Living Standards

Jonathan Edwards Excerpts

Monday 5th March 2012 Commons Chamber

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

I have been a Member of Parliament for just over a year now, during which time I have seen the significant impact of this Government’s devastating and detrimental economic policies in my constituency. The flatlining economy has led to a 15-year high in unemployment in Oldham with over 8,000 people out of work across the borough and 12 people chasing every job. The number of women out of work is the highest since 1995, and youth unemployment is well above the regional and national averages.

Young people at Oldham sixth-form college, which I visited on Friday, are devastated about their future. The cut in education maintenance allowance is preventing many of them from taking college courses, and because of the trebling of tuition fees, they do not know whether they can go on to university. Given the lack of available jobs, things are looking dire for them.

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

I congratulate the hon. Lady on her first year in Parliament. In my view, the unemployment figure is the key statistic. Today the British Chambers of Commerce announced that it was likely to reach 3 million by the end of the year. Will that not have a hugely detrimental effect on living standards?

[Debbie Abrahams]

It will indeed. I thank the hon. Gentleman for his comments.

It is not just our young people who are suffering as a result of the Government’s economic mismanagement. Last month, Oldham’s first borough-wide food bank was set up to help struggling residents who are finding themselves in desperate economic conditions—not just homeless people, but people in work.

My constituents are being squeezed every which way, experiencing increases in outgoings as a result of higher energy costs and food prices while the incomes of most people—unless they are bankers—remain the same. As we have heard, the Halifax and Royal Bank of Scotland are raising their standard variable mortgage rates, which will mean increasing problems with repossessions. We have already discussed the working tax credit changes that will affect 650 families and 1,500 children in my constituency.

These are ideologically driven cuts that reflect the Government’s desire for a United States-style welfare system. Health care is not the only welfare pillar under threat. The Government’s skilful media machine hoped that using the language of the blitz—a time when people were literally “all in it together”, accepting rationing of food and fuel regardless of where they were on the social spectrum—would whip up nostalgia and reassure people that the protective safety net in which we all invest through our taxes and national insurance, and to which we all have access if we need it, would keep them safe. Well, it is not doing so.

Rural Bank Closures

Jonathan Edwards Excerpts

Tuesday 21st February 2012 Westminster Hall

[Roger Williams]

There is a theme running through the interventions that I have taken so far. The problem is a responsibility for all the major banks, rather than for a specific bank in a particular town or community, or even in Harrow. Banks should come together and solve the problem.

Presteigne is not only a sleepy country town; it contains a number of innovative businesses such as Mangar International, which manufactures, designs and supplies rehabilitation and assisted living equipment of a sort not found anywhere else in the world. Teledyne Labtech manufactures microwave circuits, and there are a number of other businesses. We were lucky to have attracted those businesses through the Development Board for Rural Wales, and a number of manufacturing facilities sprang up in Presteigne of which we are proud and wish to hold on to. I cannot, however, see us being able to attract that type of development if there is no bank in Presteigne—it is unlikely that businesses will be attracted to areas where banking is not available.

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

I congratulate the hon. Gentleman on securing this debate; he has made some pertinent points. Last month I had a letter from my bank, HSBC in Y Tymbl. It is closing, so perhaps I should declare an interest. This issue affects valley communities, as well as rural areas. What thought has the hon. Gentleman given to alternative banking models such as credit unions? In Ireland and the USA, for example, those are mainstream institutions, rather than being banking for the poor as they are in Wales at the moment. They also perform an important economic function by lending to small businesses. Could that be part of the solution?

[Roger Williams]

The hon. Gentleman anticipates a theme that I intended to expand later in my remarks. I value the work done by credit unions, but in the area of Wales with which I am familiar, they do not seem to enlarge and extend their capacity to provide facilities for businesses, or even mortgages, but work only at microfinancial level. The hon. Gentleman makes a good point, and in these extreme circumstances it may be that the mutual model will once again establish itself and become more important in our communities, which I would welcome.

The Presteigne chamber of commerce has a very active chair, Rosamund Black. She fears that the closure of HSBC will cause extreme inconvenience and hardship and seriously damage the structure of the town. She said to me that people use the bank for more than simple financial transactions; the staff provide a vital service in offering advice and helping to solve the banking queries of many residents, particularly the elderly, whom they help with bill payments and other financial transactions.

However, despite the efforts of the community—I pay particular tribute to the mayor of Presteigne, John Kendall, to the Assembly Member for Brecon and Radnorshire, Kirsty Williams, and to the chair of the chamber of commerce—they appear to have been unsuccessful in persuading HSBC to maintain the bank. Indeed, that closure will follow other closures.

Connecting Europe Facility

Jonathan Edwards Excerpts

Thursday 19th January 2012 Commons Chamber

[Andrea Leadsom]

Yes, I completely agree with my hon. Friend’s excellent idea. That would be high on my list of bits of wasteful bureaucracy to get rid of.

What sort of parallel universe is the European Commission inhabiting, if it thinks it reasonable to be expanding the European budget for 2014 to 2020 in the current climate? Why is the EU seeking to take power and control over these particular policy areas, at a time when they are already high on our own Government’s agenda? Requiring Britain to contribute to EU funds is not acceptable, and giving the Commission the authority to require Britain to make expenditure on its own domestic projects is equally unacceptable.

My second point is that the EU has proved itself time and again to be an inefficient allocator of scarce resources. In regard to structural funds, Open Europe estimates that Britain has contributed €33 billion between 2007 and 2013, and that we have received roughly €9 billion. If we took back control over that €33 billion, we might well wish to continue to contribute to the poorer EU member states—that is, those with a national income of 90% of the average or less. However, if we had contributed the same amount to those poorer member states, we could also have spent the same €9 billion that we received from the structural fund, creating a £4 billion saving. If Britain had allocated that same amount, €9 billion, to its own regions, plus the same amount to the poorer EU states, there would have been a £4 billion saving that could have gone towards reducing our deficit or investing further in the poorer regions of the UK. The difference identified by Open Europe’s estimate is a result of the leakage due to the recycling of cash between the richer countries.

It is interesting to note that the Department for International Development spends about 4% of its budget on administration, with a target of 2%. By contrast, the EU Commission spends 5.4% of its contributions to overseas aid on administration. No doubt it is very conscious of that figure, as it has been singled out for comment.

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

The hon. Lady is making quite an interesting point, but does she not agree that the problem with her argument is that the British state does not have any convergence mechanisms?

[Andrea Leadsom]

I am sorry, but I am going to have to ask the hon. Gentleman to repeat his question. It does not have any what?

[Jonathan Edwards]

It does not have any convergence mechanisms for redistributing wealth around the British state; that is the whole problem.

[Andrea Leadsom]

I thank the hon. Gentleman for his question. He makes a good point, and he is absolutely right. It might interest him to know, however, that of the UK’s 37 regions—as defined by the EU—only two, Cornwall and west Wales, are net recipients of structural funds. All the other regions have been net contributors, including the highlands and islands region, which has contributed a net €66 million to structural funds over the past seven years, and the Tees valley and Durham region, which has contributed a net €453 million over that same period. He makes an interesting point, but in my view Britain would be far better placed to decide where to allocate those scarce resources.

Another illustration of the EU’s inability to do that job is the recent Commission study that found that 170,000 full-time equivalent personnel were needed for a whole year to administer the EU’s structural funds during the last budgetary period. That is an unbelievable number of people. On the grounds of efficiency, therefore, the allocation of funds would be far better being done at home.

My third point relates to legitimacy and localism, particularly in the areas of transport and energy. We are talking about huge, extraordinarily expensive projects that are deemed to be in the national interest. There is no doubt that, while we all want instant access to energy, we are not all so keen to have a nuclear power station two miles down the road. The case must always be made by democratically elected, legitimate leaders for the need for a particular project and/or location. HS2 is a very good example of a project on which a majority of those consulted rejected it, yet where the Government decided that it was in the national interest to disregard their views. In the case of the third runway at Heathrow, the Government decided that public opinion outweighed the national need for aviation expansion. My point is that the EU, with its remote and bureaucratic image in Britain, is hardly the right place from where decisions on projects that affect lives and communities should be taken. The great risk is that local priorities for infrastructure will be undermined while infrastructure for energy and transport projects will be forced on local communities that do not want them.

Let me end with a word of friendly advice to the European Commission. It should focus on facilitating the single market, expanding its membership and contributing to areas that are of common interest to all member states and where the EU together can add value. It should keep away from European domestic affairs and avoid the pernicious creeping power grab that this latest proposal so clearly highlights.

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

I disagree with the Government motion. I do so in part because the economic and financial position set out in it is in opposition to the policies I have espoused since I was elected, and I oppose it in particular because it would have the effect of further disadvantaging my constituents and my country.

The budget for the entire European Union looks small by comparison when placed in the context of national budgets. The majority of expenditure is on items related to agriculture and to those parts of the European Union that qualify for the cohesion fund in order to promote those areas so that their gross value added is increased to compete with more established areas of the European economy. What a pity that the British state does not employ similar convergence mechanisms! I hope that explains my earlier intervention.

The cohesion fund areas include my constituency in the west Wales and the valleys region. Whatever the arguments for the whole of the UK, and we have heard many powerful arguments to that effect, the redistributive nature of European funding is beneficial for many of my constituents. Indeed, the €50 billion recommended by the Commission in the next multi-annual financial framework for the connecting Europe facility specifically includes 20% ring-fenced in the cohesion fund for transport infrastructure.

[Mrs Main]

I come from Wales, so I might have to declare an interest in this matter. Does the hon. Gentleman believe that a European state is better at giving money to his constituency than people who are already within the UK?

[Jonathan Edwards]

I thank the hon. Lady for her intervention; I shall touch on that as I continue with my speech. That is certainly the case as far as transport investment in Wales is concerned.

In terms of the TEN-T—the trans-European transport network—the proposals for UK core nodes show little connection with the needs of Wales and the improvement of Welsh infrastructure, which is key to developing the economic prospects of Wales. None of the nine urban nodes is in Wales—neither the Cardiff nor the Swansea city regions—while Cardiff airport is not included in the airports provisions. Although Cardiff and Newport ports are both included among the 15 named ports, neither is in the west Wales and the valleys areas that receive cohesion fund support.

The Commission determines a Dublin-London-Paris-Brussels corridor—corridor 8, which includes a route from Belfast to Birmingham through Holyhead. However, critically, no southern corridor route through Wales is referenced among these major routes. Milford Haven in south Wales is the third largest port in the British state and an ideal point for a southern corridor route to and from the southern parts of the Republic of Ireland. I notice that Cork—a port, and the obvious linkage between the Republic of Ireland and Wales—is instead linked with Dublin, Southampton and Le Havre. If Wales were an independent country inside the European Union, it is difficult to imagine that it would be neglected in this way by the European Commission. A designated route along south Wales would bring significant economic benefits to the region, including to the communities I represent in Carmarthenshire, as well as the future development of Milford Haven as a port.

Having spoken to representatives of the Milford Haven Port authority, I understand that Milford Haven meets all the requirements of the European Commission. It is among Europe’s largest 80 ports and handles cargo of more than 43 million tonnes. It is a core link between the Republic of Ireland and Europe. Does the UK Government’s refusal of the connecting Europe facility mean that west Wales is being let down not just by the European commissioners, but by the London Government who are not fighting for the necessary improvements?

The UK Government will know that I have been a keen supporter of the electrification of the great western line not just to Swansea, but further to the west of Wales, and especially through my constituency in Carmarthenshire. It remains a disgrace on the part of the British state that while Glasgow to London was electrified as far back as 1974, the electrification from London, even as far as Cardiff, still remains in the planning stages and about 80% of even that electrification will take place in England.

Electrification is one of the criteria for rail in the comprehensive network, yet electrification of the north Wales coast line or the great western main line west of Cardiff are apparently not up for discussion—even though these would largely qualify for cohesion fund support. I hope this clarifies my response to the hon. Member for St Albans (Mrs Main). To what extent was this considered when the business case for electrification to south Wales was put forward, particularly with regard to the port of Milford Haven? Given the answers I have received to written parliamentary questions since May 2010, I imagine that little thought has been put into this proposal, as no estimate has been made of the cost of electrification for the areas past Swansea, despite the importance of the ports of Fishguard and Milford Haven. Rail connection from London through Bristol, Cardiff and Swansea itself is, in the annex to the proposal of 24 October 2011, identified as part of corridor 8, and it is described as “upgrading”.

We know, of course, that without a U-turn from the UK Government the electrification will go only as far as Cardiff. The European Commission thinks that electrification to Swansea is important as part of Europe-wide rail and transport links, but the UK Government do not, it seems. In a nutshell, here is one reason why my party prefers full member status within the European Union to the present constitutional position. While the EU shows interest in cross-European co-operation and investment, UK policy in recent decades has been increasingly to concentrate on promoting one part of the British state down here in London.

As to the remainder of the proposals, we welcome the support provision for telecommunications in the Commission’s recommendations. When we were in government in Wales, the increase in broadband across Wales was a major plank of my party’s economic renewal plan. Improved telecommunications allows Welsh businesses and Welsh customers to be at the heart of Europe in a way that occasionally our geography does not. That applies particularly to digital connectedness in rural areas such as my own constituency. Will the Government confirm that, despite their opposition to the proposals in the Commission’s draft regulations, the digital facilities in Wales will be at least as good as the goals identified in the digital agenda for Europe and that support for cross-EU help for businesses and individuals will be similarly provided?

On energy, we support the fastest possible and credible reduction in carbon dioxide emissions and a switch to renewable energies from fossil fuels. It is only a shame that Wales is not an independent country able to control its own energy mix and that major energy decisions are made for us instead here in London—either via the Infrastructure Planning Commission or in future by the Secretary of State for Energy and Climate Change. As a country, we generate more electricity than we consume, so transmission is always a very important issue. I must refer once again to Milford Haven—an important energy portal where liquefied natural gas is imported from across the world.

To conclude, my party’s policy throughout the economic crisis since 2007 has been to argue that capital infrastructure spending is vital for the revival of the economy in both the short and longer term—maintaining the construction industry in the short term and increasing opportunities for the future. In Wales—a country that has the same amount of electrified railway as Albania and Moldova, and whose transport infrastructure is geared to move extremely slowly from east to west and not from north to south—infrastructure investment is important.

Wales sees many benefits from the European Union, not least from the common agricultural policy and from the cohesion fund. However, these proposals from the European Commission do not go far enough in supporting infrastructure improvements in Wales, yet they are ironically being rejected by the UK Government because they involve spending too much. I call on various Ministers in this place and in the Welsh Government to work together with the Commission, the Council and the European Parliament to achieve a better deal for Wales in the connecting Europe facility.

Regional Pay (Public Sector)

Jonathan Edwards Excerpts

Tuesday 10th January 2012 Westminster Hall

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

Diolch, Mr Chope. It is a pleasure to serve under your chairmanship this morning and to have the honour of beginning the first Westminster Hall debate of 2012. I thank right hon. and hon. Friends for making the effort to come here on the first morning of Parliament’s return.

The topic of regional pay will increasingly dominate relations between the UK Government and the public sector over the coming year, perhaps even more than the still unsolved dispute over public sector pensions. Back in November, I labelled the autumn statement a panicked response to worsening economic forecasts, rising unemployment and increasing deficit payments. The statement included many interventionist measures for which my party had been calling, particularly increased capital infrastructure investment. The signature policy of the statement was the capital investment programme, which seems remarkably similar to my party’s proposals at the last Welsh general election. I hope that the £25 billion of funds to be raised from pension funds over the coming years will be shared equitably across the nations and regions of the state.

The fine print of the autumn statement contained a deeply worrying request for pay review bodies to investigate how public sector pay can be made

“more responsive to local…markets”,

with the aim that they should report in July this year. After the flurry of announcements that we heard at the beginning of the autumn statement, it took a while for the significance of that announcement to sink in. What the Chancellor was announcing was a wholesale review of the introduction of regional pay in the public sector to be introduced as early as the 2013-14 pay round. I do not want to accuse the Chancellor of being deliberately antagonistic—

[Helen Goodman (Bishop Auckland) (Lab)]

Oh, why not?

[Jonathan Edwards]

Well, it is the first day back. However, the fact that that announcement was made on the eve of the biggest industrial strike in the UK since 1926 smacks of deliberate bad timing. If the Government think that the proposals for public sector pensions have got state employees and their representatives worked up, they have not seen anything yet. As the debate rages over such proposals, I fear that we are likely to witness increased industrial strife.

After making the announcement in the autumn statement, the Chancellor explained that the review would be a significant step towards the creation of a more balanced economy in the nations and regions of the state that does not squeeze out the private sector. The claim—the theory, at least—is that depressing public sector wages where they are currently higher than those in the private sector will lead to the brightest and best choosing a private sector career over public service and that such an approach will boost the private sector.

What are the Treasury’s intentions? Is it considering a system that extends the London weighting, or is it considering something altogether more far-reaching? In June 2008, the Minister for the Cabinet Office was quoted in the Financial Times as saying that it is the intention of the new UK Government to lower rates of pay in the civil service outside London. That is on top of redundancies and a two-year pay freeze, with the autumn statement freezing public sector pay at 1% for a further two years. May I remind Ministers that a pay freeze at 1% is essentially a further real-terms pay cut for the next two years? My fear is that the Treasury’s proposals are all about saving costs. I therefore cannot see it topping up payments for public sector workers in more affluent areas of the state or reallocating resources. My concern is that the Government’s intention is to reduce pay in the poorest parts of the state across the public sector and to introduce market conditions into public sector workers’ pay and remuneration.

The Institute for Fiscal Studies reported that the public sector pay bill for 2009 was around £182 billion, which represents around 30% of UK Government expenditure and around 13.1% of UK national income. However, based on the 2010 comprehensive spending review, we know that the public wage bill will be significantly reduced by the projected reduction of 400,000 public sector jobs by 2017. In winding up today, it would be helpful if the Minister informed us what the savings will be of the Office for Budget Responsibility’s new projections of more than 710,000 public sector job losses by 2017.

At the risk of offending my friends in the Labour party, based on the policy direction of the previous Government, the Treasury should have the full support of Her Majesty’s official Opposition. What strikes me about politics in this place is that, despite the sporadic changing of the guard at No. 10 Downing street, more things stay the same. The previous Prime Minister had obviously spent too much time in his former post at the Treasury, as he was an avid exponent of regional pay. Indeed, the previous Labour Government introduced regional pay for court workers and the Prison Service.

In the teeth of the trade union movement’s opposition over the coming months to these proposals, the Treasury will justifiably be able to say that the previous Labour Government introduced the principle of differential pay, using the Courts Service as a pathfinder for its wider introduction across the whole public sector. Indeed, the Chancellor made that point repeatedly to the Treasury Committee during the evidence session on the autumn statement last month. To the Public and Commercial Services Union’s credit, it warned exactly of that during the debate surrounding the proposals for the Courts Service in 2007. It said at the time:

“There was a need for a pay and regrading review as workers from the magistrates’ courts have recently been brought into the civil service. But the Department of Constitutional Affairs has gone for the cheapest possible option. If the government brings regional pay in here, it will try to implement it in the rest of the civil service, and then across the public sector.”

I would be grateful to the Minister if she informed hon. Members about the Government’s assessment of the impact on recruitment and quality of service in south-east England of introducing regional pay in the Courts Service. More importantly from my constituents’ perspective, what has been the impact on recruitment, performance and, crucially, morale in those areas where lower rates of pay are offered?

[Helen Goodman]

The hon. Gentleman is in general making an excellent case this morning, and I congratulate him on securing the debate. Does he agree that there is a real problem surrounding the quality of public services as a result of the fact that, for example, doctors might come out of university with five, six or seven years of debt and be paid less in regions such as the north-east or Wales than in London?

[Jonathan Edwards]

The hon. Lady makes an excellent point, and I thank her for that intervention. I will come on to talk about the brain-drain element and the polarisation of wealth across the British state.

I say to the Minister that, with the policy in operation across some parts of the public sector already, the Treasury should have the information about its impact at its disposal. That leads us to ask why the autumn statement pledged to hold an investigation into the issue. There is already a wealth of evidence from trade unions about the problems of the policy in the courts and prison services.

Without having sight of the Minister’s speech, I presume that her counter-argument might include saying that it is the Government’s intention to equalise the standard of living for public sector workers. Such an argument might go along the lines that a teacher working in Carlisle or Carmarthenshire has more disposable income than a colleague working in Reading, because of the difference in the cost of living and that that is morally unjustifiable. Superficially, that seems a seductive and attractive argument, but it is essentially a policy aimed towards a race to the bottom.

I hope that the Government do not embark on a divide-and-rule strategy and play public sector workers off against each other, as they have during the public sector pensions debate. Under the proposals, both public and private sector workers in the regions and locations concerned would be losers. The impact of such a policy would not be a geographical or sectoral rebalancing of the economy; it would be a sobering experience, with public sector workers already in fear of their jobs having their pockets picked for pension payments and suffering a prolonged period of wage freezes and real-term cuts.

[Hywel Williams (Arfon) (PC)]

Does my hon. Friend agree that the arguments about differential costs of living in some areas are sometimes bogus? He will know as well as I do that, for example, transport costs in rural areas are astronomical. People might have to run two cars, as they struggle to maintain a lifestyle that involves travelling to two jobs in different directions.

[Jonathan Edwards]

My hon. Friend makes an excellent argument. Indeed, following the autumn statement, he tabled an early-day motion on the topic, which I think has been supported by about 18 Members to date. I urge those Members who support the campaign on this issue to sign that early-day motion at the very least.

Public sector workers are facing real-term cuts and that is before we consider the impact on the private sector. In many places, the private sector is reliant on the trade generated by the public sector and the money circulated through public sector employees. In constituencies such as mine, where more than 30% of people work in the public sector, there is a direct correlation between their wages and the cash circulating in the local economy.

[Mr Gregory Campbell (East Londonderry) (DUP)]

I congratulate the hon. Gentleman on securing the debate. Surely, his point about the direct correlation between socio-economic difficulties in geographical areas—particularly those that are some distance from the south-east such as Wales, Northern Ireland, Scotland and the north of England—and the high dependency on public sector employment is key. Many of those areas have only managed to get through the recession at the moment because of their high dependency on the public sector. If we were to go down this route now, we would find that the problem would be multiplied even more.

[Jonathan Edwards]

The hon. Gentleman makes an excellent point. We should be considering not depressing the public sector in those areas where the economy is weakest, but improving the private sector.

Since the general election, we have heard a lot about the UK Government’s ambition to geographically rebalance the economy. They have the full support of my party, including the national insurance holiday proposals for small businesses, which I think shows the Treasury’s intent, despite the evidence showing a lack of success. The policy indicates that the Treasury, at long last, realises that countervailing measures are required to address the so-called north-south economic divide. We will, however, need a far more comprehensive approach than we have seen to date. My fear is that this policy on regional pay goes in a completely different economic direction.

One of our major criticisms of UK Governments of whatever colour in the past 30 years has been that the emphasis has been far too concentrated on one small geographical part of the state. Successive Governments have been guilty of allowing regional and individual wealth polarisation at an incredible rate. The average gross value added per person in inner London is 10 times that of workers in the Gwent valley. Inner London is the richest part of the European Union, whereas the communities that I represent—only a few hours down the M4; longer on the train—qualify for the highest form of European convergence aid. Such are the imbalances in the British state that it is now by far the most unequal of all EU member states. Considering the unification legacy in Germany, that is a damning indictment of all successive Governments.

Far from addressing that record of shame, these proposals will further depress those economies that are in desperate need of investment. It is no surprise to anyone that the fiscal consolidation pursued by the UK Government will hit the poorest parts of the state most. The statement by the Prime Minister that we are all in this together is rivalled in its degree of preposterousness only by the previous Prime Minister’s assertion, when Chancellor, that he would abolish boom and bust. My country has the lowest average gross weekly wages in the whole UK. On average, workers in Wales earn approximately £519.40, compared with £629.10 in the south-east of England and £826.40 in London. Take away the consistency of public sector pay—a point made by many hon. Members in interventions to date—and those discrepancies will be far worse.

[Grahame M. Morris (Easington) (Lab)]

I thank the hon. Gentleman for giving way and for securing the debate. Aside from the unfairness, will he tell hon. Members whether the ability of the fire service, for example, to be resilient in the event of major incidents such as terrorist threats—or flooding, which happens in my region—is likely to be undermined by such a national pay structure? Remember, firefighters will often cross borders to help brigades in other areas.

[Jonathan Edwards]

The hon. Gentleman makes a valid point about morale and about where public sector workers choose their profession as a vocation. They do so as a lifetime commitment and are more likely to move to areas where they will get better pay. This is a pressing issue about the effect that this proposal will have on the quality of our public services in those areas where we need to be pumping up the public sector because there are problems with the economy.

It would be indefensible, considering that public expenditure per head is far higher in London than other parts of the state, for the Treasury to introduce a policy that further exacerbates the wealth divide. The spending power of people in the poorest parts of the state is obviously far lower, and that has an impact on private sector growth in those areas. In the communities that I represent, more than 30% of the population work in the public sector. Their disposable income correlates directly to cash circulating in the local economy. The move towards regional pay, therefore, is deeply worrying, as it will institutionalise lower pay in poorer areas. It will entrench those deeply socially divisive economic variances that exist within the British state and fundamentally undermine a supposed key objective of the current UK Government.

[Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)]

I congratulate the hon. Gentleman on securing the debate, because this is a very important issue. What would have been the consequence if regional pay had already been instituted and police officers from my area in Cleveland were sent down to London, Birmingham or Manchester during last year’s summer riots? What would have been the consequences for the pensions of those police officers if their annual pay was reduced in certain regions of the country?

[Jonathan Edwards]

The hon. Gentleman makes a very informative intervention, which shows some of the problems. He is right to point to the recent riots in London, because police forces from his area and mine were sent down to London to deal with those problems. What would the morale in the police force be if there was differential pay in different parts of the British state? In fact, I cannot think of many other policy interventions that would undermine completely attempts to rebalance the economy geographically.

Returning to some of the arguments used to promote the idea, the notion that depressing public sector pay would lead to the brightest and the best leaving the public sector to generate wealth seems a slightly strange one. Public sector workers often make a lifetime commitment to joining a profession and to public service. Rather than seeking work in the local private sector, they are far more likely to seek similar employment in other areas where they will receive better pay. That will result in speeding up the brain drain that has caused so much damage to the communities that I represent.

There are a number of technical problems with the introduction of regional public sector pay. One obvious problem is how to calculate pay. Is the idea to link it with private sector pay? If so, the huge disparities in pay in the private sector between different parts of the UK would be replicated in the public sector. Generally, private sector wages in Wales are only half those in London. Are we seriously saying that a public sector worker in Southwark who does exactly the same job as an individual in Carmarthenshire should be paid twice the rate?

How many different regions will there be? How will boundaries be set, and how often will pay and boundaries be reviewed? In an unusual sign of activity, the First Minister of Wales announced within hours of the autumn statement that if the UK Treasury introduced the policy, the Welsh Government would seek to assume responsibility for public sector pay. I remember being interviewed by the BBC on the steps of St Stephen’s entrance on my response to the autumn statement. I was asked to respond to the First Minister’s comments, which I had not heard previously, that regional pay was

“a code for cutting pay in Wales”.

He continued:

“Ultimately we may have to look at taking over pay and conditions here in Wales. It’s not as easy as it sounds. There are real issues in terms of how that’s done. But if we’re forced into that situation, better that than have people’s pay cut by the UK Government in London.”

That sort of fighting talk, with an alternative course of action, is extremely unlike the current Welsh Government. We normally get a pile of hot air based on Labour-Tory tribalism, but with even the Welsh Government awakening from its slumber, perhaps Ministers here in London should be very wary of the strength of opposition that these proposals will generate.

[Susan Elan Jones (Clwyd South) (Lab)]

As usual, my Plaid friends always make the case better when they do not mention the word “independence”. Going back to the better part of the hon. Gentleman’s argument, we have a Secretary of State for Wales who happens to represent a Buckinghamshire constituency. Surely, if these proposals were considered logically, the rate of pay for that Secretary of State—if she is still Secretary of State at the end of the week—would be rather different if she represented a Welsh seat. That would be absolute nonsense, and it illustrates how nonsensical this policy is.

[Jonathan Edwards]

That is a fantastic intervention, if I am honest. Obviously, if we were to think this policy through rationally, it would mean that Members of Parliament should receive differential pay, and I can imagine how that might go down with hon. Members if we had to vote on it.

[Hywel Williams]

To return to the practical problems that we have in Wales, we share a long land border with England that is rather different from Scotland. There is much less traffic. I am very glad to see that link with England and both sides should profit from it, but it means that public sector pay in the Courts Service in Mold, for example, is different from that in Chester, which is just a few miles down the road, and that is ludicrous.

[Jonathan Edwards]

That is one of the practical problems that will come from this policy.

As a Welsh nationalist, I of course welcome the statements of the Government of my country that they will look into devolving public sector pay and conditions. Let us hope that if the UK Government continue with this policy, they match their words with actions. My only word of warning is: how will the Welsh Government fund this policy, given that they are reliant on block grant funding, which has been depressed by the Treasury, and that they are paralysed by an inability to raise their own revenue? If we go down this road, we will have to reform the funding formula, which the Labour party was previously cautious about doing.

Every hon. Member will acknowledge that the cost of living—particularly housing—for public sector workers in some parts of the UK is a problem. The chasm between private sector and public sector wages in London, for example, needs to be addressed. That is why my party previously made the case for a maximum wage to tackle the ridiculous earnings and bonuses paid to people in the square mile that do so much to inflate prices for ordinary working people in both public and private sectors. We must consider introducing innovative ideas, such as rent caps, as in New York, to reduce the housing benefit bill and ensure that public sector workers are not priced out of housing.

Rather than take such bold measures, the UK Government prefer to hammer hard-working people in the poorest parts of the state in an attempt to remedy the problems caused by the obsession of successive Westminster Governments with the economic elite here in London. That policy response, based on dealing with the consequences of macro-economic policy, has led to such imbalances across the state, rather than tackling the causes of those imbalances. The argument is that, through regional pay, the differences between public and private sector pay will disappear, but that claim comes about through looking at problems through the wrong end of the microscope. That is the same perspective from which people argued that cutting public sector jobs would lead automatically to their replacement with private sector jobs—and that has since been proven quite wrong, especially in areas such as the one that I represent.

In Wales, as in other parts of the UK, the private sector is undoubtedly too small, and that is sometimes misrepresented by people saying that there is too large a public sector, but that is not the case. The private sector in Wales needs to be given encouragement to grow through tax breaks, Government support for specific industries and infrastructure improvements. My party has been championing such intervention in response to the economic turmoil of the financial crisis in the past four years. I need not remind hon. Members that the Welsh economy under Plaid Cymru was growing faster than in any other part of the UK when we left office.

Sharp cuts in the pay available to public sector workers would have a hugely negative impact upon their ability to spend in the private sector and would probably lead to a vicious downward spiral, with job losses in the private sector and then a further downward impact upon public sector pay to again realign. This is what Blanchflower calls a “death spiral”. The effect of regional pay may be to institutionalise lower pay and create employment ghettos. I am concerned that, despite such significant problems, the twin siren calls of saving money and dismantling the public sector may be too much for the Chancellor to ignore. I hope that I am wrong. Diolch yn fawr.

--- Later in debate ---

[Owen Smith (Pontypridd) (Lab)]

It is a pleasure to speak under your chairmanship for the first time, Mr Chope; happy new year.

I, too, offer my congratulations to the hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards) on securing this important debate, which, as he has rightly pointed out, will be one of the defining debates in respect of economic policy over the coming period. He made a series of telling and well argued points. It was slightly ironic to hear a nationalist Member of the House arguing in effect in favour of collective bargaining on a national, British basis right across the UK. Nevertheless, it was a very interesting point.

[Jonathan Edwards]

I make no apologies for what I said, because at the moment sovereignty over these issues resides in this place, and as someone who has been sent here to represent the ordinary working people of Carmarthenshire, I will continue to do so as long as that is the case.

[Owen Smith]

I am grateful to the hon. Gentleman for that intervention and pleased that he makes no apologies for what he said. I entirely agree with the arguments that he made in respect of solidarity and collaboration right across the UK for people who have similar interests across Britain, whichever area of the country they live in. I wholeheartedly share his views about that, which is why I am a Unionist, not a nationalist, on today of all days.

I congratulate the hon. Member for Arfon (Hywel Williams), my hon. Friends the Members for Newcastle upon Tyne Central (Chi Onwurah) and for Sedgefield (Phil Wilson), who made a powerful speech, and of course the hon. Member for Montgomeryshire (Glyn Davies), who I am delighted is taking up the challenge of telling the Secretary of State for Wales and the Chancellor of the Exchequer that we need a proper review to address this very complex issue—as he described it—as opposed to a couple of private letters to the heads of the national pay review bodies.

Public sector workers must wake up every morning wondering what this Government will do to them next. We have seen the continuing pay freeze; we have seen additional cuts in wages when inflation is taken into account for the next two years; we have seen the 3% additional effective cut in wages as a result of the changes in public sector pensions; and 710,000 public sector workers, up from the 400,000 previously admitted to, are waiting to see whether they will be in a job at the end of this spending period.

Against that backdrop, there was the bombshell in the Chancellor’s autumn statement that regional pay will be re-examined. The Chancellor said that the evidence suggests that regional pay should be considered, because there are disparities between pay bands in the public sector across the UK. As we know, the Chancellor is very keen on evidence-based policy, so I thought that I would assess the evidence in respect of regional pay to date, because we have some experience of it.

London weighting is well established. It is a means of trying to deal with the problems, particularly in respect of housing, for people working in London on lower public sector wages. The previous Government sought to expand that by looking at key worker status and further help for key workers in London. As several hon. Members have said today, and as the Chancellor said repeatedly when he appeared before the Treasury Select Committee, we also have the experience of the Courts Service. However, the Chancellor has been slightly less than fair with the facts in respect of the Courts Service. The fact is that the Courts Service changes that were introduced in 2008—the previous Labour Government introduced zonal pay and five zones across the UK—were a significant improvement on the disparities that existed hitherto. The Courts Service came together in 2005. There was a merger involving the magistrates courts, the county courts, the Crown court and the Supreme Court. Before that point, more than 50 rates of pay were being applied across the Courts Service, so we went from 50 to five. The reality is that despite protestations by some of the unions at the time, most members happily opted into that service; indeed, more than 95% did so.

Opposition Members, who believe in evidence-based policy, would like the Government properly to review the experience of workers in the Courts Service. They should consider retention, rates of pay and the way in which the system has facilitated movement or otherwise across the country, and bring that to the table as part of the evidence for the current proposal.

--- Later in debate ---

[Owen Smith]

The hon. Gentleman knows that I was not in the House in 2008, but as far as I am aware, we introduced the policy in the Courts Service and there was further consideration. The former Prime Minister, my right hon. Friend the Member for Kirkcaldy and Cowdenbeath (Mr Brown), certainly talked about regional pay, but we did not introduce it in other areas. At the end of our period in government, there had been some experimentation in respect of the Courts Service, but we did not introduce the policy elsewhere.

Let us look at what happened at the Courts Service and consider where we go from here, because there are significant risks. At the time, the Government, and certainly the Treasury, understood that there were risks. My hon. Friend the Member for Sedgefield has mentioned the Treasury paper in 2004-05, which stated that

“extremely devolved arrangements are not desirable. There are risks of workers being treated differently for no good reason. There could be dangers of leapfrogging and parts of the public sector competing against each other for the best staff.”

That takes us to the motive: why have the Government now decided to bring this forward? If it was not a good idea a few years ago, why is it a good idea now? The reason is, of course, found in the two issues that they have with the public and private sectors. First, they believe in a totally outmoded, almost Manichean split—the public sector is bad, bloated and inefficient and the private sector is good, lean, hungry and eager to work. That is their understanding.

Secondly, the Government have a thoroughly outmoded notion that cutting the public sector and effectively forcing people to transfer to the private sector—through actively cutting jobs, as we heard was the strategy in the Budget, or through reducing regional pay, as we now hear might be the strategy—will somehow inflate the private sector. There is absolutely no evidence to support that. It is a totally misguided prescription, and one I fear that the Government will repeat.

The Treasury has said that the reason for looking at getting rid of national pay bargaining is to produce

“an economic reform to boost regions of the economy that are over-dependent on the public sector. All the evidence is that flexible public sector pay to reflect local labour market conditions will allow the private sector to flourish.”

Show us the money and show us the evidence, because we cannot see it at the moment. We can see a pamphlet with a lot of inflammatory language about the Manichean split between the fat public sector and the lean and hungry private sector from a think-tank which is pretty close to the Prime Minister and which some would say is a free-market, right-wing organisation, but apart from that I do not see a lot of evidence to support the position.

I suspect that the Minister will come out with some inflammatory comparisons, but I hope that she will not. We have heard so often about paramedics earning 16% more in the public sector than in the private sector, and I hope that we will not hear such unnecessary and unfair comparisons now. As the Institute for Fiscal Studies itself has said, such comparisons do not take into account the fact that there are invariably older and more experienced workers with better qualifications in the public sector. When such factors are taken into account, the differential between the public sector and their private sector counterparts is perhaps only 2%.

[Jonathan Edwards]

The hon. Gentleman makes a very important point. This morning, the Bevan Foundation responded to the debate by stating that the IFS figures do not compare like with like and that it is deeply misleading to use the figures in that way.

[Owen Smith]

I entirely agree. The evidence is shaky and a leap of faith is required—just as we were meant to believe that cutting the public sector would lead to a flourishing private sector. As we have heard, there is no reasonable basis for making that leap of faith. On job creation in the public versus private sector, we learned that in the last quarter, for every 13 jobs lost in the public sector, only one was created in the private sector. That is the reality of what is happening in the economy. We should not take, with any degree of faith, the Government’s reassurances that changing regional pay will make a key difference.

On both sides of the House, we have come to understand that fairness is an important theme in modern politics. In politics, we seem to be tussling daily over who can be the fairest, and the Government have to stand against the test of fairness on this issue. They need to answer the question whether it is fair to target public sector workers once more to pick up the bill for a crisis in our economy that they did not cause. Is it fair for the Government to implement a policy that will once more impact disproportionately on less affluent areas that have greater health problems due to the legacy of heavy industry and other issues? Is it fair to implement a policy that will suck demand out of their economies and further reduce the incomes of people living there?

The Government have a manifestly failing economic strategy to reduce the deficit that has led, on their admission, to an increased level of borrowing— £158 billion extra is being borrowed as a result of the their policy. That is why they are thrashing around looking for extra savings and why they are countenancing further unfair and destructive measures. They need to think hard about the policy, conduct a proper review and provide evidence to substantiate their dangerous claims.

Prevention of Nuclear Proliferation

Jonathan Edwards Excerpts

Tuesday 13th December 2011 Commons Chamber

[Mr Hoban]

It is important that we continue the twin-track approach—of engagement and challenge—that the Government have set out and which the previous Government also followed.

The November IAEA report documents Iran’s failure to co-operate fully with the agency and the possible military dimensions to Iran’s nuclear programme. The IAEA reports on Iran’s programme on a quarterly basis, but the November report set out its concerns in the strongest terms to date. It states that information available to the IAEA indicates that Iran has carried out activities relevant to the development of a nuclear explosive device. The report notes that

“while some of the activities identified have civilian as well as military applications, others are specific to nuclear weapons”.

The Government view these developments with the utmost concern.

In response to the November IAEA report, its board of governors issued a resolution expressing “deep and increasing concern” about the possible military dimensions of the Iranian nuclear programme. The board urged Iran to abide by its international obligations and called on it to engage seriously on the nuclear issue. These concerns are of the most serious nature and have far-reaching consequences for the UK’s interests and those of the region. Some 32 of the 35 countries on the board of governors supported the resolution.

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

The Minister might be about to answer my question, but what are other nation states doing in response to events in Iran? In particular, I am thinking about UN Security Council members Russia and China.

[Mr Hoban]

I will outline some of the action taken by several countries to exert pressure on the Iranian regime and to ensure that targeted action is taken to prevent the development of nuclear technology. I shall address some of those issues later.

The case for UK action is also underlined by the recent calls from the Financial Action Task Force for countries to apply effective counter-measures to protect their financial sectors from money laundering and financing-of-terrorism risks emanating from Iran. Those calls were renewed with urgency on 28 October 2011 and noted the taskforce’s particular and exceptional concern about Iran’s failure to address the risk of terrorist financing. It also flagged up its concerns about the serious threat that this posed to the integrity of the international financial system. The taskforce has not expressed such serious and ongoing concerns about any other country.

The UK is leading action against Iran because Iran’s proliferation-sensitive activities pose an ongoing concern for the UK and the international community as a whole. The measure that we have imposed is strong but necessary, and we encourage other countries to take similar tough action. The UK is an important global financial centre, so UK restrictions will have a significant impact on the options available to Iranian banks. That will make it more difficult for Iranian banks to use the international financial system in support of proliferation-sensitive activities and protect the integrity of the UK financial sector. Other countries share our and the taskforce’s concern about Iran’s nuclear activities.

--- Later in debate ---

[Jeremy Corbyn (Islington North) (Lab)]

In this brief debate, we should think very carefully about the long-term implications of the path on which we are apparently setting out today. I recognise much of what was said by the hon. Members for Northampton South (Mr Binley) and for Wyre and Preston North (Mr Wallace) about human rights abuses in Iran. I draw attention to early-day motion 2526 concerning trade unionists in Iran, and there are human rights abuses against people of the Baha’i faith, Kurdish people and others. I am extremely well aware of the abuse of human rights that takes place in Iran and of the determination of many people, including working-class people, trade unionists and intellectuals, to do something about their society and to take part in that political debate. We should recognise that a lively, if robust and sometimes very dangerous, political debate is going on in Iran.

We should also think carefully about the rhetoric we use when we talk about Iran. Iran is an inheritor of the Persian tradition, a place of enormous civilisation and culture, and a place of enormous unity when faced with an external threat, as my Friend the Member for Newport West (Paul Flynn) pointed out. We should not denigrate the whole history of the Persian people and the contribution that they have made to history while ignoring our own scandalous role in their history, from the attempts at exploiting oil, which eventually led to the formation of the Anglo-Iranian Oil Company, which became BP, through to the coup in 1952 inspired by the British and the CIA. We do not have clean hands in the history of Iran, and we should have some humility when dealing with the situation there.

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

To add to that point, does the hon. Gentleman agree that the last thing we should try to do now is demonise Iran?

[Jeremy Corbyn]

Absolutely. I sat in the Chamber in the run-up to the wars in Afghanistan and Iraq, when the House indulged in an orgy of demonisation of a particular country. That created a sufficient head of steam in public opinion that was deemed by the Governments of the day to endorse an invasion of those countries. I remind the House that 10 years later we are still in Afghanistan, we have spent £9 billion or £10 billion on wars in Iraq and Afghanistan, and there is no end in sight.

The reason the Minister gave for proposing the Financial Restrictions (Iran) Order 2011 to the House was that this is a banking order—a finance order—but he relied heavily on the IAEA reports and the issue of Iran’s nuclear capacity and nuclear capability. I stand here as somebody who is passionately opposed to nuclear power and nuclear weapons in equal measure. I believe nuclear power to be intrinsically environmentally unsustainable and dangerous, and I think nuclear weapons are absolutely immoral. However, I recognise that in law there is a distinction in that any country is allowed to develop nuclear power; it is not allowed to develop nuclear weapons.

Iran remains a signatory to the nuclear non-proliferation treaty. Last year’s NPT review conference came to the conclusion that the best way of bringing about a nuclear-free world—a big step—would be the creation of a nuclear-free middle east. That would, of course, mean a mechanism for negotiation involving Israel and Iran. Israel, I remind the House, has 200 nuclear warheads and the rhetoric of the Israeli leaders is strongly critical of Iran. We need to bring about a mechanism, impossible within the NPT while Israel remains outside it, and possible only within the terms of a nuclear weapons convention. I hope the Government will put considerable efforts into promoting a nuclear weapons convention, and retaining a diplomatic link and debate, negotiation and discussion within Iran.

There are those who say that the war has not started yet and there is nothing to worry about. I remind them of a number of facts. One is that the US fleet in the Gulf is enhanced and enormous. There is a US base in Bahrain. Iran shot down and captured a drone missile that had apparently strayed over the border or been deliberately sent over it, depending which narrative we care to follow. A serious and significant number of assassinations and explosions have occurred in Iran over the past few weeks, with greater and greater intensity. I do not know who is causing those explosions. It could be foreign forces; it could be internal opposition; it could be all kinds of people, but there are clearly enormous tensions. Isolating Iran in the current circumstances is more dangerous than anything else I can think of.

The Economy

Jonathan Edwards Excerpts

Tuesday 6th December 2011 Commons Chamber

[Stephen Williams (Bristol West) (LD)]

It is a great pleasure to follow the former Chancellor. We can contrast his thoughtful and authoritative approach with what we heard earlier from the shadow Chancellor, who has just left the Chamber. We are asked to believe that he cries during the “Antiques Roadshow”, but anyone watching our debate would have cried with despair at the pantomime act we were treated to earlier. Before one of the shadow Chancellor’s assistants gets up to tell me how many people in Bristol West receive child tax credits, let me tell the Labour Front-Bench team that people in Bristol West are far too smart to fall for the illusion that an increase of 5.2% in tax credits somehow amounts to a cut.

The state of the public finances has been mentioned several times. Before the coalition Government came to office, the deficit as a proportion of gross domestic product was 11.2%. In our first year of government, it was cut to 9.3%. According to the independent forecast from the Office for Budget Responsibility, the deficit will be 4.5% at the end of this Parliament. We will have effectively halved it over the lifetime of the present Government. The Darling plan, if I may refer to it thus, has been mentioned several times during the debate. I seem to recall that its aim was to do just that—to halve the deficit over the lifetime of this Parliament—so let us not hear too much for the foreseeable future from Opposition Members about cutting too fast and too deep.

The coalition is bringing the deficit under control, which enables us to benefit from international confidence that we can borrow cheaply and service the accumulated debt that already exists in an affordable way. In 2010 our credit rating was similar to those of Italy and Spain, and the fact that it is now so much stronger is due to the decisive action taken by the coalition Government. That improved rating is important not just to the Government’s Debt Management Office—although the billions of pounds that no longer need to be spent on servicing debt interest are now available to fund our priorities, whether they be pensions, education or the health service—but to all our constituents and the businesses that employ them. Historic low interest rates are a monetary stimulus, underpinning domestic confidence and increasing spending and investment.

One of the coalition Government’s key objectives is to make work pay in order to expand employment, and one of the key objectives that the Liberal Democrats have brought to the coalition Government is a progressive increase in the income tax threshold to £10,000 by the end of the current Parliament. That will make work pay for the low-paid in particular, and especially for women with part-time jobs, and it is fundamental to our commitment to fairness during the lifetime of this Government.

Last week, during a debate similar to this, I referred to the recommendations of the High Pay Commission. I was pleased when the Deputy Prime Minister said at the weekend that he hoped that the coalition Government would be able to implement many of those recommendations. We should also tackle tax avoidance in order to make it clear that, as well as rewarding the work done by those with low incomes, the Government are tackling high pay at the top of the income streams in the companies for which they may work.

Economic growth needs to be stimulated. I note that several Members with constituencies in the south-west are present. I am sure that none of us misses the South West regional development agency, but I have no doubt that all of us, especially those representing constituencies in greater Bristol—including the Minister of State, Department for Work and Pensions, my hon. Friend the Member for Thornbury and Yate (Steve Webb), who is in the Chamber—will welcome the establishment of a local enterprise partnership covering the greater Bristol area, as well as an enterprise zone in my constituency to create new jobs in new media businesses.

Bristol will benefit from the regional growth fund, from Going Places funds, from the housing market stimulus, and from a new technology innovation centre. A couple of weeks ago, my right hon. Friend the Secretary of State for Business, Innovation and Skills opened the National Composites Centre, near the constituency of my hon. Friend the Minister of State, and we are also to have a university technology college. Those are examples of real actions being taken by the coalition Government to stimulate growth, particularly in new areas of the economy.

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

How will regional pay in the public sector help areas of Britain that are lagging behind, such as the south-west and Wales? Surely it will only entrench regional wealth inequalities.

[Stephen Williams]

That is an interesting point. The Chancellor said in the autumn statement that a study would be carried out so that we could assess the evidence and decide what to do in the future. I do not think that we should form any firm conclusions at this point, but I would point out that regional pay differentials are the norm in the private sector.

Europe has been mentioned a few times today. It is worth our reminding ourselves that the European Union is the world’s largest single market, that it is worth up to £12 trillion—the aggregate value of the EU member states—that it has 500 million consumers, and that 50% of British trade exists with our fellow EU members. At this point it is all the more important for the United Kingdom to play a full and constructive role as a member of the EU, and I know that the Under-Secretary of State for Business, Innovation and Skills, my hon. Friend the Member for Kingston and Surbiton (Mr Davey)—who is present—plays an active role in financial services, energy, digital media and green technology. We want the single market to work in the interests of our country. Now is the time for our country to engage positively in Europe rather than hoping for some loosening of our relationship with the EU, let alone the catastrophic developments that would result from withdrawal.

The coalition Government have ambitious plans. We have restored confidence in our public finances and brought them under control, we have achieved international credibility, and we will stimulate economic growth and make work pay. These are difficult times indeed, but sustainable growth and recovery are on the way.

Eurozone Crisis

Jonathan Edwards Excerpts

Thursday 27th October 2011 Commons Chamber

[Mr Osborne]

My hon. Friend makes a good observation. Because of the credible fiscal plans that we have set out, we have secured confidence in Britain’s ability to pay its way in the world, taken our credit rating off negative watch, which is where it was at the time of the general election, and secured for our country record low interest rates. Those interest rates would be at risk if we pursued the policies advocated by the Opposition, which would also be a rather bizarre position to take into the European Council discussions, when right at the top of the agreement signed yesterday is the statement that countries need to pursue policies of

“fiscal consolidation and structural reforms.”

The Opposition have voted against every policy of fiscal consolidation and every policy of structural reform.

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

Does the Chancellor think that the 50% haircut of Greek sovereign debt will be sufficient and does he expect that holders of Italian debt will also need a trip to the barber’s?

[Mr Osborne]

We think 50% is a very good number. We had in mind somewhere around 50%, and we wondered whether that would be achievable. One of the pleasant surprises of last night was that it was achieved. It is only a headline agreement, and as the former Chancellor said earlier, it absolutely needs to be put into practice now if this deal is to mean anything. I think it is best for me to stick to talking just about Greece.

Global Economy

Jonathan Edwards Excerpts

Thursday 11th August 2011 Commons Chamber

[Mr Osborne]

My hon. Friend is absolutely right. First, I should take the opportunity that I did not take in answer to the previous question—as my hon. Friend, too, is a Cheshire MP—of praising the work of the Cheshire police, who have shown outstanding bravery over the past few days. My thoughts go out, as the hon. Member for Ellesmere Port and Neston (Andrew Miller) said, to the injured officers.

My hon. Friend is absolutely right. Surely we have learned something from the past decade, which is that relying on an unsustainable housing boom, unsustainable Government spending and unsustainable bank lending is not a model of growth that this country can pursue again. We have to get off this country’s addiction to debt, not just in the Government but in banks and households. That is what we are doing and it is a difficult adjustment that many western economies are having to go through. Unfortunately for us, given that we were the most enthusiastic participants in the debt boom, that adjustment is particularly difficult here in the UK.

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

Does the Chancellor agree with the recommendations of the recent economic commission of the Conservative party in Wales that job creation levers should be devolved to the Welsh Government? Does he agree that there is no need for another lengthy commission to come to that sensible conclusion?

[Mr Osborne]

As the hon. Gentleman knows, we are in active discussion with all the parties in Wales and with the Welsh Assembly Government, discussing what further powers might be devolved to the Welsh Assembly, including fiscal powers that might have a role in economic development. I do not want to pre-empt that debate, but the fact that we have been prepared to engage in it shows that we are doing this in good faith.

Sovereign Grant Bill

Jonathan Edwards Excerpts

Thursday 14th July 2011 Commons Chamber

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

I have a series of concerns with the Bill. First, it creates an artificial link between the profits from an estate given up by the royal family in 1760 and an amount required to carry their official duties in the present day. My major concern is with the escalator process that is put in place, whereby the amount that is received each year will be the same as or greater than that of the previous financial year, either through the floor introduced in the Bill or because 15% of the Crown Estate’s profits is greater than the floor. I am disappointed that the Opposition amendment on that was defeated in Committee.

There are curious oddities in the Bill. Why is there a need to round up the Crown Estate’s profit to the nearest £100,000? Why round it upwards and not downwards? Why round it up at all? The profit of the Crown Estate is a red herring. There is no link between the successful organisation of the estate’s affairs and the amount received by the royal family. This is not a business arrangement. I recognise that there are arguments that the royal family should receive a lump sum and be able to transfer funds for better use. I also recognise the argument that the money provided is given for a specific purpose. However, if it is not being used for that purpose, on what grounds is that amount of funding being given?

As many Members have said, there should be a regular needs-based analysis of the royal family’s expenditure, with grants provided accordingly. Having said that, I like the idea of a reserve fund for money that is not used. This sounds like the end-of-year flexibility that the Welsh Government set up under Plaid Cymru a few years ago, only for the Treasury to steal back £400 million earlier in the year. I look forward to the day when the Treasury follows the same pursuit in taking back money allocated to the royal family.

The Crown Estate, which is a key part of the Bill, is owned by the state and administrated by commissioners. It owns large areas of land in Wales and claims the seabed and foreshore as part of its urban, rural and maritime portfolios. Yet last week’s annual report fails to provide a nation-by-nation or regional breakdown of the investments and profits of the Crown Estate. Figures for Scotland are provided on the website, but apparently no comparable figures for Wales are published. In the interests of transparency, we would like to see those figures published. In the interests of Wales, we would like to see responsibility for the Crown Estate in Wales transferred to the Welsh Government. This is our land and our seabed, and it should be used for investments that benefit the people of Wales.

[Mel Stride]

I feel that I must return to the status of the Crown Estate. Does not the hon. Gentleman accept that it is effectively owned by the institution of the monarchy and not by the state at all?

[Jonathan Edwards]

I do not agree. My belief is that the Crown Estate in Wales should now be devolved to the Welsh Government.

Profits are coming from the use and exploitation of these assets. Those profits, be they for renewable energy on land or sea, should be given to the people of Wales. Having control of the Crown Estate land and sea in Wales would give us the opportunity to be a world leader in renewable energy and to develop our economy accordingly. In the meantime, the Bill should not include reference to the Crown Estate and should instead provide a series of grants according to the needs of the royal family to undertake their duties. If we are to have one single sovereign grant that is not needs-based, then why not simply increase it by the consumer prices index, as that seems to be the Government’s preferred measure of inflation?

Finance (No. 3) Bill

Jonathan Edwards Excerpts

Tuesday 5th July 2011 Commons Chamber

[Chris Leslie]

Indeed. Sometimes Government Members protest too much. The Opposition simply want a review of what the bank levy combined with the bonus tax could yield. My hon. Friend is right about the corporation tax cuts from which the financial sector will benefit. The sector will have a tax cut of £100 million in 2011-12, £200 million in 2012-13, £300 million in 2013-14, and £400 million in 2014-15. That is a £1 billion corporation tax cut over this Parliament. The Treasury ought to supplement its very modest bank levy plan with the bank bonus tax because it is only fair that those who played such a central role in the global economic downturn make a greater contribution to help to secure the economic recovery by supporting jobs and growth.

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

I agree with the thrust of the hon. Gentleman’s argument—the bankers are getting off far too lightly—but rather than introducing a payroll tax, as he suggests in the amendment, would it not be better to increase the corporate levy? Would that not deal with the bonuses issue?

[Chris Leslie]

We discussed in Committee how the bank levy might be altered, and I will come in a moment to my own criticisms of how the Government have framed the bank levy. Their original plans would have brought in far more revenue, but the banks started complaining so the levy was shrunk back to a level that the banks felt was acceptable, not to a level the taxpayer felt was acceptable.

--- Later in debate ---

[Jonathan Edwards]

I will not take up much of hon. Members’ time this evening. I regret to inform the Treasury that we will vote against the Government. Leaving aside our concerns about the speed and depth of the cuts, our main concern as a party is obviously the effect of the Budget on Wales. Given the economic headwinds that Wales faces, the Treasury might be interested to know that all four parties in the National Assembly, including the Conservative party and the Liberal Democrats, have today signed a joint declaration calling for an immediate reform of the Barnett formula, borrowing powers for the Welsh Government, including the ability to raise capital funds via bonds, and fiscal responsibility in respect of taxation powers. Although 5 July is not usually a historic day, I would say it is today because all the Unionist parties have adopted Plaid Cymru’s economic policies. I understand that the Treasury Minister will meet the First Minister on Monday and I hope he will embrace this fresh mandate from the people of Wales.

Question put, That the Bill be now read the Third time.

The House proceeded to a Division.

[Mr Speaker]

I ask the Serjeant at Arms to investigate the delay in the No Lobby.