Dairy Industry

Debate between Guto Bebb and Jonathan Edwards

Wednesday 5th November 2014 Westminster Hall

[Jonathan Edwards (Carmarthen East and Dinefwr) (PC)]

Diolch, Mrs Riordan. It is a pleasure to serve under your chairmanship. I start by congratulating the hon. Member for Carmarthen West and South Pembrokeshire (Simon Hart) on securing this debate. I associate myself with many of his comments.

The Welsh dairy industry contributes about 10% of the milk produced in the UK, and Carmarthenshire is one of the places in Europe most ideally suited to producing milk, due to the plentiful resources of fresh grass. However, the long-term trends in the industry have not been particularly good. Since 1999, the number of dairy producers in Wales has fallen by 51.3%.

Recently, the price of milk has fallen below 27p a litre, with the cost of production being higher than that. First Milk has announced that it will cut its prices even further in December. In the Baltic states, the price of milk is down to 13p a litre; that shows the fall in milk prices throughout the EU and the world. Milk is a highly nutritious product and a vital component of any healthy diet, but in the supermarkets it is cheaper than water, so something is going wrong somewhere.

During the recess, I visited a local farm, Bremenda Uchaf at Llanarthney, in the middle of the Towy valley, with the Farmers Union of Wales to discuss the emerging situation in the dairy industry. As I said recently during Welsh questions, the most recent crisis has been caused by two main factors: another supermarket price war, in which dairy foods and milk in particular bear the brunt as they are gateway products; and reprisal Russian sanctions on EU food products. President Putin introduced a one-year ban in August, and CNN reported that it is worth £1.5 billion to the EU dairy sector. Demand for milk and other products, such as beef, has fallen significantly and over-supply in domestic and EU markets has depressed prices. I read in The Guardian today that the situation in the eastern part of Ukraine is still highly volatile, so the sanctions may remain in place.

[Guto Bebb (Aberconwy) (Con)]

On the impact of sanctions from Russia, does the hon. Gentleman believe that the Government should act in the same way as the Polish Government, for example, who have encouraged people there to eat apples to stand up to Putin? Should we not encourage people to eat Welsh cheese to stand up to Putin?

[Jonathan Edwards]

I would certainly encourage people in Wales to eat Welsh cheese and to drink as much Welsh milk as possible. My daughter is on a pint a day, so I am doing my bit for the cause.

The industry also faces other long-term challenges, in particular the end of milk quotas next year. Competitors in Ireland are preparing for this by increasing milk production, and unless there are strategies in place to help Welsh farmers, we could have a long period of milk price instability. I fear that there is a lack of political direction at Welsh Government level. In a recent evidence session of the Welsh Affairs Committee, the new Secretary of State for Environment, Food and Rural Affairs seemed to indicate to me that the current difficulties were likely to be short-term. I invite her to reconsider her position and to put in place interventionist measures to help the industry before we face another serious crisis, like the one we faced a few years ago.

I want to list a series of interventions that are needed, from the Department but primarily from the Welsh Government. We must ensure that all that can be done is done, and that no one in the supply chain is using the current downward price trend as a convenient excuse to make additional cuts to farm-gate prices. We need retailers who use milk as a loss leader to ensure that they fund those deals from their own profit margins and not from the pockets of farmers. It is vital that those retailers put transparent pricing mechanisms in place and ensure that suppliers are compliant with the voluntary code.

Put simply, milk being sold cheaply devalues the product in the eyes of consumers, and this could have long-term negative ramifications for the sector as a whole. It is extremely worrying to every dairy farmer to see milk being used as a battleground between retailers.

Housing Benefit (Wales)

Debate between Guto Bebb and Jonathan Edwards

Thursday 1st May 2014 Westminster Hall

[Jonathan Edwards]

I did not read that report, but it makes a point about the unbalanced nature of economic growth across Britain. I am referring to the rising housing benefit bill in the UK context. The statistics I have cited do not refer to Welsh house prices in particular.

The Committee’s report found that Wales is being hit hardest by the lack of single social properties in the social rented sector. Wales is therefore being hit by a policy designed to address the public expenditure implications of the dysfunctional London economy. As I have consistently argued, we need a range of reforms. Before becoming an MP, I was heavily influenced by the reforms in the Republic of Ireland. I used to be a policy officer for the citizens advice movement in Wales, and some of these issues were prevalent then. The 2004 reforms in the Republic of Ireland were welcome. The Residential Tenancies Act 2004 achieved a number of objectives. First, it set up a private residential tenancies board. Secondly, it regulated the private rented sector, with an extension of tenancies to a more European model of longer-term tenancies. Defined rights and obligations were provided for both tenants and landlords, and access was provided to an inexpensive dispute resolution system. The bonds that individuals who rent often have to pay were safeguarded—unfortunately, on too many occasions people lose those bonds—and rents were capped, which is a policy that exists across the world. There are rent caps in New York, the home of global capitalism, so it is difficult to define them as some sort of socialist trap.

[Guto Bebb]

I do think that rent caps are a socialist trap. The fact that they are supported by the Committee’s Labour members, Liberal member and Plaid member is unfortunate because, in Wales, many people who have invested in buy-to-let properties have done so because of the previous Labour Government’s anti-pension policies. For many of those people, their private rented property is their pension provision. I find the attack on those individuals, who are trying to take care of their own situation in retirement, unfortunate to say the least.

[Jonathan Edwards]

The point I am trying to make is that if the Government are serious about bringing down the housing benefit bill, the only way to do it is to cap the cost of rents in the private rented sector. That is what all the OBR projections indicate. It is interesting that the Select Committee Chair referred to the evidence of the TaxPayers Alliance. When I gave the alliance a choice of either reducing the housing benefit bill or preserving free markets, it said that it preferred preserving free markets, which is more important to the TaxPayers Alliance than the Government’s tax liabilities. Perhaps it should change its name to the Free Market Alliance.

[Guto Bebb]

I think it has already been accepted in this debate that there is a link between private sector provision of housing and social sector provision of housing. Would rent controls result in any increase in private sector provision of social housing? If not, how will it help anyone looking for rented housing in Wales?

[Jonathan Edwards]

My point is that the OBR’s figures indicate that the Government will not achieve their objectives with the bedroom tax. If the objective is to bring down the housing benefit bill, the only way to do that is via rent control in the private rented sector. I welcome the fact that the leader of the Labour party made a case overnight for some of the reforms for which I have been making a case for a number of years. Rent caps would drive down artificially high rental costs, and they would also curb boom and bust property speculation, which is a cycle we have seen far too often in the UK economy in recent decades. Rent caps would also help working people to remain in the cities, rather than being forced out, as they are in inner London. They would also stop the current policy’s social cleansing, through which people are forced to move from where they have lived for many years.

[Mr Clive Betts in the Chair]

We also need to consider supply issues, which many Members have highlighted. The recovery of the 1930s following the great depression was largely driven by a massive public housing building programme. Rents paid for public housing provide a steady stream of revenue, so it is an ideal vehicle for drawing down private sector funds to deliver economic growth and address some of the social problems that we face.

I will now quickly return to the local indicators in Carmarthenshire, and I will finish on this point. Applications for discretionary housing payments have rocketed in south-west Wales. Between 2012-13 and 2013-14, the budget increased by 64% in Carmarthenshire, by 106% in Pembrokeshire and by 118% in Swansea. There were only 327 discretionary housing application payments in Carmarthenshire in 2012-13, but between April and May 2013 there were 534 applications. That is a 63% increase in the first two months of that year, compared with the whole of the previous year.

Nearly 2,000 people have had changes to their housing benefit entitlements in Carmarthenshire since this policy was introduced. As I mentioned, this policy only makes savings if people stay and pay.

I finish on a point made by my colleague, the hon. Member for Ceredigion (Mr Williams). He mentioned the work of Paul James, a Plaid Cymru councillor for Llanbadarn Fawr, a veteran of the UK Army and also a servant of the French Foreign Legion, so he is not a man to be messed about with—[Interruption.] He has the Minister’s number! He is upset about the impact of the bedroom tax on veterans and their families, who were under the impression that veterans would be exempt full stop from it. Yet it appears that only people on active service are exempt. If that is the case, obviously, military personnel from Wales in barracks or in training would be outside Wales and not exempt, because our regiments are not held domestically. Our servicemen are not home-based; they go to barracks in England. Yet their families are being hit by the bedroom tax. The Minister must look at that. I should be grateful to hear his remarks at the end of the debate.

Fairness and Inequality

Debate between Guto Bebb and Jonathan Edwards

Tuesday 11th February 2014 Commons Chamber

[Guto Bebb]

It is not for me to correct the hon. Gentleman, but I am not sure whether the proposals were rejected by the Welsh Government. They were certainly rejected by the Labour Front-Bench team in Westminster—a significant difference. Perhaps Labour Members can enlighten us on whether there is a lack of trust between the Westminster team and the Assembly team.

The motion is wrong-headed in many ways, but its key failure is highlighted in the final sentence, which

“calls on the Government to halt its further spending and welfare cuts”.

That tells us that the motion is not serious. It talks about the importance of creating equality and opportunities and supporting people and communities, yet it does not recognise that to have a successful, sustainable economy we cannot carry on borrowing at rates that are unsustainable in the long term. There is nothing moral, fair or reasonable about asking our children and grandchildren to pay for our mistakes. We have a responsibility to future generations not to saddle them with unsustainable debts. We have an ageing population and a demographic problem, nowhere more so than in parts of north Wales that I represent. We face a real challenge to care for the elderly and to ensure that we have a fair pension system. Future generations will have to meet those obligations. In asking them also to meet our inability to take hard decisions, the motion is not a serious one, and it deserves to be rejected.

[Jonathan Edwards]

Will the hon. Gentleman inform the House what the debt to GDP ratio is now—it has risen under this Government, of course—and what it was in 1947, when the NHS was created?

[Guto Bebb]

The hon. Gentleman has made this point on numerous occasions. He is absolutely correct to say that the level of debt has increased under this Government, but for a party that says the level of debt should have increased at an even faster pace, it is hardly reasonable to argue that this Government have therefore failed. It should also be pointed out that we have an NHS that is, rightly, much more expensive and costly than it was in 1948, so that is a false analogy.

--- Later in debate ---

[Guto Bebb]

I reject the hon. Gentleman’s argument. To have more equality, we need more jobs and economic opportunities. The hon. Gentleman argues that that would happen with more Government spending as a proportion of the economy. If that was the case, then Wales would be, by a long stretch, the most successful part of the United Kingdom, because there is no part of the UK more dependent on the public purse. The dependency on public spending in Wales has led to failure not over the past three or four years, but over a 15 to 20-year period. It has not led to economic growth or prosperity, and it has not led to economic opportunities. Indeed, the very reverse is true: the size of the state in Wales is one of the reasons why the rebuilding job being undertaken by the Westminster Government is so important. In a Welsh context, we have created an economy that is unbalanced and has not created the variety of jobs needed to support our young people and ensure that we have an equal society. I argue very strongly that anybody who says that the answer to all economic issues in a Welsh context is more public spending is simply wrong.

[Jonathan Edwards]

Will the hon. Gentleman give way?

[Guto Bebb]

I will try to make a bit of progress.

The key point to remember is that those who now claim that the economic recovery has been too slow in coming are the exact same people who claimed that unemployment would increase dramatically because of the decisions taken in 2010. They are often the same voices who argued that there could be no growth without public spending, yet in Wales and in the whole of the UK we are seeing a vast increase in private sector employment. We have 1.5 million new private sector jobs, a ratio of almost 4:1 in comparison with the loss of jobs in the public sector. Wales is not an exception. Time and again when this is debated in the Welsh media, we hear people saying that the economic recovery is happening in London and the south-east. That is simply not reflected in the facts. In Wales, unemployment is falling and employment rates are increasing.

Anyone who is genuine about the opportunities necessary to reduce inequality would welcome the jobs that are being created. What we often hear from the parties on the Opposition Benches, however, is a complaint about the type of jobs being created: that they are not proper jobs and not the type of jobs we should be proud of. That is such a demeaning comment to make to people going out of their way to try to earn their living. I wonder how someone working in a Tesco or an Asda in my constituency feels when they hear a member of the Labour party demeaning a job as nothing more than shelf stacking. Such comments from a party that claims to represent labour are utterly disgraceful. I have made this point to the House previously and I will make it again.

One of the most moving things I have done as an MP was to visit a Tesco partnership store in Toxteth, in Liverpool. I can tell Members that a visit from a Conservative MP from north Wales is not something that happens very often at any store in Liverpool. The Tesco store in Toxteth was the largest inward investment into Toxteth since the riots in 1982. It was Tesco that undertook that investment. Half the staff employed at that store had been unemployed long term—for more than 18 months. The retention rate was more than 94% and the pride they showed in the fact that they were now working for a living was moving—there is no other way of describing it. I met one lady who ran the bakery section and asked whether she would ever want to move on. Her response was, “I’d have to be taken out of here in a box. It has given me my life back.”

Welsh Affairs

Debate between Guto Bebb and Jonathan Edwards

Thursday 1st March 2012 Commons Chamber

[Guto Bebb]

rose—

[Jonathan Edwards]

rose—

Commission on Devolution in Wales

Debate between Guto Bebb and Jonathan Edwards

Thursday 3rd November 2011 Commons Chamber

[Guto Bebb]

The hon. Gentleman is mixing up the question of fiscal changes, which is what we are discussing, with the issue he raises about GP surgeries. The fact that Northern Ireland has an uncompetitive tax regime compared with that of the Republic of Ireland is a huge political issue, and it is also well known that the republican factions in Northern Ireland have financed themselves through smuggling operations because of the different rates of duty on petrol.

I do not want to overstate this issue, but we should take it seriously. I am sure that we can successfully address it, and the Silk commission has been set up precisely to examine such matters. Members of Plaid Cymru often refer to the Holtham report as a document that is beyond criticism, and it highlights this issue in some detail. I think the Silk commission needs to look into it and come to a conclusion.

On fiscal responsibility, I was intrigued by an article in today’s edition of The Western Mail. I do not read The Western Mail often—after all, I am a north Walian, and we tend to read the Daily Post up in north Wales—but in that article it appears that the hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards) said that he did not support fully devolving fiscal responsibility and tax-raising powers to Wales at this point in time, as he thinks that would be inappropriate.

[Jonathan Edwards]

rose—

[Guto Bebb]

I agree with that; I think it would be inappropriate. We know that there is a huge funding gap between the amount of money raised in taxes in Wales and the public expenditure in Wales. I would therefore ask the hon. Gentleman whether he disowns the policy of his party, which is to call for independence—a policy that I am pleased to say the party never advocated when I was a member of it.

[Jonathan Edwards]

rose—

[Guto Bebb]

The question of fiscal responsibility does raise issues, therefore. [Interruption.] I was under the impression that honesty in this Chamber was appreciated. There are issues that we need to consider.

--- Later in debate ---

[Guto Bebb]

I did not notice that the hon. Member for Carmarthen East and Dinefwr was seeking to intervene. Earlier, I spoke with him in the Tea Room and told him I would be making that comment, and I would be delighted to take an intervention from him.

[Jonathan Edwards]

I thank the hon. Gentleman for his courtesy in giving way. As a former Member of my party, he will know that independence for our country is an aspiration, but that does not mean that we want it tomorrow. One reason for gradually devolving fiscal powers is to empower our economy to be strong enough to achieve that ambition.

[Guto Bebb]

That is an interesting clarification, which is contradicted somewhat by an article by one of the Plaid Cymru leadership contenders that appeared in the Daily Post last week, and in which it was stated that the constitutional aspiration of the party of Wales was clear. It was not a very clear statement, I thought.

--- Later in debate ---

[Guto Bebb]

I am not sure whether the most significant change would have to be in income tax. There is an argument for changing the rates of employers’ national insurance contributions, which could be beneficial from a Welsh economic perspective. Whether the changes require a referendum depends on the range and the outcome of the Silk commission. I would not want to commit myself on that at this point in time.

The concept of fiscal responsibility is something that everybody in Wales should welcome. I find it difficult to understand how anybody in this Chamber who believes that the Welsh Assembly should have a degree of accountability to the people of Wales can be opposed to the concept of fiscal responsibility. I look forward to the findings of the Silk commission on part I. I believe that they will contribute to the debate. It is crucial that all stakeholders in Wales contribute to this debate, because otherwise we will end up with a discussion not dissimilar to what the hon. Member for Monmouth described.

Finally, part II deals with constitutional changes and what further boundaries we need to consider, beyond the changes that have already been made. It is important to state that we are talking about boundaries within policy areas, not physical boundaries. Several individuals I know who live in Oswestry are slightly concerned about the comment that we are looking to change the boundaries. Personally, I would be delighted to welcome back Croesoswallt—or Oswestry—to Wales, but I do not think that that is the intention of the Silk commission.

When we talk about boundaries, we are talking about whether there are aspects of the relationship between the responsibilities of the Assembly and those of Westminster that we need to look at again. As has been said, matters such as transport are not fully devolved. That may be a good or a bad thing, but the main arteries going in and out of north Wales and south Wales go from east to west. Therefore, if there were improvements to the A55 in Flintshire they would be wasted unless there were improvements to the M56 in Cheshire. There are clearly transport issues that need to be examined. We have also spoken about the fact that health is not fully devolved.

Finally, we need clarification on energy policy. The opportunity for economic and employment growth in Wales as a result of large-scale energy projects is something that we should all welcome. However, there is confusion over whether permission for such projects is granted by the Welsh Assembly or Westminster. Businesses looking to invest in hydro, wind power or tidal power need clarity about where the permission comes from and where the responsibility lies. That would be beneficial to the Welsh economy. I sincerely hope that that will be considered as the Silk commission moves on to part II.

[Jonathan Edwards]

I thank the hon. Gentleman for giving way again; he is being extremely generous. He will be aware that his party and the Lib Dems fought the National Assembly election in May on the basis that they would extend energy consenting powers. Does he agree that it is a disgrace that the UK Government down here are ignoring those pledges that were made to the people of Wales less than six months ago?

[Guto Bebb]

I again thank the hon. Gentleman for his contribution. This is a difficult subject. There is clearly a need for clarity for the business community. Having said that, I would be extremely concerned if I was a resident of Anglesey who supported the new nuclear power station and the issue was completely devolved to the Welsh Assembly, which has a pathological hatred of anything nuclear. Clearly this is an issue that needs to be examined. The point that I am making is that the Silk commission will allow us the opportunity to consider this subject in detail.

Ultimately, what we do have—this is probably why the shadow Secretary of State was so churlish in his response to the announcement of the Silk commission—is a coalition Government who are willing to consult on a cross-party and non-party basis, and to talk to the people of Wales about the way in which Wales should be governed in the future. The Silk commission is being established to try to create real accountability for the Welsh Assembly, and in particular, it is examining the way in which some devolved areas need to be considered again to ensure that we have a settlement that works for Wales. I am astounded that any Opposition Members would oppose a consultation process.

Public Bodies Bill [Lords]

Debate between Guto Bebb and Jonathan Edwards

Tuesday 12th July 2011 Commons Chamber

[Jonathan Edwards]

I am grateful for that intervention, and the hon. Gentleman leads me on to my next point, which is about one of the key recommendations of the Welsh Affairs Committee report. I would like the Government, as part of the Bill—and the future funding formula for S4C, which was announced yesterday—to state clearly that cuts will be comparable to those for other public service broadcasters. That would appease many in Wales.

The Select Committee report also called on the UK Government to safeguard the funding for the channel beyond 2014-15. We argued that without long-term certainty of funding, the channel would not be able to plan its future commissioning strategy. We called for a long-term funding formula enacted in primary legislation. I therefore welcome the written statement yesterday as a positive step forward. The devil will be in the detail, but my colleagues and I look forward to working constructively to build on yesterday’s announcement, which in our view would have to be based on some sort of calculation inflation.

As a party we have major concerns that S4C will mostly be dependent on funding via the licence fee. Our preference would be for a direct funding stream. If the Department is intent on funding S4C via the BBC, the licence fee should be top-sliced. As my right hon. friend Lord Wigley said during the passage of the Bill in the other place:

“He who pays the piper calls the tune.”—[Official Report, House of Lords, 28 March 2011; Vol. 726, c. 1005.]

If S4C does not have total control over its own budget, its financial independence will be shot to pieces.

Ministers might be aware that the Broadcasting Entertainment Cinematograph and Theatre Union, the National Union of Journalists, the Writers Guild of Great Britain, Equity, the Musicians Union, and Cymdeithas yr laith Gymraeg have all jointly called for the resources available to S4C to be increased by raising a levy on private broadcasters, drawing on best practice in other countries.

[Guto Bebb (Aberconwy) (Con)]

The hon. Gentleman mentions the need for funding to be raised from other broadcasters. Does he accept that the Select Committee report indicated that the Welsh Assembly could play a part? The Welsh Assembly claims that it wants the channel to be accountable to it, yet it is not willing to put any money into the pot.

[Jonathan Edwards]

I am grateful for that intervention and I look forward to the day when broadcasting is devolved to the Welsh Government. In light of events of recent weeks, I expected support from across the House for the innovative idea of a levy on private broadcasters to support public service broadcasting in the UK. I hope Ministers are actively pursuing the idea.

That brings me to operational independence. The Committee called for assurances that operationally there would be no role for the BBC in the day-to-day management of S4C. I for one cannot see how anyone can claim that S4C is an independent broadcaster if it has personnel from another channel running its day-to-day affairs. I hope the Department will make a clear statement on the issue as the Bill progresses.

The ability of a public service broadcaster to hold Government to account is essential if it is to retain the confidence of its audience. Therefore we view the inclusion of S4C in schedule 3 as particularly worrying. The schedule enables the Department to make significant changes to the management and organisation of S4C without recourse to primary legislation.

I shall deal briefly with other consequences of the Bill for Wales. Much of the rest of the Bill refers to powers over environmental bodies being devolved to Wales. These bodies are listed in clause 13 as being the Welsh devolved functions of the Countryside Council for Wales, the Environment Agency, the Forestry Commissioners and Welsh flood and coastal committees. I seek clarification of clause 18 and the requirement of consent from UK Ministers. How is this to be operated, and in what situations do Ministers expect this to take place? I am also confused by the reference to the Secretary of State in clause 20(11). Does this mean that any order made by Welsh Ministers will be subject to a veto by the Houses of Parliament? That would clearly go against the result of the referendum in March. We will test these clauses in greater detail in Committee.

Finally, on consumer advocacy in Wales, the Bill proposes that Consumer Focus be abolished and its functions transferred to Citizens Advice in Wales and England. There is broad support for distinct consumer advocacy for Wales. There seems to be strong support among key stakeholders for advice and advocacy in Wales being brought under one body. I am glad that the UK Government have stated that they are open to making different provisions for Wales and Scotland following discussions with the devolved Administrations. I understand that current consumer bodies such as the CAB movement in Wales are adapting their governance structures in light of anticipated changes, and I urge the Department to work closely with Welsh Government Ministers and stakeholders to develop a solution that is client focused and best able to respond to the needs of the Welsh people.

Housing Revenue Account Subsidy (Wales)

Debate between Guto Bebb and Jonathan Edwards

Wednesday 10th November 2010 Westminster Hall

[Jonathan Edwards (Carmarthen East and Dinefwr) (PC)]

May I begin, Mrs Brooke, by saying that it is a pleasure and an honour to serve under your chairmanship this afternoon?

The topic of my debate is the housing revenue account subsidy scheme, and it aims to highlight one of the great injustices of public housing policy in Wales during the last 20 years. That policy has led to a reported £2 billion in cash terms—not taking into account inflation—of the rents of some of the poorest people in Wales being returned to the Treasury. It has also led to chronic under-investment in the Welsh public housing stock, which is among the poorest and of the worst standard in Europe, with the associated social and health implications. It has deprived our communities of a significant cash investment. Furthermore, it has driven the stock transfer agenda.

With the UK Department for Communities and Local Government scrapping the housing revenue account subsidy scheme for England in September—a decision that we in Plaid Cymru welcome wholeheartedly—there can be no justification for Welsh local authorities having to continue paying around £100 million per annum to the Treasury.

As far as Wales is concerned, the story of the housing revenue account subsidy scheme is one of great incompetence by both Labour and Tory politicians, who have miserably failed some of the poorest people in Wales. Perhaps that is not surprising, as I am reliably informed that only a very few individuals understand the full complexity of the scheme.

As part of the then Conservative Government’s relentless attack on public housing, the Local Government and Housing Act of 1989 led to the confiscation by the Treasury of a large part of the rents paid by tenants. The complication of the new arrangements was hardly helped by those arrangements being labelled as a “subsidy”. My understanding of the word is that “subsidy” should mean some sort of financial benefit, but that was certainly not the case in this instance.

The effect of the 1989 Act was to undermine the attractiveness of public housing by running down its quality, as investment was redirected from local communities. Rents in Wales were lower than those in England—they still remain lower now—and that led to less revenue in general. The quality of housing in Wales is also generally poorer. However, under the terms of the Act, local authorities were forced to return any surplus from expected rent, after operational and maintenance costs were met, to the Treasury, rather than investing those moneys in the housing stock. That had the bizarre effect of promoting the stock transfer of public housing, which is a theme I will return to later.

Perhaps the use of the word “subsidy” comes from the effect of the new arrangements, which meant that those council tenants who were able to pay their rents were, via the new funding mechanism, paying for the housing benefit entitlements of others. Of course, that did not apply to private rented sector tenants or to tenants of registered social landlords.

With HRA payments being used to fund housing benefit, the greater the money that the Treasury could accumulate via the scheme, the less it needed to pay out directly in benefits. Indeed, the 1989 Act allowed UK Government Ministers to set the expected level of rent income from each local authority, as well as the expected level of expenditure on maintenance and management of their homes.

[Guto Bebb (Aberconwy) (Con)]

First, I congratulate the hon. Gentleman on securing this debate. On that specific point, it is also worth pointing out that the decision in 1989 to introduce those changes also meant that there was a more equal distribution of rents among the local authorities in Wales. Indeed, there was a cap on the increase in rents for local authority housing at that time.

[Jonathan Edwards]

The hon. Gentleman makes an honourable point, but I am trying to point out the perverse effects of the 1989 Act and I am sure that he will give me some time to do so.

As I was saying, the 1989 Act allowed UK Government Ministers to set the expected level of rent income and the expected levels of expenditure on maintenance and management of the local authority homes. The policy motive of the UK Government was to drive up council rents while decreasing expenditure on housing, in order to increase the differential and gain maximum financial advantage from the new arrangements. As a result, the quality of publicly owned housing stock in Wales significantly worsened.

The then Secretary of State for Wales, Peter Walker, was guilty of a dereliction of duty of the greatest scale, as Wales was included under the terms of the new arrangements while the Secretary of State for Scotland, Michael Forsyth, refused to sign the Scottish clause, meaning that Scotland was exempted from the 1989 Act. Considering that housing benefit is a UK function, there was no reason at all why Scotland should have been excluded and Wales included, apart from the ineptitude of the Wales Office and its Conservative occupants—if the hon. Member for Aberconwy (Guto Bebb) will forgive me for saying so.

New Labour being new Labour, it continued the policies of the previous Tory Government on public housing for the first three years after the 1997 election. In 2000, however, following a backlash among local authorities, the UK Government introduced proposals to amend the scheme without legislation. To end the deduction of rents from local authorities, the Treasury introduced in each housing revenue account an amount for spending on the renovation of properties. That new budget line was called the major repairs allowance and it was set at a level to ensure that local authority expenditure exceeded rental income, with the immediate effect of halting the Treasury’s rent grab.

The increase in funding brought about by the MRA for England was from UK Government sources and the UK taxpayer, and hence a Welsh equivalent should have been introduced by increasing the block grant by the Barnett formula. However, and critically, those new changes were only applied to England. In what has been described as “the year of the great mistake” by Paul Griffiths, a former Labour Welsh Government special adviser, in an excellent Bevan Foundation article, for some reason the Treasury again decided to make Wales a special case and Labour, which was in control of the Welsh Government, totally missed the significance of the changes applied to the HRA in England. As a result, since devolution, Wales has lost a further £1 billion, with an average of around £100 million per annum being siphoned off from council rents in Wales.

It is true that the Welsh Government could have made a unilateral decision and left that money with the councils, but as devolution guidance notes insist that any policy decision must be neutral in its impact upon the Treasury that would have meant that the Welsh Assembly Government had to find a further £100 million from its already underfunded Budget to give to the Treasury. Therefore, that is a change that can be made only with Treasury consent.

We in Plaid Cymru continuously make the case that Wales is ill-served by the UK Government. The Barnett formula continues to underfund Wales to the tune of £300 million per annum. We welcome the announcement of a review of the formula, which will take place shortly, although for the life of me I cannot see why that review has to take place after the referendum. However, given its attitude on Barnett and other issues, it is no surprise to us that the Treasury would consider Wales as an afterthought in relation to the introduction of the MRA in England in 2000.

The gross incompetence of the Welsh Government of the time is less easy to understand. Quite how successive Welsh Ministers and Welsh civil servants have failed to challenge the inequity of the situation is beyond me. With a Labour-controlled Welsh Government more concerned with placating their London masters, it is hardly surprising that the people of Wales are being let down so badly. Indeed, it has taken a Plaid Cymru Housing Minister to put this issue on the agenda at all. In short, the Treasury, under Labour control, threw a hospital pass to the Welsh Government in 2000, with a tragic £1 billion consequence for some of the poorest communities in my country.

In 2004, the Welsh Assembly Government created its own MRA out of its own funds, which further confused the issue. It meant that around £100 million was diverted from other areas of devolved responsibility each year, when the right course of action was to demand what was rightfully Wales’s from the Treasury. Therefore, despite the introduction of the Welsh Government-sponsored MRA, the Treasury continued to rake in their £100 million per annum from the HRA scheme in Wales.

As I mentioned earlier, one of the direct consequences of the HRA scheme has been to make the sale of publicly owned housing far more attractive, either under the terms of the right to buy or by the wholesale selling off of stock to registered social landlords, because housing associations are not covered by the scheme and are free to spend this money as they see fit on improving housing stock.

To date, the local authorities of Bridgend, Ceredigion, Merthyr, Newport, Monmouthshire, Rhondda Cynon Taff, Gwynedd, Torfaen and Conwy—the local authority of the hon. Member for Aberconwy—have all transferred their stock to housing associations, with many more local authorities seeking to follow the same path, due to their inability to access funds to help them to meet the Welsh housing quality standards set for 2012.

--- Later in debate ---

[Guto Bebb]

On that specific point, it is interesting to note that some local authorities in Wales have identified the issue and embarked upon stock transfer as a means by which they can invest in repairing the properties that they hold. Indeed, it is very interesting that Gwynedd council, which is actually controlled by Plaid Cymru, has also followed that procedure. However, I am sure that the hon. Gentleman will concur that it is interesting how often local opposition to such a move has been led by Labour politicians. In view of how the Labour Government in Wales failed completely in 2000 to address that issue, is it not surprising that local Labour politicians have been so opposed to those stock transfers?

[Jonathan Edwards]

The hon. Gentleman makes an excellent point. It is a shame there are no Labour Members here to debate that issue with us. Of course, he and I have divergent views on stock transfer. I will return to the situation in my home county of Carmarthenshire later.

[Guto Bebb]

My understanding is that Plaid Cymru party members are extremely supportive of the stock transfer undertaken in Gwynedd. In the county of Conwy, which I have the pleasure of representing, it has been deemed a great success, even though Labour party members opposed the decision.

[Jonathan Edwards]

The hon. Gentleman makes a point. To be honest, there is a debate within the party about the merits of stock transfer. I, for one, am not as persuaded as some of my colleagues in the north of our great country may be.

The stock transfer agenda has been driven by the denial of funds to Welsh local authorities that would not necessarily have wanted to go down that path, because of the housing revenue account subsidy scheme. The HRA scheme has therefore had the undoubted effect of driving greater change in Wales than was ever envisaged, and, in my view, not necessarily a change for the better.

My local authority, Carmarthenshire county council, which is keen on keeping its housing stock, was recently forced to borrow money in order to introduce its housing plan to keep its stock in public ownership. If the money from the council’s own rents had been available to it, it would not have needed to borrow money; it could have used the revenue generated by its stock’s rents. As a ring-fenced account, money collected in this way can only be used on housing. Why is that option simply not available for local authorities in Wales?

Due to the scale of the situation, it is perhaps surprising that the Treasury was unable to provide details of the HRA contribution made by Welsh local authorities when I asked a parliamentary question on the subject in July. Thankfully, it seems the Welsh Government are better at keeping records of that sort of financial transaction. Their response to my freedom of information request made clear the scale of the great rent robbery.

As the Treasury has been unable to provide the figures, it will be useful for the record and indeed for the Treasury’s records if I outline each Welsh local authority’s contribution in cash terms since 1999. If I may try the patience of the House, Mrs Brooke, the figures are, to the nearest million: Blaenau Gwent, £12 million; Bridgend, £16 million; Caerphilly, £70 million; Cardiff, £139 million; my home county of Carmarthenshire, £51 million; Ceredigion, £15 million; Conwy, £14 million; Denbighshire, £32 million; Flintshire, £62 million; Gwynedd, £53 million; Ynys Môn, £23 million; Monmouthshire, £33 million; Neath Port Talbot, £52 million; Newport, £75 million; Pembrokeshire, £63 million; Powys, £60 million; Rhondda Cynon Taff, £2 million; Swansea, £56 million; Torfaen, £71 million; Vale of Glamorgan, £56 million; Wrexham, £110 million. Merthyr was the only Welsh council in surplus of £5 million. If the Minister wants, I can provide an annual breakdown for each year since 1999, but I might try his patience a bit too much.

[Guto Bebb]

Do the figures quoted date from 2000 onwards, or from the 1989 decision?

[Jonathan Edwards]

From 1999, because the Welsh Government can provide figures only since devolution, but 2000 would have been the benchmark.

Considering the pressure on housing waiting lists, it is sobering to think that if those moneys had been retained over the past decade, 10,000 brand-new family houses could have been built in Wales, all eco-friendly and built to modern specifications. That could have helped address major social justice issues such as fuel poverty. Some 30% of households in Wales, not just those living in public stock, are in fuel poverty. We could have addressed Wales’s terrible legacy of poor housing and associated poor health. The money could also have provided enormous benefits for the local construction economy, which is part of the backbone of Welsh employment, and improved the circulation of money inside some of the poorest communities in Wales.

I am informed that by now the Treasury will have received a letter on the issue from the Welsh Minister for Business and Budget and Deputy Minister for Housing and Regeneration. The letter encloses a report by Professor Wilcox, an expert on housing finance. I have not been privy to that report, but I believe that it argues that Wales should have parity with Scotland. I agree, as I hope will all parties in Wales.

Furthermore, the new UK Government’s decision to scrap the housing revenue account for England this September means that there is no justification whatever for the Treasury’s insistence that the scheme should continue to apply to Wales alone. Such is the inequity and injustice at the heart of the whole affair that I believe, as I said in a recent early-day motion, that the Treasury should make reparations based on the real-terms amounts of money accumulated over the past two decades. At the very least, the Treasury must make a clear statement that the provisions of the HRA and the great pillage of Welsh rents are to cease with immediate effect.

In terms of the UK Budget, this ever-decreasing figure, which lessens every time a local authority transfers its housing stock, is small, but to the tenants who must make do with poorer-quality housing than they deserve and the local authorities that want to provide new and better-quality housing for their residents, it is a significant amount. This is not just the right thing to do; it is the best thing to do and the fair thing to do. Diolch yn fawr.

Parliamentary Voting System and Constituencies Bill

Debate between Guto Bebb and Jonathan Edwards

Monday 6th September 2010 Commons Chamber

[Jonathan Edwards]

The hon. Gentleman will have to wait; our voting intentions will be made clear.

We have many concerns about the impact of constituency changes on Wales. Wales, more than any other part of the UK, will be seriously affected by the proposed changes. As many right hon. and hon. Members from my country have pointed out, Wales will probably have about 30 seats following the changes—a cut of 10 seats or 25%, compared with 5.5% in England, 9% in Scotland and 17% in Northern Ireland. We do not agree with those changes, which will strongly affect the Welsh voice at Westminster. We will table an amendment to prevent such a massive loss of representation.

[Guto Bebb (Aberconwy) (Con)]

On the reduction in the number of Welsh MPs from 40 to 30, does the hon. Gentleman agree that, in the eyes of the Welsh public, an unintended consequence of that change will be an enhancement of the powers of the Welsh Assembly. We can debate the powers of the Welsh Assembly, but my view, which I suspect he shares, is that the people of Wales should make a decision about the powers of the Welsh Assembly. Does he agree that by reducing the number of Welsh MPs from 40 to 30, and reducing the voice of Wales in the House, we are, in effect, increasing the powers of the Welsh Assembly by default?

[Jonathan Edwards]

The hon. Gentleman makes a valid point, which was also made by the right hon. Member for Torfaen (Paul Murphy). A case could be made for reducing the number of Welsh MPs, but such a reduction would have to follow a further transfer of powers and a plebiscite in Wales, following a referendum. Part 4 of the Government of Wales Act awards sovereignty over current devolved fields only, so that would not justify a reduction in Welsh MPs either, even if a referendum was won in March.

The think-tank Demos recently published a map showing the power gap—how different constituencies in the UK vary in importance with regard to their voters’ actions. The proposed change to a system based on electoral registration will not, as the Deputy Prime Minister argues, ensure that all votes will be worth the same in electing a Member of Parliament. Under AV, the same few swing seats will still decide the Government. In addition, basing such a system on electoral registration might be doubly damaging to some areas. Those areas with greater social problems, such as poor education or higher unemployment, are likely to have fewer people on the electoral roll. In reality, therefore, MPs for such areas will be dealing with a greater number of electors than he or she imagined, as well as a much higher caseload.

The leader of my party, the hon. Member for Dwyfor Meirionnydd (Mr Llwyd), expressed amusement at the idea of new constituencies being no larger than 13,000 square miles. If I remember my geography lessons correctly, Wales is only 20,000 square miles in total. However, this is a serious point: if a Member’s constituency is 100 miles north to south and east to west, how can they properly serve their constituents while travelling between their constituency and London and around a large rural area?

As the Bill is on constitutional affairs, and we are dealing with changes to the Government of Wales Act 2006, other issues should be raised. Power to vary National Assembly election dates should be a matter for the Assembly and not the Secretary of State for Wales. We should end the electoral system that prevents candidates from standing for both a constituency and a regional list for the National Assembly—a policy with which, I believe, the Conservative party and the Liberal Democrats in Wales both agree.

There is little in the Bill to commend: a referendum on a voting reform option that will not excite the proponents of electoral reform and that will merely tinker with the edges of the problem of the first-past-the-post system, even if the referendum is successful; a referendum date with a negative impact on democracy, most obviously in the Celtic nations, carried through without consultation or discussion with those Administrations; and a change in the number of MPs, which will massively and negatively impact on my country. Although my party strongly believes in electoral reform, we cannot support the Bill at this stage.