Debates between Jonathan Edwards and Geraint Davies during the 2010-2015 Parliament

Wales Bill

Debate between Jonathan Edwards and Geraint Davies
Wednesday 10th December 2014

(9 years, 10 months ago)

Commons Chamber
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Jonathan Edwards Portrait Jonathan Edwards
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The commission’s remit is not one of its own choosing, but the SNP decided to act in the best interests of the country and move the process forward. Making out that the Smith commission proposals are what were included in the vow is not right. It was essentially home rule or devolution max, and on any definition of devo max, it means the full devolution of all powers apart from defence, foreign affairs, the monarchy and military policy. That is not included in the Smith commission proposals, which were less significant than what was promised to the people of Scotland on the eve of the referendum.

As I was saying, the Smith commission is vastly more progressive in its trajectory of travel, offering 100% of income tax in comparison with the Wales Bill offer of only a paltry income tax sharing arrangement—and even then, only following a referendum many years down the line.

Geraint Davies Portrait Geraint Davies
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(Swansea West) (Lab/Co-op): Does the hon. Gentleman accept that if Wales has its own powers to set both a higher and a lower rate of tax and it chooses to reduce the higher rate so that a lot of millionaires move to Monmouthshire, the overall tax take to the United Kingdom would be dramatically reduced because those people would all evade tax by moving to Wales? Does he think that is a good thing to set in motion, and does he have any idea whether the Government have calculated the cost of that possibility?

Jonathan Edwards Portrait Jonathan Edwards
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I am interested in this line of tax harmony across the UK being put forward by the Labour party. In Wales, of course, we had at the last count 22 local authorities all setting different rates of council tax, and we are a key part of a single market across the European Union with its different members setting different tax rates. If Labour Members’ arguments were to hold water, surely they would argue for tax harmonisation across the whole of local government in Wales and across all member states of the European Union. It does not make much sense to me.

Geraint Davies Portrait Geraint Davies
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Will the hon. Gentleman give way again?

Jonathan Edwards Portrait Jonathan Edwards
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I think I have answered the hon. Gentleman’s point.

In conclusion, the general election is fast approaching, and I can assure this House and the people of Wales that Plaid Cymru will fight that election on the basis that we will not allow our country to be treated as a second-class nation by the Westminster establishment.

Geraint Davies Portrait Geraint Davies
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I come here with an open mind about these tax issues, but I must confess that I have major concerns because I fear that the incentive for the Government to devolve tax powers is not one of freeing the nation of Wales to make its own decisions, but one of distracting attention from the fact that Wales is grossly underfunded both in revenue under the Barnett formula by some £300 million and in capital receipts. If we had our fair share of HS2, for instance, we would have an extra £2 billion.

Jonathan Edwards Portrait Jonathan Edwards
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The hon. Gentleman and I are both Swansea city supporters and I am grateful that he has been kind enough to allow me to intervene.

Geraint Davies Portrait Geraint Davies
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I can see that the hon. Gentleman is wearing black and white.

Jonathan Edwards Portrait Jonathan Edwards
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This is my wedding suit, or rather the suit I had with my wedding suit. It has led to much comment. [Interruption.]

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

Recall of MPs Bill

Debate between Jonathan Edwards and Geraint Davies
Monday 27th October 2014

(9 years, 11 months ago)

Commons Chamber
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Geraint Davies Portrait Geraint Davies
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The point about Chris Mullin is well made. Different people with different temperaments in different situations, with different constituencies with different profiles and majorities, will face different stresses and strains—not just actual and in your face, but behind the scenes. As I have said, that might have a very corrosive influence on democracy itself, and we should stand fully against it.

All of us like to think that despite pressure behind the scenes or otherwise, one would put principle before popularity. With fixed-term Parliaments, we know that we will have five years of making difficult decisions, but have the time to explain such things. However, we might be faced with instant demands or pressures, which—let us face it—might be orchestrated by political parties against those in particularly marginal seats. There would be issue after issue, and requests to do this and to do that. People from 38 Degrees, or whatever it is called, are just the tip of the iceberg. Lots of other groups would insist on the immediate satisfaction of their demands. It is easy to get groups of people to send in letters without their thinking through the issues. It would all become a sort of crowd mentality, and before we knew it, people who should be MPs would be intimidated and not stand, and it would also interfere with the quality of people who came forward.

Jonathan Edwards Portrait Jonathan Edwards
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Surely the defence against the scenario that the hon. Gentleman presents is the fact that the threshold, as suggested in the amendments of the hon. Member for Richmond Park (Zac Goldsmith), would be 20% of the electorate, and that people would physically have to visit the town hall and put their name to a recall petition. [Interruption.] Well, it would be 20% to initiate the final recall mechanism for a recall by-election. In my constituency, that would be more than 11,000 people. If 11,000 people went to the town hall in Ammanford and wanted my recall, I would resign myself.

Geraint Davies Portrait Geraint Davies
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Yes, but my understanding is that 5% would be needed to start the process.

My issue is with recall being within the armoury of those who want to intimidate people for any reason. On the face of it, it might be for a policy reason, but I thought that we were supposed to be discussing behavioural issues in relation to conduct and doing the right thing. Obviously, if we break a law, we should not be above the law, but I might be an MP and support the wrong football team. People may laugh at this, but people might say, “We don’t want someone for Liverpool who supports West Ham”, and there might be enough of them to mount a challenge, which would be a massive distraction.

Housing Benefit (Wales)

Debate between Jonathan Edwards and Geraint Davies
Thursday 1st May 2014

(10 years, 5 months ago)

Westminster Hall
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Westminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.

Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.

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Jonathan Edwards Portrait Jonathan Edwards (Carmarthen East and Dinefwr) (PC)
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It is a pleasure to serve under your chairmanship, Sir Roger, as it is to speak in this debate. Indeed, it is a pleasure that the No. 1 conclusion in the report makes the case for rent controls in the private rented sector. That was an amendment that I suggested when we were deliberating over the report, and it received the support of the majority of the Select Committee, for which I am extremely grateful.

The under-occupation penalty for recipients of housing benefit in the social rented sector is the signature regressive social security policy of the current UK Government. Labelled the bedroom tax, in Welsh it is called the treth llofftydd—when there is a hashtag in Welsh on Twitter, we know we are in trouble.

The bedroom tax, as the Select Committee Chair, the hon. Member for Monmouth (David T. C. Davies), said, is part of the UK Government’s efforts to reduce the housing benefit bill. I, too, pay tribute to his chairmanship. It is a pleasure to be a member of the Committee and to work with him. He is extremely fair to me as the single Plaid Cymru member of the Committee. Despite his persona in the Chamber as a ferocious, right-wing beast, he is a very kind Chairman.

The UK Government, of course, have a three-prong strategy for reducing the housing benefit bill. First, there is a cap on benefits, which the official Opposition now support, with additional regional elements, should they form the next Government. Secondly, the annual uprating of welfare payments is pegged at 1%, which means that there are real-terms cuts to social security support every year. Thirdly, there is the bedroom tax, or under-occupancy penalty.

Despite all that, in its response to the 2014 Budget the OBR projected that housing benefit expenditure will increase by £1 billion by 2018-19. If they have time, I ask Members to read that report on their way back on the train this evening. Page 146 states:

“The largest driver of the rise in spending on housing benefit has been caseload growth in the private rented sector.”

The report goes on to say that the trend towards renting is driven primarily by the huge increase in house prices, which means that young people are unable to afford to purchase their own home. Only those who are supported by their parents are able to afford a deposit. The last bit of page 146 states:

“The rising proportion of the renting population claiming housing benefit may be related to the weakness of average wage growth relative to rent inflation. This explanation is supported by DWP data, which suggest that almost all the recent rise in the private-rented sector housing benefit caseload has been accounted for by people in employment.”

That makes my case for me. The key reason for the increase in the housing benefit bill, which we will see despite the regressive policies introduced by the UK Government, is spiralling rents in the private rented sector.

The Financial Times reported in 2012 that rents had increased by 37% since 2007, and it projected a 35% increase in rents over the following five years. That was before the housing bubble that we are now experiencing, with the OBR projecting that house prices will increase by 9.2% in the third quarter of 2014 alone. The OBR envisages a 30% increase in house prices over the next five years. When we couple those statistics with stagnant wages, it is unsurprising that more and more people in employment are falling into the trap of requiring housing benefit. Often when we discuss this issue, people miss that housing benefit is an in-work benefit; it is not for people who are unable to work but for people who are working now.

House prices are projected to reach 2008 pre-crash levels by 2019, which means we are in a greater boom and bust cycle than we were in 2008. As wages are stagnant, the bubble is being fuelled by increased debt. We are living in worrying times.

Geraint Davies Portrait Geraint Davies
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Will the hon. Gentleman acknowledge that bank lending to businesses is 30% down since 2008 but that bank lending for mortgages is beyond 2008 levels? House prices are going up, rent is going up but real wages are going down. When interest rates go up, we will have a sub-prime debt disaster on our hands.

Jonathan Edwards Portrait Jonathan Edwards
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The hon. Gentleman and I are singing from the same hymn sheet. We were promised a rebalancing of the economy and a move towards business investment and exports, but we are seeing the same old boom and bust policies that have been the hallmark of the UK economy for many decades. The danger is that the boom and bust on this occasion might be even more serious than that built up in 2008.

Finance Bill

Debate between Jonathan Edwards and Geraint Davies
Monday 1st July 2013

(11 years, 3 months ago)

Commons Chamber
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Geraint Davies Portrait Geraint Davies
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In essence this debate is about political choices and not just the technical efficiencies of marginal rates of tax. When this Government took over from Labour in 2010, two thirds of the deficit had been created by the banking community and a third by pump-priming in response to the financial tsunami after a history of sustained growth under the Labour Government. The new Government decided to focus not on growth, but on cuts to get down the deficit, which was a fundamental error that has led to a flatlining economy. They then had to decide who should bear the brunt in order to pay down the deficit—80% in cuts and 20% in taxes—and the answer that the Conservatives and the Liberal Democrats came up with was that it should be the poorest who were hit hardest.

The recent spending review and infrastructure plans replayed the same Tory agenda: the cuts will hit hardest in the poorest areas, including Wales and the north, and 80% of the investment in infrastructure for growth will benefit London and the south-east in order to shore up the Tory and coalition votes. This new clause is about making a move in the other direction so that the very rich make a slightly greater contribution, which will be redistributed to people in the middle and at the lower end of the income scale.

Jonathan Edwards Portrait Jonathan Edwards (Carmarthen East and Dinefwr) (PC)
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The hon. Gentleman may have read an Institute of Welsh Affairs blog today by Gerry Holtham, the well-respected Welsh economist, who was scathing in his criticism of the hon. Gentleman’s party for adopting Tory austerity policies. How concerned is the hon. Gentleman, on the back of his criticisms of the UK Government’s austerity policies, about the fact that his party has adopted the very same strategy?

Geraint Davies Portrait Geraint Davies
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A moment ago I talked about Arab oil sheiks and now I am going to talk about Welsh milk shakes. On a serious note, what the Labour party has said is that when we take over in 2015, should the people of Britain give us their confidence, as I hope they will, we will inherit—this is self-evidently true—the current Government’s spending plans for 2015-16, so we will carry them out. As we make progress, I hope that the focus will switch to growth more than cuts, as it did after we inherited the Conservative party’s spending plans when we took over in 1997. We ran with those plans for a year and then we had consistent growth. The economy grew by 40% from 1997 to 2008 before the financial tsunami caused by sub-prime debt. I imagine that we will do the same in 2015. We offer no apology that we will have fiscal discipline alongside a focus on growth and that we will get people into jobs to pay down the debt. We will also change the composition of cuts to the rich and poor in certain areas.

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Jonathan Edwards Portrait Jonathan Edwards
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It has been a number of weeks since we debated the provision in earlier stages of the Bill. My concern about the mansion tax policy, which I support in principle, is whether agricultural land would be included as a part of the estate that would be taxed. Does the hon. Lady agree that we must ensure that farmers are protected?

Geraint Davies Portrait Geraint Davies
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But only Welsh farmers—[Interruption.]

National Assembly for Wales

Debate between Jonathan Edwards and Geraint Davies
Wednesday 6th February 2013

(11 years, 8 months ago)

Commons Chamber
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Geraint Davies Portrait Geraint Davies
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It is a good idea, but that does not mean that it is about the respect agenda. I think that perhaps the idea came from this place without proper consultation and it just so happened that the Welsh Assembly Government agreed with it. Will the Minister tell us whether there was consultation on that part of the Green Paper. My understanding is that there was no consultation on any of it. Was there, in any sense, an element of the respect agenda, or was it just a blind coincidence of view?

There is also a move towards the resurgence of dual candidacy whereby somebody can stand in a first-past-the-post election and, should they fail, reappear like a vampire figure through the list mechanism and find themselves transposed into the National Assembly without a mandate, having failed to win in the first place. In other words, losers will be winners; I will be talking about Bob Dylan later.

Jonathan Edwards Portrait Jonathan Edwards (Carmarthen East and Dinefwr) (PC)
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The hon. Gentleman holds the strong view that the Green Paper was an attempt to gerrymander the political system in Wales. However, the implementation of the double jeopardy rule that prohibits people from standing in the list and in a constituency was the worst kind of gerrymandering by the right hon. Member for Neath (Mr Hain) when he was Secretary of State for Wales. Is the hon. Gentleman proud that the electoral system that we now have for the National Assembly for Wales is mirrored in only one country in the world—Ukraine?

Geraint Davies Portrait Geraint Davies
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It is a shame there is no one from Ukraine present to speak up for themselves—no disrespect to Ukraine, but that matter could be taken up in another place, namely Ukraine.

On double candidacy, the proposition was put in a manifesto which was voted for in an election. There was a White Paper and it went through a proper system. Of course, it is possible to disagree with something that has been properly considered and passed in a democratic way—I respect that and I am sure that we all share that view—but we are complaining about proposals that were put through in a one-sided and seemingly political way without proper collaboration with the institution that would then have to run the situation, namely the National Assembly for Wales.

Could the Minister confirm whether the boundary changes are now dead and buried in the aftermath of the vote here, particularly in the light of a Wales Office spokesperson saying that it is now not in anyone’s interests to change the boundaries as proposed by the Green Paper?

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Geraint Davies Portrait Geraint Davies
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The evidence certainly points in that direction. Thankfully, there are different institutions in the United Kingdom that can take forward different policies and ideas. For example, in Wales people can go to university for £3,000 a year or about £10,000 across three years, rather than pay £30,000. In this place, the Conservatives say, “It is impossible to have lower fees. Where would the money come from?” That idea and many others show that there are different ways of doing things. That is healthy for democracy.

The attempt to use the power that this place has had historically to blunt the blade of innovation in Wales is quite wrong. Unfortunately, all the evidence suggests that these changes are being proposed for party political gain.

Jonathan Edwards Portrait Jonathan Edwards
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The hon. Gentleman is being very gracious in giving way. I am sure that he will be glad to hear that Gareth Bale has just scored for Wales and that we are beating Austria 1-0.

There has been cross-party consent in Wales on creating a fairer electoral system. The Richard commission published its report in 2004 and argued for 80 Assembly Members elected by single transferable vote. Does the hon. Gentleman agree that parties across the divide, both here and in the National Assembly, should come together and look again at those proposals?

Geraint Davies Portrait Geraint Davies
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There is a case for having a broad debate about the best way forward. That is part of the Silk discussion and I agree with that. I am surprised that Plaid Cymru’s position is that there should be co-determination as opposed to devolution on these matters. Perhaps that is a change in its position and it is now less devolutionist than I appear to be. That is there for the record.

I will be helpful and give the Minister time to respond and to answer any questions that other Members may have. Clearly, there are more questions than answers in the aftermath of the great boundary victory—a constitutional change for which we can thank the Liberal Democrats, who are here in abundance. I can barely see the green leather, there are so many of them here tonight!

We need to move forward with effective democracy. It would help to have coterminosity of seats for Assembly Members and MPs. Obviously that could change in the future. It would be good to have stability in our relationships with constituents and for decisions increasingly to be made where they have the greatest impact.

Inward Investment (Wales)

Debate between Jonathan Edwards and Geraint Davies
Thursday 29th November 2012

(11 years, 10 months ago)

Westminster Hall
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Westminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.

Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.

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Geraint Davies Portrait Geraint Davies (Swansea West) (Lab/Co-op)
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It is a pleasure to welcome this report, which I was pressing for. Wales sits within the UK economy and the global marketplace, and we all need to pull together in both the Welsh and the UK Governments to provide the best opportunities for Wales in a changing environment and to give Wales the tools to do the job. I will cover the basic ground of the report and what we should be doing in Wales, including in the councils, focusing primarily, as has been said, on the UK Government’s responsibilities to present Wales as an accessible, adaptable and attractive location for inward investment in a global marketplace.

Obviously, we cannot compete on labour costs as we did in the past with China but we have electronic global market reach and clearly competitiveness is about added value and skills. Emerging markets in China, India and south America should be seen as major opportunities for emerging consumer markets of high value products, whether arts or science-led, for the Welsh economy. We should refocus our efforts in that way.

Following the global financial tsunami in 2008, Wales is particularly vulnerable, because the proportion of people in the public sector is greater, and as the Government begin to reduce the investment in public sector jobs and wages, consumer demand is disproportionately hit. We know that the root of very low or static growth in the UK is the collapse of consumer demand, which was still going up in 2010, albeit with a deficit, but the announcement of 500,000 job cuts deflated that and we are now bouncing along. The issue is to keep money going into local economies, and to target investment in the most productive area.

Jonathan Edwards Portrait Jonathan Edwards (Carmarthen East and Dinefwr) (PC)
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Does the hon. Gentleman agree that the big headwind in household expenditure has more to do with the huge personal debt bubble and asset bubble built up under the last Labour Government—£1.4 trillion, and 100% of GDP? That is an incredible record and far higher than any other state in the developed world. Is that not why consumer spending is collapsing?

Geraint Davies Portrait Geraint Davies
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I was not expecting to hear cries for austerity from Plaid Cymru, but there you go. They come from all sorts of directions.

Very briefly, you will know, Mr Bone, that between 1997 and 2008 Britain enjoyed a period of more rapid growth than had been seen since the war with paid back debt, massive growth in employment, and reductions in welfare costs. After the financial tsunami of 2008, my right hon. Friend the Member for Kirkcaldy and Cowdenbeath (Mr Brown) and Barack Obama got the fiscal stimulus going so that we did not go into a global depression, which the hon. Gentleman seems to be calling for. In 2010, we then had a deficit, which the coalition Government inherited. Two thirds of that was due to the bankers and one third was due to excess investment above earnings to pump-prime the economy and keep it growing. The current Government then decided to focus more on cuts than growth to get the deficit down, ending up with virtually zero growth, and the deficit has been growing ever since. I do not know whether the hon. Gentleman wants to cross the Floor to the Conservative side, but when history is written, it will be seen as a painful place to be.

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Geraint Davies Portrait Geraint Davies
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That is kind of you, Mr Bone; thank you.

I want to mention the issue of city regions. In terms of working together in a critical mass in a global marketplace, one benefit of trying to bring together the four local authorities of Swansea, Neath Port Talbot, Pembrokeshire and Carmarthenshire, plus the universities and industry, to argue the commercial case as well as the social case for electrification of the railway to Swansea was that there was a refocusing on the common interests of that area.

I am very pleased that the Welsh Government have taken the initiative in doing a consultation on city region status and have given the go-ahead for the Swansea Bay city region to move forward. Swansea has always been seen to be, to a certain extent at least, in the shadow of Cardiff, so it is interesting to note that Cardiff itself contains about 300,000 people, but the continuous urban footprint of Neath Port Talbot and Swansea, going to Llanelli, is one of about 400,000 people —the biggest urban footprint in Wales. We can work together within that and within Carmarthenshire, haloing out to Pembrokeshire and, indeed, Ceredigion—there is not really anywhere to go beyond that. The hon. Member for Ceredigion (Mr Williams) is very welcome in the Swansea Bay region. I am talking about working together to have a diverse skills base. Working with the universities and the local authorities to get coherence, focus and value for money is very important.

I have already welcomed the rail electrification. It was regrettable that we had to work so hard to get the Government to agree to an extension from Cardiff to Swansea, but that was very good news. As I have said, the next thing that we want is to be able to say that we have super-connectivity.

Of course, the Swansea Bay brand has been created partly through football. The Minister will know that Swansea won 3-1 against West Brom last night. That sort of news is transmitted to 600 million people in 200 countries. That is important because the name Swansea is then known. Increasingly, people are hearing of Swansea who may not even have heard of Cardiff. That is amazing.

Jonathan Edwards Portrait Jonathan Edwards
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I just want to add to the excellent point being made by the hon. Gentleman. As colleagues know, I have just returned from my honeymoon in Cape Verde, and I actually watched the Swansea game against Liverpool live on TV in my hotel room.

Geraint Davies Portrait Geraint Davies
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I bet the hon. Gentleman’s wife was happy about that, with him shouting for a goal, but there we are. I wish him a long and happy marriage while watching Swansea. I thank him for that intervention, which was very welcome.

On a serious note, the Swansea brand is of course a global brand, so there is an opportunity to attach various values to it, including the fact that it is a nice family and business environment by the sea. With internet connectivity, why would people want to be in the expensive congestion of London, for instance, when they could be overlooking Swansea bay? The fact that there are sporting successes, good schools, a good health service and so on is critical to that.

I mention that point partly to move on to the regional pay issue. The Government have been considering the case for regional pay, and I will say two things about that. First, reducing the pay of people in the public services in Wales by some 20%, which is the implicit agenda, would remove even greater amounts of economic power from the consumer markets in Swansea and, again, push down the private sector; but as important or possibly more important, GPs and other public servants would think that they would be better off getting a job in Bristol, where their pay would be higher, and suddenly we would be denuded of some of the best GPs and other public servants. That would have implications for inward investors, who are being taken, for instance, from London.

Let us consider how inward investment works. UKTI promotes the UK. Someone says, “Okay, I’ll go to the UK. That sounds great in terms of stability, environment, access to Europe and everything else, but where shall I go in the UK”—that is the next decision—“and how do we have added value there?” Of course, in Wales, we have environmental opportunities. We want to increase accessibility, skills and research and development. However, if the families going there suddenly do not have the right GP or education services because of wage deflation in Wales, that will be very bad for inward investment.

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Jonathan Edwards Portrait Jonathan Edwards
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Diolch yn fawr, Mr Rosindell. First, may I apologise to Members for rudely interrupting proceedings to perform my telling duties in the series of close votes we have just had in the main Chamber?

Before the Divisions, I was remarking on the importance of transport links, which is clearly emphasised in the report. Wales is located at the centre of one of the most important trading routes in the European Union, so it is vital, with the ongoing negotiations among our partners at a European level, that there is at least a southern link running through south Wales and linking the Republic of Ireland with Britain and Europe. Personally, I would also like to see a northern link going through north Wales, which would then fund the improvement of transport infrastructure there. I welcome the fact that the Government are actively looking at that, and I am glad to put that on the record.

I want to touch briefly on the bilateral negotiations on funding for the Welsh Government and on the recent Silk commission, which reported as I left on my honeymoon. Both those things impact directly on the Committee’s report. First, on the bilateral negotiations, I was disappointed that there was no reform of the block grant; there was not even a Barnett floor, let alone reform of the housing revenue account subsidy scheme. On the borrowing powers that were announced, the reality is that we could not buy a packet of crisps using the current powers. The Welsh Government Finance Minister has been completely outfoxed, yet again, by the Treasury.

The conclusions of the bilateral negotiations might, however, come into play if the recommendations of the Silk commission are implemented, so their full implementation could be of value. To access the borrowing powers announced in the bilateral agreement, we need fiscal levers to raise revenue, so the more tax-sharing arrangements there are between the Welsh Government and the UK Government, the better. That is why it is imperative that we do not stick just to the minor taxes preferred by the Welsh Government—stamp duty, the aggregates levy and the long-haul airport tax—but devolve sharing arrangements for income tax, which would enable the Welsh Government to have far greater leverage in terms of their borrowing powers. Given that their capital budgets are being cut by 42%, they need those borrowing powers, not only so that they can level out peaks and troughs using fiscal levers, but so that they have power to invest. The current position of the First Minister is therefore completely bizarre, and it is a huge let-down to the people of Wales.

Fiscal powers are important with regard to political accountability, which is something that finds favour with Conservative Members, but the main reason we should have fiscal powers is that they would incentivise the Welsh Government to turn the Welsh economy around. At the moment, given that they get a block grant, there is no incentive for them to develop it. If they were responsible for raising their own revenue, there would be an incentive to generate wealth to invest in public services.

Geraint Davies Portrait Geraint Davies
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Is the hon. Gentleman’s position that Wales should have devolved power over income tax, and that a proportion of that could be used as a revenue stream to pay back borrowing, but that Wales should not use tolls to pay back borrowing which, as I said, is a tax on inward investment and trade?

Jonathan Edwards Portrait Jonathan Edwards
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The hon. Gentleman has a long-standing position on this. He has explained my position on the importance of the devolution of income tax quite adequately. The reality is that if we devolved an income tax-sharing arrangement, we would, even if we did not change the level, have huge leverage to borrow far more. Personally, I would like the Welsh Government to have responsibility for setting tax bands, but the reality is that we are nowhere near getting into that debate.

On the tolls, I would like the Welsh Government to have responsibility for the Severn bridges, because they are the major access route to the south Wales economy. There would be a leverage potential on the revenue, but that is not my primary reason for supporting this. I would like the Welsh Government to have responsibility for the tolls and to set them at a rate that would enable them, on top of maintaining the bridges, to have money to reinvest in wider Welsh infrastructure, but that rate would be far lower than at present.

I look forward to next week’s autumn statement, and plenty of progress on the bilateral negotiations and the Silk commission.