UK Steel Industry

Debate between Stephen Doughty and Jessica Morden

Wednesday 3rd December 2014 Westminster Hall

[Stephen Doughty]

I share my hon. Friend’s disappointment. I asked the Chancellor a question on that issue, and I was disappointed that he chose to make a political point, rather than engage with the serious issues being raised by many hon. Members.

I want to focus on a number of strategic issues. Whether it is energy prices, taxation, foreign dumping, uncertain future ownership or the lack of clarity in the UK’s industrial and infrastructure strategies, it is crucial for the sake of our future industrial and manufacturing capacity, as well as for jobs across the UK, that the steel industry has urgent, robust and bold action from the Government, not caution and bureaucratic handwringing alongside many warm words that make little difference in practice.

[Jessica Morden (Newport East) (Lab)]

Because of the challenges facing the steel industry, steelworkers have had to adapt, accepting changes to their terms and conditions and rising to the challenge of hitting the targets that companies have set them in difficult times. Does my hon. Friend agree that announcing some support for the steel industry is all very well, but delivering on it is crucial for steelworkers, who have worked so hard in difficult times in constituencies such as mine?

[Stephen Doughty]

That is absolutely the case. My hon. Friend speaks about her constituency; employers at Celsa in my constituency have taken some hard decisions to ensure that the company continues to thrive and go forward. We need that kind of commitment from the Government, too.

The steel industry does not need posturing or the erection of barriers to trade or unjustified protection from fair competition; it is simply asking for action to level the playing field and ensure that we do not offshore carbon emissions or contract out our potential domestic growth generation to such places as China and Turkey.

Severn Bridges (Tolling)

Debate between Stephen Doughty and Jessica Morden

Wednesday 5th March 2014 Westminster Hall

[Jessica Morden]

I strongly agree, and I will say much the same thing in my remarks. The Severn bridge tolls are the most expensive in the UK. It now costs £6.40 for a car to cross the bridge, £12.80 for a van, and £19.20 for a coach or lorry. By comparison, it costs just £1.50 for a car to cross the Humber bridge or £2 to use the Dartford crossing. However, the Dartford crossing is free to use between 10 pm and 6 am, and a scheme was recently launched under which local residents can pay just £20 a year to cross the bridge as often as they like. Those are both examples of the Government stepping in after local campaigns and helping long-suffering road users. If they can help businesses and residents in those areas, why can they not take decisive action to help in the case of the Severn bridges?

The tolls are a cost-of-living issue for my constituents, especially those who commute daily over the bridge, and the cost is a big burden for many businesses that operate out of south Wales. Constituents constantly tell me how hard they find it to absorb the increased tolls each year when pay is frozen, hours are reduced and the cost of living continues to rise. A constituent e-mailed me a few weeks ago to say:

“I’m employed in Yate in Bristol which means I have the daily trip across the bridge. While I had budgeted for the bridge cost, the actual cost of commuting along with the increase in the cost of living is currently causing me great concern. I try to ride an old motorcycle as much as I can”—

a motorcycle can cross for free—

“but I have found the wind protection on both bridges to be unsatisfactory, even in the summer, leading me to balance the cost of taking the car with the danger of taking the motorbike. Therefore, I would really like to take the car every day but the cost is just too high, and as you know the cost has now increased again.”

There is little choice. It costs about £2,400 to commute to Bristol by train using a standard adult ticket. Some of my constituents feel that the yearly toll increases have a knock-on effect on alternative modes of transport, such as the bus or the train, which further restricts their choices. The train service from Severn Tunnel Junction station is frequently full, and commuters are sometimes left standing on the platform at peak times. Those who commute between Bristol and Newport East have a really raw deal, which is a significant barrier to those looking for employment in Bristol. It is one thing to pay the toll once a week or so, but quite another to pay it every day, just to go to work. The local anger and frustration was demonstrated just a few days ago on St David’s day, when 120 local singers re-enacted the Rebecca riots—the men were dressed in traditional women’s clothing, apparently—on the M48 bridge. That shows just how strongly people feel about the matter.

[Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)]

I congratulate my hon. Friend on securing an excellent debate on a crucial issue, and I endorse all the points that she has made so far. She has mentioned individuals, but does she agree that we are also hearing increasingly from businesses? In particular, the Freight Transport Association, which has 700 members across Wales—many of them in my constituency—has talked about the impact that the tolls are having on the small margins in its members’ businesses.

[Jessica Morden]

I thank my hon. Friend for his intervention. I was going to praise the Freight Transport Association for its campaign, so I am glad that he mentioned it, and I very much agree with him. The Newport business man I mentioned earlier also told me about the negative impression of the toll:

“the toll has a major effect on recruitment and retention of staff in both directions. The northern fringes of Bristol across to Cardiff are all very commutable (M4 allowing) but having to build in excess of the £30 per week in to commuting costs prevents a lot of skills transfer between the areas. As an example, an employee of one of my clients told me that the bridge tolls have risen nearly 50% in her time commuting, whereas her salary has risen less than 15%.”

Businesses, particularly those in the haulage industry—I make special mention of the Freight Transport Association’s campaign—say that the tolls mean they bear a cost that their competitors across the bridge do not have to deal with. They have to add the cost on to their bottom line, which hits their competitiveness. Some companies pay in excess of £250,000 a year.

A Welsh Government study, of which I am sure the Minister is aware, shows that scrapping the tolls altogether could improve the economic output of south Wales by some £107 million. The report also shows that for a car journey—excluding commuters and business travel—the toll represents approximately 19% of the costs of a trip between Cardiff and Bristol. For light goods vehicles the figure is 23%, and for heavy goods vehicles it is 21%. The total cost of crossing the bridge for businesses and consumers, once VAT is taken into account, is in excess of £80 million a year in 2009 prices.

That is the impact of the tolls, which I am sure other Members will also articulate, but what can the Government do to help? Every year, when it is announced that the tolls will go up, bridge users ask for them to be frozen, and the Government say that they cannot be, because of the concession. However, the Government wrote off £150 million of the £330 million debt on the Humber bridge, so where there is a will, there is a way. The Government could step in and compensate the concessionaire; they just choose not to. Will the Minister address that point when he responds?

Last year, the Welsh Affairs Committee asked the previous Minister, the hon. Member for Lewes (Norman Baker), to look at a scheme for business—for example, a toll-free overnight period that would help businesses with their costs, as well as easing congestion. The current Minister has replied that the concession would have to be extended to pay for that. I will say it again: the Government stepped in to help with the Humber bridge; why not do so here? Will he clarify his remarks about the TAG concession being the limit of the concession that the Government can offer under European law? It would be helpful to have that explained in person.

Will the Minister also give us some answers on what the Government are planning, as regards where we go at the end of the concession, when the bridge returns to public ownership? The Treasury has done pretty well out of the Severn bridges in previous years. In 2000, the European Court of Justice ruled that VAT must be charged on private bridges. Between 2003 and 2012, the Government accrued an unexpected windfall of £121 million as a result of that change. Estimates from the Scrutiny Unit suggest that by the end of 2013, the figure is likely to be nearer to £135 million.

The Finance Act 2007 started the abolition of the industrial buildings allowance, meaning that the Government held on to an estimated £21.2 million, in 1989 prices, which they would never have expected. I understand that in today’s prices, that would be nearer to £40 million. Although the Government argue that they must continue tolling to recoup the £88 million in costs from unexpected repairs to the first bridge, they have actually accrued more than £160 million from both changes, which is more than enough to write off the existing debt. Will the Minister please update those figures and confirm how much to date the Government have received from VAT, and how much has been saved as a result of abolishing the industrial buildings allowance? The Department for Transport does not seem keen to answer my latest parliamentary question, even though we have had the figures before.

Will the Minister confirm that we are still looking at mid-2018—the last date we had—for the end of the concession? Previous Ministers have alluded to the fact that they would like to continue tolling for two years after the concession ends in order to recoup the Government debt that we have discussed previously—that was admitted to the Welsh Affairs Committee a couple of years ago. Is that still the case? Will the Government publish an updated full breakdown of the outstanding £88 million of debt and how and when it was incurred?

What is the current thinking on the level of the toll? The Minister has just written to the Select Committee to say that VAT would not be collected on a public bridge after the concession ends; will the tolls therefore reduce by at least that amount? If not, and the Government maintain the level of the toll, the Freight Transport Association has pointed out that businesses will no longer be able to reclaim VAT and so could effectively face a 20% hike in tolls. A specific answer on that possibility would be helpful, because we do not want businesses to end up in a worse position.

What serious work has been done on concessions for people who live locally? As I mentioned earlier, people who live locally can now cross the Dartford crossing an unlimited amount of times for £20 a year; that sounds extremely good to me. I hope that we do not hear, again, the stock answer to all such questions: “We have made no decisions about the tolling and do not know what the level will be. We are not there yet.” At the heart of the issue is a strong suspicion that the Government see the bridges as a cash cow, or even—as was suggested to me—a river of money. The concessionaire is in a win-win situation, as it can increase the tolls every year and be compensated for any changes. Meanwhile, the Government receive more than they expect through VAT and other income, while the poor old user has to pay more for longer.

In its 2010 report, the Welsh Affairs Committee recommended that, come 2018, tolls be reduced to a maintenance-only level, which would be very much supported by my constituents. We called for transparency on the financial arrangements of the bridges, and for discussions on ownership to be considered. We also asked the Government to consider off-peak rates for businesses, and local concession schemes for residents. Four years on, we have very little detail on anything. May we please have some answers today?

Universal Credit (Wales)

Debate between Stephen Doughty and Jessica Morden

Tuesday 5th February 2013 Westminster Hall

[Stephen Doughty]

Indeed. I agree with the hon. Gentleman’s comments.

Coming on top of two of what my right hon. Friend the Member for South Shields (David Miliband) has called “rancid” measures—the bedroom tax, and the tax on people in work in the Welfare Benefits Up-rating Bill that we saw a few weeks ago—I am deeply fearful about the impact of the changes on many of our most vulnerable constituents, not to mention the organisations that support them.

Let us look at some of the headline figures. On Monday 10 December 2012, the Government published their new impact assessment for universal credit, which showed several very worrying facts. First, 800,000 more people across the UK face lower entitlements. The original assessment, which was published in 2011, said that 2 million people would face lower entitlements under universal credit, but that number has now risen to 2.8 million, with an average loss of entitlement of £137 a month. I will come to the specific statistics for Wales in a moment. Of those losers, 400,000 will be concentrated in the two lowest income groups.

We expect 600,000 more parents to lose out under universal credit. Households will also lose more: the original impact assessment said that only 200,000 families would lose more than £75 a month, but the latest one states that 1.3 million households will lose more than £100 a month and that an incredible 300,000 families will lose more than £300 a month, which amounts to £3,600 a year. The impact assessment points out that higher administrative costs will result from the changes. The Department has also dropped its claim that universal credit will tackle poverty, which has been removed from the 2012 impact assessment.

There have been delays, and we might hear the reasons for some of them when the Minister speaks later. The roll-out of universal credit is already a significant number of months late, and the DWP has been unable to confirm the timetable. Indeed, there is a great lack of clarity on the part of my local authority and others about how universal credit will be rolled out and when.

[Jessica Morden (Newport East) (Lab)]

Does my hon. Friend agree that the Government have still not given any real answers about how those without bank accounts or internet access will be helped to adapt to the new monthly payments? Such answers are long overdue.

[Stephen Doughty]

Absolutely, and I will come on to that point in due course.

It is not only those whom I have spoken to who have sincere worries about universal credit. As we have several times seen in the press, one Cabinet Minister has reportedly said in private:

“The information technology for the new system is nowhere near ready. It’s a disaster waiting to happen.”

Who knows whether such rumours are to be believed, but I understand that a number of Cabinet Ministers share that view, which is perhaps one reason for the delays.

What is the specific impact on Wales? Based on an analysis of the December impact assessment and some rough calculations, we estimate that a staggering 140,000 people across Wales might lose £1,600 a year. That is based on an estimate of the Welsh population that will be affected. I would be grateful if the Minister shared the Government’s figures and estimates about how many will be affected in Wales and how much they will lose. Will he provide a breakdown by local authority to help local authorities prepare for the impact of the changes?

Aside from the raw figures, which are shocking in themselves, I want to share the key fears that people have raised with me about the implementation of universal credit in Wales. First, there is the challenge of budgeting for many families; secondly, as my hon. Friend the Member for Newport East (Jessica Morden) mentioned, there is the digital divide; thirdly, there are power relationships within the home; and, finally, there are the risks posed to local authorities, housing associations and other registered social landlords.

First, on budgeting, the Secretary of State for Work and Pensions frequently appears to suggest that those of us who raise the issue are patronising our constituents. Rather than taking so entirely complacent an approach, I commend the work that organisations such as the citizens advice bureaux, the Cardiff and Vale credit union, housing associations—for example, Cadwyn in my constituency—are doing to support tenants by helping them to set up bank accounts, jam jar accounts and similar facilities in credit unions. I also commend the Welsh Government’s work to support those efforts.

Levels of financial literacy––let alone access to a bank account––are not, unlike this measure, universal, and we need to be realistic about the impact of the changes on many people. Rather than making huge assumptions, perhaps the Minister would tell us what risks he sees in relation to the problems in the area and what his Department is doing to assist. I can certainly tell him that many of the organisations that I have mentioned, let alone individual constituents, have experienced varying or little support from his Department, and that relates only to those who are aware of such support.

I want to touch on direct payments and the data from the direct payment pilots that the Department has conducted. A couple of days ago, “Inside Housing” published an article entitled, “Direct payment pilots report increased arrears”, by the journalist Carl Brown, which states:

“Landlords testing direct payment of benefit failed to collect 8 per cent of rent on average in the first four months of the six pilot projects.”