Barnett Floor (Wales)

Craig Williams Excerpts

Tuesday 10th November 2015 Westminster Hall

[Alun Cairns]

I am grateful to the hon. Lady, but Scotland’s devolution settlement, and therefore its financial settlement, is naturally different. However, I pay tribute to her for her earlier point, when she asked why Labour did not act in its 13 years in government, when there was a greater divergence between the relative funding in Wales and England, and Wales was getting worse off.

[Craig Williams (Cardiff North) (Con)]

I apologise for joining the debate late and I commend the hon. Member for Torfaen (Nick Thomas-Symonds) for introducing it. Given Labour’s 13 years of inaction on this issue and the clear commitment the Chancellor has made to dealing with it, may I ask the Minister what the Labour party’s position is on the Barnett funding floor and the Barnett formula in general? I thought that the Leader of the Opposition wanted to tear it up.

--- Later in debate ---

[Alun Cairns]

I find it a bit rich that the hon. Gentleman is complaining that a Barnett floor has yet to be introduced when we are committed to introducing it. We said we would do it last March and in our manifesto, and we will introduce it alongside the next spending review. When he was part of an Administration, although Wales’s relative position was deteriorating, absolutely nothing was done to introduce a Barnett floor.

Hon. Members will be aware that since 2010 significant commitments have been made, beyond the Barnett formula, to back the Welsh economy. Those include a commitment to fund and upgrade the great western main line through to Swansea and a significant contribution to the cost of the upgrade and electrification of the valley lines, reinforcing the UK Government’s support for improving infrastructure in Wales. Two years ago, the Welsh Government were given early access to capital borrowing powers to use for M4 improvements.

[Craig Williams]

That is a very interesting point. Not only have we promised the funding floor—and we will deliver it—but we have given the Welsh Government access to borrow money to fix a horrendous problem in south Wales, namely the M4 congestion, by delivering an M4 relief road, yet they are still dithering.

[Alun Cairns]

My hon. Friend makes an important point. I can hardly speak to business people or people who travel the border regularly without their complaining about the delays around Newport. We urge the Welsh Government to take the strongest action possible to complete the job of bridging the M4 around the south of Newport.

A new prison is being built in Wrexham, in a £212 million project supporting over 1,000 jobs. Through tax devolution we are empowering the Welsh Government with further levers to support and encourage the growth of the Welsh economy. Business rates have now been fully devolved, something I hope Opposition Members will acknowledge. Stamp duty and landfill tax will be devolved in 2018, as has already been committed to.

We would like progress on the devolution of a portion of income tax, as specified in the Wales Act 2014. Tax devolution will make the Welsh Government responsible for raising more of the money that they spend. Excluding Welsh rates of income tax, the Assembly will be responsible for approximately 10% of all taxes collected in Wales. The introduction of the Welsh rate of income tax would make the Assembly responsible for twice as much, or approximately another £2 billion in revenue. The Government will implement the commitments of the St David’s day Command Paper to build a stronger, clearer and fairer devolution settlement for Wales.