Wales Bill

Lord Murphy of Torfaen Excerpts

Tuesday 24th June 2014 Commons Chamber

[Jonathan Edwards]

I am sure that that very useful intervention will be noted by the constituents of the hon. Member for Alyn and Deeside (Mark Tami).

Plaid Cymru recognises the issue of congestion on the M4 corridor around Newport and wants investment to take place. However, the current Labour Welsh Government’s preference for a new M4 to the south of Newport at a cost of £1 billion is a disproportionate solution to the amount of congestion. According to Friends of the Earth and Professor Stuart Cole, the Welsh Government consultation documentation overestimated traffic growth in 2012 and 2013. The flows were lower than the Welsh Government predicted, so they do not have a strong enough statistical base on which to justify such a huge financial and environmental cost. As the Federation of Small Businesses has pointed out, committing the vast majority of Welsh borrowing capacity and money from outside the borrowing limit in the Bill to one single project is misguided and does not serve the whole of Wales or the whole of the Welsh economy.

[Paul Murphy (Torfaen) (Lab)]

I am listening with extreme interest to the hon. Gentleman’s points. It seems to me that Plaid Cymru is therefore actively opposing the development of the relief road around the M4, which he will have to explain to those who vote for Plaid Cymru in Gwent and Glamorgan.

[Jonathan Edwards]

I have huge respect for the right hon. Gentleman. I will outline two alternative proposals that would be a better use of the borrowing capacity of the Welsh Government than blindly following what the Treasury wants.

The new M4 will not be a quick and decisive solution, despite what its supporters say. It will not be completed until 2031, according to the Welsh Government. The £380 million blue route, an upgrade of the A48 corridor that includes flyovers, would represent better value for money and would avoid the environmental damage caused by building on the Gwent levels to the south of Newport. The road upgrade would be accompanied by modern traffic management methods, such as signage to direct traffic flows between the A48 and the existing M4, depending on congestion levels. The blue route is future-proofed until 2035 and, if needed, it could be developed further beyond 2035. Money saved by developing the blue route could be invested elsewhere in Wales. In our previous transport consultation, Plaid Cymru identified transport needs in north, mid, west and south Wales. Above all, Plaid Cymru’s proposal to support the blue route is more innovative and balanced than the proposal with which the Labour and Conservative parties are trying to push ahead. Wales must not get tied into the UK Government’s deal on the M4.

Ultimately, although a new route is needed to relieve the pressure on the M4, what is really needed is the development of a metro system for south-east Wales and the valleys. Early estimations have put the costs at about £1 billion. The reality is that the M4 is used as a local road in south Wales, as the right hon. Member for Torfaen (Paul Murphy) well knows: 40% of journeys made on the M4 in that area are local ones of less than 15 miles. This means that—in one act—commuter journeys could be transferred to a metro system to relieve the pressure on the M4. The great thing about a metro system is of course that, after the initial outlay, a ready stream of revenue is provided through ticket sales that could be used in part to repay the initial expense and reinvest in services and upkeep. The success of the Newcastle and Tyneside metro could be repeated in south Wales if we had the necessary vision.

In conclusion, it appears that the Westminster Government are intent on binding the Welsh Government’s hands on how they utilise the borrowing capacity. The M4 relief road is a case in point. Unfortunately, the current Labour Welsh Government lack the ambition and vision to do something different, and are blindly following the UK Government’s lead. Amendment 8 would make sure that a future Plaid Cymru-led Welsh Government were not bound in the same way but could prescribe more intelligent solutions to infrastructure problems and provide a boost for the whole of the Welsh economy, rather than just the primary corridor routes in and out of Wales that concern the Westminster Government. With your permission, Mr Deputy Speaker, I will therefore definitely push amendment 8 to a vote at the appropriate time.

[Paul Murphy]

It was interesting to hear the points made by the hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards), but I want to concentrate on my party’s new clause 4 on reserved powers. I very much welcome the new clause, which relates to the laying of

“a report before each House of Parliament on the further legislative steps needed to move to a model of reserved powers for the National Assembly for Wales”.

[Interruption.] Perhaps I should give up for a second while negotiations are going on behind the Speaker’s Chair.

I repeat that I support new clause 4 on reserved powers for Wales. I remind the House that the Leader of the Opposition, who was in north Wales for the Labour party conference some months ago, said that the next Labour Government would introduce a

“new Government of Wales Act, with powers assumed as devolved to Wales, unless specifically reserved. Bringing Wales into line with Scotland—modernising and advancing the devolution settlement for generations to come.”

I do not see why the Government, and particularly the Secretary of State for Wales, should reject such a proposal. In an earlier incarnation, I was probably more sceptical about devolution than even he is now, but the world changes. As the hon. Member for Carmarthen East and Dinefwr mentioned several times, the world has changed with regard to what might or might not happen in Scotland in a few months’ time. Let us assume, as I hope will be the case, that the voters of Scotland vote no. If that happens, we know that the Government—not the Opposition—will make far-ranging changes to Scotland’s constitution, with its Government being given extra powers as a consequence of his Government’s commitments. The Secretary of State also knows that it is quite likely that a future Labour Government would agree to such proposals. I therefore cannot understand why he is opposed to reserved powers for Wales only a matter of weeks before the possible introduction of a new Bill for Scotland that would give extra powers.

That argument is simple enough, but in a sense it goes back to our previous debate about borrowing. The Treasury Minister tried to make the point, rather heavily I thought, that borrowing could not be greater in Wales because we did not have sufficient streams of income. However, the shadow Secretary of State pointed out that Scotland and Northern Ireland were given borrowing powers for different reasons. Therefore, it is strange that, within Government, Wales is going that way and Scotland is going another way. There is no reason why that should be the case.

--- Later in debate ---

[Mr Elfyn Llwyd (Dwyfor Meirionnydd) (PC)]

I am following the right hon. Gentleman’s argument and I fully accept what he says about the benefits of a reserved powers model. However, it seems to us that the problem with the new clause is that it relies on a report some time in the future to bring that in. Accepting what he says and the obvious benefits of a reserved powers model, why do we need that report?

[Paul Murphy]

I hope that my hon. Friends on the Front Bench will elaborate a bit more on the matter, but my guess is that they discussed the issue of reserved powers at earlier stages and a new clause is necessary to revive the debate on that on Report. I agree that this measure is relatively modest in asking that a report be laid, but I am sure that my hon. Friend the Member for Llanelli (Nia Griffith) will clarify that we are in favour of reserved powers, as described by the Leader of the Opposition in north Wales. There is no equivocation at all about whether we want reserved powers. We do. The new clause is framed in this way so that the House can debate what is an important issue.

[Hywel Williams]

From my reading of new clause 4, it does propose a reserved powers model, but that is contingent on a report not on the reserved powers model, but on borrowing by Welsh Ministers. The Opposition seem to be yoking two different things together. I suspect that it is a delaying, or even a wrecking tactic.

[Paul Murphy]

It certainly is not a wrecking tactic. I have made the position clear. I am just a Back Bencher, but Labour Front Benchers will also make it clear that the Labour party is committed to reserved powers for Wales. In the light of what is likely to happen in Scotland, that becomes much more important.

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

I am grateful to the former Secretary of State for giving way. He is definitely not just a Back Bencher, but does he genuinely believe that moving to a reserved powers model is a panacea for all the difficulties and challenges of a devolution settlement between England and Wales—issues such as water, transport, and the populous border, which the shadow Secretary of State described earlier? Does he genuinely believe that moving to a different starting point is a panacea to overcome the challenges in the current devolution settlement?

[Paul Murphy]

I do not think for one second that the model is a panacea for all the issues and problems that we face, but I think that it will give tools to the National Assembly and the Welsh Government that they currently may not have and make it easier for them to resolve various issues. I do not suggest for one second that the model means that we will have to end the important cross-border co-operation that exists, or that there will be no need for the Governments to discuss matters. Of course that will have to happen, because of points Members made earlier; large swathes of the population live on the border in Wales, in contrast to Scotland. I agree with the Minister that this model is not the complete answer but it is an answer. It is also an answer in the light of what both parties are thinking with regard to Scotland. Whatever happens in Scotland—like me, the Minister will argue for a no vote—it will undoubtedly change the political and constitutional landscape of our country and so Wales must be in a position to take part in that. Otherwise, we will be seen as an adjunct to a very large England, with Northern Ireland, with its own special issues, on one side.

Therefore, I agree with the new clause. I am sure that my hon. Friend the Member for Llanelli will be able to make the points that I have not made and that have been discussed by Members.

[Nia Griffith (Llanelli) (Lab)]

The new clause calls on the Secretary of State to issue a report on the further legislative steps needed to move to a model of reserved powers for the National Assembly for Wales. It seeks to prepare the way for Wales to enjoy the reserved model of powers, so that legislation should set out the areas that are reserved for the UK Parliament, rather than trying to define all the areas that Wales can legislate on.

The current situation is that the model of devolution in operation for Wales is the conferred powers model. Following the referendum in March 2011, the National Assembly for Wales was empowered to make primary legislation in the 20 broad policy areas. Therefore, the areas where the National Assembly can legislate are conferred upon it and listed in the statute. However, Scotland and Northern Ireland enjoy the reserved powers model, which means that the legislation sets out the areas where the devolved legislature cannot legislate—areas that are reserved to the UK Parliament.

--- Later in debate ---

[Wayne David]

I just think it is very important to learn. I know that is anathema to the current Government, but if we recognise that devolution is a developing process, it is vital that we learn and make things better and, when things are clearly not as they should be, make improvements. That is a good way to approach government.

[Paul Murphy]

I remind my hon. Friend and the House that there are highly developed mechanisms in these islands to resolve disputes of any nature through the Joint Ministerial Committee, or simply between ministerial committees, without having to go to courts of law. There are better means of proceeding, and we should use them rather than go to the Supreme Court.

[Wayne David]

My right hon. Friend makes an extremely good point. He has tremendous experience in these matters—far greater than I have—and I would certainly bear out what he has said. A common sense way to approach disputes between different legislatures in the United Kingdom is to sit down and talk, and use the established structures, and not resort to expensive, time-consuming legal processes that are very obtuse to most people. That is one lesson to be learned.

We must also learn the lesson that we need a different model. We need a reserved powers model to form the bedrock of our developing devolution settlement in the United Kingdom.

--- Later in debate ---

[Paul Murphy]

It is a great privilege to speak on Third Reading of a Bill that my hon. Friend the Member for Pontypridd (Owen Smith) indicated we will not oppose, for a variety of reasons. The Secretary of State referred to this as a milestone Bill. I have sat through 26 years of Welsh Bills, and I have to say that I do not think this is a milestone. There are some good parts to it, but a real milestone was the Bill introduced by the Labour Government after the 1997 general elections, which set up the Welsh Assembly.

The hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards) suggested in a previous debate that the Westminster parties, by which I assume he meant the Conservatives, Labour and the Liberal Democrats—he is actually a member of a Westminster party, as we meet here in Westminster, rather than Dudley or anywhere else—were obstructive when dealing with devolution matters. Had he said that in 1978, he would have been absolutely right. I was treasurer of the “No Assembly” campaign in Wales and deeply opposed devolution in the late ’70s, but I changed my mind, and for a variety of reasons, including all those years of Conservative government. He and his Plaid Cymru colleagues must reflect on this: no Labour Government would have meant no Assembly and no Welsh Government. Obviously we were helped by the pro-devolution parties—the Liberal Democrats and his party.

The hon. Member for Montgomeryshire (Glyn Davies) suggested that a Labour Secretary of State might have “chickened out” of extending the Assembly’s powers. I see no evidence for that, having been a Secretary of State for Wales twice. I certainly would not have chickened out. Indeed, when this Bill was introduced I enthusiastically supported the previous Secretary of State, who I thought showed great courage in introducing it as a Conservative, and I agreed with her.

[Glyn Davies]

I would like to reassure the right hon. Gentleman that I do not think the Labour party would have chickened out had he been Secretary of State.

[Paul Murphy]

I am grateful to the hon. Gentleman for that.

The devolution of extra powers was supported overwhelmingly by the people of Wales in the referendum, including in my constituency, which, having been one of the most sceptical and anti-devolution constituencies in the whole of Wales, changed its mind. I think that there has been a sea shift in how people perceive devolution. People understand it more, although not completely. We heard earlier about the Welsh television surveys indicating that many people did not know who ran the health service, for example. There will still be some of that, but there has been a change none the less.

To that extent, I welcome aspects of the Bill. The change to the name “Welsh Government” might seem trivial to many people, but it is significant. I think that the fixed terms, the ban on dual membership and other aspects of the Bill are greatly to be welcomed. Even though we disagree on how the business of taxation should be introduced in Wales, the fact that the Government have introduced the idea that we should deal with it is significant. All parties now agree on that, even if we disagree on the method and mechanism by which it will be introduced. However, there are parts of the Bill, including dual candidacy, on which we fundamentally disagree with the Government. There are substantial disagreements, but there are also agreements.

The Bill will now go to the other place, and I think that there is an opportunity for their lordships to improve it. I will refer to just two issues. One relates to reserved powers, which I spoke about earlier. I think that the Scottish referendum—I hope that there will be a no vote—will be followed by extra powers for the Scottish Parliament and that that will be replicated in our Assembly in Cardiff. I hope that the Government will rethink that.

More immediately significant is the issue of borrowing. I think that we are being short-changed in Wales as a result of this Bill. I agree wholeheartedly with the Government that the Welsh Government should be able to borrow, as the Northern Ireland Executive and the Scottish Government can, but I have still heard no reasonable answer to the question that all of us on the Opposition Benches have posed. The borrowing principle was introduced in Edinburgh and Belfast without necessarily any reference to streams of income, even though Scotland theoretically has a stream of income and the Northern Ireland Assembly has dealt with rates for many years. There is a gaping hole there. I think that their lordships would be well advised to examine that issue in the Bill.

[Mr Llwyd]

There is one further problem with the borrowing situation in the Bill. Why should the Westminster Government allow borrowing powers and then direct where the money should be spent? That undermines the whole principle of devolution, subsidiarity and any other principle of democratic accountability in sharing out responsibility. Their lordships will undoubtedly address that issue.

[Paul Murphy]

I think they will be right so to do. There is a lot of work to be done by their lordships, particularly the Welsh Members, in dealing with these issues, including borrowing.

[Mr David Jones]

I am reluctant to interrupt the right hon. Gentleman, but the intervention by the right hon. Member for Dwyfor Meirionnydd (Mr Llwyd) is completely misconceived. There is no question of the Westminster Government directing the Welsh Government as to how to exercise their borrowing powers.

[Paul Murphy]

In that case, we are all right, are we not, and we can see what happens next?

These detailed issues are very important for us. Whatever divides us in this Chamber—the nature of politics is that we do divide on issues—there is a general consensus among us all that this Bill is another step in the right direction, and a step that makes sure that we remain members of the United Kingdom. By strengthening devolution, we strengthen the United Kingdom. However, the situation is changing. We must all accept—even I, coming from south-east Wales and Monmouthshire, with all my early scepticism, accept it, and not reluctantly but with some enthusiasm—that the landscape of our constitution and the way in which we govern ourselves in the United Kingdom is changing. Inevitably, the referendum in 87 days’ time will change us all, but I hope that in so doing it will unite us in ensuring not only that the United Kingdom remains as it is but that we devolve, sensibly, more and more powers—including, indeed, taxation—to the people of Wales.

Wales Bill

Lord Murphy of Torfaen Excerpts

Tuesday 6th May 2014 Commons Chamber

[Alun Cairns]

The changes to the capital budget are nowhere near the cuts that the last Labour Chancellor proposed to make leading up to the Budget. We need to compare like with like, and we need to consider the financial circumstances at the time. One of my early points was that limitless borrowing powers simply cannot be granted because of the changes in circumstances that take place. The point has already been made that if we are asking the Treasury to stand behind the debt that is being taken on by the Welsh Government, the Treasury obviously needs to be able to support that and a sensible limit needs to be provided. The capital sum of £500 million is sensible, certainly in the first instance, but we need to be pragmatic about that over time.

Finally, the Administration’s infrastructure commitments, particularly the electrification of the Great Western main line, demonstrate the priority placed by the Government on the east-west link along south Wales, which has not been forthcoming since the M4 was cancelled all that time ago.

[Paul Murphy (Torfaen) (Lab)]

If I was an independent observer listening to the previous two Conservative Members’ contributions to the debate, I would wonder whether they wanted borrowing at all. The hon. Member for Vale of Glamorgan (Alun Cairns) seemed to be very lukewarm on the issue, and questioned whether all this should really come out of the revenue budget. My hon. Friend the Member for Caerphilly (Wayne David) made it perfectly clear: 33% of the capital budget has been cut. There is no question in my view, or in the view of probably all the parties represented in the Assembly, including the hon. Gentleman’s party, but that there is a need for capital spending on infrastructure in Wales, including hospitals, schools and all the rest of it. The hon. Gentleman seems to have a lukewarm attitude towards it.

[Alun Cairns]

rose—

[Paul Murphy]

I will give way in a second because I want to refer to what the hon. Member for Forest of Dean (Mr Harper) said. He did not really like the idea of what he termed “popular” capital projects. He gave the impression that the Welsh Government would go round Wales seeking out the most popular issues with which to woo the electorate. That is a complete load of baloney. There is a consensus among Assembly Members about what they want: the M4 relief road is one and the A55 is another, but there are others too, including the Velindre and other hospitals. I absolutely welcome the clause. The Government have done well in introducing it. The Labour Government should have done it. I was Secretary of State for five years and we should have done it then, but things move on and the Government have done the right thing, although I question the mechanics of it.

[Alun Cairns]

I want to set the record straight. I am merely sounding a note of caution over limitless borrowing powers. The figure of £500 million is sensible and pragmatic, and it needs the Treasury’s support. After the recent financial crisis, we need to recognise the risks of unlimited borrowing.

[Paul Murphy]

I agree with the hon. Gentleman on that, but I still direct the independent observer, from wherever he or she may come, to the beginning of his speech where he spoke about the benefits of dealing with these things, which the right hon. Member for Richmond (Yorks) (Mr Hague) dealt with before the 1997 general election, out of revenue. That is impossible given the strain on the revenue budget these days in Wales. The capital budget has to come out of a separate pot.

I want to emphasise the points made by my hon. Friends the Members for Pontypridd (Owen Smith) and for Llanelli (Nia Griffith) and others about the calculation of the £500 million.

[Mr Harper]

I would not have intervened but for the right hon. Gentleman’s accusation that I was lukewarm. I made it quite clear that I very much support clauses 19 and 20 and capital borrowing powers being devolved. I was objecting to the idea that they could be unlimited. That is why I argued against the amendments tabled by Plaid Cymru Members. I argued that there should be a role for the Treasury and this House in making sure that those measures were limited, but I absolutely welcome them and I will support them in the event of a Division this evening.

[Paul Murphy]

That is good to hear.

I come back to the issue of how this has been calculated. I was Finance Minister in Northern Ireland, where there is a stream of income from the rates. The household and the business rates go to the Northern Ireland Executive. But I do not believe that the way in which the borrowing powers were calculated for the Northern Ireland Executive were based on the fact that they had an income from rates. I certainly do not believe that the Scotland Act, which allowed Scottish Ministers to borrow 10% of the Scottish capital budget in order to fund additional capital projects, had anything at all to do with funding streams. I am not saying that funding streams are unimportant, but why should Scotland and Northern Ireland have separate calculations in order to determine what they can have, while Wales has to go by a different methodology? That is wrong. It is unfair. There should be fairness and equality in determining the capital budgets for Wales, Scotland and Northern Ireland.

The reason is probably that these things were done over a period of years in different ways. But it is not done with any consistency based on revenue streams. I wish that the Government could rethink that. Amendments have not been tabled because the Opposition support the issue of borrowing. The First Minister and other Ministers in Wales have been saying for at least two to three years now that to have borrowing and to increase their capital spending was the single most important thing they wanted. We welcome that, but we question the method by which the £500 million has been arrived at.

[Mr Gauke]

It is a pleasure to respond to the debate, and I thank all right hon. and hon. Members for their contributions. Clause 19 amends the Government of Wales Act 2006 to extend existing borrowing powers in relation to current spending and give Welsh Ministers new capital borrowing powers, and clause 20 repeals the existing borrowing powers that the Welsh Government inherited from the Welsh Development Agency.

Amendments 5 and 34 relate to the capital borrowing limit set in clause 19. Through the Bill, Welsh Ministers will be given new capital borrowing powers that will enable them to borrow up to £500 million. A non-legislative annual limit of £125 million has also been agreed with the Welsh Government. The Government have been consistently clear that borrowing powers must be commensurate with the level of independent revenue that is available to support the costs of borrowing, and a capital borrowing limit of £500 million is substantial relative to the tax powers that are initially being devolved. As hon. Members have already pointed out, if the same ratio between revenue and the borrowing limit had applied in Wales as in Scotland, the overall capital borrowing limit for Wales would have been closer to £100 million. The limit has been increased to £500 million to enable the Welsh Government to start improvements to the M4, should they choose to do so, in advance of a referendum on income tax devolution, and I hope that that flexibility will have the support of Members on both sides of the House. The Government recognise that the £500 million will not be appropriate for ever, but we believe that the arrangements we are implementing provide a more robust mechanism for reviewing and changing the limit than would be the case under the amendments. Specifically, the Command Paper published alongside the Wales Bill sets out the review process that we will undertake at each spending review, and the Bill makes provision for the limit to be changed through secondary legislation.

The UK and Welsh Governments have previously agreed a joint process to review convergence between Welsh and English funding at each spending review. That process will now be extended to ensure that the capital borrowing limit remains appropriate.

The Command Paper committed to consider not only the impact of inflation, but the economic and fiscal circumstances at the time of each spending review and the size of the independent revenue stream available to the Welsh Government. That means we will be considering a much broader range of factors than proposed by amendment 5. For example, if an element of income tax is devolved in Wales, applying the same ratio as in Scotland could suggest an increased limit for Welsh Ministers of around £1 billion.

Following the joint review process, the Bill contains the power for the UK Government to set out a new limit through secondary legislation. Although we have legislated that the limit cannot be reduced below £500 million, legislating that the limit can only be increased in future is not the right answer and could have unintended consequences. For example, consider the scenario in which the UK and Welsh Governments agree that the borrowing limit should be increased substantially. Under our proposals, the limit could be increased accordingly and, if necessary, reduced in future if fiscal conditions deteriorate.

The problem with amendment 34 is that it would act as a disincentive for future UK Governments to agree to increase the limit when fiscal conditions allow, because they would know that the limit could never subsequently be reduced. The UK Government would understandably be cautious about ever increasing it. We do not think that that is the best outcome for Wales, as it might result in unintended consequences.

The Bill provides a capital borrowing limit of £500 million, robust arrangements for jointly considering the limit with the Welsh Government and the appropriate flexibility for changing the limit in future. I hope that the whole Committee can agree with that approach and urge right hon. and hon. Members not to press amendments 5 and 34.

Amendments 35 to 37 cover the sources of borrowing available to Welsh Ministers to fund capital investment and the related powers and responsibilities that should be devolved. As a result of the Bill, Welsh Ministers will be able to borrow from the national loans fund or from banks to fund additional capital investment. The national loans fund is almost certainly the cheapest way for them to borrow, while borrowing from banks provides flexibility.

However, in the Command Paper published alongside the Bill, the Government explained that if a case for Welsh bonds was made, we are willing to consider it. That remains our position. But it is right that the UK Parliament retains the competence over the sources of borrowing available to the Welsh Government so that the UK Government can properly execute their macro-economic responsibilities. For example, it should be for the UK Parliament, rather than the Welsh Assembly, to decide whether it is appropriate for there to be another entrant into the sterling bonds market. As is consistent with that, although we are providing Welsh Ministers with these important new borrowing powers, it is right that the Treasury retains sufficient control over aggregate levels of public borrowing. I hope that this further explanation of our position will allow hon. Members not to press their amendments.

Let me explain the changes we are making in relation to current borrowing. Welsh Ministers can already borrow for in-year cash management purposes. That enables them to borrow up to £500 million from the national loans fund to manage the flow of funding in and out of the Welsh Consolidated Fund while maintaining a working balance. Clause 19 extends those powers by additionally allowing Welsh Ministers to borrow across years to deal with differences between the full-year forecast and out-turn receipts for devolved taxes. A non-legislative limit of £200 million a year has been agreed with the Welsh Government, within the continuing £500 million overall limit.

Wales Bill

Lord Murphy of Torfaen Excerpts

Wednesday 30th April 2014 Commons Chamber

[Paul Murphy (Torfaen) (Lab)]

I am delighted to follow my hon. Friend the Member for Ynys Môn (Albert Owen) not least because he put his finger on the point about the only recent mandate being the change that my right hon. Friend the Member for Neath (Mr Hain), who made an outstanding speech, made when he was Secretary of State in 2006, which was to do away with dual candidacy. I do not know whether the people of Wales looked in detail at the manifesto, but it was in front of them. There was no other way apart from a referendum to discover whether the people of Wales wanted it. Following their voting, in the majority, for the Labour Members of the Welsh Assembly, the mandate was put into operation by the Labour Government here some time later.

One of my biggest regrets from my time as a junior Minister in the early days of the previous Labour Government when I served on the Committee chaired by my right hon. and noble Friend Lord Irvine of Lairg to look at the devolution proposals for Scotland and Wales is that I did not object either to this particular part of the legislation or to the daft system of top-ups. We were persuaded—we were duped—by the then Secretary of State for Wales into believing that anybody wanted it. The argument put forward by the hon. Member for Cardiff North (Jonathan Evans) was that the system would prevent any one particular party from having an overall majority all the time. That was also the view put forward by Donald Dewar, the then Secretary of State for Scotland, but events have now overtaken that view. Scotland ended up with a Government with a substantial majority, based on the first-past-the-post seats, so the argument no longer stands.

I am not saying that there should not be some form of proportionality, but I do not like it myself and I do not think that the people of Britain like it either. The proposal was resolutely defeated in the recent referendum on the alternative vote. My view is that the system is bad because people do not understand it. First, people do not understand why their Assembly Member, who is elected by first past the post, is supposed to be the same as their regional Assembly Member, who is elected by a top-up system. Secondly, and more appropriately, they do not understand the bizarre results that occurred in regions such as mine in south-east Wales where there were overwhelming votes in favour of the Labour party, but people were elected to the Assembly on tiny votes. Thirdly, as described with great eloquence by my hon. Friend the Member for Pontypridd (Owen Smith) and my right hon. Friend the Member for Neath, people neither understand nor like how top-up AMs pretend to be constituency Assembly Members and use their base to try to get the constituency seat.

[Jonathan Evans]

The right hon. Gentleman knows the high regard that I have for him, but he seems to be presenting an argument that is against proportionality in this electoral system. Does he recognise that, irrespective of whether the same candidate is on both lists, the public do understand the system of top-up seats that comes through proportionality? Opinion polls in Wales regularly reveal that people intend to vote differently in relation to constituencies than in relation to regional Members, which indicates that they understand that their choices are different.

[Paul Murphy]

It can be argued that people vote differentially, as they do for the Assembly, and indeed for the House of Commons, but I see no evidence in my constituency that they vote differentially for the top-up Members and the constituency Members of the Assembly; they vote Labour—end of story. The same is true in seats that are not held by Labour, for example next door in Monmouthshire. I think that people do not understand the system. I am not arguing against the notion of proportionality, although I do not like it; I am arguing against this particular system.

Equally, with regard to clause stand part, people neither like nor understand the idea that candidates can stand and be defeated but then get in. It is a simple system that they just do not like. We used it when we were in power, of course, but that does not make it right. Ultimately, that is why people understand that the system is flawed and needs to be put right. I think that candidates should have to make up their minds and decide either to stand for the constituency and work hard at it, as everybody in the House of Commons does, or to stand for some other type of proportional system.

In my view there is a case for increasing the number of Assembly Members. The fact that there are new legislative powers in Cardiff means that the Assembly cannot go on with just 60 Members. It simply is not big enough. It is not a popular argument, but the place needs more Members if it is to work. However, I do not think that they should be elected using this system. My view, inevitably, as someone who believes in the first-past-the-post system, is that there should be two Assembly Members for each of the 40 constituencies in Wales. That could be modified with some sort of proportionality, of course, whether the alternative vote or some other system.

Ultimately, what matters is that people relate to their elected representatives, whether Members of Parliament, councillors or Members of the European Parliament. The hon. Member for Cardiff North is right about the daft system for electing MEPs—we brought it in, by the way, and ought to be ashamed of it—which means that no one knows who their local MEP is, but that is another issue. I am trying to emphasise the link between an elected Member and his or her constituency, whether two Members for the constituency or one, because people understand that. As soon as people fail to understand how their representatives are elected, the system is most certainly flawed.

[Susan Elan Jones]

It is a pleasure to serve under your chairmanship, Mr Chope, and to follow my right hon. Friend the Member for Torfaen (Paul Murphy) and other Members in this important debate. My mind is going back to the early hours of 2 May 1997, when a new day had dawned. There were not too many of us who had noticed that new day, because I am not talking about Labour gaining Monmouth, or Enfield, Southgate or Hove; I am talking about Surrey Heath, where the local party wanted a keen and—as was then the case—relatively young Labour candidate to fly the flag. It found one—me.

A new day really had dawned, because we had gained 11,511 votes, which was 21% of the vote. Never had that been achieved before, I thought. I felt an immense sense of victory. The campaign had had a few strange moments. There was the time I told people how important it was to have a new and reforming Labour Government who would bring in devolution. People looked at me and said, “Your campaign doesn’t belong in Surrey.” There was the time I told people that a new Labour Government would ban handguns, and they showed me their membership cards for Bisley gun club. Then there was the time I said that the Labour Government would introduce a national minimum wage. They used a few expletives and explained that they certainly did not intend to pay it to their employees.

It was not the greatest of campaigns. More to the point, after I had realised that I had won 21% of the vote, I realised that I had lost 79%. Let us, though, imagine the scenario if things had been different. Let us imagine that there had been a regional list on which I could have stood, and lo and behold, on that great heyday of the Labour party, much to the annoyance of the 79% of people who had not voted for me, suddenly, miraculously, I reappeared as No. 1 on the list in Surrey. I could have been the Member for Bisley or the Member for Chobham. The right hon. Member for Surrey Heath (Michael Gove) would no doubt have been quaking in his boots at the concept of this Welsh misfit down in the suburbs. That shows how ridiculous dual candidacy is.

Pub Companies

Lord Murphy of Torfaen Excerpts

Tuesday 21st January 2014 Commons Chamber

[Paul Murphy (Torfaen) (Lab)]

In the last three Januarys, including this one, I have written to Mr Speaker to ask to speak in a debate on pub companies. In all three debates—I assume this one as well—there has been unanimity across the House of Commons on what measures need to be taken. I pay particular tribute to my hon. Friend the Member for Chesterfield (Toby Perkins), the hon. Member for Leeds North West (Greg Mulholland) and, although he is not here, the hon. Member for Northampton South (Mr Binley), and many others too, right across the political spectrum, who regard this as a very serious and important issue. There have been two unanimous votes in the House of Commons on this, although on the second one it took 24 hours before the Secretary of State decided that he agreed with the House of Commons, and he came along and gave us great assurances of what would happen.

There have been four Select Committee reports, more or less all arguing for the same course of action. Enormous numbers of people from our constituencies—I think of Mr Phil Jones who owns the Open Hearth in Griffithstown in my constituency—have written to us about the iniquities of the system. A large number of organisations support the basis of the Opposition motion, including the GMB, CAMRA and the Federation of Small Businesses—a whole host of them. The essence of it is that they all say—I understand that the Secretary of State agrees with this—that first of all there should be a statutory code of practice; secondly, a mandatory rent-only option for pubcos that own more than 500 pubs; thirdly, an open market rent review; and finally, an independent adjudicator. All those are meant to enhance the significance and importance of the role of pubs in our communities. That has already been mentioned a number of times, and I am sure will continue to be throughout the course of the debate.

A new institution that has come into the debate, which many hon. Members will have read about, is the Local Government Association, which talked about the importance of pubs in our communities, and, as the Secretary of State mentioned, the importance of the community right to bid for pubs. But the essence of my contribution is not what has been said and will be said, but why we have had a delay, which strikes at the heart of what was said by the Secretary of State—who clearly is not listening to me, but perhaps other hon. Members are.

The Secretary of State presides over one of the largest Departments in the Government. He has an army of officials and civil servants and a little army of junior Ministers. He tells us today that the reason why this has been delayed is that the consultation is so enormous, so vast and so unwieldy that they cannot make up their minds as to what to do, but in the same speech he admits that this was not an open-ended consultation. This was a consultation on the basis of the Government not having made up their mind but being very close to making up their mind on what the solution should be. In many ways it was a closed consultation, making it much easier.

[Andrew Griffiths]

I understand the right hon. Gentleman’s desire for movement and to see some improvement in this matter, but does he not accept that in 13 years of his Government, despite 6,000 pubs closing in the last three years alone, they did nothing at all, apart from a few weeks before the general election, when, amazingly, something appeared in the manifesto? Does he understand that at least this Government are listening to the consultation and looking to make some changes for the good?

[Paul Murphy]

Of course I accept that Labour could have done more when we were in government, but after three debates in the House of Commons during the last three years, and when the Government have already said that they want to take these matters into legislation, they are now using the excuse of a consultation being too burdensome to allow them to make up their mind. If we were at the beginning of a parliamentary Session, that would not be too bad, but we are not. We are 15 months away from a general election. We are possibly just months away from a Queen’s Speech. When my hon. Friend the Member for Chesterfield referred to the fact that this had been kicked into touch, perhaps he had a point. Unless the Government make up their mind relatively soon, time will run out and nothing will happen between now and the general election.

[Jim Shannon]

The right hon. Gentleman makes a very good case. With some 50% of pubco licensees reporting earnings of less than £10,000 and 26 pubs a week closing—a different figure from that mentioned by the Secretary of State—time is not on our side. Urgency is needed. We need to have the legislation in place before the next election.

[Paul Murphy]

The hon. Gentleman is absolutely right. The purpose of this debate is not to argue for or against the proposals, because last year the Secretary of State said that he agreed with them. He said that he did not believe in the voluntary system and that a proper system of regulation was needed, and I believe he genuinely believes that. He represents moderation in the Cabinet and, some might argue, social democracy.

[Mr Sheerman]

And sanity.

[Paul Murphy]

Indeed. In which case he would be opposed to the big energy companies, the shenanigans of the bankers and—I believe that he is—the way the pub companies operate, which is to the detriment of the small and medium-sized enterprises that are our pubs. I therefore think that he is on our side.

However, I know from my years in government that things can be delayed for other reasons, even if Ministers pretend that it is because the consultation exercise is too big to handle. I think that the Secretary of State is meeting opposition from Cabinet colleagues, maybe from the Treasury and maybe from the top. The consultation ended months ago and the timetable is now tight, and I do not believe for one second that the delay is being caused by anything other than Government disagreement, whoever it is from.

The longer the delay continues, the greater the damage to public houses in our communities. Some 26 pubs a week are closing. The pub companies themselves have caused thousands upon thousands to close. Some of those closed pubs have now been taken over by big companies and turned into shops—I think Tesco has taken over 130 in the past few months. When we bear in mind the importance of pubs to our communities, we realise that the longer the delay continues, the worse the situation will get.

The Secretary of State has the power to change that. He could persuade his colleagues—that is where the problem is coming from—on how to change those things. Unless he does so, all the promises that he was forced to make last year, which I believe he thinks are right, will come to nought.

[Mr Chuka Umunna (Streatham) (Lab)]

What puzzles the Opposition is the fact that the Secretary of State has accepted in principle the need for a legislative code, so I do not understand why he is unable to commit today to taking legislative action by at least the end of this Parliament, given that that is what he is consulting on. Does my right hon. Friend, like me, fail to understand why we are not seeing that commitment from the Secretary of State?

[Paul Murphy]

I repeat that I think the reason is that he is encountering opposition within the Government.

The Secretary of State is right that things have changed. Having been a Cabinet Minister for eight years and having dealt with all sorts of consultations, my experience is that we must of course take them seriously and look at the pros and cons, but he had already made up his mind, more or less, before the consultation was done. The consequence of all that is that he has to battle on. He has to get back into the Cabinet Committees and persuade his colleagues that this is important. Let us ensure that in the Queen’s Speech there is a proper Bill to put right what is clearly wrong.

Protecting Older People from Fraud (Wales)

Lord Murphy of Torfaen Excerpts

Tuesday 15th October 2013 Westminster Hall

[Paul Murphy (Torfaen) (Lab)]

I am glad to be serving under your Celtic chairmanship, Mr Weir. I am sure that you understand that some of the issues in today’s debate are very much relevant to the whole of the United Kingdom. I am also grateful to the Minister, whom we look forward to hearing from later.

A few statistics will show the extent of scams just in Wales, and how they affect all of us who represent Welsh constituencies. Between February 2012 and February 2013, 2,500 scams were reported, but it is reckoned that only 5% of scams that occur are reported to the authorities, so the total number could be as high as 50,000. There were 958 doorstep complaints, with 19 prosecutions, and 1,658 post, e-mail and telephone scams, with only two prosecutions. Those figures are revealing, not least because the majority of the victims of those scams were probably people, such as myself, over the age of 60. Those who are affected by such crooks and gangsters, who prey on our old people, are, I fear, vulnerable, physically and mentally. On average, older people lose £1,200 per person when swindled, although they can lose an awful lot more—their dignity, their self-esteem and, tragically and occasionally, their very will to live.

Recent examples of scams in Wales include one that involved the distinguished correspondent for BBC Wales, David Cornock. His elderly mother was swindled out of £270,000 by fraudsters, eventually leading to her premature death. In addition, a man in my constituency sent money to a non-existent lottery, the so-called European Lottery Guild, while a woman in Wales sent nearly all her money to a clairvoyant in Switzerland. Those examples are only the tip of the iceberg, which is why Age Cymru—a fine organisation—is now campaigning on the issue, led by Gerry Keighley, who used to be the editor of my local evening paper, the South Wales Argus. They are all doing a great job.

[Chris Evans (Islwyn) (Lab/Co-op)]

The Bryn estate in Pontllanfraith in my constituency has been plagued by doorstep scammers, rogue traders and their ilk for a number of years. Thanks to the Bryn residents’ association, a “no cold calling” zone has been introduced, which has had a huge and beneficial effect. Does my right hon. Friend agree that such schemes require further sight by the Government and endorsement throughout the country?

[Paul Murphy]

Indeed I do, and I shall come on to that matter in one of my recommendations to the Minister. My hon. Friend makes an interesting point, however, about the role of neighbours. When someone is aware that an older person or couple, vulnerable as they are, lives nearby, neighbours, as well as friends and family, have a huge role to play in deterring such terrible things, as do citizens advice bureaux and our local authorities’ trading standards departments, all of which are aware of the issues.

I want to bring to the attention of Members a new sharp practice—that is what I shall call it at this stage—resulting from the so-called green companies exploiting the Government’s affordable warmth scheme and the green deal. Those schemes are, in themselves, good; they seek to give vulnerable people, such as those on benefits or who are older, help towards reducing their energy bills, whether through insulation or whatever. I am in no way criticising such excellent schemes, which are funded by the United Kingdom Government, not the Welsh Government, although of course they operate in Wales as well as throughout the rest of the United Kingdom.

Such phone-in companies call older people and try to persuade them to register for advice and assistance, for which they are charged. In reality, those who wish to take advantage of the Government schemes can simply go to the authorities, official help lines, citizens advice bureaux or trading standards departments and ask for advice on what they should do. As everyone in the Chamber knows, however, people are often caught by a person calling on the telephone, and they are susceptible and more vulnerable to such activity.

[Jessica Morden (Newport East) (Lab)]

I congratulate my right hon. Friend on securing the debate and on his work with Age Cymru, which I hope will help people in future. I, too, have seen a huge increase in my constituency of companies using the green deal to scam older people—cowboy practices. Recent cases have now been referred to trading standards, but they are clearly the tip of the iceberg. Does he agree that this seems to be a particular problem in south Wales, as reported by Which? recently? We should investigate that issue more fully.

[Paul Murphy]

Indeed. I did not come across that until constituents came to me with their problems. I shall give three examples—there are many—of this sort of practice. Eco Green Deal Solutions has now shut down, I am delighted to say, after the consumer watchdog programme, “X-Ray” on BBC Wales found that several customers who were not eligible were charged up to £249 for arrangement and assessment fees. Another is Cornerstone Green Solutions, which took £99 from an elderly and vulnerable lady in my constituency. I understand that another company, Diversity Network Ltd, which is totally independent of the other two, has tried to arrange a refund.

The company that has caused most concern throughout south Wales, including in my hon. Friend’s constituency, is Becoming Green. It has caused great distress to some constituents who came to see me, and among other things, it caused me to raise the matter in Parliament. It is charging older people £299 for what it calls its advice service, and when it is challenged, my constituents are unable to get their money back. One of its customers—interestingly, bearing in mind the earlier debate, he lives in Torquay—recently wrote to a national newspaper, whose reporter contacted the company 17 times before getting beyond an electronic switchboard, which cut him off. I also had great trouble getting through to the company, as did my constituents.

The problem is that admirable schemes have been undermined by the activities of companies that are jumping on the bandwagon simply to make a big profit. I have contacted trading standards offices. Torfaen has an excellent trading standards office, which in recent weeks has received 62 complaints about such companies, 44 of which trade in becoming green, almost wholly from people over 60. The companies that I mentioned operated in Cardiff, where trading standards have received many complaints. Both authorities, and probably Newport and Caerphilly, are looking closely into the activities of those companies and others, and investigating them.

[Nia Griffith (Llanelli) (Lab)]

Does my right hon. Friend agree that in many instances such companies come up with ideas that are totally inappropriate for the householders they meet. I know of people living in terraced houses who use coal to heat their homes but are being told all sorts of nonsense about new gas boilers when they are not on mains gas? Much of the scammers’ advice is hot air, and we must ensure that we get rid of them.

[Paul Murphy]

My hon. Friend makes a valid point. The companies often confuse older people by offering opportunities that may never occur. They may refer to loans as grants, and confuse the people they are talking to.

This is not the Minister’s direct responsibility, but will he liaise on this matter particularly—I will come to other recommendations—with his counterpart in the Welsh Assembly Government and Welsh local authorities to publicise as much as possible the activities that we have all condemned today, so that our constituents are aware of them and can report them to the proper authorities? The Torfaen newspaper, which goes through every letter box in the valley, has highlighted the issue, so that people are made aware of it. That is the sort of thing that we must do.

I turn to more general points, which are important and on which the Government could help. First, will the Minister liaise with Royal Mail so that protocols are changed to allow staff to offer advice and to report suspicious mail? Postal companies should be empowered to refuse to deliver misleading, dishonest or scam mail in which promises and guarantees of large sums of money to the recipients are visible on the envelope. That might require the law to be amended, but it is worth considering. Age Cymru has heard of older people receiving up to 70 letters a day from companies encouraging them to take part in various scams. Secondly, will he work with the telephone companies to offer more protection against phone calls, especially from abroad, and to close down offenders’ lines? Thirdly, will he work with internet providers to increase protection by blocking access to known offenders?

My hon. Friend the Member for Islwyn (Chris Evans) referred to increasing the number of “no cold calling” zones throughout Wales. There are 14 in my constituency, and they are located specifically in areas where people are more elderly and vulnerable. They have been particularly successful in Torfaen, but they exist in other constituencies, and they should be encouraged. I hope that the Minister will liaise with Welsh local government to ensure that the matter is taken up.

It is the collective job of the United Kingdom Government, the Welsh Assembly Government and councils in Wales to protect the most vulnerable people in society from the activities of the unscrupulous rogues who plague us and prey on older people.

Jobs and Growth

Lord Murphy of Torfaen Excerpts

Thursday 17th May 2012 Commons Chamber

[David T. C. Davies]

I am happy to give way to a Labour Member who wants to answer some of those points.

[Paul Murphy (Torfaen) (Lab)]

The hon. Gentleman has said that the people of his constituency are pleased with the performance of his Government and his Chancellor. Is that why they actively rejected the Conservative party and the Liberal Democrats, so that they lost control of Monmouthshire county council?

[David T. C. Davies]

Monmouthshire county council will have a Conservative-led administration, with help from our great friends in the Liberal Democrat party, with whom it is always a pleasure to work. They were not responsible for causing the mess left by Labour.

I want some answers from Labour Members. I want to know why they left us with a debt of £1 trillion and what exactly they intend to do about it. It seems to me that the basis of their economic theory is Enid Blyton’s “The Faraway Tree”, which children climb to find a land where everything is free and nothing has to be paid for. To me, that is a fairytale; to them, it is an economic theory. They think they can just carry on borrowing and borrowing, and put off until tomorrow what needs to be done today.

--- Later in debate ---

[Paul Murphy (Torfaen) (Lab)]

The hon. Member for Bournemouth East (Mr Ellwood) hinted that the local elections results in May were not bad for the Conservative party. It strikes me that the loss of 1,000 council seats is not a ringing endorsement of the Government’s economic policy. What people were talking about in those polls was, of course, the economy.

[Oliver Colvile (Plymouth, Sutton and Devonport) (Con)]

Will the right hon. Gentleman give way?

[Paul Murphy]

I will not, because there is not enough time.

People were also talking about unemployment in those polls. Unemployment in my constituency is at 8.2%. That compares with 3% when the Labour Government were in power.

I will address my short remarks to the alternative. The Government have taunted the Opposition, saying that we do not have an alternative. Opposition Members have been arguing the case for an alternative. The Labour Government in Wales are giving us an alternative. For the past year, they have been doing the sort of things that are necessary to stimulate the economy and provide jobs.

The hon. Member for Warwick and Leamington (Chris White) talked about small businesses. If he came to Wales, he would see that there is a small and medium-sized enterprises investment fund of £40 million. We have talked about the two-year-old regional growth fund in England, which has spent £200,000 to create just one job. In Wales, there is the £15 million Wales economic growth fund, which has already received 500 applications, including from my constituency, where a leading precision engineering company has invested nearly £800,000 in machinery, of which £250,000 came from the Wales economic growth fund. There is a £40 million stimulus package for young recruits and the skills growth Wales programme. There is capital investment for schools, social housing and energy efficiency. In England, the future jobs fund has been scrapped. In Wales, it continues as the jobs growth Wales fund, which will benefit 4,000 young people a year. Wales has its first ever national infrastructure plan, under which £90 million will be spent on capital projects.

Wales is also encouraging the third sector. In my constituency, the First Minister opened the Marie Curie Cancer Care national support call centre, which has created 140 jobs. This very morning, all Welsh Members of Parliament were invited to a meeting with Welsh university vice-chancellors. The universities in Wales are working with the Welsh Government, the UK Government and local government to create jobs. The contrast is between what the UK Government are not doing and what the Welsh Labour Government are doing. Why on earth cannot the Government here in England have the same sort of schemes we have in Wales to stimulate the economy and growth and ensure more jobs?

The mood is shifting. It shifted in the local government election results in England, Wales and Scotland. It has shifted in the United States, and in Europe with the election of François Hollande. The message that comes loud and clear from those countries and our own people is that we must change. The winds of change, as a Conservative Prime Minister once said, must now be heeded. Unless the Government understand the need for that change, it is simply not credible that any sort of growth will occur in the next few years.

The alternative is there, but the Government are reluctant, stubborn and foolish enough not to accept it. Unless they do, we will go deeper and deeper into recession.

Rural Bank Closures

Lord Murphy of Torfaen Excerpts

Tuesday 21st February 2012 Westminster Hall

[Paul Murphy (Torfaen) (Lab)]

I congratulate the hon. Member for Brecon and Radnorshire (Roger Williams) on bringing this issue to the attention of the House. He has served his constituency with great sincerity for many years. When I was Welsh Secretary, he and I visited many parts of it, and I know he has raised this issue because he feels deeply about it, particularly as far as Presteigne is concerned.

I want to talk about another bank closure. Again, it involves HSBC, but this time it is in my constituency—in Blaenavon, in my valley. Blaenavon, a Welsh mining valley, has the characteristics of a rural area, in the sense that it is geographically isolated, its population is about 5,000 or 6,000, and it is part of the Brecon Beacons national park. It now has only one bank, HSBC, because the others have closed.

The decision to close the bank has caused enormous difficulty and distress among the people of Blaenavon. The town council and I have met the Assembly Member—Lynne Neagle—and bank officials. Hundreds of people attended a public meeting; it is very unusual these days for people to turn up to a public meeting to support banks, but these people did. There has also been a large petition. It therefore means a great deal to the people of Blaenavon that the bank is about to close.

The hon. Gentleman referred to HSBC as the world’s local bank; I was recently attracted by a newspaper headline, “HSBC banks on going deeper into rural areas”, until I discovered that the newspaper concerned was the Shanghai Daily. The article, which was from 2009, said:

“HSBC said…it has opened two more rural banks in China as it seeks to penetrate deeper into the rural financing industry in the country.”

It also said the bank

“is committed to bringing our global rural finance expertise into China’s countryside to help develop a sustainable model of finance and to contribute to the local economy”.

So HSBC is opening banks in China and closing them in Wales and the rest of the United Kingdom.

I understand the point made by the hon. Member for Carmarthen West and South Pembrokeshire (Simon Hart), who said that it is perhaps hard to castigate the last bank remaining in a town. Nevertheless, when it has gone, the effect on local communities can be quite devastating because those communities often have lots of older people. In addition, local industry and small and medium-sized businesses rely on the banks. There is also the fact that communities are isolated and that many older people do not have their own transport. In Blaenavon’s case, there is the added issue that the town is a world heritage site, with lots of tourists from across the world coming to visit, but there is no longer a bank. The issue is therefore of great concern.

Today’s debate must concentrate not only on saying that the banks must be much more responsible in looking after rural areas, but on what can be done. The hon. Member for Brecon and Radnorshire made some suggestions, as have my hon. Friends. I want to make one or two points, which I hope the Minister and my hon. Friend the Member for Chesterfield (Toby Perkins), who speaks for the Opposition, will refer to when they wind up.

Clearly, the most important point is that if the bank goes, a cash point should remain, because it is hugely difficult to obtain money in a small town if the cash point disappears. If possible, there should also be some form of deposit facility so that people can deposit their money in a machine.

The issue of internet and telephone banking is also important. As the hon. Member for Brecon and Radnorshire said, however, the number of people over 65 who attempt to use such facilities is small. Clearly, there is a job of work to be done by the banks in trying, when they close, to train or teach their customers to use the telephone and internet banking facilities that many other people use. I pressed HSBC to hold seminars in Blaenavon to show people that.

[Simon Hart]

I am sorry to intervene so often. Does the right hon. Gentleman agree that we might want cash points that do not charge people to take their own money out—in other words, not LINK cash points, which cost about £2.50 every time someone sticks their card in?

[Paul Murphy]

Indeed. That is very important; particularly for older people, being charged to take out money is an extra burden.

The Post Office basic bank accounts are useful. People may be able to carry out their transactions through the post office. Credit unions, which were raised earlier, are also important. However, the sharing of facilities between banks needs to be explored. Another intriguing issue is mobile banking. In Ogmore Vale in south Wales, for example, HSBC and, I think, the Royal Bank of Scotland together initiated a mobile banking scheme for the area. It is like a mobile library, and it goes around villages and towns, providing facilities and the opportunity to use the banks.

It strikes me that the Government—both the United Kingdom Government and the Welsh Government—need to be able to come up with imaginative ideas. When it is known that the last bank in a town in a rural area is going to disappear, there should be some sort of action plan. Either the local authority or the Welsh or United Kingdom Government should be able to consider the alternatives for the town, and the possibilities that I have outlined. Often people’s fear is the worst thing. They need reassurance that some sort of facility can be provided in the community, through the exercise of more imagination.

My hon. Friend the Member for Harrow West (Mr Thomas) referred to a summit. That is an important suggestion; the representatives of banks and Government could sit round a table and perhaps come up with ideas for action plans for towns and large villages that are losing their banking facilities.

I congratulate the hon. Member for Brecon and Radnorshire once more on raising the issue, which is hugely important and affects all our constituents, crossing the party political boundaries of the House of Commons. I hope that the Minister will come up with ideas to alleviate the problems of our communities.

Fuel Costs

Lord Murphy of Torfaen Excerpts

Monday 7th February 2011 Commons Chamber

[Paul Murphy (Torfaen) (Lab)]

I welcome the debate, and the hon. Member for Dundee East (Stewart Hosie) made a powerful speech. It is relevant that it arises on a Supply day motion from the Scottish National party and Plaid Cymru, because the issue is also of particular concern to Northern Ireland, and the hon. Member for Belfast East (Naomi Long) is in her place. All devolved Administrations have a voice to raise and a point to make about the fuel increases in their countries. Hon. Members will know that a joint ministerial Committee meeting took place last week in London, when the First Ministers of Wales, Scotland and Northern Ireland jointly asked the Government to ensure that there would be no increase in fuel prices in the Budget in April. I hope that that will be the case.

I share the concerns of my hon. Friend the Member for Bristol East (Kerry McCarthy) about some of the detail of the derogation for rural areas. I support the idea of a pilot, but it should include at least one part of Wales, and to confine it to islands would make such a study rather artificial. I appreciate that there are particular problems in rural parts of the United Kingdom and it is important to consider that, but confining the pilot to islands would be a mistake.

[Naomi Long]

Does the right hon. Gentleman agree that, if there were a pilot, it would be helpful if a part of Northern Ireland were included in it, given that there are specific problems due to the geographical separation between Northern Ireland and the rest of the United Kingdom?

[Paul Murphy]

Indeed. When I was Secretary of State for Northern Ireland, the point was always made to me that it is the only part of the United Kingdom that has a border with another country—the Republic of Ireland— and the problems of fuel prices in Northern Ireland are particularly acute. It would be a good idea to have a pilot there, too.

The Economic Secretary spent much of her time telling us that it was all the Labour Government’s fault, and then she said that she wanted to be conciliatory. If I may say so, she is slightly schizophrenic about what she wants. Let me emphasise to her that, for the 24 years that I have been in the House of Commons, whether in opposition or in government, the Treasury has always won its case. It has won it on the basis that it wanted the money from fuel—a Conservative Government as much as a Labour Government argued for fuel regulators. There is no point in trying to say that one side or the other is responsible because all Governments in the past three decades have done precisely that.

There is a difference now—and we will differ fundamentally about the reasons for it. Given that we are post banking crisis and have to deal with the deficit, of course the world has changed and we must therefore consider imaginatively ways in which to deal with the fuel prices that our businesses and our families have to pay. However, the Economic Secretary must recognise the point that my hon. Friend the Member for Bristol East made: the single, most devastating reason for fuel price rises in the past few months is the increase in VAT. It is as simple as that. Petrol and diesel are more expensive because VAT has gone up. As all Opposition parties have argued, we should rethink the VAT increase.

The effect of the fuel prices on small businesses in Wales is calamitous. The difference in Wales, as in Scotland, Northern Ireland and parts of England, is that so much of our economy is now based on the success of small and medium-sized businesses. If they are to suffer—it has been shown that they will if fuel prices increase—special attention should be paid to them. The Federation of Small Businesses in Wales has already said that it is disappointed with the Government’s treatment of fuel prices. The Economic Secretary is right to say that devolved Administrations have a part to play in that the Government and the devolved Administrations should work closely with small businesses to see how they can tackle the matter.

Small businesses also deal with other pressures. In south Wales, the Severn bridge is undoubtedly a problem for them. Someone who has a large vehicle such as a lorry and crosses from England to Wales has to pay £17 each time. That is a big disincentive to small businesses in Wales. Earlier, the Prime Minister rightly pointed out that he, like me and every hon. Member, wants banks in our countries to lend more regularly, more frequently and more effectively to small businesses.

The debate is important—so important that hon. Members from all parts of the United Kingdom are taking part in it to ensure that the Government’s mind is bent to trying to find a solution. I fear that the Economic Secretary was right when she said that the fuel stabiliser was a problem—doubtless the Government are looking at it—but there are serious issues, which could have a knock-on effect unless they are tackled effectively and carefully.

In the past couple of days, I went to my local Sainsbury’s petrol station to fill up. Like many supermarkets, it offers diesel and petrol at much cheaper rates than smaller, independent petrol stations. I paid just over £1.30 a litre for diesel. Compared with some of the prices, which we have heard today, in parts of rural Scotland and Wales, the price in my part of the world, although quite high, is lower.

It particularly struck me, when considering the reasons for taking part in the debate, that Shell was making £1.6 million an hour in profits. I know that that is not all on fuel. However it strikes me as incongruous that, when the citizens and businesses of our country have to face huge, inflationary rises because of increases in fuel duty, large oil companies are making those enormous profits. Perhaps the Government can consider that. They were supposed to look at how the banks share out their profits and pay their bonuses. They have not done well on that. Perhaps they should look at some oil companies, too.

Whatever the Government do, they should understand that there is real and justified concern from all Members about the fuel increases. I hope that they will listen.