Oral Answers to Questions

Debate between Lord Hain and Stephen Crabb

Wednesday 4th March 2015 Commons Chamber

[The Secretary of State for Wales (Stephen Crabb)]

We have made it clear that we remain open to considering any well developed and privately funded proposals that come forward for harnessing the tidal range resource in the Severn estuary. The right hon. Gentleman’s tenacity on this and a great number of other subjects will of course be greatly missed when he leaves this place. I look forward to meeting him next week to talk further about the Severn barrage project.

[Mr Hain]

I am grateful to the Secretary of State. Is he aware that the company now taking forward the Severn barrage—exclusively for any form of renewable energy—requires no consumer subsidy through a contract for difference? That could be a game changer for the Government.

With your indulgence, Mr Speaker, may I thank my Welsh Labour colleagues for their comradeship, especially during my two years as a Welsh Minister and seven years as Secretary of State for Wales? We can be proud that we established a Welsh Assembly, and it has been a privilege to serve.

[Stephen Crabb]

I thank the former Secretary of State for his question. As I said, I look forward to talking to him in more detail about the project, and to understanding how the proposal might have changed since he and his associates last presented the ideas to various Committees. Let me add that I am proud to be part of a Government who believe in major infrastructure investment, and who are delivering strategic infrastructure investment in Wales the likes of which we have never seen before.

Oral Answers to Questions

Debate between Lord Hain and Stephen Crabb

Wednesday 21st January 2015 Commons Chamber

[Stephen Crabb]

I thank my right hon. Friend for that question, and he is absolutely right: the sentiment among businesses in north Wales, south Wales and west Wales is very confident and optimistic, and what they tell me every week as I criss-cross Wales talking to them is in stark contrast to the message we hear from the Opposition, who regularly now talk down the Welsh economy and the efforts of Welsh business.

[Mr Peter Hain (Neath) (Lab)]

On the economy, how does the right hon. Gentleman respond to today’s research by the university of Oxford and the London School of Hygiene and Tropical Medicine that only a fifth of claimants who have had their benefits sanctioned and then taken away have found work? Surely this will not rebalance the economy or make it stronger, let alone make it just, and it is diabolically punitive.

[Stephen Crabb]

I have not seen that report so I am not going to get drawn into commenting on the specifics, but I have seen the latest figures for the performance of the Work programme in Wales, which should give us encouragement that we have a set of measures in place that is helping to bring down long-term unemployment.

[Mr Hain]

indicated dissent.

[Stephen Crabb]

The right hon. Gentleman shakes his head, but I encourage him to look at the figures for long-term unemployment in Wales: they are coming down yet again this month, which is positive news. There is much more to be done, but the emerging picture is a very strong and positive one.

Wales Bill

Debate between Lord Hain and Stephen Crabb

Monday 31st March 2014 Commons Chamber

[The Parliamentary Under-Secretary of State for Wales (Stephen Crabb)]

It is a pleasure to close this important debate and it is good, as ever, to follow the hon. Member for Llanelli (Nia Griffith), who on this occasion gave an uncharacteristically churlish speech. I want to call her out on her comments about the contribution by my hon. Friend the Member for Forest of Dean (Mr Harper), who is always the model of courtesy and graciousness in his contributions in this House. His remarks about Wales were based on evidence and truth and were carefully made, so I commend him. He is a former Cabinet Office Minister, so he is familiar with issues pertaining in particular to fixed-term Parliaments. This debate has been enriched by his participation. It has also been enriched by the speeches of not one, but two former Secretaries of State. It was good that the right hon. Member for Neath (Mr Hain) and my right hon. Friend the Member for Chesham and Amersham (Mrs Gillan), who is no longer in her place, both gave very thoughtful contributions on issues about which they have a lot of experience.

We also heard from the Chairman of the Welsh Affairs Committee, which did a fantastic job in scrutinising the draft Wales Bill. The speech by my hon. Friend the Member for Monmouth (David T. C. Davies) in fact attracted not just praise from Liberal Democrats, but a slightly backhanded compliment from the right hon. Member for Neath, who described him as having “sincere and intelligent extremism”. As I am sure the right hon. Gentleman knows better than most hon. Members in this House, extremism in the defence of liberty is no vice at all.

We have had a fascinating and wide-ranging debate during the past few hours on matters directly, and sometimes indirectly, related to the Wales Bill. There were excellent speeches from both sides of the House, and I thank all hon. Members for their speeches.

I will limit my remarks to the Bill, but I first want to say that, regardless of points of disagreement, there has been a broad measure of consensus on and support for the Bill by all parties in the House. Just as a Dulux colour sheet has different shades, there have been different shades of support—ranging from frosty and cold by my hon. Friend the Member for Monmouth to rather grudging and unenthusiastic by Opposition Members through to warm by my right hon. Friend the Member for Chesham and Amersham. There has been support for the Bill and, as we go into Committee, we should not forget that this wide-ranging Bill enjoys broad support from hon. Members and parties across the House.

The vast majority of hon. Members clearly support the Government’s move towards achieving a strong measure of fiscal devolution that will give the National Assembly for Wales control of devolved taxes for landfill and land transactions, and enable the Welsh Government to borrow for capital investment. I hope that such a positive position continues as the Bill progresses.

I should perhaps start with the lockstep, a term that few hon. Members had probably heard before the Silk commission did its work, but one with which we are certainly becoming increasingly familiar. I know that the Government’s proposals to allow the Assembly to vary income tax rates uniformly—in other words, in lockstep—subject to a referendum, concern some hon. Members on both sides of the House. Let me be clear that this Government believe that the structure of income tax is a key mechanism to redistribute wealth across the whole of the United Kingdom, including Wales and, as such, that wealth redistribution is properly determined at UK level. The lockstep is consistent with the principle that fiscal devolution should not unduly benefit one part of the UK at the expense of another, which would result in what at least one hon. Member has called a race to the bottom. I am pleased that that position is one that now seems to enjoy the support of Labour Front Benchers, although that was not clear when we last discussed it in the Welsh Grand Committee.

There would be a real risk of a so-called race to the bottom if the Welsh Government were able to set substantially lower rates for higher or additional rate taxpayers without needing to change the basic rate. Far from making the income tax powers unusable, as some hon. Members have suggested, the lockstep makes the powers very usable, as my right hon. Friend the Secretary of State explained at the start of the debate. Devolving income tax would give the Welsh Government a crucial lever to reduce taxes across the board in Wales to make it a lower-tax economy and put money back into the pockets of hard-working people across Wales.

If electors in Wales decide in a referendum in favour of income tax devolution, the Welsh Government would become responsible for almost half the income tax generated in Wales. In reducing the tax burden on working people in Wales, the Welsh Government would reap the benefits of a growing Welsh economy and gain access to a significantly larger revenue stream to finance further borrowing. With vision and foresight, the Welsh Government could grasp that virtuous circle with both hands.

Some Opposition Members, not least the right hon. Member for Neath, raised concerns about how the application of devolved income tax will work in practice. There was some discussion of that in the last sitting of the Welsh Grand Committee, when there was a lot of confusion about whether Welsh budgets would be detrimentally affected by the devolution of 10p of income tax. Following the Welsh Grand Committee, I circulated a letter to all members of the Committee explaining, with a practical example, how that would work. I would therefore hope there would be some clarity, but the right hon. Member for Neath said that there is a risk that Wales will be cast adrift. Let me explain to him that the system of income tax devolution we are proposing protects Welsh funding in two ways. First, the lockstep retains the redistributive structure of income tax across the UK, as I have just described. Secondly and crucially, the block grant adjustment mechanism, which we are calling indexed adjustment, means that Wales is protected from UK-wide shocks. For example, if the UK tax base were to decline, the block grant adjustment will be reduced accordingly. Reducing the block grant adjustment thereby increases the Welsh block grant. Therefore, the finances of the Welsh Government are protected through that mechanism.

[Mr Hain]

I am grateful for the Minister’s views. Is he saying that, if the Welsh Government raise less, Westminster will compensate more?

[Stephen Crabb]

That is not what I am saying. A key principle of the mechanism is creating the incentive for the Welsh Government to create the conditions for the economy in Wales to grow, so that they can reap the fruits and benefits of a growing Welsh economy. The protection kicks in when there are shocks and changes that affect the overall UK tax base. When changes would otherwise have a detrimental impact on Welsh Government revenues, Welsh Government revenues are protected because of the indexation. I shall circulate further information to right hon. and hon. Members.

Oral Answers to Questions

Debate between Lord Hain and Stephen Crabb

Wednesday 20th November 2013 Commons Chamber

[Stephen Crabb]

The collective purchasing power of communities and groups of buyers of oil might have a role in bringing down prices for consumers in rural areas. We are seeing that with switching as well. My colleagues at the Department of Energy and Climate Change are encouraging community groups to come together to strike collective switching agreements with companies to help bring down prices.

[Mr Peter Hain (Neath) (Lab)]

With sky-high energy bills in Wales, which are higher than anywhere else, and a Tory-aligned think-tank saying that people are maxed out on personal debt—there are about 250,000 of them in Wales—does the Minister agree with the planning Minister, the hon. Member for Grantham and Stamford (Nick Boles), that his party is the party of the rich and that its members are seen as aliens and heartless extremists?

[Stephen Crabb]

The right hon. Gentleman is a member of a party about which one of his colleagues said it was “intensely relaxed” about people becoming filthy rich. It was intensely relaxed about many families on low incomes being pushed into greater household debt. We do not take that approach; we are trying to bring down household debt.

Oral Answers to Questions

Debate between Lord Hain and Stephen Crabb

Wednesday 16th January 2013 Commons Chamber

[Stephen Crabb]

The evidence on the economic impact on the Welsh economy of the Severn bridge tolls is mixed, not least in respect of tourism, which relies on the bridge to carry visitors into Wales. All I would say at this stage is that until 2018, when the concession ends, no decisions can be taken about the future use of those tolls and whether they will remain at the current levels or whether other options are available.

[Mr Peter Hain (Neath) (Lab)]

6. What assessment he has made of the economic effect on people working in Wales of reductions in tax credits and other benefits for working people.