Concentrix

Hywel Williams Excerpts

Wednesday 26th October 2016 Commons Chamber

[Hywel Williams (Arfon) (PC)]

I have spoken in previous debates about Capita’s failures in delaying the payment of disability benefits to some of our most vulnerable people. It seems to me that the only difference this time is the name of the corporation involved. Is not the fundamental issue that private profit-making companies are failing to deliver critical Government services?

[Rebecca Long Bailey]

The hon. Gentleman makes an interesting point. I will come on in due course to the issue of the contract and how it is delivered, because there needs to be a wider investigation and discussion about that.

In 2014-15, there were no appeals against a decision. In 2015-16, there were 365, and from April to August 2016, there were 176. A similar spike is clear in the number of mandatory reconsiderations, which more than quadrupled between 2014-15 and 2015-16. It is even more shocking that that number almost quadrupled again in the period up to mid-August.

Concentrix: Tax Credit Claimants

Hywel Williams Excerpts

Tuesday 18th October 2016 Westminster Hall

[Fiona Mactaggart]

The point is that if we do not manage to get answers from the Minister, we will end this contract but will be walking into the risk of future contracts making the same kind of mistakes, including targeting single mums in a way most of us find completely unacceptable, and breaching the law that provides the power to end benefits and so on. This situation really is not tolerable, and it is up to us to ensure that it never happens again in any aspect of Government administration.

[Hywel Williams (Arfon) (PC)]

I am grateful to the right hon. Lady for raising this important issue. I, too, have constituency cases with which I could regale this Chamber. Does she agree that there is a fundamental danger in a model that has a private organisation, which is accountable to its owners and has a duty to make profits for them, providing a public service, where the accountability must be to the public and the first duty must be to provide the public with a full and proper service?

[Fiona Mactaggart]

The hon. Gentleman is right. Civil servants are trained to conform with the law. How can Ministers ensure, in this contract or in any future contracts, that there is not a parallel reinterpretation of the law by a private company? When the Minister was informed about the Wikeley judgment, as I hope he was, what did he do to ensure that all future decisions would conform to the law? Civil servants are generally trained in a culture where the law is the guide to how they work; I am concerned that Concentrix staff were not operating within such a culture. There is a real risk of letting out similar contracts in future that do not operate within such a culture.

Bank of England and Financial Services Bill [Lords]

Hywel Williams Excerpts

3rd reading: House of Commons & Report stage: House of Commons
Tuesday 19th April 2016 Commons Chamber

[Hywel Williams (Arfon) (PC)]

Does my hon. Friend agree that a worthwhile commercial advantage would be gained by issuing banknotes? That value would then accrue to Lloyds bank, and possibly to taxpayers in Wales and the rest of the UK, which would be a good move.

[Jonathan Edwards]

I am grateful to my parliamentary leader for his intervention. He is completely right, and that is why four banks in Northern Ireland and three in Scotland have continued the practice. There is a commercial interest for Lloyds, but also a public interest due to our part ownership of the bank.

Permission to issue Welsh banknotes would be a welcome boost to brand Wales, recognising our country as an equal and economic entity. Notes in Northern Ireland celebrate individuals such as J.B. Dunlop, Harry Ferguson and James Martin, as well as architectural splendour such as that of Belfast city hall. Notes in Scotland pay tribute to that country’s fantastic bridges and recognise the contribution of people such as Sir Walter Scott and Robbie Burns. Notes currently used in Wales recognise people such as Elizabeth Fry, Adam Smith and Matthew Boulton, and previous notes have portrayed Charles Dickens, Michael Faraday, Sir Isaac Newton, William Shakespeare, George Stephenson and the first Duke of Wellington. They are all great people, but none, to my knowledge, has anything to do with my country.

Is it not fair and sensible for us in Wales to use notes that recognise our historic landmarks, such as the incredible Castell Carreg Cennen in my constituency, Pont Menai in north Wales, Yr Wyddfa—Snowdon, the largest mountain in our country—and our historic greats such as Owain Glyndwr, who was nominated the seventh most important person of the last millennium by The Times, of all papers? There is also David Lloyd George, the originator of the welfare state, Aneurin Bevan, the architect of the NHS, and Gwynfor Evans, the first Plaid Member of Parliament and the father of modern Wales.

A case could also be made for what is arguably the most famous Welsh painting of all: “Salem”, painted by Sydney Curnow Vosper in 1908. His painting of Siân Owen aged 71 at Capel Salem, a Baptist chapel at Pentre Gwynfryn in the north of Wales, is a national icon, much as Constable’s “The Hay Wain” is in England. The Royal Mint already produces Welsh-specific coins, so my proposals raise no major issue of principle—indeed, the Minister referred to the Royal Mint earlier in the debate.

A national poll by ITV Cymru/Wales found that more than 80%—indeed, it was 82.6% when I looked at the website today—of the Welsh public supported these calls. If we are unsuccessful in the Division, I hope that the UK Government will support Plaid Cymru in putting right this historical anomaly and bring forward their own proposals.

[Hywel Williams]

I have a Welsh pound coin with me, and it reeks of nationalist propaganda because around the edge it states “Pleidiol wyf i’m gwlad”, which means “True am I to my country”. I certainly agree with that, but it is issued by the Royal Mint.

[Jonathan Edwards]

My hon. Friend makes my point entirely. There is no issue of principle at stake; this is about finding the mechanism for delivery.

This issue has received considerable media coverage in Wales. Considering that we are only two weeks from the Welsh general election, I suggest to Treasury Ministers that the election prospects of their candidates in Wales may be damaged if they choose to ignore the strong views of the people of Wales on this matter.

--- Later in debate ---

First, let me give the House a history lesson. The UK is a rare example in the world of a country that allows certain commercial banks to issue banknotes. As the hon. Gentleman said, since the 1840s, when the House passed the Bank Charter Act 1844, no new bank has been allowed to issue commercial banknotes in the United Kingdom. Let me put that in context. The 1840s happened a long time ago: it was the time of both Elizabeth Fry, whom we celebrate on the Bank of England £5 note, and Charles Darwin, whom we find on the £10 note. Since then, many of the banks that were originally authorised to issue banknotes have lost or surrendered their rights. The last private note issuer in Wales was the North and South Wales Bank, which lost its note-issuing rights in 1908 when it was taken over by the Midland Bank, now rebranded as HSBC. Today, only seven commercial note issuers remain: three banks in Scotland, and four in Northern Ireland. The Government are committed to preserving the long-standing tradition of commercial issuance in Scotland and Northern Ireland, as is clear from the amendments made in clause 36.

[Hywel Williams]

Does the Minister agree with my earlier point that there is a commercial advantage to be gained from issuing one’s own notes? Why can that advantage not be extended to bank operations in Wales?

[Harriett Baldwin]

That is the very point that I was about to make. The amendment seeks to confer the right to issue commercial banknotes in Wales—a clear commercial advantage—on just one bank, Lloyds Banking Group. That appears to be based on a link to a right to issuance that was broken more than 100 years ago. Today, the Government—the taxpayer—owns just under 10% of Lloyds Banking Group. Part of Lloyds Banking Group already has a commercial banknotes issuance operation, which may be why the hon. Member for Carmarthen East and Dinefwr chose to focus on a single bank in his amendment. That is due to the acquisition of the Bank of Scotland operation, which is authorised to issue banknotes in Scotland. However, extending the privilege and the commercial advantage of issuing banknotes in Wales to just one bank would raise competition and commercial issues for others.

I liked the wide range of suggestions about who should be represented on Welsh banknotes, and, as I said earlier, the coins in our pockets are minted in Wales. I appreciate that the motive behind the amendment—the symbolic issue about which the hon. Gentleman feels so strongly—is to create a symbol, rather than to deal with a pressing economic or practical need for different banknotes.

The Bank of England has already announced that future banknotes, starting with the polymer £5 note which will be issued in September 2016, will include symbols representing all four home nations. For Wales, the imagery will be taken from the Royal Coat of Arms and the Royal Badge of Wales. The Bank recently announced that the design for the £5 note would be revealed on 2 June 2016.

I am very glad that we have had a chance to discuss the merits of the amendment. The hon. Gentleman will understand why I cannot support it. However, I welcome the opportunity to convey the message that an important symbol of Wales will appear on our new banknotes.

Question put, That the amendment be made.

Budget Changes

Hywel Williams Excerpts

Monday 21st March 2016 Commons Chamber

[Hywel Williams (Arfon) (PC)]

One of the smaller, disregarded mysteries of the Budget is the announcement of the north Wales growth field, which seems to exist in name only. Will the Minister enlighten the House about its details?

[Mr Gauke]

The Government will be engaging with the Welsh Government and local authorities on that. The future for the Welsh economy would be best pursued by electing a Conservative Government in Wales, as well as in the United Kingdom.

Enterprise Bill [Lords]

Hywel Williams Excerpts

Wednesday 9th March 2016 Commons Chamber

[Karl MᶜCartney (Lincoln) (Con)]

Like my good friend, my hon. Friend the Member for Peterborough (Mr Jackson), it is with a heavy heart that I will be voting in favour of the amendment tabled by my hon. Friend the Member for Enfield, Southgate (Mr Burrowes), who spoke so eloquently earlier. I say that because, to keep Sunday special, I will be voting against my Government—a decision that no loyal Government Member wants to take, and certainly not too regularly. It also means that I will be voting against my good friend and fellow sportsman, the Minister. He has spent some time speaking to me and other colleagues, trying to persuade us, but I think he was given a very sticky wicket. He will not mind my saying that he perhaps batted more like Geoffrey Boycott than Ian Botham. He did his very best.

The reasons why I will be supporting the amendment, and why other Members should consider supporting it, are based on three core issues: my Conservative principles and the traditions of our country; the impact on staff in all shops; and particularly the impact on small independent shops, their owners and their staff. These places are well used and well liked in the city of Lincoln, but if Sunday is no longer special, we will lose them.

There is something uniquely British—perhaps even Anglo-Saxon and, dare I say it, Christian and traditional—about the way we mark Sunday in this great country of ours. It is the one special day we have every week, and to lose that means losing something special about Britain. A week where every day is the same will mean a drab and very grey Britain.

As a Conservative who believes in our country’s traditions and culture, undermining that special day is not something I can support. I personally would go even further and look at protecting other days in the year, such as Boxing day, Good Friday and Easter Monday, perhaps by imposing current Sunday opening hours on those days. Sunday already provides enough opportunities for large-scale shopping—if someone is up early enough, they have a full six hours. Those who want to shop online will do so, whether or not larger shops are open for longer on Sundays. For those who do not want to spend all day shopping in large malls or superstores on Sunday, there are plenty of convenience and independent shops to go to, and I am fearful about the impact of this measure on those shops, which are the lifeblood of many communities across our country.

I want to live in a country with a rich mixture of shops, not an endless sea of large, faceless superstores. I fear that extending the hours of larger shops on a Sunday will diminish choice, impact on the livelihood of those owning and working in smaller shops, and ultimately damage businesses on our high streets. I am also concerned about the impact on the families of shop workers. As well as Sunday being a special day for those who do not have to work, we must ensure that it remains a special day for those who do work. If we extend shopping hours, there will be no respite for those people, and throughout the week all they will have is snatched time with their families—they will be on a conveyor belt of work that never ends. Everyone needs quality family time, or just time away from work. As the hon. Member for Bishop Auckland (Helen Goodman) said, we should all work to live, not live to work.

I understand that big businesses want to sweat their assets. Closed large stores in Bluewater, Meadowhall or anywhere around the country earn no money from shoppers, and hence no profit for their owners. In the middle of the UK, I am sure that Bicester shopping village would want to open for 24 hours, 365 days a year, but what would be the effect on the staff working there? Sunday as it is currently is a Great British compromise that works for everyone. Retailers can trade, customers can shop, shop workers can spend quality time with their family, and we can still have that one special day of the week.

I do not want to live in a country where every day is the same, and where our traditions and uniqueness are lost. Upholding the traditional British way of life is important to me and my constituents, and that is why I will vote for the amendment. I hope that, after today’s reasoned debate, some of my Conservative and traditional colleagues will examine their consciences and support the amendment tabled by my sound and illustrious hon. Friend the Member for Enfield, Southgate.

[Hywel Williams (Arfon) (PC)]

The Minister’s proposals for pilots are what we call in Welsh a “cath mewn cwd”—a cat in a sack—and if we open that sack, we will get our noses scratched, as far as I can see. With Wales, the Government are bypassing our National Assembly, fostering a relationship directly with our local authorities. They are bypassing our Government in Cardiff and acting on the basis of that peculiar entity, “England and Wales”. Local authorities in England and Wales are to be treated as if they exist in the same country, national devolution is ignored and, as the infamous entry in the first “Encyclopaedia Britannica” put it, “For Wales—see England”.

I have two brief points. First, there is a precedent in terms of the council tax benefits that were devolved to local authorities in England, but to the National Assembly in Wales. Secondly, this particular matter is devolved in Northern Ireland and Scotland, and I would say that Wales should be treated no differently.

[Andrea Jenkyns (Morley and Outwood) (Con)]

Retail is in my blood. Growing up, my mother owned a shop, and at 16 I started work on the shop floor, working my way up to management. I spent nearly 20 years across the food, fashion, electrical and furniture retail sectors, working in the sort of stores on which the Bill will impact. I am passionate about our high street, which is why I chair the all-party group for high streets and town centres.

Our high streets are struggling, and the influence of the internet has had such a major impact that they are becoming a haven of pound shops and charity shops. We must do all that we can to support our high streets. Things are tough enough for retailers at the moment, and we must consider ways to increase footfall, not to limit growth opportunities. In 1994, at the age of 20, I remember signing a new contract to opt in to working Sundays. I was happy to do that because I wanted the hours—I wanted to save up for my future—and I am shocked that more than 20 years later we are still having this debate.

I am a firm believer that size should not matter and that there should be a level playing field for all retailers. It is discriminatory against retailers of more than 3,000 square feet if they cannot open for the same hours as those that are under that square footage. I remember being a manager of a store that was limited to six-hour trading, when the dilemma was that other stores on the high street were open for longer. Customers were confused about why our neighbouring stores could be open when we could not be. How do retailers get around this? Even 20 years ago, we would open for the same amount of time as other retailers, but with some time for browsing only. We were still employing staff for those hours, so the changes would not, as some critics say they would, impact on Sunday trading and on making Sunday special. Customers were frustrated, as they wanted choice. We still needed to employ staff for longer than six hours to replenish the stock.

In my retail management career, we had no trouble finding staff to work the Sunday shifts. Working on a Sunday was popular with students, those who wanted their first job, parents who found it easier to get babysitters for their children over the weekend and older people. If anything, I found it was the 20-something party-goers who wanted Saturday night on the razzle who were not so keen on working on a Sunday.

In my experience, opposing the changes on the grounds that they would not be fair to workers is a rather lame argument. As experience demonstrates, there are always some groups who are more than happy to work these shifts. We must allow for that flexibility. Some say that we need to keep Sunday special, and I respect that, but do they not shop on the internet on a Sunday? Do they not visit their local leisure centre on a Sunday? Goods are delivered on a Sunday, we eat out in restaurants on a Sunday and call centres are open on a Sunday. People in many sectors and professions work on a Sunday, and while there has been a lot of talk about rights, what about their rights?

We had the debate on Sunday trading 20 years ago. We cannot press a pause button and halt this changing world. We live in a global economy that trades 24/7. If we do not embrace it, we will be left behind. We need to ensure that the economy is flexible, dynamic and responsive to the new reality. I am the chair of the all-party group on local democracy. Its secretariat is the National Association of Local Councils, which represents 8,000 town and parish councils. I fully believe in devolution; it is one reason why I am a Brexiter and fully support coming out of the EU. How can we speak of devolution while we cede more power to Brussels? How can the SNP say it wants more power in Holyrood rather than Westminster, and oppose a Bill that is, in essence, truly devolutionary? To those Members who truly believe in devolution and putting the power into the hands of local decision makers, I urge them to support the provisions. By devolving Sunday trading laws, we will not only create more opportunities for our local economies and more employment opportunities, but give more power to local people. This is why I fully support the Government’s Bill.

Short Money

Hywel Williams Excerpts

Tuesday 23rd February 2016 Commons Chamber

[John Penrose]

I could not agree more. People outside this place—outside the Westminster bubble—who are looking at our discussions today will not understand why politicians feel that they should treat themselves separately and as a special case. Those people will look at what has happened to their budgets over the last five or six years and say, “What is sauce for the goose should be sauce for the political gander as well.”

[Hywel Williams (Arfon) (PC)]

Setting aside for a moment the outrageous detail of the request for views, will the Minister tell the House what effect a cut in Short money would have on scrutiny and on the comfort, or discomfort, the Executive feel as they go about their business?

EU Referendum: Timing

Hywel Williams Excerpts

Tuesday 9th February 2016 Commons Chamber

[Mr Dodds]

The right hon. Gentleman, from his considerable experience, makes a very salient point.

This debate is not about the substance of the EU referendum argument or the deal that the Prime Minister has negotiated, so I will pass over the details of that deal—it is surprisingly easy to do so. Instead, I want both sides of the House to consider whether the result of the referendum will be morally binding or politically conclusive and whether we will settle the debate for a generation. We can do that, of course, but, on the Government’s current timetable, I fear we will not. This is needless folly, not least for the Conservative party, but there is time, even now, for it to reconsider—that would be in its long-term interests—and I believe it should.

To be clear, there is no suggestion that the public cannot choose or that a compressed electoral cycle would, as some have suggested, be too complex for the voters. Of course the people can choose and understand the issues. This is not about their choice, and still less is it about their ability to choose; it is about the Prime Minister’s desire that they choose in a particular way at a particular time in the rushed referendum that I fear he is set upon.

Why hold the referendum on 23 June? No Minister has made the case for an early referendum—quite the reverse; they have extolled and observed the virtues of Electoral Commission guidance and past polls at all levels, be they general elections, local elections, devolved elections and, yes, both the national referendum in the last Parliament on the alternative vote and the recent Scottish referendum. The House and public are entitled to ask, therefore, why they are seemingly intent on kicking over their own precedents. Why is this poll to be so very different from all that have gone before? What explains the rush and the panic?

[Hywel Williams (Arfon) (PC)]

Given the congestion of events in May and June, what does the right hon. Gentleman make of the comparative coverage already in the media of the referendum and the elections in our own backyards?

[Mr Dodds]

The hon. Gentleman makes a good point. Despite the public’s ability to discern the different issues at stake in the different election questions, the media often fixate on one issue. They will undoubtedly concentrate heavily on the national question of the EU referendum while giving little coverage to the elections in the devolved regions. That is another good argument for why the two should not become enmeshed.

--- Later in debate ---

[Iain Stewart]

I am not arguing that the elections should be held on the same day—we have accepted that they should be held on a separate day and that there should be a minimum of six weeks between them and the referendum—but there are lessons that we can extrapolate from that campaign. The Electoral Commission report on the 2011 AV referendum specifically addresses the issue of media coverage, which a number of Members have raised, and it concludes that it was not an issue. Paragraph 3.60 states that there was

“no inherent disinclination on the part of the media from Scotland, Wales and Northern Ireland…to cover the referendum; rather, the elections were considered to be a greater priority than the referendum.”

The right hon. Gentleman and his colleagues should not be worried about the capacity of the Scottish media to cover both the Holyrood elections and the referendum over the same period.

[Hywel Williams]

rose—

[Stephen Gethins]

rose—

--- Later in debate ---

[Hywel Williams (Arfon) (PC)]

I congratulate the right hon. Member for Belfast North (Mr Dodds) on securing this debate. The Minister referred to Alan Greenspan, and said that he was not going to give any clues, and that certainly was the case with his remarks. I quote back to him Henry Kissinger who, when facing a very excited press conference, scanned the excited news hounds and said, “Do any of you boys have questions for the answers I’ve already prepared for you?” That is rather how it felt this afternoon.

Plaid Cymru is in favour of staying in the Union—we believe there is a strong positive case to be made for that, and that another EU is possible. Among other things, developing the Union has strengthened protection measures for the environment, farming and rural life, increased social protection for the workforce, improved the protection, wellbeing and prosperity of minorities—including linguistic minorities—and strengthened progressive cohesion and regional policies. We will campaign on those issues. I certainly regret the rather tetchy tone of the campaign so far, but that is quite separate from our concern about the date of the referendum—a concern that is shared by people on both sides of the argument.

The First Ministers of the three devolved Governments have written a joint letter to the Prime Minister to insist on a later date for the referendum, and, as others have said, that is important for the respect agenda. There is a risk that the May elections could become proxy votes for the referendum, and I agree with the Electoral Commission’s concern about the proximity of the proposed referendum date to the elections, which could lead not to confusion but to voter fatigue.

The DUP will campaign for a power-sharing set up in Northern Ireland, and—from my reading at least—it is unlikely that an early EU referendum could influence the consequence of the Northern Ireland Assembly elections in the same way and to the same degree as might be the case in Wales, Scotland or London. The result in Northern Ireland will be a power-sharing Executive, but the result in Wales, I am glad to say, is much more open—indeed, it is possibly wide open. That is why I was particularly disappointed with the response of the hon. Member for North West Durham (Pat Glass), because there is a question for us in Wales about the position of the Labour party—I note the vast green acres of empty Labour Benches.

[Alex Salmond]

And on the other side.

[Hywel Williams]

And on the Conservative Benches.

Carwyn Jones, our First Minister, has written to the Prime Minister and made his views abundantly clear. However, the Labour party at Westminster does not oppose a June referendum—in fact, it seems very much in favour of that as it wants a quick referendum. Either the Labour party headquarters does not listen to Carwyn Jones, or possibly it is part of a less laudable plan to frame the National Assembly election as a fight between Labour and UKIP. There is no doubt that there will be a strong UKIP campaign in Wales, and it might even achieve some membership of the National Assembly. It is in the Labour party’s interest to frame the debate in that way, thus avoiding scrutiny of its dismal record in government for the past 17 years.

[Alex Salmond]

It is difficult to see how the Government or the Labour party can pursue a respect agenda to the devolved nations if none of their Members is in the Chamber to hear the arguments being articulated from those countries.

[Hywel Williams]

The right hon. Gentleman makes a good point. Some Welsh Members were here earlier in the debate, but it is regrettable in the extreme that they are not here now to contribute. I assume, however, that they will be trooping through the Lobby if the Labour party decides to take part in a vote.

The media campaign has already started, and it feels almost as if every news broadcast and every newspaper is running stories on the latest developments in the referendum campaign. The hon. Member for Milton Keynes South (Iain Stewart), who is no longer in his place, said that it was quite easy for people to make up their minds, and mentioned the press in their respective countries. However, 85% of people in Wales get their newspapers not from Cardiff or Llandudno Junction, but from London, and the so-called national debates in England and Wales, or the UK, often influence their voting behaviour. Few media outlets will pay proper attention to the Welsh general election, and anything that detracts from that is to be regretted.

Few media outlets will cover crucial issues such as the state of the Welsh NHS, the proposed 32% cuts to Welsh universities by the Welsh Labour Government, or election pledges from other parties. The Welsh NHS is no less important to the people of Wales than the English NHS is to the people of England. Given the constitutional significance of the result of the referendum, particularly if people in Wales and Scotland vote in contrast to the people of England, the Government would be well advised to pause before setting an early referendum date.

HMRC and Google (Settlement)

Hywel Williams Excerpts

Monday 25th January 2016 Commons Chamber

[Mr Gauke]

I am grateful to my hon. Friend for his question. He is absolutely right that it is the action that we have been taking that has meant that companies are changing their behaviour and that we are getting in revenue.

[Hywel Williams (Arfon) (PC)]

The deadline for submission of self-assessment tax returns is in six days’ time, on 31 January. What consideration has the Minister given to reaching deals, victorious or otherwise, with any of my self-employed constituents who miss that deadline?

[Mr Gauke]

Let me return to this case. There has been a lengthy inquiry by HMRC into the affairs of Google. That inquiry has now come to an end and reached a conclusion. There is nothing to suggest that anything other than the proper enforcement of the law as it stands has led the way to this particular conclusion.

Spending Review and Autumn Statement

Hywel Williams Excerpts

Wednesday 25th November 2015 Commons Chamber

[Mr Osborne]

I put on record my thanks to my hon. Friend. He came to see me and we discussed what more we could do to level the playing field so that families trying to buy their own home are not disadvantaged when compared with those purchasing buy-to-let properties in places such as Croydon. We discussed what we could do with stamp duty, and he was one of a number of people who discussed clever ideas about how we could help families to buy their own home. I am glad that his thinking has come to fruition in this autumn statement.

[Hywel Williams (Arfon) (PC)]

We look—sometimes in vain—to the Welsh Government for transparency and coherence. Given the increase in health spending in England, will the Chancellor enumerate in real terms and on a year-by-year basis the consequential increases in funding for the Welsh Government? If he cannot do so now, will he write to me?

[Mr Osborne]

The Welsh block grant will rise in cash terms and will be worth £15 billion—over £500 million more than this year. There is also additional capital investment, and £900 million more is available for investment in Wales. Today we have made the historic announcement about a Welsh funding floor, which addresses long-held concerns in Wales that it is under-protected and not fairly treated by the Barnett formula. We have addressed that by building on work that has been done over many years by people such as Professor Holtham, and I am sure the hon. Gentleman agrees with me that this is a good deal for Wales.

Tax Credits

Hywel Williams Excerpts

Thursday 29th October 2015 Commons Chamber

[Frank Field]

I will certainly do that, because I want to refer to a proposal that I initially made about making a reform at nil cost. I did not do that because I wanted to be dragged to the stake and burned as a result, but because I was anxious to begin a debate. If one is asking the Government to change their mind, somebody who has made proposals might also change their mind. With any proposal, the net withdrawal rate is crucial. We in this House thought it intolerable that people should pay more than 45% on their income tax and suffer that rate of withdrawal. It is not a bad rate to aim at for poorer people when we add income tax, national insurance, and withdrawal of tax credits and other benefits. That underscores the point that the right hon. Gentleman made.

[Hywel Williams (Arfon) (PC)]

Would the right hon. Gentleman also see merit in looking at the geographical distribution of the effects of these measures, given that as the Member for Birkenhead he will know that there are very poor communities where the effects will be very widespread? The result will be not just poorer people but poorer communities.

[Frank Field]

I very much agree. I know that the Exchequer Secretary also has an interest in improving Treasury data so that we can better understand tax and benefit changes. I hope that the hon. Gentleman’s plea will not fall on deaf ears.

--- Later in debate ---

[Hywel Williams (Arfon) (PC)]

I congratulate the right hon. Member for Birkenhead (Frank Field) on securing the debate. When he first proposed it, he wrote to me and a number of other Members and I readily agreed. That was, of course, before the storm broke. We have moved on, as he acknowledged in his remarks earlier.

Unfortunately I am old enough to have worked not only with tax credits, but with family credits and even family income supplements. The inherent problems with such systems was apparent from the start. There have been low-wage subsidies, to a lesser extent than now, initially with tapers of well over 100%, and the cost to the taxpayer was apparent. These problems have not gone away.

As I said in the debate on 20 October, I have no problem in principle with removing low-wage subsidies, so long as we ensure a decent living wage for all; family support to make up for the variation in income when people have families of different sizes; and proper, affordable childcare provision, available universally, particularly in deprived and rural areas where the current provision is very poor and patchy. For rural areas in Wales, support for small businesses is extremely important to enable them to earn and to pay a living wage. Those are the sorts of changes that I would like to see. Then I would gladly agree to the Chancellor’s proposals.

I do not have much of a problem with tapers. Tax credits should lessen as people earn more and, as I said, tapers over 100% are, thankfully, a thing of the past, but the disincentive effects remain when high rates of combined tax credits and benefit withdrawal reduce people’s incomes substantially. The Chancellor’s proposals will worsen this effect. What incentive will there be for working harder and earning that extra marginal pound if it melts away in reduced tax credits and benefits, as we heard earlier in the debate? The figure of 93p in the pound was mentioned.

As the minimum wage or the national living wage rises, the taper reduces tax credit payments—an obvious point—and the cost to the taxpayer goes down. All this is well known and well understood, but what the Chancellor intends goes well beyond what is normal and what is acceptable. Had he been happy to operate the tapers as they are and keep the thresholds as they are, he would have gained tax revenue. Had he been satisfied with that course of action, people earning more would be paying more tax and claiming less in tax credit. Significantly, many would be claiming less housing benefit, which is a problem that Members on both sides of the House recognise. However, he has deliberately gone further. Tax credits will be withdrawn earlier and at a faster rate. That is on top of the freeze on tax credit levels for four years, as set out in the Welfare Reform and Work Bill, and the decision to limit the child care element to the first two children in a family.

With regard to childcare, what discussions have the Government had with the Welsh Government, because provision in some parts of Wales differs significantly from provision in England? If we are tailoring a system to promote proper childcare, there needs to be consultation with not only the Welsh Government, but the Scottish Government and the Northern Ireland Executive. I am also concerned about the effects on the under-25s. My concern is that these measures will reduce work incentives and deepen child poverty—we have heard the figure of 200,000 for the number of children who will be pushed into poverty.

There are also geographical effects, as I mentioned in an earlier intervention on the right hon. Member for Birkenhead. There are communities in Wales in which a large percentage of people take advantage of tax credits, so whole communities will be hit as tax credits are cut. That is particularly true in west Wales and the valleys, which at European level is recognised as a very poor region that is subject to various European grants. Actually, it is on a par with parts of former-communist, eastern Europe. Many people in those communities claim tax credits in order to go out to low-paid work, and I am concerned that they will be struck hard. Therefore, adding to what the right hon. Member said, I repeat my call for data to address the geographical distribution of the effects of these measures, and not just the effects for poorer families individually.

Let me turn briefly to some of the other points the right hon. Member for Birkenhead made. As I have said, I hope that data and childcare have been discussed with the Welsh Government. There is almost a philosophical point here, which is that we recognise the value to society of bringing up children, because they are the next generation who will be caring for the elderly—perhaps my social administration slip is showing. I am a veteran of many campaigns to save and secure child benefit, and as far as I am concerned that is one of the central arguments.

Postponing the introduction until after next April is clearly a good idea. Restricting it to new claimants is something that I would agree with, although that would put them in the difficult position of going out to work for reduced tax credits, and I have already mentioned the disincentives to taking up work that that might provide, so we have to be very careful.

Pensions tax relief has been mentioned. I am afraid that I am also a veteran of previous debates on tax credits. That was one of the suggestions my party made when Adair Turner was reviewing pensions. Of course, the circumstances are different now. Certainly, we could have seen that happen then, which would have meant that the Government might not be in the position that they are in now.