Wales: Economy

Baroness Randerson Excerpts

Monday 7th April 2014 Grand Committee

[The Parliamentary Under-Secretary of State, Wales Office (Baroness Randerson) (LD)]

My Lords, I thank the noble Baroness, Lady Morgan, for securing the debate today on this important issue. I have to remark on the change of rhetoric from the Opposition. A year ago, when unemployment was still higher in Wales and the statistics were not so good, we discussed this issue and the Labour Party told us that it was all the UK Government’s fault that Wales was lagging so badly behind. Now that unemployment in Wales has fallen and there are signs of recovery, which we would all welcome strongly, of course, the rhetoric from the Benches opposite is that this recovery is due entirely to the Welsh Government: the UK Government bear no responsibility for it at all.

The truth of the matter, as all noble Lords actually know, is that we all strongly welcome the fact that Wales is at last starting to catch up. Several noble Lords have referred to the fact that the problems with the Welsh economy have existed for many decades, and GVA—to which the noble Lord, Lord Wigley, referred—has been a persistent problem as it has declined over the years. These are not sudden problems and it is absolutely clear that there are levers in the hands of the Welsh Government, but the macroeconomic levers of course remain with the UK Government. It would be helpful if the noble Baroness took some of the advice of the noble Lord, Lord Rowe-Beddoe, and adopted a more open-minded approach to this.

The truth is that, since 2010, the UK economy has gone from rescue to recovery. Wales is now in a great position to take advantage of this. The economy is growing and, as the Chancellor outlined in the Budget, Wales is growing faster than forecast, as is the UK. We are now growing faster than Germany, faster than Japan and faster than the US. I remind the party opposite that it claimed that none of this growth would be possible if the coalition Government continued to take the difficult decisions to deal with the deficit. It predicted disaster, and disaster we have not seen.

I will refer to one or two issues relating to employment. It should be emphasised that since the end of the first quarter of 2010, employment in the private sector in Wales has increased by 114,000. Over the past quarter alone, private sector employment increased by 12,000. Although there has been, as the noble Baroness said, a decline in the number of people employed in the public sector, that decline has been proportionately very much lower than in the rest of the UK and has been very significantly outstripped by the number of jobs created in the private sector.

Reference was made to youth unemployment, which of course seriously worries us all, but youth unemployment was a long-standing problem in Wales. It rose by 74% under the previous Government. It is therefore hugely welcome that the youth claimant count was down by 3,500 in the most recent statistics in February last year. Once again, there appears to be a better picture.

The noble Baroness, Lady Gale, referred to women in the labour market. I am so pleased that she drew attention to that. Since May 2010, the number of women employed in Wales has increased by 36,000. I draw her attention to the fact that, on International Women’s Day, I hosted an event in the Wales Office with leading businesswomen and women in academia in Wales. She asked whether the UK Government had a similar scheme to the one in Wales. The Women’s Business Council has existed for a considerable time and is designed to encourage women at the top of business and to ensure that there is a better spread throughout the business world.

More people have been going out to work in Wales than at any time in our history. Since the election, 81,000 more people are in work in Wales. The employment rate, as has been noted, has increased by more than in any other region of the UK over the year, and unemployment in Wales is now below the UK average, at 6.7%. We absolutely agree that times have been tough for households as the economy recovers, throughout the UK and in Wales, but it is important to acknowledge that, last year, average earnings in Wales increased by 4.4%. That is more than twice the rate of inflation, inflation now being 1.7%, at a four-year low.

Central to the coalition Government’s measures to support families and those in work is the increase in the income tax personal allowance. Only last week, a further 13,000 people in Wales were taken out of income tax—in fact, that happened only yesterday—and 144,000 have already been taken out of income tax altogether in Wales. With our further increase in the personal allowance announced for April 2015, a total of 155,000 people will have been taken out of income tax in Wales as a result of the Government’s decisions. That will make a real difference and will be worth £805 per year to those people, providing a boost to living standards. I also say that, with 1.2 million people working in Wales, virtually everyone in work in Wales will have benefited from the income tax cut to the personal allowance. I see that there is a Division.

[The Deputy Chairman of Committees (Baroness Gibson of Market Rasen) (Lab)]

My Lords, there is a Division in the Chamber and this Committee will therefore stand adjourned for 10 minutes.

--- Later in debate ---

[Baroness Randerson]

Thank you, my Lords, I will resume. I wanted to speak about the support for business that the UK Government have been undertaking. In the Budget, the annual investment allowance was doubled to £500,000 from the end of 2015 to support businesses across the UK in investing and expanding. There was a business energy package, which is important for Wales because businesses like Celsa have high energy requirements in Wales. That package will be worth up to £240 million to businesses between 2016 and 2019. We are also extending by three years the period in which enhanced capital allowances are available to companies investing in enterprise zones: until March 2020.

Mention has been made of the investment in broadband. I remind noble Lords that this is UK government money. The UK Government have provided £69 million to Superfast Cymru and £150 million to tackle mobile coverage across the UK. Some £10 million has gone to Cardiff and £6 million will go to Newport for the Super-Connected Cities Project, so the concern about broadband connectivity is right but it is important that we pay attention to the speed with which it is being tackled, as indeed the UK Government are tackling the issues of infrastructure across Wales and the UK.

The noble Baroness referred to a war on Wales. Scrutiny is not war, nor is criticism. With government comes responsibility—the responsibility to deliver. One must not confuse wanting the best for Wales, pointing out where there are problems, with talking Wales down. It is important that the Labour Government in Wales take that scrutiny on the chin, if I may put it that way, and accept that they have to take responsibility.

I welcome the constructive comments from the noble Lords, Lord Griffiths and Lord Rowe-Beddoe, about the key aspects of our economy, the higher education institutions and the airport, which are essential to the growth of the Welsh economy. This debate has highlighted the fact that Wales is on the up but there is a long way to go. The proof is there that this Government are creating the right conditions for growth, but we fully accept that our job is not done and that there is still a long way to go.

Committee adjourned at 7.07 pm.