Wales Bill

Baroness Primarolo Excerpts

Wednesday 10th December 2014 Commons Chamber

Consideration of Lords amendments

[Madam Deputy Speaker (Dame Dawn Primarolo)]

I must draw the House’s attention to the fact that financial privilege is involved in Lords amendments 1 to 17. If the House agrees to any of them, I shall ensure that the appropriate entry is made in the Journal.

Clause 8

Welsh rates of income tax

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

I beg to move, That this House agrees with Lords amendment 1.

[Madam Deputy Speaker (Dame Dawn Primarolo)]

With this we may take Lords amendments 2 to 13 and 17.

[Stephen Crabb]

Taken together, these amendments remove the so-called lockstep mechanism from the income tax provisions. By removing that mechanism so that the Bill reflects the Silk commission’s recommendation in its part I report, the National Assembly for Wales will be able to set separate Welsh rates of income tax for each band. Subject to a referendum, all three income tax rates would be reduced by 10p, and the Assembly would decide a separate Welsh rate for each band. Those Welsh rates would be added to the reduced UK rates.

The lockstep is probably second only to dual candidacy as the most debated aspect of the Bill; it has been debated at great length in both this House and the other place. I have been clear throughout the passage of the Bill that I have been prepared to listen to all the arguments and perspectives and, if necessary, to take a different approach on the lockstep. That is exactly what I have done. Before I go any further, I would like again to place on the record my thanks to my right hon. Friend the Member for Clwyd West (Mr Jones) for his hard work and perseverance as Secretary of State for Wales in guiding the Bill through its early stages.

On Second Reading, the hon. Member for Rhondda (Chris Bryant) made a point of counting the number of times my right hon. Friend used the word “accountability” in describing the Bill; I believe that he stopped at 15. Frankly, though, my right hon. Friend could have used it 15 times more because the Bill was, and is, all about accountability. By being made responsible for raising a proportion of the money that they spend, and allowing the people of Wales to judge them on how they spend it, the Assembly and the Welsh Government will become more accountable to the electorate.

In removing the lockstep, we are removing what was widely seen to be a deterrent to the Welsh Government’s accepting the devolution of income tax in Wales. Given the other financial provisions in the Bill and the full devolution of business rates, which, as my right hon. Friend the Chancellor confirmed last week, will be implemented as planned next April, the Assembly would become responsible for raising around a quarter of the money that it spends.

Hon. Members will be aware that last week the Office for Budget Responsibility published a forecast of devolved tax revenues for Wales alongside the autumn statement. That showed that revenue from the 10p of income tax that would be devolved to Wales would net the Welsh Government almost £2 billion in 2014-15—about nine times as much as stamp duty land tax and landfill tax combined. The figures show, in black and white, that through the Bill we are providing the Assembly and the Welsh Government the tools to help grow the Welsh economy and take responsibility for raising a significant portion of the money that they spend. The removal of the lockstep makes it even easier for them to do that.

I welcome the First Minister’s statement in the Senedd last week in which he confirmed for the first time that he would accept income tax devolution. That is indeed progress. But—and there is always a “but”—once again he hid behind the self-imposed “barrier” of funding. I have always said that the powers in the Bill should be as far-reaching and flexible as possible, to provide the Welsh Government with the tools to grow the Welsh economy. Where we have committed to removing obstacles, however, the First Minister continues to erect them. He seems intent on denying the people of Wales their rightful say on whether income tax powers should be devolved, rejecting the opportunity to make the Welsh Government more accountable to those who elect them and refusing to accept responsibility for raising more of the money that they spend.

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[Madam Deputy Speaker (Dame Dawn Primarolo)]

Order. I have no idea what is being talked about here. We are not discussing Swansea football club and we are not discussing suits or weddings. The hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards) is supposed to be making an intervention on the tax-raising powers in the Wales Bill. Perhaps he could face me, so I could hear him; and, secondly, he could make sure that his intervention is in order.

[Jonathan Edwards]

I am grateful to you, Madam Deputy Speaker, for saving me because my good friend was distracting me on the basis of some spurious points. Is it the position of the Labour party, should it form the next UK Government, that HS2 will be seen as an England-only project and not a UK-wide project, thus giving Wales its rightful consequentials of £2 billion, which the hon. Gentleman mentioned?

[Geraint Davies]

rose—

[Madam Deputy Speaker]

Order. The hon. Member for Carmarthen East and Dinefwr is now trying to tempt his friend—having claimed that his friend was tempting him—to go down a route that we are not discussing today. We are debating Lords amendments on the tax-raising powers in the Wales Bill. Geraint Davies now has the Floor.

[Geraint Davies]

Let me publicly assure Mrs Edwards that the wedding was not spurious. I congratulate the hon. Gentleman on both his point and his suit. It is a very nice suit, in black and white.

As I mentioned earlier, the differential rates pose a real problem. There is a presumption that Wales will not lower the higher rate, but a very small number of people in Wales earn more than £150,000 a year. They currently pay 45%, and will pay 50% under a new Labour Government. In theory, if a new Labour Government in Cardiff or Westminster—or any other Government, for that matter—reduced the top rate and a large number of people simply slipped across the border, they would be evading large amounts of tax. Obviously Wales would benefit, because more money would be coming in, but for the overall tax-paying community, the amount would go down, and that is of legitimate concern.

I should like to hear from Ministers what evaluation the Office for Budget Responsibility has made, producing different forecasts with different scenarios. My guess is that it has made none, and that this legislation is being rushed through in the hurried aftermath of what happened in Scotland, so that Wales can be given something comparable to the quick settlement that was made following electoral concerns in Scotland as we move towards a general election. That is not the way in which to establish a new constitutional settlement and a settled financial regime. It is all very well the hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards) saying “You want harmony, we have difference, so it does not matter what happens.” Such changes and differences bring pressures that are not settled, and which will be replicated in the future.

Air passenger duty has been mentioned. Other things being equal, if someone says, “Can I set my own air passenger duty?”, the response might be, “That’s brilliant: we can raise some money.” But what if Boris Johnson in London says, “Hold on, there is a precedent here, I want the money for Heathrow, and I am going to lower air passenger duty”, which is what he has said about stamp duty? We are talking about major shifts in the financial powers across the Union, which will unsettle the Union itself. Obviously we want a devolved settlement that is stable rather than ever-changing, rather than the setting in motion—by means of a quickstep to avoid short-term political advantage—of a system that will unravel into chaos.

I know that there seems to be consensus across the Floor of the House today. It is a case of “Don’t worry; we will have a referendum, and hopefully it will be all right on the night.” What I have just described will probably not happen in Wales, because what prospect is there of our suddenly having five UKIP Assembly Members and a regional list? Oh, there is such a prospect; well there we are. What prospect is there of a newly emerging rainbow alliance—perhaps a very unfortunate rainbow with not a crock of gold but a crock of something much more unpleasant at the bottom of it, which will generate a cynical, unfair tax proposition that will lead us back into the dark ages? That is possible. [Interruption.] Obviously there is agreement, as laughter leads the room.

[Sammy Wilson]

I am glad to learn that the hon. Gentleman has now joined the Unionists in his heart, but does he accept that once we start to disaggregate the fiscal arrangements for the United Kingdom, real constitutional issues become involved? The danger is that the more fiscal powers are devolved to regional administrations, the looser the Union will become. [Interruption.]

[Madam Deputy Speaker (Dame Dawn Primarolo)]

Order. This is ridiculous. The debate is degenerating into some sort of Christmas party. Members are just shouting at each other. This is a proper debate on Lords amendments. Members who have been in the House for a long time know that heckling, or comments from a sedentary position, are not acceptable. Mr Davies, I should be really grateful if you would now focus on the points in the Bill, so that we can hear the rest of your comments, followed by the Secretary of State’s conclusion. I shall do my best to ensure that you are not interrupted, or tempted to answer questions that are not asked formally in the Chamber.

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[Alun Cairns]

I beg to move, That this House agrees with Lords amendment 14.

[Madam Deputy Speaker (Dame Dawn Primarolo)]

With this it will be convenient to consider Lords amendments 15 and 16.

[Alun Cairns]

These amendments provide that, when a resolution to hold a referendum on income tax powers is moved in the National Assembly for Wales, the Assembly must state as part of the resolution whether the voting age for that referendum is to be 16 or 18. During the Bill’s passage through the other place, a number of peers sought to extend the franchise in Wales to 16 and 17-year-olds. They highlighted the fact that young people in Scotland had been able to vote in the independence referendum, but young people in Wales would not be able to vote in a referendum on income tax powers. I pay tribute to the younger voters of Scotland who actively registered and voted in that referendum. I know that many people felt that the involvement of 16 and 17-year-olds helped to reinvigorate the political process and the political parties, and I understand why the Bill has reignited the debate on these issues.

Government Policies (Wales)

Baroness Primarolo Excerpts

Wednesday 26th November 2014 Commons Chamber

[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.

[Madam Deputy Speaker (Dame Dawn Primarolo)]

Order. The Secretary of State will not have deliberately misled the House. If it has been pointed out that he is incorrect, I am sure that he is capable of making the correct entry in the record now.

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[Several hon. Members]

rose—

[Madam Deputy Speaker (Dame Dawn Primarolo)]

Order. Given the short amount of time that we have left for this debate, it is necessary to put a time limit on Back-Bench speeches. We are starting with seven minutes. It depends on how many interventions there are whether that limit will be reduced further. So there will be a seven-minute limit on all Back-Bench contributions to this debate, from the next speaker.

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[Guto Bebb]

I will not take an intervention from the hon. Gentleman. It is about time that the Labour party heard some hard truths about the way it has failed Wales time and again. That failure in Wales is replicated in Scotland. The Scots have seen through the failure of Labour; it is about time that the people of Wales did the same.

The people of Wales should turn to the Conservative party and this coalition, as we are showing people that we can make a difference to their situation. We can ensure that we create employment. In my constituency, unemployment has fallen by 42% since the coalition came to power, and we should welcome that fact. I am proud of every single one of those jobs. My constituency had 13 years of a Labour MP, and it is not hard to guess what happened to the unemployment figures—they went up. With this coalition, unemployment is falling. We have an increase in the number of people employed and self-employed in my constituency, and we should be proud of every single one of those individuals.

The Opposition always say that they can make a difference to Wales, but they believe that the difference lies in the hands of Government. We believe that difference can be made by people setting up their own businesses and making a success of those businesses. Last week, the Under-Secretary of State for Wales, my hon. Friend the Member for Vale of Glamorgan (Alun Cairns), visited two businesses in my constituency. We failed to visit a third because the owner was in London winning an award. That owner is not just the UK butcher of the year but a man who started a business that now employs 60 members of staff—[Interruption.] The Labour party is laughing at entrepreneurial job creation in my constituency. My hon. Friend then visited the Welsh food centre, which was established two years ago and now employs 60 members of staff. It is the largest privately led project in north Wales and has been receiving funding from the European Union. It is a fantastic success story—somebody had a vision; they were willing to implement it and take a risk with their own money. [Interruption.] The hon. Member for Rhondda (Chris Bryant) is chuntering from a sedentary position. He does not understand what running a business means, let alone appreciate the difficulties. It is that type of success story that is changing lives in my constituency.

The success of small businesses in my constituency has been helped by the fuel duty freeze and the cuts implemented by this Government. The Labour party, by contrast, has bled our rural communities dry with its fuel duty escalator. My constituency also has a significant number of people of above-average age, including a lot of pensioners. Despite the economic inheritance that the Labour party gave us, those pensioners have been protected by the triple lock. The degree of respect that they have been shown by the coalition contrasts with the insult of the 75p pension increase provided by the Labour party. Labour Members say that their party looks after the poorest in society, but it was willing to forget our pensioners. In difficult economic times, the coalition has not forgotten our pensioners, and those people will remember that at the general election.

A key point to remember is the way we have tried to be reformist in difficult times. The Government’s introduction of the single-tier pension is immensely important to a constituency such as mine, which has a significant number of self-employed people. In such times, the coalition Government are not scared of taking long-term decisions that will make a real difference to my constituents’ lives. We hear complaints from Labour Members about changes to the welfare state, but we know why: they like a compliant, complicit population. The truth of the matter is that the welfare state in Wales was not working and we needed to ensure that changes were made.

One of the key successes of welfare reform throughout the United Kingdom, although perhaps not so much in Wales, is the Work programme. Its huge success will grow, as National Audit Office reports clearly show. Labour Members often talk about the Work programme supporting the lowest hanging fruit, but no one—not a single individual—accesses the Work programme unless they have been unemployed for at least 12 months. Compare and contrast that with the situation under Jobs Growth Wales which, by the way, I have supported and publicised to my business community. Under that programme, a person can be a graduate today and on Jobs Growth Wales tomorrow, but someone cannot get on the Work programme until they have been unemployed for 12 months, so it genuinely helps the hardest to reach. Jobs Growth Wales has done a good job, but it is not an attempt to support such individuals. We have a success on our hands—

[Madam Deputy Speaker (Dame Dawn Primarolo)]

Order.