Autumn Budget as it Relates to Wales (Morning sitting)

Chris Bryant Excerpts

Wednesday 7th February 2018 General Committees

[Alun Cairns]

The hon. Gentleman will be well aware that when that commitment was made, the intention was to use electric-only trains rather than bimodal trains.

[Chris Bryant (Rhondda) (Lab)]

The former Secretary of State for Transport also categorically stated in the House of Commons that the valleys lines would be electrified by the end of 2018. There is absolutely no prospect of that happening, is there? Why do Conservative politicians keep making promises that they know they have no prospect of fulfilling?

[Alun Cairns]

The hon. Gentleman is well aware that that responsibility has been passed over to the Welsh Government, with additional money being made available by the UK Government for that scheme. I suggest that he puts that question to his colleagues in Cardiff Bay, because the former Transport Secretary would have been repeating the claims and the comments that had been made by politicians in Cardiff Bay.

--- Later in debate ---

[Christina Rees]

Eight years of cuts and where has it got us? Your policies have driven up the debt. I really do not see where you are coming from.

[Chris Bryant]

Is not there another point? If the Government keep on trying to run the state on the cheap, they will end up spending more because they have to buy in agency workers in the NHS and schools, and pay consultants to do work that could have been done in-house. It is a complete and utter false economy that they have been running all these years.

[Christina Rees]

I really cannot add to that—my hon. Friend put it so well and I totally agree. That was my opinion on Budget day. I wonder if I could be persuaded differently by Conservative Members by the end of this Welsh Grand Committee today. The way things are going so far, I do not think I will.

Let me demonstrate the appalling attitude to Wales shown by the UK Tory Government through a budget that embodies this disdain. More than half of the new funding announced for Wales will have to be paid back to the UK Tory Government. Two thirds of the additional capital funding is made up of a form of funding called financial transactions, which must be repaid to the Treasury. There are also restrictions on what it can be spent on. The Welsh budget has experienced year on year cuts as a result of the UK Tory Government’s ongoing ideological programme of austerity. There is an ongoing battle between the social democratic values of the Welsh Labour Government versus the neoliberal ideology of the UK Tory Government.

Even with these small increases in funding, our budget will still be 5% lower in real terms in 2019-20 than it was in 2010-11, which is equivalent to having £900 million less to spend on public services in Wales. If we exclude the financial transactions funding, which we will have to pay back, our budget will be 7% lower, or equivalent to £1.1 billion less by 2019-20.

Wales has been let down elsewhere too. The Welsh Labour Government have repeatedly called on the UK Tory Government to fully fund a pay rise for all public sector workers. The UK Tory budget was a missed opportunity to do just that. The Welsh Labour Government have called on the UK Tory Government to invest in key infrastructure projects in Wales, including the Swansea bay tidal lagoon, which has been mentioned before, and rail, but the Chancellor once again turned his back on Wales. The only feedback we have had on the tidal lagoon is the vague point about value for money that was trundled out again last week and today, despite the UK Tory Government’s independent Hendry review recommending its support as a no-regrets decision. The Secretary of State has told us that Welsh Labour Government and UK Tory Government officials met to discuss the tidal lagoon, but what about the UK Tory Government decision-makers? When are they going to front up and put up? The Secretary of State knows that the Welsh Labour Government have pledged millions to support the Swansea bay tidal lagoon.

The UK Tory Government have cancelled the electrification of the main line from Cardiff to Swansea, as mentioned by my hon. Friend the Member for Caerphilly (Wayne David). None of their explanations for doing so make economic or environmental sense. If the UK Tory Government had kept their promise to electrify the main line from Cardiff to Swansea, we would not have needed bimodal trains, which are heavier because they need to carry both sources of power, making each journey more expensive. The heavier trains increase wear and tear on the track, the buffet car has been taken out to make 130 more seats, and so on.

There has been no devolution of air passenger duty to Wales. Last week at Wales questions, the Secretary of State failed once again to answer a question put by the hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards) about devolving airport taxes. Building on the excellent work of Visit Wales, the Welsh Labour Government would be able to use the control of air passenger duty to support and promote Welsh tourism. Anyone who visits Wales will agree that it is spectacularly beautiful.

If I were being magnanimous––I am a very gentle, understanding person––I could mention something that the Tories did include for Wales in their Budget. They announced that the Severn bridge tolls will be scrapped by the end of next year, following an immediate cut to various charges. What they did not tell us is that the drop in toll prices is merely down to the removal of VAT, because legislation, rather than political priorities, dictates that VAT cannot be charged once the bridges have been brought back into public ownership. Who is to say that the Tories will not break yet another promise and fail to remove the tolls, even though it is difficult to do a U-turn while driving on the Severn bridges?

We urge the UK Tory Government to pause and fix universal credit, which is creating appalling poverty, debt and desperation for families across Wales. They choose not to, instead tinkering around the edges of a broken system. We ask the UK Tory Government once again to join Welsh Labour and support business, infrastructure and innovation, for on each and every one of these, Wales has been let down once again. On the crucial issue of the north Wales growth deal, after sustained pressure from Welsh Labour MPs and the Welsh Labour Government, the Chancellor indicated that discussions would begin to take the project forward. I am pleased to hear that that is going to happen today.

--- Later in debate ---

[Jonathan Edwards]

The export boom that would be expected from a 20% devaluation in sterling has not occurred. That is the factual reality of the situation. The fact that the currency is not rebounding, despite the British Government apparently outlining what they want from the Brexit negotiations, indicates that the markets are betting against the British Government.

[Chris Bryant]

One of the biggest mistakes that the coalition Government made in 2010 was cutting capital budgets. That meant that we did not have the infrastructure in place that we need for a modern economy. That has hit productivity across the whole country.

[Jonathan Edwards]

Mae’r Bonheddwr anrhydeddus yn gwneud pwynt cywir iawn a byddaf yn dychwelyd i’r pwyntiau hynny yn hwyrach yn fy araith.

(Translation) The hon. Gentleman makes a very valid point, and I will return to the issues he raises.

--- Later in debate ---

[Jonathan Edwards]

The hon. Gentleman makes a valid point. The hon. Member for Caerphilly and I were in the United States a few years ago, and we had a very interesting discussion with the food lobby there. I guarantee that it carries a lot of weight, and that is a clear indication of some of the problems we will face in future.

I shall return to the Budget.

Mewn polisi ariannol y mae’r perygl arall. Mae polisi ariannol hynod lac gan y Banc Canolog wedi cynnal yr economi ers 2010, a bydd oes yr arian rhad yn diflannu’n raddol wrth i gyfraddau llog gychwyn ar eu taith tuag at normaleiddio.

Yn ystod y cyfnod hwnnw, daeth twf economaidd i ddibynnu fwyfwy ar wariant gan ddefnyddwyr fel canran o GDP. Bydd methiant i ail-gydbwyso oddi wrth economi a gynhelir gan ddyled cartrefi yn rhwystr sylweddol yn y blynyddoedd i ddod.

(Translation) Monetary policy is another danger. The ultra-loose monetary policy of the central bank has sustained the economy since 2010, and the area of cheap money will gradually be removed as interest rates begin their journey to normalisation. During that period, economic growth has become even more reliant on consumer spending as a percentage of GDP. Failure to rebalance from an economy sustained by household debt will be a significant barrier in years to come.

Personal debt is reaching the level it was at before the great crash of 2008. That should be of great concern to us all.

Mae dirwasgiadau yn dueddol o ddod bob degawd, sy’n golygu, naw mlynedd wedi chwalfa ariannol fawr 2008 ein bod yn nes at ddiwedd y cylch na’i gychwyn. Nid yw’r methiant i neidio’n ôl yn sydyn o’r chwalfa fawr ac i ail-gydbwyso yn sectoraidd a daearyddol, na dibyniaeth yr economi ar beiriant cynnal bywyd polisi arianyddol yn argoeli’n dda at y dyfodol.

(Translation) Recessions tend to come each decade, which means that nine years after the great financial crash of 2008, we are far nearer the end of the cycle than its beginning. The failure to rebound sharply from the great crash, the failure fundamentally to rebalance sectorally and geographically, and the reliance of the economy on the life support of monetary policy do not bode well for the future.

The failure to rebound quickly from the great recession, the failure to rebalance sectorally and geographically, and the decade-long dependence on the life support of ultra-loose monetary policy do not bode well for the future.

O ystyried graddfa’r her, nid yw’r Mesur Cyllid yn addas. Cyn ymdrin â rhai o gymalau’r Mesur hwn, carwn ganolbwyntio ar rai o’r darpariaethau sydd, ysywaeth, ar goll.

Mae model economaidd y Deyrnas Gyfunol a ddilynwyd ers degawdau gan holl bleidiau sefydliad San Steffan wedi ei seilio ar hyrwyddo gweithgarwch a chyfoeth yn Llundain a de-ddwyrain Lloegr. Dylai’r anghydraddoldebau daearyddol o ran cyfoeth fod yn destun cywilydd i wleidyddion San Steffan. Mae naw o’r deg rhanbarth tlotaf yng ngogledd Ewrop yn y wladwriaeth Brydeinig yn ogystal â’r un cyfoethocaf. Yn anffodus, wrth gwrs, mae gorllewin a gogledd Cymru ymysg y tlotaf. Dylai’r Trysorlys fod yn ceisio ymdrin â’r record gywilyddus hon, ac eto does dim yn y mesur cyllid hwn fydd o ddifrif yn mynd i’r afael â’r heriau o’n blaenau.

Efallai mai un o ganlyniadau Brexit fydd y bydd cwmnïau ariannol Dinas Llundain yn adleoli i Baris, Frankfurt a Dulyn. O ystyried hynny, dylai Llywodraeth Prydain ymateb drwy ganolbwyntio ar sectorau economaidd eraill, yn enwedig gweithgynhyrchu. Dylai hyn arwain at symud y pwsylais ymaith o dde-ddwyrain Lloegr i’r cenhedloedd a’r rhanbarthau.

Yn anad dim, dylai Cymru gael y grym cyllidol i lunio ein heconomi ein hunain. Mae’n warthus fod gan yr Alban a Gogledd Iwerddon setliad cyllidol a threthiannol llawer gryfach na Chymru. Oherywdd hyn, bydd economi Cymru dan anfantais sylweddol. Dydw i methu deall pam nad yw gwleidyddion o’r pleidiau Unoliaethol a bleidleisiodd o blaid rhoi mwy o bwerau i’r Alban a Gogledd Iwerddon yn barod i ddarparu ar gyfer ein cenedl ni ein hunain.

Hyd yn oed os ydym yn rhoi i’r neilltu yr anghydraddoldebau cyfansoddiadol, mae’r sefyllfa yn golygu fod Llywodraeth Cymru yn llai abl i ymyrryd yn ein heconomi. Os mai Brexit caled fydd hi, dylid datganoli portffolio cyfan o drethi, gan gynnwys treth teithwyr awyr, treth ar werth a threth gorfforaeth.

Dylai buddsoddi mewn seilwaith gael ei wasgaru’n fwy cyfartal ar draws y wladwriaeth Brydeinig.

(Translation) Considering the scale of the challenge, the Finance Bill is in no way fit for purpose. Before addressing some of the measures in the Bill, I will concentrate on some provisions that are sadly missing. The UK economic model, which has been followed for decades by all the establishment parties in Westminster, is based on promoting activity and wealth in London and the south-east of England. The geographical wealth inequality should be a matter of shame for Labour and all politicians in Westminster. Nine of the 10 poorest regions in northern Europe are in Britain, as well as the richest. Unfortunately, west Wales and north Wales are among the poorest. The Treasury’s overriding aim should be to address that shameful record, but nothing in the Finance Bill will seriously get to grips with the challenges facing us.

One consequence of Brexit might be the relocation of London-based financial companies to Paris, Frankfurt or Dublin. Given that, the British Government should focus on other economic sectors, and manufacturing in particular. That should shift the focus away from London to the nations and regions.

First and foremost, Wales should be empowered to create its own economy. It is disgraceful that Scotland and Northern Ireland have stronger financial settlements than Wales. Given that, the Welsh economy will be at severe disadvantage. I cannot understand why politicians from Unionist parties vote in favour of giving more power to Scotland and Northern Ireland, but are unwilling to do so for our own nation. Putting aside the constitutional imbalances, that means that the Welsh Government are less able to intervene in our economy. If we are to have a hard Brexit, a portfolio of taxes should be devolved, including air passenger duty, VAT and corporation tax.

Infrastructure investment should be more evenly spread across Britain. Why should Welsh taxpayers’ money be spent on English projects?

[Chris Bryant]

We had a vote last week on what we will do about the Palace of Westminster, where lots of people were anxious about us spending so much money in London. Is there not a really important thing we could do for every region of the United Kingdom? After Brexit, we will not have the skills in this country to complete the work on one of our biggest infrastructure projects, so should we not set up a parliamentary apprenticeship scheme so that people can gain those skills in Wales, with every constituency in Wales having someone working on the project here?

[Jonathan Edwards]

Mae’r Bonheddwr anrhydeddus yn codi pwynt dilys. Ces i ddim y cyfle i wneud y pwynt yma yn ystod y ddadl, ond yn bersonnol byddwn i wedi moyn symud y Senedd allan o Lundain. Rydw i’n credu byddai hynny wedi bod yn symbol o’r angen i ddatganoli’n economaidd y Wladwriaeth Brydeinig. O ystyried bod y penderfyniad bellach wedi cael ei wneud—rwy’n llongyfarch y Bonheddwr anrhydeddus ar ennill ar ei welliant—dylem nawr fanteisio ar y cyfle i sicrhau bod y buddsoddiad hynny yn cael ei wasgaru ledled y Wladwriaeth Brydeinig. Rwy’n credu bod yna job wirioneddol i’w wneud ar hynny, ac rwy’n edrych i’r Bonheddwr anrhydeddus i gynnig arweiniad, o ystyried mai fe sydd wedi arwain y ddadl i aros fan hyn—dyna job fach iddo fe dros y blynyddoedd nesaf.

(Translation) The hon. Gentleman raises a valid point. I did not have the opportunity to make this point during the debate, but I wanted to move Parliament away from London, because that would be a symbol of the need to devolve the British states economically, too. Given that a decision has been made—I congratulate him on getting his amendment to that motion through—we should take every opportunity to ensure that that investment is spread across Britain. There is a real job to be done there, and I look to him to give leadership on that over the next few months, given that he has led the debate for remaining here.