19:00 - The House divided: - Ayes: 199 / Noes: 299 - Question accordingly negatived.
Owen Smith
I hate to say it, but the hon. Gentleman really ought to study his history a little harder, because Kier Hardie, even when elected in 1895—not as a Welsh MP, but in West Ham—spoke in this House about devolution, and when elected to Merthyr as a Labour MP in 1905 he was absolutely a campaigner for home rule and devolution for Wales. The hon. Gentleman’s history is wrong; mine is perfectly accurate.
Recent history—the past four and a half years—shows that the Labour party is still campaigning for rights for Welsh people and standing up for Welsh Labour valleys. Thus we have seen Jobs Growth Wales, the most effective youth employment programme anywhere in Britain, 1,000 jobs created only last week, and massive increases in inward investment, all positives that have come as a result of devolution and the protection of the Welsh people.
The Secretary of State for Wales (Stephen Crabb)
The shadow Secretary of State mentions Jobs Growth Wales. Of course we applaud any initiative that gets people into work and helps increase opportunities for young people, particularly in Wales, but he must be aware that the independent study of Jobs Growth Wales commissioned by the Welsh Government showed that around 75% of all the young people on the programme would have found work anyway. He needs to answer this question: is that a good use of taxpayers’ money?
Owen Smith
I think that the evidence for Jobs Growth Wales is absolutely clear to us all. It has proven to be the most effective youth employment programme anywhere in Europe. It is succeeding in creating 16,000 opportunities for young people, and it is succeeding in keeping those young people in work beyond the six months. It is widely supported by the business community right across Wales. I cannot imagine for a minute that the Secretary of State should wish to undermine it, especially when it stands in such stark and promising contrast to his Government’s Work programme.
Owen Smith
Around 750,000 young people in Britain are still unemployed. Although that is fewer than the 1 million who were unemployed just a couple of years into this Government’s time in office, and we welcome that fall, I suggest that 750,000 is an enormous number of people to be left languishing on the dole, but that is what we have come to expect from a Tory Government.
Stephen Crabb
In response to the hon. Member for Alyn and Deeside (Mark Tami), those are not my words, but those of an independent inquiry into the matter. Of course the business community supports Jobs Growth Wales, which has made good inroads into giving opportunities to young people. However, when about 75% of young people are considered to be able to get work anyway without the need for a support programme, we should bear in mind the question of whether it is a good use of taxpayers’ money.
In comparing Jobs Growth Wales with the Work programme, the shadow Secretary of State is comparing apples and pears. The Work programme does not work with bright young graduates who are fresh out of university but with people who face the biggest hurdles in getting back into work—the 200,000 people in Wales who never worked a day in their life under Labour.
Owen Smith
I do not want to belabour the point, but the Secretary of State needs to consider carefully whether he wants to denigrate Jobs Growth Wales, which does not, by and large, work with undergraduates but with youngsters aged 16 to 24, most of whom will not be undergraduates. It has been demonstrably successful in Wales, and he should be welcoming and supporting it, not seeking to undermine it.
Owen Smith
I do share my hon. Friend’s anger, and I will express it here today. I also express my anger that Government Front Benchers laugh when we hear of the scale of the poverty that is still being visited on people right across the country.
Stephen Crabb
On a point of order, Mr Deputy Speaker. The shadow Secretary of State has just claimed from the Dispatch Box that I was laughing at the news that the ward in Caerphilly is now the most deprived—[Interruption.] Not at all—it is a complete untruth, and I ask him to withdraw it.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. I am sure that the shadow Secretary of State has taken your comments on board.
Owen Smith
I am grateful to my hon. Friend for his intervention. Yes, of course that is right. The evidence is right before our eyes: over 50% of Welsh local authorities have had to use top-up discretionary housing payments to deal with the volume of problems created by the changes to welfare in Wales, versus just 27% in England. That is more evidence that Wales is being hit harder on the watch of the Secretary of State and the Minister than anywhere else in the UK.
The Parliamentary Under-Secretary of State for Wales (Alun Cairns)
Will the shadow Secretary of State explain, therefore, why only three of the 22 local authorities have applied for additional discretionary housing payment to help with hardship as a result of the spare room subsidy changes?
Owen Smith
Some 54% of local authorities in Wales have used up most of their discretionary housing spending. The figure for England is 27%. Wales is harder hit than anywhere else and we are having to spend more money. If the Minister seriously suggests that the DWP figures are wrong, and that Wales does not have a greater volume of people hit by the bedroom tax than anywhere else, he can tell us, but I am sure that he will not disagree with the DWP. I am sure that he will agree with me that 40,000-odd people in Wales are affected, 25,000 of whom are disabled.
Alun Cairns
I will happily clarify that Cardiff, Caerphilly and Conwy are the only three local authorities, of the 22 in Wales, that have asked for an uplift in discretionary housing payment to help with hardship. Why did other local authorities around Wales not do so if the situation is as bad as the hon. Gentleman suggests?
Owen Smith
Let me tell the hon. Gentleman something very simple that he could do to stop this back and forth about numbers: he could think about the impact on people in his constituency and mine, and those of all other hon. Members, and he could scrap the bedroom tax tomorrow. That is what Labour will do if we are elected. We will get rid of it in a heartbeat. Frankly, the nonsense about who has applied for which grant demeans this debate, which is a serious debate about the impact on real people.
Owen Smith
Introducing a tax that is reliant on people being able to move to smaller properties was, in and of itself, barmy, because there are not the properties for people to move into. That is why 60% of social housing associations in Wales are struggling to rehouse people.
Of course, it is not just the people who are hit by the cuts to welfare payments that are affected, but the wider population. Sheffield Hallam university produced a report just a few weeks ago that said that the welfare cuts will result in a £1,000 reduction in the incomes of all people across the south Wales valleys eventually, as reductions in aggregate demand, reductions in spending and further job losses—it suggested that 3,000 jobs might be lost across south Wales—result in a less dynamic and resilient economy. It is not just the people who are directly impacted by the welfare cuts who are affected, but the wider economy.
On top of the welfare cuts, ordinary workers who are not in receipt of benefits are losing £1,600 a year. That is why Labour will do something about low wages in Wales. We have made it very clear that we will set the national minimum wage at 58% of median earnings by 2020. That will mean a minimum wage of £8 in Wales and will put an extra £2.50 per week in the pockets of working people. It will mean 60 quid a week or £3,000 a year for hard-working families. [Interruption.] The Secretary of State laughs and giggles once more, as I discuss low wages.
Owen Smith
He is laughing even as he comes to the Dispatch Box. I am talking about low wages in Wales and the Secretary of State is giggling. I do not know what he wants to tell us, but he can have another go.
Stephen Crabb
There is no laughing or giggling, but we can smile because the hon. Gentleman trumpets, in his usual proud, puffed-up way, the idea that the Opposition would increase the minimum wage to £8 an hour. Under the proposals that the Government have put in place, the minimum wage would be higher than that. Why is he proposing a cut in the minimum wage?
Owen Smith
It is nonsense to suggest that we are proposing a cut in the minimum wage. We will increase the minimum wage to £8, which will bring massive benefits for hard-pressed workers in Wales.
The Secretary of State for Wales (Stephen Crabb)
I am delighted to follow the shadow Secretary of State for Wales and to have the opportunity to talk about the record of the UK Government in Wales. I notice that the Opposition changed their minds on the original motion that they sought to table. I believe it was originally entitled “The disastrous effect of Government policies on Wales”. It seems that they no longer believe that to be the case, and quite right too. We are winning the argument and we have not even begun our speeches yet.
We have to ask ourselves why, at this precise moment, the Opposition have tabled such a ludicrous motion and are trying to talk down the Welsh economy and present a black caricature of what is happening inside the Welsh economy when last week was such a successful week for Wales. On Friday, the Prime Minister, Labour’s own First Minister of Wales, business leaders and journalists stood together at Celtic Manor for the UK Investment Summit, rallying together to bang the drum for the huge strides made in the Welsh economy in recent years. Why would Labour choose to have such a debate at this time to talk down the efforts we are all making to secure new investment and new job creation in Wales?
Huw Irranca-Davies
I would applaud any jobs created in my constituency, but I will tell the Secretary of State why we are having this debate today. A guy came into my surgery two weeks ago and showed me his payslip. It was disgraceful. An umbrella company was taking more than £50 from him to contribute to its—the company’s—employer’s national insurance contribution, and deducting £35 as a contribution to his own annual leave. According to HMRC he was employed by the company. Does the Secretary of State condone or condemn such companies?
Stephen Crabb
I condone companies that invest in Wales and create jobs, which is the most important thing in driving up wages. Let us be clear about this on both sides of the House: we acknowledge and recognise that wages are not where we would like them to be in Wales. We want to see real wages going up in Wales. The best hope for workers in Wales to see real increases in wages is more job competition: the creation of more and higher quality jobs. That was exactly the purpose of last week’s investment summit. Welsh Labour Members really need to make up their minds. They say one thing at this end of the M4, but back down the road in Cardiff they say another thing about what is going on inside the Welsh economy. They need to make up their minds on whether they back Welsh business or not.
Huw Irranca-Davies
The Secretary of State is making a strong and forceful case. Will he argue as strongly and as forcefully for the groups of construction workers in my constituency who are now up to £100 worse off, for the youngsters who are at the beck and call of employers on zero-hours contracts with no continuity and no certainty of employment, and the people working in two part-time jobs because they cannot get one full-time job? Would he say that they are benefiting from the economy in the same way?
Stephen Crabb
We feel equally offended by the abuses in the workplace that the hon. Gentleman describes. The record of the coalition Government is actually very positive: increasing penalties for companies that do not pay the minimum wage properly, and consulting on the abuse of zero-hours contracts and taking action.
Mrs Moon
The Secretary of State will be aware that I have raised several times in the Chamber the case of a person in my constituency who had money deducted from his salary. He spotted that it had been deducted and went to his employer, who said that it was because he was taking too long in the toilet. Will the Secretary of State condemn employers who do not tell employees that they are deducting money from their wages, or those who are making false deductions from salaries on an ad hoc basis when it is not clear that the money has been taken or what it has been taken for?
Stephen Crabb
I am not aware of that specific case, but clearly it does not sound right; it does not sound like an employer that values its employees. However, we should be wary of painting a caricature of the Welsh economy. There are specific abuses, which we will crack down on, and examples of bad practice, which we must not tolerate, but overall the picture is of an improving economy. Wales is getting stronger and its economy is improving, and if Labour Members really value their constituents and want to see opportunities extended to them, which I genuinely believe they do, they should back the general thrust of our policies.
Mrs Moon
The company would not talk to me, so I asked HMRC to investigate—let it look at the payslips, let it see what is happening—and what did I get? I got a response saying, “We’ll get back to you some time in December.” That is not good enough. I need an assurance that the company will be investigated.
Stephen Crabb
If the hon. Lady sends a copy of that correspondence to my office, I promise we will respond quicker than that.
Guto Bebb (Aberconwy) (Con)
Instead of the doom and gloom being portrayed by Labour, will my right hon. Friend join me in celebrating the 42% fall in the unemployment rate in my constituency since the coalition came to power?
Stephen Crabb
Absolutely, I welcome the fall in unemployment in my hon. Friend’s constituency. During the shadow Secretary of State’s speech, I was looking through Labour Members’ constituencies. Many of them saw increases of 60%, 70% and 80% in unemployment under the last Labour Government, whereas unemployment in those constituencies is now falling.
Wayne David
What would the Secretary of State say to my constituents in Lansbury Park, who, because of the policies of his Government, now find themselves living in the poorest ward in Wales?
Stephen Crabb
I have been to the hon. Gentleman’s constituency: I had a fruitful set of meetings with people working at the coal face in terms of supporting people in long-term unemployment and helping them back into work. I realise that there are challenges in the Welsh economy and that sections of Welsh society are still not seeing the full benefits of economic recovery, which is why there is no complacency on the Government Benches, but I must point out that his local authority is working very well with the Department for Work and Pensions, in preparing for the roll-out of universal credit, which will make a difference to the lives of people in his constituency.
Jonathan Evans
Is not the answer to the hon. Member for Caerphilly (Wayne David) that the Lansbury Park estate did not become poor in the last four years, and that throughout all the years he has represented the area, it has been one of the poorest in Wales? It is only since the coalition came to office that unemployment has started falling, whereas when Labour was in office, it went upwards.
Mr Deputy Speaker (Mr Lindsay Hoyle)
That was not a point of order, but I am certain that the hon. Gentleman has clarified his position.
Stephen Crabb
Not until every section and geographical part of Wales is sharing in the benefits of recovery will we talk meaningfully about a full economic recovery in Wales. There is no complacency on the Government Benches about that.
To round off the debate about Caerphilly, I must point out that under the last Labour Government, of which the hon. Gentleman was a member, unemployment in his constituency rose by 92%, whereas it has fallen by 31% under this coalition Government. I say with all humility that he should be trumpeting that and welcoming the fact that today there are more men, women, lads and girls going out to work in his constituency than there were under Labour.
Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)
The Secretary of State made great play just now about measures being taken to tackle non-payment of the minimum wage. Exactly how many prosecutions have there been for non-payment in Wales, and does he think it an acceptable level, given the experiences of many people, including in my own constituency?
Stephen Crabb
I will get back to the hon. Gentleman with the—[Interruption.] Rather than come up with a specific number, I will write to the hon. Gentleman and provide him with a factual answer.
Jenny Willott (Cardiff Central) (LD)
As I am sure the Secretary of State is aware, I was previously the Minister responsible for the national minimum wage. There have not been prosecutions in many cases, but what has been done is far more important—I am sure my right hon. Friend will agree. This Government have ensured that employees who have not received the minimum wage when they should have done have had their money paid back, so they have not lost out as a result. It is far more important that employees get recompense and get their minimum wage.
Stephen Crabb
My hon. Friend brings some helpful information to this debate, and I commend her for her work as Minister in driving up and improving employment practices for workers in Wales and throughout the United Kingdom.
Stephen Crabb
I will give way a bit later.
Let us remind ourselves that when we formed this coalition Government back in 2010, the coffers were empty, and the previous Chief Secretary to the Treasury was joking that the money had all gone. Wales was in an employment slump, and the Labour party was far too relaxed about the tragedy that 200,000 people in Wales had never worked a day in their lives. What a tragedy that was for Welsh communities and for the individuals who had never worked a day in their lives. This Government are not content to be relaxed about that and we are not shying away from the responsibility for trying to put that right. That is why hard-working people are at the very heart of our long-term economic plan. It is why we have cut income tax for more than a million people in Wales so that people can keep more of what they earn. It is why we have cut national insurance contributions to allow businesses to grow so that they can keep and take on more staff, and why we have introduced the Work programme to provide the best possible support for long-term unemployed people, so that they do not get left behind as they did under the last Labour Government.
We have cancelled Labour’s planned fuel duty increases so that petrol will be 20p cheaper than it would have been under the last Government, saving money for the owners of 1.7 million vehicles in Wales, and we are also taking action to help the relatively high proportion of pensioners we have in Wales. Last year, we increased pensions above inflation by £2.70 a week, on top of the record cash rise of £5.30 in the state pension the year before. In April this year, we increased it again by £2.95, in line with our triple lock. This was the biggest cash increase since the state pension was first introduced. That should be compared with the tiny 75p increase offered by Labour when they were in government. It is not hard to tell which party is on the side of pensioners in Wales.
Mr David Hanson (Delyn) (Lab)
This debate is about the economy, but it should also be about values. Will the Secretary of State explain to us what values drive him to cut the taxes for the richest people in Wales while putting up VAT, which is paid by everybody, no matter what their income? What values drive him to make benefit cuts such as we have seen with the bedroom tax and to hit the poorest people hardest? As I say, this debate is about values.
Stephen Crabb
I agree with the right hon. Gentleman that it is about values. It is about our values as a Government who are not content to see 200,000 people in Wales who have never worked a day in their lives. That is why I celebrate the fact that there are 38,000 more people in work in Wales since the election and 47,000 fewer households where nobody works. What does that mean in real terms? It means more kids in Wales growing up seeing a mum or dad going out to work. Opposition Members, who go under the name of “Labour”, should be championing that.
David T. C. Davies
Is my right hon. Friend aware that this debate is not about the economy, but about the effect of Government policies on Wales. Does it surprise him that the hon. Member for Pontypridd (Owen Smith), who spoke very entertainingly—I look forward to coming back to it—for nearly 40 minutes did not once mention the national health service or the effect of Government policies on health?
Stephen Crabb
My hon. Friend makes an important intervention and we look forward to hearing more from him later in this important debate. It is about values, but over the last week, the mask has finally slipped—yet another example of Labour’s mask slipping. We saw it last week when a member of the Opposition Front-Bench team saw fit to ridicule someone’s home just because they had a white van parked outside it and were displaying the flag of St George. The Labour party can no longer with any credibility claim to be the workers party. It is the party of the liberal metropolitan elite, that sneers at hard-working people. Today Labour Members should be on their feet championing workers in their constituencies —[Interruption.]
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. I am struggling to hear the Secretary of State. I am sure that we all want to hear him.
Stephen Crabb
Time and again we see that the Labour party simply does not believe in the people of Wales. It thinks it knows best, it does not believe that people can manage their benefits, it does not believe that businesses are strong enough to play their part in rebalancing the economy and it certainly does not believe that Wales is an ambitious country hungry for success.
I believe those things and so do this Government, from the Prime Minister down. We reject the negativity of the Labour party, which is using this debate to talk Wales down at the very time that it should be backing Welsh businesses and backing the people of Wales who are working so hard to drive the economic recovery forward. Since the election, 46,000 fewer people in Wales are claiming out of work benefits, there are 90,000 more private sector jobs in Wales and 26,000 more small businesses are driving the economy forward. That is all down to the difficult decisions taken by the coalition Government back in 2010 to get the economy moving again. Each one of those decisions was challenged and rejected by Labour.
Jenny Willott
The Secretary of State mentioned the growth in the small business sector and he also mentioned the employment allowance, which gives a national insurance contribution rebate to businesses. Will he welcome with me the fact that more than 1,000 small businesses in my constituency alone and tens of thousands across Wales have already taken that up, enabling them to invest in their staff through training or higher salaries and even to create new jobs and take on more people?
Stephen Crabb
That is a message I hear consistently from small businesses up and down Wales. Wherever I go, they welcome the efforts the Government have made to give them confidence to hire more workers and to keep staff. The last thing that businesses want to be doing is shedding staff at this time. They know how hard things have been for many families out there in the economy and they are doing everything possible to hold on to staff and grow their work forces. We have been supporting them in that.
Chris Bryant
The single thing that every business man or woman in Wales has said to me is that they want economic security and certainty about the future if they are going to see investment or to make further investment themselves. What is really worrying them is that the Government are playing fast and loose with our membership of the European Union, hanging the sword of Damocles over the Welsh economy and the UK economy. The uncertainty about whether we will be in or out is surely bad for the Welsh economy.
Stephen Crabb
The uncertainty about the European Union and the doubts and concerns about it are out there anyway. If the hon. Gentleman talks to people in Wales and looks at the public opinion polls, he will see that opinion in Wales is almost equally divided between those who are saying they want to come out of the European Union and those who are saying that they want to stay in. The Prime Minister’s strategy of getting a better deal from Europe as regards our membership and putting it to the people of Wales and the UK, arguing for Britain to stay in on that renegotiated membership, is the best strategy for dealing with this and addressing it head-on. That has to be the best way.
Chris Bryant
I disagree. I would have a referendum tomorrow. If that is the Secretary of State’s real argument, let us have a referendum tomorrow. The idea of holding off for two years and having some nebulous renegotiation when we have not even set the terms of what we want and are constantly saying to businesses in Wales that we do not know whether will be in or whether the Prime Minister would support staying in the European Union in two years’ time can only be bad not only for big businesses, such as Airbus and General Electric, but for the small and medium-sized businesses that rely on investment through the public funds that come from the EU.
Stephen Crabb
I have a great deal of time and respect for the hon. Gentleman, who knows his stuff on this issue, but I suggest that he look at what the business organisations are saying. They support what the Prime Minister is saying about renegotiating. Businesses themselves in the UK and Wales want a less intrusive, less costly and less burdensome membership of the European Union.
Mr Mark Williams (Ceredigion) (LD)
I want to reiterate the point made by the Opposition, but from a farming perspective. Has the Secretary of State listened to the president of the Farmers Union of Wales, who talked about the great uncertainty that this will cause many hundreds of small businesses—that is, the farms of Wales?
Stephen Crabb
I meet regularly the Farmers Union of Wales and NFU Cymru and I am aware of what they say. I also speak to a lot of individual farmers and, again, I point out that there is a split. There are some strongly held views on both sides, so the Prime Minister's strategy of trying to settle the debate for the long term and get it out of the way is absolutely right.
Time and again over the past four and a half years, the Labour party has got the big calls about the economy wrong. Their dire predictions about increasing unemployment have not materialised. Their prediction that the Welsh private sector was too thin or weak to support the rebalancing of the economy has been proved wrong.
There is, however, one thing about which the shadow Secretary of State has been right, not wrong, and on which we absolutely agree with him. He was recorded saying to activists—at his own party conference, I think—that his leader was not quite up to the job, and that his party had lost touch with its core voters. We entirely agree with his analysis in that instance.
Owen Smith
If the Secretary of State is going to repeat what is frankly nonsense—if he is going to come out with unsourced gibberish like that—he really needs to come up with some corroboration. Otherwise, he can withdraw what he said right now.
Stephen Crabb
Well, I do not know. I read the press, and I see what the press report.
Owen Smith
On a point of order, Madam Deputy Speaker. The Secretary of State has just uttered an untruth in this Chamber. I do not know where he has come up with that untruth, but I ask him to rescind it immediately, and apologise.
Stephen Crabb
Well, Madam Deputy Speaker, I merely pick up what has been reported and discussed in the media.
While the Labour party is busy tearing itself apart, we are cracking on with creating the right conditions to get the economy moving. We are investing in Wales because we believe in Wales. I am particularly delighted to be able to tell the House that the rail electrification projects in south Wales will go ahead. I am sure that the hon. Member for Pontypridd would have preferred us not to meet that challenge, so he would have one more reason to be negative and talk down the economy in Wales, but I am proud of the deal that the Wales Office brokered between the Department for Transport and the Welsh Government, putting Welsh interests right at the heart of the Government’s agenda.
Stephen Crabb
I give way to the hon. Member for Rhondda, who is very excited today.
Chris Bryant
No, I am quite calm, actually. This is calm.
Will the Secretary of State tell me precisely when we shall see the electrification of the valleys lines? I have heard successive Ministers make promises about it, but absolutely nothing has happened.
Stephen Crabb
We are delivering this project. We have worked very constructively with the Welsh Government to put the deal in place. We will see trains running on the electrified service to Swansea in 2018, and on the valleys lines in 2022. Obviously, those timetables are subject to how quickly the Welsh Government move in managing the project, but they understand its strategic importance and urgency for people and businesses in south Wales.
Geraint Davies
I welcome the news of the financial deal and the certainty of the timetable, with a date of 2018 for the Swansea service. However, the economics of austerity and low wages have meant that instead of increasing by 7% this year, income tax receipts are flatlining, and the projected income from national insurance and income tax is £13 billion down, so the Chancellor will not now be able to reduce the deficit by £11 billion. Does the Secretary of State not accept that the politics and economics of low wages and hitting the poor hardest simply are not working, and debt is being driven up?
Stephen Crabb
I am not sure that I follow the hon. Gentleman’s argument. If he is expressing concern about the deficit, let me ask him why, for the last four and a half years, he and his colleagues have pursued policies with the exact objective of increasing the deficit and increasing the debt, and have argued and voted against every measure we have tried to introduce to restore stability and sanity to our national finances.
Effective transport links are a vital part of any modern economy, and few areas in the United Kingdom are more in need of the improved commuter costs, reduced travel times and more frequent train services that electrification will bring than the valleys communities. Yet again, investment has Welsh people at its heart. The Government’s programme of investment in rail infrastructure in Wales and throughout the UK is one of the most ambitious since the development of the rail network in the 19th century. By 2019, we shall have put in place more than 870 miles of electrification, whereas Labour Governments have managed less than eight miles.
Rail electrification is only one example of the constructive and co-operative relationship that we have struck with the Welsh Government to help deliver for the people of Wales. In contrast to the Labour party in Westminster, we do not posture and play silly games; we roll up our sleeves, put partisan interest aside and do our very best to help get Wales moving again.
Opposition Members may recall the NATO summit in Newport just two months ago, which was a stunning success for Wales—a great example of two Governments working in co-operation to deliver for the people of Wales. We hosted the largest gathering of world leaders in Britain’s history, putting Wales on the world stage. We worked with local business, local councils—I pay particular tribute to Newport city and Cardiff city councils—the Welsh Government and the local people, and they all delivered superbly. NATO showcased the excellent hospitality Wales has to offer and created jobs for local people, and this success paved the way for last week’s investment summit—another example of this Government working positively with the Welsh Government in the interests of Wales.
It could not be any clearer: the UK Government are putting business at the forefront of the recovery and they are delivering. I refuse to accept the Opposition’s argument that the private sector in Wales is too weak for the rebalancing of the economy to work, and I certainly refuse to accept the constant bashing the shadow Secretary of State delivers in respect of Welsh businesses.
These two historic events—the NATO summit in September and the investment summit last week—should convince the shadow Secretary of State that Wales can deliver on a scale matching any other nation in the world. Joint working on this scale demonstrates how the Welsh and UK Governments can co-operate and collaborate in the interests of the people of Wales.
Securing good quality jobs for people in Wales is a priority shared by both the UK and Welsh Administrations. Airbus in north Wales continues to be a shining example of the quality of jobs and the skills sets Wales has on offer. I was therefore delighted that investment from both Governments last week has secured 6,000 jobs in the long term at the firm’s factory in Flintshire, in the constituency of the hon. Member for Alyn and Deeside (Mark Tami).
Chris Ruane
Does the right hon. Gentleman agree that the rise of Airbus, out of the ashes of the closure of Shotton steel works, was down to actions taken by the Labour Government in 1998, when we gave Airbus £500 million in launch aid? That was an example of private and public co-operation.
Stephen Crabb
Airbus is deeply appreciative of the efforts of Governments of all party shades, and is particularly appreciative at the moment of the way the Governments in London and Cardiff are working together to strengthen it and see it secure for the long term.
Stephen Crabb
I give way to the Member in whose constituency Airbus is located.
Stephen Crabb
There is truth in what the hon. Gentleman says. It is an excellent example of European industrial co-operation, but he knows better than anyone else here that at the heart of the success of Airbus in his north Wales constituency are the excellent skills and motivation of the workers, many of whom are in his constituency, but also in other constituencies.
North Wales is at the heart of Wales’s economic growth, and I look forward to seeing more excellent examples of enterprise in Wales’s very own northern powerhouse tomorrow, when I embark on a two-day business tour there. The Labour party here in London at times seems to resist these developments.
Ian Lucas
If the right hon. Gentleman is visiting north Wales, perhaps he will visit the Wrexham area. I hope he will accept that many of our exporting giants in north-east Wales, such as Kellogg’s and Toyota, export to European markets, and that the international investors who decide where to invest and create new jobs are frightened off by his Prime Minister’s indecision and this Government’s lack of clarity.
Stephen Crabb
Business is not being scared off: quite the opposite. We recognise that the single European market is an enormous strategic prize for the UK, but in fact a greater proportion of Welsh exports go to countries outside the EU than to those inside it, and our trade with countries outside the EU is growing at a faster rate, so the hon. Gentleman should not be so insular and should look at the worldwide dimension, rather than just the European one.
Mr Hanson
When the Secretary of State is travelling to north Wales, will he stop off in Chester or go to Vauxhall in Ellesmere Port and ask my constituents there how much they value having a voice in this House to represent their interests on matters that are dealt with by the English Government?
Stephen Crabb
I will take the opportunity to have exactly those conversations, and I expect that all those people will tell me resoundingly just how important the right hon. Gentleman’s voice is in representing their interests.
Stephen Crabb
Exactly. There is a faint whiff of scaremongering coming from Labour on those issues.
I want the Government to bang the drum for investment into Wales, whether it be the UK Government or the Welsh Government, and I am delighted to be able to say that inward investment into Wales is on the rise. In the past year in Wales alone, 79 projects have got under way—the highest number for almost 25 years. The 13 years of the last Labour Government did nothing for boosting inward investment in Wales, but I have seen for myself what this Government’s policies have done for inward investment—[Interruption.] The hon. Member for Vale of Clwyd (Chris Ruane) says that that is all down to the Welsh Government, but almost all the inward investment projects that we secured for Wales last year involved the active support of UK Trade & Investment and the UK Government.
Just last month I visited Hydro, a company that specialises in water purification using electro-based technology. While I was there, Hydro announced a new £20 million joint venture deal in the United Arab Emirates to assist that country to achieve more effective water treatment solutions. I look forward to hearing the hon. Member for Llanelli (Nia Griffith) congratulating that company and championing the business interests in her constituency when she speaks later in the debate.
Stephen Doughty
The Secretary of State is talking about the contribution of major businesses to the Welsh economy. Does he agree that the steel industry in Wales is facing significant challenges, with Celsa and Tata in particular being affected? It is crucial that the Government act quickly and robustly to deal with the concerns that those companies have raised about energy, dumping from markets in China and Turkey, and the many other matters that he and I have had correspondence on. Does he acknowledge that the Government need to get their act together and move a lot faster on those issues to support the steel industry in Wales?
Stephen Crabb
My ministerial colleagues and I are working hard on those issues, and we have also had correspondence and meetings with Ministers in the Department for Business, Innovation and Skills. We are certainly alive to the concerns of the steel industry and we want to do everything possible to secure the future of that strategic industry in the hon. Gentleman’s constituency and elsewhere in south Wales.
The road network in Wales is another vital element of its infrastructure connections that businesses and communities rely on. That is why we are providing the Welsh Government with increased borrowing powers via the Wales Bill to boost investment in Welsh infrastructure, including work on the M4 upgrade. Congestion on the M4 has long been a concern for south Wales businesses, and an upgrade is grossly overdue. That is another vital infrastructure decision enabled by this Government.
Hywel Williams (Arfon) (PC)
Does the Secretary of State agree that successful exporting businesses such as Siemens in my constituency would be even more successful if the A55 were upgraded from its present woeful state?
Stephen Crabb
I have a huge amount of sympathy for the hon. Gentleman’s point. Businesses in north Wales make that point to me consistently, and I expect to hear more on that while I am in Wales over the next 48 hours. The Under-Secretary of State for Wales, my hon. Friend the Member for Vale of Glamorgan (Alun Cairns) will shortly be hosting a transport summit in north Wales in order to identify the strategic infrastructure projects that we need to focus on if we are to secure the long-term economic success of the area.
I will bring my remarks to a close shortly. I could have gone on to talk about investment in digital infrastructure and the support that we are giving the Welsh Government for the broadband project. I could also have mentioned the investment in the new prison in Wrexham, which is a really strategic investment for north Wales, along with the many other examples of how this Government are doing everything possible to create the right framework and conditions for Welsh business to succeed, and to create the jobs and wages that we all want to see for all our constituents.
I am very proud of the transformative projects that this Government have achieved in Wales. I am also proud of the people in Wales who are making those policies work to their full effect. I am proud that we have a growing private sector with more people in work and more businesses. I am just dismayed at times that the Opposition cannot bring themselves to welcome that, bang the drum and support it. We have no problem with rolling up our sleeves and working with the Welsh Government in the interests of Wales. Why does the Welsh Labour party at this end of the M4 have a mental and political block that prevents it from being a constructive Opposition in the interests of Wales?
Ian Lucas
As someone who has run a small business in Wales, I ask the right hon. Gentleman whether he understands that his Government’s policies are doing the economy down. His Government are suppressing demand in the local economy by cutting wages, increasing taxes such as VAT, and preventing people from having enough money to spend to help local business. Does he not understand basic economics?
Stephen Crabb
What I do understand is the way unemployment has been falling in the hon. Gentleman’s constituency. He should be championing the fact that youth unemployment has fallen by 49% in the past four and a half years. That is more lads and more girls in his constituency getting their first jobs and a foot on the jobs ladder. That is what it is all about.
Last Friday, when Opposition Members were working out what clever things they were going to say in this debate and trying to find new ways to talk down the Welsh economy, what were we doing? I will tell them where I was last Friday: I was down in Newport, standing shoulder to shoulder with the UK Prime Minister and the Welsh Labour First Minister. We were all banging the drum for more investment in Wales, banging the drum for more jobs for Wales, together sending a united, strong, positive message from Wales that Wales is coming back. We all need to work together to see that continue.
Paul Murphy
I fancy it is because of the money that has been cut from the budget generally, because of what the Government here are doing by reducing the amount of money that is coming through the block grant. The Secretary of State actually said somewhere in his speech—he is getting a bit like his boss now, making things up from time to time—that there was no inward investment in Wales in 13 years of the Labour Government. That is rubbish—of course there was inward investment in Wales during those 13 years. As Secretary of State, I went around talking to firms that had benefited from inward investment and so on.
Stephen Crabb
I did not actually say that, and I apologise if I did give that impression. The point I was making was that there was a collapse in the inward investment: compared with what we had seen in the ’80s and ’90s, there was a huge decline over that 13-year period in the amount of inward investment coming to Wales. Thankfully, with the Welsh Government and UK Government working together, we are seeing that go back up.
Paul Murphy
The Welsh Government are certainly doing it, because foreign investment in Wales has increased by 30% whereas the figure for England is 10%—I rather suspect the work of the Welsh Government has made the difference.
The other issue the Secretary of State has to take into account is the welfare policies of the Government. In effect, those changes in Wales are doing two things that are detrimental to the people of Wales. I agree with reforming the welfare agenda and I agree that we should not have workless families in Wales—we all agree on that—but the great brunt of the cost of these welfare reforms often falls not on those who are out of work but on those who are in work. Those people in work are suffering sometimes more than anybody else.
Last week’s report by Sheffield Hallam university showed graphically how the south Wales valleys have been hit harder by welfare reform than any other part of the United Kingdom. We can talk about the impact on individuals, which is catastrophic, but we can also talk about the sucking out of the local economies the money that would have gone in had these people still been receiving these benefits. The reforms will cost £34 million a year in my constituency alone, and the average loss of income per working age adult in Torfaen is nearly £600 a year—in one ward, Trevethin, the figure is £850. Some 3,000 jobs in the south Wales valleys could have been created but for the impact of these so-called welfare reforms put in place over the past few months and years, which have been pretty botched.
Finally, I wish to refer to the bedroom tax and make no apology for doing so. One of the first things the new Labour Government will do is abolish it, and everybody in Wales will cheer. Not only is it cruel and wicked, but it is not working. Some 20% of housing benefit claimants in my constituency are affected. In the first year of the policy Bron Afon, which runs social housing, had 268 tenants fall into arrears; we are talking about some £63,000 of arrears that people never had before until this came about. That is not helping anybody. It does not help the tenants, the local authority or the social landlords, and it again takes out of the local economy vital money that could be used to boost local businesses, particularly small and medium-sized enterprises. Ultimately, that is why we have seen an enormous increase in the number of people using food banks in both my constituency and the rest of Wales. Until two or three years ago, I never saw a food bank. Now, we visit them time and again. Our churches and our chapels collect for them every Sunday. That increase is a direct result of the Government’s policies in Wales, which will undoubtedly be rejected by the people of Wales next year. We will then have a Government in Cardiff and a Government in Westminster working together for the benefit of the people of Wales.
Huw Irranca-Davies (Ogmore) (Lab)
I am delighted to follow that excellent contribution by my good friend the Member for Ynys Môn (Albert Owen), which struck the right balance between the necessary optimism and the vision we have for a better future and the real challenges.
It has been a passionate debate and I have been as passionate as many with my interventions, but I want to say first that when I speak for my constituents, I speak for all of them. Many of them are in small businesses and micro-businesses—one man or one woman operations that they intend to build up slowly. They drive the economy locally. I also speak, however, for people who work within the set-up of Raspberry Pi down at the old Sony site at Pencoed in my constituency, and who have reinvented a way to take computers forward, so that everybody can pull them apart and put them back together, and use them in schools and for developing nations, and have different applications for them. They are helping our trade balance, and that is a fantastic story, as is the story of Ford Bridgend in the neighbouring constituency represented by my hon. Friend the Member for Bridgend (Mrs Moon). Ford consistently employs and invests in that plant, and takes on many apprentices.
Stephen Crabb
I am pleased that the hon. Gentleman has mentioned the case study of Raspberry Pi. Does he agree that this is a great example of what we now call reshoring? It has brought back the manufacturing of this product from China to the UK, helping the trade balance. It is a great example of what we mean by rebalancing the economy.
Huw Irranca-Davies
I agree. It is an astonishing story, showing how sometimes the coincidence of business and political networks meeting happens, so that an offhand conversation can lead to a company thinking, “Well, why do we have to be out in the far corners of the world? Why don’t we come back here? We have a skilled work force.” Sony Bridgend, which has had difficult times over the past couple of decades, has re-engineered itself as a national award-winning centre of design in manufacturing and production, and that is what attracted the company back. It has been a huge, rip-roaring success, and there are another 20-odd companies on that site that we hope will build up as well.
That is all good, and I welcome every instance of the claimant count dropping, but we also have to look at the other side of the story. As parliamentarians, no matter what seat we represent, we have to look at the kind of jobs that those individuals are going into. As my hon. Friend the Member for Ynys Môn said, we need to ask whether they can get credit or a mortgage. Can they think seriously about setting up a home for a family and a future? Can they rent somewhere?
I am sure that Members on the Government Benches know in their heart of hearts that behind the claimant count drop there are a lot of people who want to be paid a bit more, who want to work a few more hours and who want the certainty of a permanent contract with the protection that any decent employer would surely want to give to a decent worker. That does not involve loading burdens on an employer. Government Members often tell us that we know nothing about this, but I can tell them that I have managed businesses in the public and private sectors. I understand the challenges of balancing a business plan and bringing in the bottom line, but that has to involve treating the workers decently as well.
We cannot achieve this overnight. This is not just a case of extolling the virtues of business and job creation; let us also talk about the quality of those jobs. Let us take businesses, large and small, by the hand and ask what more we can do to lift people up by giving them skills, education and training, a decent wage and decent terms and conditions. That involves making an investment in the worker as well as in the plant. There are many good companies out there. I am trying to avoid using a soundbite, but this is a reflection of the reality in my constituency: it has an M4 catchment. We can travel down into what is still a very good manufacturing centre along the M4. Thanks to Labour’s investment over the years, people can also get on a train in Maesteg—now at a lower price than a couple of years ago, thank goodness—and travel to work in Cardiff or Newport.
Let us take as an example a youngster who has to get a minimum wage job. Getting to work could mean spending £5 a day on a ticket or driving in a clapped-out car that will cost them 50 or 60 quid a week. When they ask me whether it is worth going out to work, I will say, “Of course it’s worth it. It is always worth going out to work, because of all the good things that come from being a valued member of a work force.” I want those people to be valued. I want them to be paid decently. This debate has sometimes seemed polarised, but this is not a question of me, as the MP for Ogmore, standing here and saying that all businesses are horrible. They are not; they create the jobs. We can put some of the framework in place and make it easier for them to create the jobs, but it is the businesses themselves that create and drive those jobs, and the people in those jobs need to be treated decently.
It is not all doom and gloom in my constituency, but when I first became an MP, there was one food bank there. Now, there is not a single village without a food bank. Last week, I went to the setting up of a Christians Against Poverty debt advice centre. We already have a citizens advice bureau, as well as debt advice being given by Valleys to Coast. We have had a tenfold increase in the number of people in work who are taking out payday loans.
Yes, let us welcome job creation, but let us also be honest about what we want out of those jobs. I do not want anyone to be forced into taking two or even three low-paid jobs. They should be able to find an employer who will pay them decently to do a job with good terms and conditions and who will value their contribution. I do not want youngsters or people close to retirement to be told that their only option is a job in retail with no guaranteed hours. I do not want them to be told, “We may or may not call you but, my God, if we do, you’d better come in because if you don’t, there are half a dozen other people who will do the job instead.” I do not want that. It is not a good way to drive an economy.
Let us have some frankness in the debate. If we can say that we want job creation but we also want them to be good jobs, we will have done a good job for our constituents. That, by the way, means tackling one of the biggest scandals that I have come across recently. There has been a massive change since March or April this year, with HMRC’s new rules and its approach to umbrella companies in construction. Constituents are coming into my office, skilled, long experienced construction workers, who are £100 a week worse off. It is there in their pay slips and it is legal. It is due to subcontracting out beyond the original contractor to umbrella companies, which deduct payments from those workers. If one thing comes out of today’s debate, I hope it is that the Minister will condemn that practice and undertake to destroy it.
The Parliamentary Under-Secretary of State for Wales (Alun Cairns)
I thank all Members for their valuable contributions. It is fair to say that the tone of the debate changed somewhat from the negative one that prevailed at the outset to the more measured contributions by the hon. Members for Islwyn (Chris Evans), for Aberavon (Dr Francis) and for Ogmore (Huw Irranca-Davies).
This coalition Government inherited an economy that was on its knees. Throughout the past decade, we have had an unstable model for the economy. There was an over-reliance on the public sector, the financial services sector and economic growth from London and the south-east. In spite of the crocodile tears and the synthetic anger that we saw from the shadow Secretary of State, the situation was even more perilous in Wales. One of the saddest legacies that we inherited from the previous Administration was that Wales was the poorest part of the United Kingdom, and that was after 13 years of control from Labour Members. Ultimately, their economic model came crashing down.
We have a long-term economic plan that is working and delivering the recovery for Wales. It is based on investment in infrastructure—both digital and traditional —the development of skills, welfare reform, and making Wales and the rest of the UK a more competitive environment for business, which is something that some Labour Members have recognised today. I pay tribute to my hon. Friend the Member for Aberconwy (Guto Bebb) for being a strong and doughty champion for small businesses and the self-employed in his constituency.
Geraint Davies
Does the hon. Gentleman not accept that the British economy grew by 40% in the 10 years to 2008, before the banking crisis? Since then it has virtually flatlined, which is why his party has borrowed more in four years than the Labour party did in 13. It is a disaster.
Alun Cairns
I will happily repeat that, in 1997, Wales was not the poorest part of the United Kingdom. But between 1997 and 2010, Wales sadly and tragically became so. That was when the hon. Gentleman was a Member for Croydon Central, before he decided to come back home to Wales, so he will have played a part in the policies that led to such a devastating consequence for Wales and the Welsh people, and that is something for which he should apologise. Investing in infrastructure is key to our economic plan, and Wales has rightly received significant sums for some major projects.
I cannot mention railways without paying tribute to my right hon. Friend the Secretary of State for Wales for his hard work and persistence in seeking a solution to secure the electrification of the line all the way to Swansea and of the valley lines as well. That is the largest investment in railways in Wales since Victorian times. Wales was sadly left in the slow lane when it came to railways. After 13 years of a Labour Administration, Wales, Moldova and Albania were the only three countries in Europe that did not have any electrified railways. Wales is now set to benefit from rail investment worth £2 billion. Our north Wales link to Liverpool is being renewed through the Halton Curve, which is welcomed by all businesses in north-east Wales and north-west England. Crewe is becoming a hub station for HS2, which offers new opportunities to the whole of north Wales, ensuring that we all benefit from this major UK strategic investment.
It was 12 months ago that my right hon. Friend the Chancellor announced a funding package to enable the upgrade of the M4 around Newport, which was something for which businesses had been calling across the whole of the south Wales corridor. That project was cancelled by the previous Administration in 1997 after my right hon. Friend, the current Leader of the House, committed to it when he was the Secretary of State for Wales. The project was cancelled by Labour but reinstated by the Conservatives.
I was sorry that the hon. Member for Wrexham (Ian Lucas) did not welcome the £212 million investment for a new prison in Wrexham. Even after it is up and running, its operational activity will involve £23 million being pumped into the economy each year.
Wales is playing its part in our energy infrastructure upgrade after years of neglect that led to the risk of the lights going out throughout the United Kingdom.
Albert Owen
The Minister is aware that Wales pays among the highest distribution costs in the whole of the United Kingdom, as is reflected in our bills, so would he support flattening those costs throughout the United Kingdom? Some areas might have to pay a little more, but north-west Wales actually produces energy and we pay too much for it through our bills.
Alun Cairns
Of course, that is a matter for Ofgem, as an independent organisation. I know that it has made changes and I look forward to its further deliberations. I am sure that the hon. Gentleman recognises the major investment of £20 billion for Wylfa nuclear power station on Anglesey, which will create 6,000 construction jobs alone.
Of course, such activity does not stop at hard infrastructure, and upgrading our digital networks is central to our plans. Wales is benefiting from £69 million of Government investment for superfast broadband to provide access to more than 275,000 homes and businesses, although I did not hear any welcome for that from Labour Members. By spring 2016, 96% of Wales will have access to superfast broadband connectivity. Further digital projects include Cardiff and Newport being part of the Government’s super-connected cities programme. A pilot programme in Monmouthshire to tackle hard-to-reach areas offers exciting prospects, while the mobile infrastructure project to which the hon. Member for Ynys Môn (Albert Owen) referred is a clear plan to start filling the not spots.
As well as dealing with infrastructure, there was a need to reform the benefits system. The historical problems of worklessness in some communities in Wales were another legacy of the previous Labour Administration, but the Work programme is offering new prospects. It has already supported back into work more than 15,000 of those who were furthest away from employment. Universal credit is simplifying the tax and benefit system and increasing the incentive to work. Some 200,000 households in Wales will have higher entitlements under universal credit—on average, £163 more a month—and the poorest claimants will benefit the most. Shotton in Flintshire is already live and the rest of Wales will be online by April 2016. This is a once-in-a-lifetime opportunity to change the benefits system for the better. The changes offer the opportunity of transforming the fortunes and prospects of families and communities. Alongside the benefits cap and other measures, they will make work pay for everyone.
Supporting business is a key part of the long-term economic plan. More than £100 million has been provided to businesses in Wales through the business bank. More than 600 start-up loans have been awarded to businesses in Wales to release the entrepreneurial spirit mentioned by my hon. Friend the Member for Aberconwy. Some 35,000 businesses in Wales have benefited from the employment allowance to help them to grow and take on new workers. We have a disproportionate dependence on energy-intensive industries, and they will benefit from our energy package of £240 million, which I am sure that the hon. Member for Cardiff South and Penarth (Stephen Doughty) will welcome in the light of his interest in the industry in his constituency. Our enterprise zones on Deeside, and at Ebbw Vale and Haven Waterway, will benefit from enhanced capital allowances until 2020, which will give investors incentives and security.
If I had time, I could highlight so many more policy areas where I can show that Wales is coming back. Outcomes are the most important measures. I have been talking about inputs until now. When we combine the impact of these changes as part of our long-term economic plan, there is little wonder that the number of people claiming jobseeker’s allowance has fallen for 20 consecutive months—
Ms Rosie Winterton (Doncaster Central) (Lab)
claimed to move the closure (Standing Order No. 36).
Question put forthwith, That the Question be now put.
Question agreed to.
Main Question accordingly put.