Spring Budget: Wales

Debate between Beth Winter and Stephen Crabb

Wednesday 29th March 2023 Westminster Hall

[Beth Winter (Cynon Valley) (Lab)]

Diolch yn fawr, Mr Hollobone. I wonder if I am living in an alternate universe to the previous speaker, the hon. Member for Ynys Môn (Virginia Crosbie). This time last year, I undertook a research study on the cost of living in my constituency. I will share a copy with Conversative Members because the evidence about the levels of deprivation was stark, with people going without food and unable to pay their gas and electric bills. The responsibility for that lies squarely with the UK Government, and my contribution will evidence why I feel so strongly that that is the case. So I beg to differ with the hon. Member. I congratulate my hon. Friend the Member for Newport West (Ruth Jones) on securing the debate.

Wales fired the UK industrial revolution through our coal and steelworks, and we are now leading the green industrial revolution through onshore and offshore wind. The United Kingdom’s wealth was built on Wales, but it now resides in London and southern England. There is a lot of research to evidence the fact that there is a disproportionate amount of money in the south-east of England.

Wales has been let down by Westminster—by Tory Governments—for many years, and this month’s Budget continues that theme. The reality is that under this Tory Government, households in Wales and in my Cynon Valley constituency are worse off, despite the Welsh Government’s significant efforts to put in place a range of measures to help households. We have seen the largest fall in living standards since the 1950s, wages are lower in real terms than they were 13 years ago—that is a fact—and public services, including local government services, continue to be cut in real terms.

Ahead of the Budget, the Welsh Government called for increased support for households in the cost of living crisis, including increased public spending to ensure public sector workers are paid a fair wage, increased funding for public services and investment to boost growth in the economy. Wales TUC called for a boost to pay across the economy, with decent pay rises and a path to a £15 an hour minimum wage, alongside a plan for strong public services, fair taxation and protection from hardship for workers.

After the Budget, the Welsh Government said:

“The Chancellor has chosen to hold back funding at a time when extra investment is desperately needed to ensure our hard-pressed public services can respond…and to ensure public sector workers are paid a fair wage.”

The Institute of Welsh Affairs said that the Budget

“puts money into the hands of well-off high earners”,

and that it “represents a political priority” that is completely “at odds with the needs” of the vast majority of people in the country.

The Bevan Foundation said that

“the fact that there is so little direct action on the cost-of-living crisis is a source of concern”,

and that the Chancellor’s focus is

“starting to drift from this very real problem.”

I was fortunate, about 18 months ago, to commission the Bevan Foundation to undertake a piece of research on our economy in the Cynon valley and come up with an action plan based on community wealth building to address the appalling levels of deprivation and inequality. We are on the path to implementing that at a grassroots level. I am really encouraged by the work that people in Cynon Valley are undertaking to provide an alternative future, but that is no thanks to the UK Government.

The reality is that Wales is constrained from offering more by the UK Tory Government, who routinely withhold fair, needs-based funding for Wales to meet the increasing pressures on our communities. After more than a decade of austerity and the pandemic, Wales’s economy and public services, including local government services, have been absolutely stripped to the bone.

Wales is yet again being starved of funds. We heard news this week that, as my hon. Friend the Member for Newport West said, the UK Government have taken £155 million from the Welsh reserve fund, despite the Welsh Government making proposals that would see the money retained, which has been agreed many times before—there was a precedent. It is—I will use the term—theft from the people of Wales, and it demonstrates the Tories’ complete contempt for our country.

[Stephen Crabb]

The hon. Lady talks about local government services, but how would she respond to the point that local authorities across Wales—all of them, and especially some of the Labour councils not far from her constituency—are sitting on billions, or at least hundreds of millions, of pounds of reserves, seemingly with very little intention of dipping into them to invest in the kinds of priorities that they need to at this time? They might say, “Well, we’re waiting for a rainy day,” but it is pouring outside, for all the reasons the hon. Lady set out. Why will they not spend that money?

[Beth Winter]

I beg to differ. If we look at local governments, there are very few with any significant reserves. For example, my local authority has experienced cuts in excess of £90 million since the start of austerity, and it has tapped into reserves significantly to meet the shortfall. I think the figure was about £30 million in the last year, although do not quote me on that. That is already happening, and local authorities do not have the reserves to which the right hon. Gentleman referred.

In terms of EU structural funds, Wales faces a £1.1 billion shortfall in funding—so much for “not a penny less, not a power lost”. I am interested to hear the Minister’s explanation for the significant shortfall in funding post EU.

On the levelling-up fund and the shared prosperity fund, the Tories’ record is one of failure, and the announcements in the Budget do very little to reverse more than a decade of austerity. One year on from the levelling-up White Paper, most places have lost out in the scramble for levelling-up funding. Millions have been wasted in the application process. Bids have been eaten up by inflation. My constituency has not received a penny, nor have other valley constituencies such as Blaenau Gwent or Torfaen. The UK Government’s shared prosperity fund was to replace EU structural funds, but funds have been cut, and the Welsh Government have been completely cut out of that process.

Strengthening the Union as it Relates to Wales (First sitting)

Debate between Beth Winter and Stephen Crabb

Tuesday 18th January 2022 General Committees

[Stephen Crabb]

It is a pleasure to serve under your chairmanship, Mr Davies, although it does mean that we will not benefit from a contribution from you to today’s debate. I will start by commending the Secretary of State on calling this meeting of the Welsh Grand Committee. It represents something of a revival, or a resuscitation, of the Committee, given that it looked like it was going to go the way of the Scottish Grand Committee and disappear from parliamentary proceedings quietly into the night. It is a timely moment to have a grand Welsh debate today, given the extraordinary period that we have come through as a nation and given the significant and serious challenges that lie before us. I hope the rest of the debate will be constructive and honest as we address these issues.

The pandemic has tested our nation’s financial and institutional capabilities, and proved a test to our constitution. We should all be able to agree today that, as we emerge from this current phase of the pandemic and hopefully enter a more benign phase, we can agree that the United Kingdom comes out of it with its relevance and importance highlighted more than ever. Contrary to what the Opposition have been primed to say, the fact is that the UK Government got the big calls right all the way through the pandemic. As the Secretary of State has highlighted, there was a period of very fast decision making at the time of uncertain, partial information and evidence. Whether one looks at the decisions around the furlough scheme and business support, the decisions around vaccine development, procurement and roll-out of the vaccines once approved, or at the most recent decisions on how we responded to the omicron variant and the very fine balance that we had to strike just before Christmas, taking precautionary measures but not damaging the economy, which had started to rebound following the earlier lockdowns, the Government’s decision making has been proved broadly correct. I look forward to the future review demonstrating that. The truth is that the UK compares very favourably with nations similar to ours, in terms of how ready we are to move ahead in this better phase of the pandemic, and to continue the economic growth.

[Beth Winter (Cynon Valley) (Lab)]

We have had in excess of 150,000 deaths from covid in this country. It is an absolute disgrace. My constituents in Cynon Valley had the third highest death rate in the UK. How can the right hon. Gentleman say that the UK Government’s decision making during the covid pandemic should be commended when we have had one of the highest death rates from covid in the world?

[Stephen Crabb]

I am sorry to respond to the hon. Member: it is not true that we have the worst covid death rate in the world. The standardised measurement of per 100,000 shows that Britain compares to similar sized nations such as Spain, France and Germany. There are a lot of other countries that have sadly experienced far greater deaths. Every single death is a tragedy, as the hon. Member is right to say. My other point in response is that decisions about public health in Wales were almost wholly the responsibility of the Welsh Government.

The decisions taken at UK level that affected Wales were around the financial architecture of how to support individuals, families and businesses. The public health measures were taken by the Welsh Government. As I will explain, generally the Welsh Government have veered to a tendency for more lockdown rather than fewer, wanting to be stricter, often on very flimsy scientific evidence—as the hon. Lady herself demonstrates in her question, to such little effect.

I draw hon. Members’ attention to the latest jobs data published this morning, with record job vacancies again and the employment picture continuing to improve. That is not what many people predicted for this phase of the pandemic, once the furlough scheme had been unwound. People were predicting a crisis of unemployment, but the truth is that that never happened. What happened was that the UK economy was well placed to rebound strongly last summer and it has continued to create jobs.

That is a really good thing, and it is down to the decision making of the Treasury team, to create that furlough scheme, which meant that there was not a tsunami of business failures and redundancies. Businesses were able to use that as a platform to grow again once the economy had been reopened. We do face challenges: the cost of living is certainly one of them, inflation, energy price hikes and, as revealed in this morning’s data, the fact that wage levels are not keeping pace with the cost of living, which is a serious issue that we need to address.

I reinforce the message of the Secretary of State that, when it came to those big decisions about how to get the country through the economy, the UK Government have been proved right. The Prime Minister continually emphasises the importance of seeing this as the one United Kingdom emerging from the pandemic. He is always incredibly polite and careful in his remarks about the Welsh Government and the First Minister. Even in private, when we coax him to say something critical about the Welsh First Minister, he is always incredibly polite, when sometimes we would like him to be stronger.

He is doing that in a genuine spirit of teamwork. That reflects well on the Prime Minister: he genuinely wants to foster a team UK ethos, respecting the fact that the Welsh Government have a different set of competences and have the freedom to take different decisions about public health protection measures. He is genuinely trying to foster an atmosphere of team UK.