyn (Mr Hanson). Most importantly of all, the Silk commission will need to consult and take account of public opinion. It is vital that a move towards any change has the support and backing of the people of Wales.
We are disappointed that the Secretary of State has decided to make setting up the Silk commission a priority over tackling the challenge of delivering a fairer funding system for Wales—an issue that is specifically excluded from the commission’s remit. If her Government were really interested in delivering the best for the people of Wales, they would have made it a priority to introduce the so-called Barnett floor—a concept that was explored in the Holtham reports and adopted by Labour in our 2010 manifesto as the most practical and immediate step to protect funding to Wales.
Roger Williams
Does the hon. Lady agree that the floor has less applicability in these straitened economic times than it would if there were an expanding economy?
Nia Griffith
As the hon. Gentleman will have heard my right hon. Friend the Member for Neath (Mr Hain) explain, we are at a tipping point. Until now, the Barnett formula has served the people of Wales well, but from this year onwards the balance will tip slightly in the other direction. Putting a floor in would offer additional protection and would be a straightforward measure. It could be implemented with the agreement of the Treasury and without having to go into the difficulties of trying to work out a needs-based analysis, which is much more complex but is something that we might wish to see in the long term. So, as Holtham identified, the Barnett formula has served Wales well up to now, but if nothing is done it will begin to disadvantage Wales. The whole point of putting in the Barnett floor is to prevent that from happening and to protect funding. The Holtham commission recommended moving to a needs-based analysis, and it produced evidence of how a needs-based funding system could be made to work in a way that is fair to all parts of the United Kingdom. In its second report, it demonstrated that a needs-based funding formula that is fair to Wales would deliver £117 to Wales for every £100 that is spent in England on devolved activities. It recognised, too, that moving to a needs-based formula would take time but, in the meantime, the Barnett floor could protect Welsh funding. Instead of making that a priority, as it could be implemented quite easily, the Secretary of State has set up a commission that specifically will not consider the issue of funding reform.
Nia Griffith
I hope very much indeed that that bilateral work is progressing quickly and effectively.
It is small wonder, given the Conservatives’ track record on devolution, that many Opposition Members have expressed suspicions about the Government’s motives for setting up the Silk commission. There are suspicions that the Government might be trying to sell Wales short and push through measures that would seriously disadvantage Wales. The concentration of wealth creation in London and south-east England means not only in Wales but in Scotland, Northern Ireland and the other regions of England that public expenditure is greater than the income from those areas, which are all net beneficiaries of the UK tax regime, while London and parts of the south-east and East Anglia are net contributors.
That is for historical reasons, including the early emergence of London as the commercial capital and its importance as a world financial centre, and it is in contrast to other European countries, where the importance of the city state and, much later, unification has produced different patterns of wealth distribution. The disparities have existed in the UK for many years: they are deeply embedded and cannot simply be eliminated by a few years of regional policy or European funding, helpful as that is to compensate for the differences. Nor can they simply be eliminated by substantial growth in the private sector, vital as that is to Wales and across the UK.
With such deep-seated historical differences in wealth distribution, complete financial independence for Wales, as advocated by Plaid Cymru, is an absolute non-starter. With a gap of £14.6 billion between public spending and the revenue raised in Wales, it would mean every man, woman and child in Wales contributing an extra £4,800—nearly £5,000 each a year just to maintain current levels of spending.
Jonathan Evans
The Labour party has been using those figures quite heavily today, and it has based them on the Holtham report, but that is misleading. The report indicates a gap of £6 billion. Will the hon. Lady correct that statement and the statements of the right hon. Member for Neath (Mr Hain)?
Nia Griffith
Those figures were recently provided by the House of Commons Library, on 2 November, and I am sure that it has checked them thoroughly.
We are suspicious about the Government’s motives in setting up the Silk commission, whose remit excludes fair funding. It looks as if the Government might be using it as a back door to cutting funding to Wales, or seeking to adopt measures that could leave Wales subject to fluctuations in funding that would be impossible to cope with. The Labour party will strongly resist any moves that would disadvantage Wales.
Many people have been puzzled by the timing of the debate, as the remit for the Silk commission has already been set, so it did not offer an opportunity to influence its terms of reference. Perhaps, when the commission has had a chance to study the issues, it may wish to seek views or raise questions in an interim report, and that would be a more appropriate time for a debate. Having the debate now, before the commission has even begun its work, but after the terms of reference have been decided, is somewhat bizarre. [Interruption.] I think that the Secretary of State is trying to intervene, but the point was well made by my right hon. Friend the Member for Torfaen that that does make us question the reason for the debate.
Mrs Gillan
I should like to inform the hon. Lady and the House that the terms of reference were agreed with the Labour party in the Assembly.
Nia Griffith
The irony being that today we have discussed the importance of Parliament; many Government Members have referred to the importance of the commission being set up by Parliament.
Nia Griffith
No, I think that I have made my point. Opposition Members felt that they would have had more chance to influence things if the timing of the debate were different.
Up and down Wales, as far as the person in the street is concerned, the Silk commission is set up and can get on with its work. What those people are worrying about today is the empty order book in their company, the shops that are closing in their high street, the cuts in their council services, losing their job or their home, their children not being able to find work, and the daily struggle to make ends meet as prices for essentials such as food, vehicle fuel and energy bills spiral upwards. They understand something that the Government seem to have forgotten—that before the Government can raise any revenue or talk about any formula to distribute it, they need wealth creation. Indeed, what is the point of talking about taxation without wealth creation?
This week the Government have sent completely the wrong message to potential investors in Wales. Only days after the head of Tata Europe told MPs that he has been having serious doubts about future investment in Wales because of this Government’s lack of a long-term manufacturing strategy, the Government confirm his doubts by trying to sneak out in a written statement yet further cuts to the feed-in tariff scheme, with devastating effects on the industry. This is not about feed-in tariffs. This is not just about manufacturing industry. This is about raising the proper revenue and then being able to do something with it. It is about wealth creation, setting the right long-term strategies that will encourage manufacturing to come to Wales, attracting the investment that we need and providing the wealth so that we can talk about what we do with it. [Interruption.] I still have two minutes to go, I believe.
Why do we remain wary of the Government’s motives and suspect that they might be setting up the Silk commission to try to reduce funding to Wales? Because daily we see funding being sucked out of Wales, whether in higher VAT, the change from the retail prices index to the consumer prices index for the calculation of pensions and benefits, or the winter fuel allowance being cruelly cut for the over-80-year-olds from £400 to £300 this month, leaving many worrying about whether they can afford to put the heating on. It is this sucking money out of Wales that worries us considerably.
Although we welcome the Silk commission, wish it well with its work and look forward to debating its findings, in the meantime I again ask the Secretary of State to make it a priority to establish the so-called Barnett floor to protect funding for Wales, and I urge her Government to adopt fiscal policies that will stimulate the economy in Wales.
Oral Answers to Questions
Nia Griffith Excerpts(14 years, 9 months ago)
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Mr Speaker
Order. I am rather surprised and disappointed by the slow progress today. We must speed up.
Nia Griffith (Llanelli) (Lab)
Given the Secretary of State’s discussions about enterprise zones with the First Minister and other Welsh Assembly Ministers, does she accept that whatever we do on the ground in Wales, and whatever stimulus the Welsh Assembly can provide, we still need a proper fiscal stimulus from her colleagues in the Cabinet here? What discussions has she had with her colleagues in the Treasury about ensuring that growth happens?
Mrs Gillan
The hon. Lady makes a very good point, and that is exactly why, following the Budget, there was an increased provision for the Welsh Assembly Government of £65 million. Just to correct any figures that have been bandied about, I have checked with the Treasury and £10 million of that £65 million was Barnett consequentials for enterprise zone expenditure, and £20 million was for small business rate relief consequentials. I am sure that with £30 million the Welsh Assembly Government will be able to do something.
Oral Answers to Questions
Nia Griffith Excerpts(14 years, 10 months ago)
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Nia Griffith (Llanelli) (Lab)
Given that an enormous amount of time and money has been put into studying tidal energy in the Severn estuary, what efforts is the Secretary of State making to take forward the plans for that and ensure they do not get lost?
Mrs Gillan
The hon. Lady knows that throughout the years when I have been both shadow Secretary of State and now Secretary of State for Wales, I have been very supportive of all the work that has been done, particularly on tidal lagoons, as well as in examining the case for the Severn barrage, which has, of course, been put to one side for the time being. I can assure her, businesses in her constituency and our research institutes that we will always consider that option for future generation in and around the Welsh coast.